The Apprenticeship Levy

The Apprenticeship Levy is charged on employers’ “paybills” at a rate of 0.5%. The levy is payable through Pay as You Earn (PAYE) and is payable alongside income tax and National Insurance. To keep the process as simple as possible “paybill” will be based on total employee earnings subject to Class 1 secondary NICs.

Each employer receives one annual allowance of £15,000 to offset against their levy payment. There is a connected persons rule, similar to the Employment Allowance connected persons rule, so employers who operate multiple payrolls are only be able to claim one allowance.

1.) If you’re an employer with a pay bill over £3 million each year, you must pay the apprenticeship levy from 6 April 2017. You can find out how to do this here.

You will report and pay your levy to HMRC through the PAYE process.

The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.

Detail on how to setup and use your online account can be found here.

2.) If you do not have to pay the levy then you can still receive support to pay your apprentices.

From May 2017, you will pay 10% towards to the cost of apprenticeship training and government will pay the rest (90%), up to the funding band maximum.

If you do not pay the levy, you won’t be able to use the apprenticeship service to pay for apprenticeship training and assessment until at least 2018.

Instead, you’ll need to agree a payment schedule with the provider and pay them directly for the training. The provider must prove that you have paid your contributions as a condition of government paying its contribution.

There are 2 different types of apprenticeships to choose from:

  • apprenticeship standards– each standard covers a specific occupation and sets out the core skills, knowledge and behaviours an apprentice will need; they are developed by employer groups known as ‘trailblazers’
  • apprenticeship frameworks– a series of work-related vocational and professional qualifications, with workplace- and classroom-based training

To choose training:

If you would like to discuss any of this further then please contact us on 0116 2423400

Becky Edwards, Payroll Manager 

Hot Topic Making Tax Digital for Business

The government have issued information on how Making Tax Digital for Business (MTDfB) is expected to work for VAT once the rules are introduced in April 2019.

Under the proposed rules, which have been issued subject to consultation, VAT registered businesses with turnover over the VAT registration threshold will be required to submit their VAT return digitally using software. Businesses with a turnover above the VAT threshold (currently £85,000) will have to:

  • keep their records digitally (for VAT purposes only) and
  • provide their VAT return information to HMRC through Making Tax Digital (MTD) functional compatible software.

It has also been confirmed that MTD will be available on a voluntary basis to other businesses, for both VAT and income tax.

Exemptions will be available where HMRC are satisfied the business is run by a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications, some insolvent businesses; or where HMRC are satisfied that it is not reasonably practicable to make a return using an electronic return system for reasons of disability, age, remoteness of location or any other reason.

The proposed rules include provisions that where a business is in scope for MTD the business must use functional compatible software to meet the new requirements. This software will either be a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The functions of the compatible software include:

  • keeping records in a specified digital form
  • preserving digital records in a specified digital form
  • creating a VAT return from the digital records and providing HMRC with this information digitally
  • providing HMRC with VAT data on a voluntary basis and
  • receiving information from HMRC via the API platform that the business has complied.

Businesses will need to preserve digital records in the software for up to six years. The digital records include:

  • ‘designatory data’ including the business name, principal place of business and VAT registration number together with information about which VAT accounting schemes they use
  • the VAT account that each VAT registered business must keep, by law, and
  • information about supplies made and received.

Further information on the required information can be found in Annex 1.

The government will make the final detailed requirements available to the software providers by April 2018 to allow time for the software to be developed and tested prior to the rules coming into effect from April 2019.

VAT returns

Businesses within the scope of MTD for VAT will be required to submit their VAT returns using their functional compatible software.

The information contained with the VAT return will be generated by pulling information from the digital records. This information will contain as a minimum the 9 boxes required for the completion of the VAT return but can also contain a specific data set of supplementary information, all of which will be pulled from the digital records.

Businesses submitting monthly or non-standard period returns will be able to continue to do so. The VAT annual accounting scheme will also be retained with the current conditions. Businesses making these types of returns will also be required to keep digital records and submit their VAT returns through software.

Under the new rules some businesses may choose to voluntarily provide further information:

Periodic updates
Businesses will be able to submit VAT information more frequently than their VAT return obligations require on a voluntary basis as a ‘voluntary update’.
Supplementary data
HMRC believes that businesses and HMRC could benefit from the submission of supplementary data detailing how the figures in the return are arrived at. HMRC believe this additional data will help them target non compliance. The software will allow for the voluntary submission of supplementary VAT data as part of a VAT return or a voluntary update. This will allow HMRC to test with businesses the extent to which they and HMRC can benefit from such supplementary data.

Timescale

VAT is the first tax to be reportable under MTD and businesses within the scope of MTD will need to keep their records digitally, using approved MTD functional compatible software, from 1 April 2019. The software will create the return from the digital records and this will need to be submitted under MTD for return periods starting on or after 1 April 2019.

We will keep you informed of developments in this area and ensure we are ready to deal with the new requirements. Please contact us for more information 0116 2423400

Have you got a moment?

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Have you got a moment?

Do you dread hearing that in your office or, in fact, anywhere?

It invariably means that your plans have just been scuppered and that you will know have to spend a chunk of time looking at something completely different.

Exactly how long is a moment?

I guess I’ve always thought of it as being about 30 seconds but, if you’re looking for a proper definition, my dictionary simply gives it as “a brief period of time”.

It goes on to expand a little and ends with “momentous – of great importance” which implies anything but brief!

It seems from my quick research that in the Middle Ages they had a different concept of time measurement and that a moment would be equal to 90 seconds nowadays.

How should you respond to the initial question?

Clearly it depends who is asking!

My favoured response, used with care, would be something like “Yes – I’ll be with you dreckly!”

OK, so what does that mean?

“Dreckly” is a slang word in common usage in Cornwall.  It would appear to derive from “directly”, which would of course imply an immediate response.  However, in practice it has a meaning accepted to be “at some indeterminate point in the future”.

Now it crosses my mind that everyone has a different view on how many is a few … perhaps I’ll look into that another day.

Neil Ford, Technical Manager

New Lifetime ISA

The Lifetime Individual Savings Account (ISA) is a longer term tax-free account that receives a government bonus. The accounts will be available from today (6 April 2017). HMRC have produced a helpful guide on the account. Some of which is reproduced below:

Opening a Lifetime ISA

You can open a Lifetime ISA if you’re aged 18 or over but under 40.

As with other ISAs, you won’t pay tax on any interest, income or capital gains from cash or investments held within your Lifetime ISA.

Saving in a Lifetime ISA

You can save up to £4,000 each year in a Lifetime ISA. There’s no maximum monthly savings contribution, and you can continue to save in it until you reach 50. The account can stay open after then but you can’t make any more payments into it.

The £4,000 limit, if used, will form part of your overall annual ISA limit. From the tax year 2017 to 2018, the overall annual ISA limit will be £20,000.

Example – you could save:

£11,000 in a cash ISA

£2,000 in a stocks and shares ISA

£3,000 in an innovative finance ISA

£4,000 in a Lifetime ISA in one tax year.

Your Lifetime ISA won’t close when the tax year finishes. You’ll keep your savings on a tax-free basis for as long as you keep the money in your Lifetime ISA.

Lifetime ISAs can hold cash, stocks and shares qualifying investments, or a combination of both.

Government bonus

When you save into your Lifetime ISA, you’ll receive a government bonus of 25% of the money you put in, up to a maximum of £1,000 a year.

Withdrawals

You can withdraw the funds held in your Lifetime ISA before you’re 60, but you’ll have to pay a withdrawal charge of 25% of the amount you withdraw.

A withdrawal charge will not apply if you’re:

using it towards a first home

aged 60

terminally ill with less than 12 months to live.

If you die, your Lifetime ISA will end on the date of your death and there won’t be a withdrawal charge for withdrawing funds or assets from your account.

Transferring a Lifetime ISA

You can transfer your Lifetime ISA to another Lifetime ISA with a different provider without incurring a withdrawal charge.

If you transfer it to a different type of ISA, you’ll have to pay a withdrawal charge.

Saving for your first home

Your Lifetime ISA savings and the bonus can be used towards buying your first home, worth up to £450,000, without incurring a withdrawal charge. You must be buying your home with a mortgage.

You must use a conveyancer or solicitor to act for you in the purchase, and the funds must be paid direct to them by your Lifetime ISA provider.

If you’re buying with another first time buyer, and you each have a Lifetime ISA, you can both use your government bonus. You can also buy a house with someone who isn’t a first time buyer but they will not be able to use their Lifetime ISA without incurring a withdrawal charge.

Your Lifetime ISA must have been opened for at least 12 months before you can withdraw funds from it to buy your first home.

If you have a Help to Buy ISA, you can transfer those savings into your Lifetime ISA or you can continue to save into both – but you’ll only be able to use the government bonus from one to buy your first home.

You can transfer the balance in your Help to Buy ISA into your Lifetime ISA at any time if the amount is not more than £4,000.

In 2017/18 only, you can transfer the total balance of your Help to Buy ISA, as it stands on 5 April 2017, into your Lifetime ISA without affecting the £4,000 limit.

If you would like to discuss any of this further then please get in touch.  0116 2423400 or info@torrwaterfield.co.uk

THE BENEFITS OF USING APPS

In today’s fast moving world we are all looking for ways to save time.  The majority of us carry some kind of hand held device, whether it is a tablet or simply a mobile phone on which we can organise our day to day lives.  We even provide our children with these devices to occupy them and give ourselves five minutes of peace and quiet!

Apps can be downloaded to hand held devices and are generally a cheap way to provide not only entertainment but also as a means to seek and manage information.  Where our children are happy to play games and line the pockets of the game creators of ‘Flappy Birds’ and ‘Candy Crush,’ perhaps we as adults are looking for something a little more informative and useful.

I monitor and manage important deadline dates for the clients of Torr Waterfield and I find the Companies House App an extremely useful business tool.  By searching for companies on this App I am able to instantly see information such as the following:

  • Company number
  • Date of incorporation
  • Registered Office address, along with a link to view the location on a map
  • The company accounts reference date
  • The date the last set of submitted accounts were made up to
  • The date the next set of accounts are due for submission
  • The date the last submitted annual return (now known as a confirmation statement) was made up to
  • The date the next annual return/ confirmation statement is due for submission
  • Nature of the business
  • Current and resigned company directors and secretaries and certain details about the company officers
  • History of submitted documents

This App is available to everyone, so if you think your business may find this company search facility useful then you may be interested to know that it can be downloaded for free.

As mentioned by my colleague Calum Ainge in his June 2016 blog, entitled Keep Up To Date And Download Our Free Tax App,’  the Torrwaterfield Tax App is also available free of charge and includes features such as key tax dates, tax tips, news, tax tables and it even has a tax calculator. app-phone

If you think that your business may benefit from the above Apps then all you need to do is either visit the App store or Google play and download your Apps for free.

Beth Judd, Accounts & Tax

Keep up to date and download our free Tax App

Here at Torrwaterfield we are constantly updating our systems and software to keep up to date with ever changing technology. Part of this included creating a Taxapp. The Torrwaterfield Taxapp is free to download and available on both IOS devices app-phone(App store) and Android devices (Google play).  

The app includes the following features:

Key Tax Dates – A reminder of important tax dates that can be updated to your calendar with a tap of the screen.

Tax Tips – A section that provides detailed tips and explanations which cover VAT, the family, businesses, selling assets and tax efficient savings.

News – An up to date newsfeed to keep you regularly informed on topics that matter to you or your business.

Tax Tables – Key tax rate tables with explanatory notes so we can now keep you up to date on the current tax position, such as the latest advisory fuel rates which are reviewed quarterly.

Tax calculators – A range of tax calculators including gross pay to net, gross pay to net (self-employed), VAT due, corporation tax due, company car and fuel benefits, SDLT due, loan repayments and mortgage repayments.

My personal favourite feature is the tax calculators. They allow you to easily work out tricky sums. For example, you can work out your company car and fuel benefits by entering the value of the car, its CO2 emissions, if it’s diesel or petrol and whether or not the company pays for fuel. You will then be instantly shown your car and fuel benefits for the previous and current tax year.

If you think any of the above will be useful for you or your business then please feel free to download the app by searching for ‘torr waterfield’ on either the App Store or Google play.

Calum Ainge, Accounts & Tax
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