P11D & Employee Benefits

Under the current system employers are required to submit employer benefits to HMRC using a P11D form and pay over the relevant National Insurance after the tax year is over.

Proposed by HMRC the P11D form will be replaced by reporting employee benefits on the monthly payroll. Of course this can already be done voluntarily but will likely become mandatory from 6th April 2020 (Not yet confirmed).

What does this change mean? This means that the additional national insurance due for employee benefits will be due through the year each month through the current RTI process.

This change have not been confirmed but is expected to be introduced by most Accountants.

If you currently have employee benefits such as cars or healthcare do get in touch if you have an questions about the future of declaring this to HMRC.

Richard at TG

Registering for MTDfV

MAKING TAX DIGITAL FOR VAT

Accurate as at March 2019 (Subject to change) If you are the slightest bit unsure about whether or not you should register for MTDfV now give us a call on 01480300945 and we will be able to confirm if your business is ready or not.

Making Tax Digital for VAT (MTDfV) comes in to effect for VAT periods starting from the 1st April 2019. Please see below when the first return is due to be an MTD filing.

VAT Quarters

 

First mandatory MTDfV return Period Due at HMRC
March/April/May April to June 2019 Quarter 7th August 2019
January/April/July/October May to July 2019 Quarter 7th September 2019
February/May/August/November June to August 2019 Quarter 7th October 2019

Note: Businesses are able to early adopt MTDfV. If your software is compliant we recommend signing up early to ensure any issues are sorted out before it becomes mandatory.

If you do not have making tax digital compliant software please get in touch before signing up to MTDfV.

Also please be aware it takes up to 72 hours to register and 12 days for any existing Direct Debit details to be transferred to the MTD system. Therefore we do not recommend completing this just before filing a return or before the last Direct Debit has been taken.

Assuming your software is now compliant and your turnover will be over £85,000 for the next 12 months you will need to register with HMRC for Making Tax Digital before your mandatory return is filed.

You can do this by following the steps below:

Before starting the process you will need:

  • Company Reference Number
  • Company UTR Number

Step 1. Go to https://www.gov.uk/log-in-register-hmrc-online-services and sign into your business tax account.

(this is where previous VAT returns using the HMRC website would have been submitted from)

Step 2. Under the section “Sign up to Making Tax Digital for VAT” Click on the hyperlink “Find out more about Making tax digital for VAT (Opens in a new tab)

Step 3. In the new tab scroll down to the “Sign up for making tax digital for VAT” heading and click on the “Sign up for Making Tax Digital for VAT” hyperlink.

Step 4.  On the new page scroll down to the “Sign up your business” heading and again clicking on the “Sign up for Making Tax Digital for VAT” hyperlink.

Step 5.  Following the on screen questions (These may vary). If you have any questions about how to answer please do give us a call on 01480300945.

Step 6. Within 72 hours you should receive an e-mail stating if you have been accepted for MTDfV. Once this comes through you will need to enable your software to submit MTD returns. This varies on different software options available so do contact the software support or us for help if needed.

 

Finally if you have an questions about MTDfV do get in touch on 01480 300945.

 

Richard at TG

R&D Tax Credits

Back in 2000 HMRC launched the R&D tax claims for businesses developing new products & services. (Breaking new ground)

R&D is an excellent way to enhance expenses to reduce the corporation tax due to HMRC. HMRC allow R&D expenditure to be enhanced by 130% allowing a total of 230% of the costs against profits.

If the business is starting or not yet ready to trade it may wish to use the R-DEC claim to receive a rebate from HMRC to put towards future costs. Currently this is 14.5% of the enhanced amount.

Which ever way your business may wish to proceed we are able to assist by providing the relevant calculations, documentation to go with the claim to HMRC and provide advice throughout the process.

Therefore is you feel there is potential for an R&D tax claim for you business get in touch for a free discussion about claiming R&D.

Richard at TG.

Making Tax Digital – Just round the corner.

With April 2019 fast approaching the details of Making Tax Digital for VAT are starting to become clearer.

The Basic line for MTD for VAT is – Any business with a taxable turnover greater than the VAT threshold (Currently £85,000) must submit MTD submissions replacing the current VAT submission via the HMRC website. This must be done through compliant software, something that will be discussed below in a separate blog in more detail.

When do businesses need to adopt MTD – assuming businesses are VAT registered with taxable turnover over £85,000 they must start submitting MTD returns on the 1st period following 1st April 2019. therefore if you VAT return ends 31st May 2019 your first MTD submission must be for the period 1st June to 31st August 2019.

Deadline for submissions – HMRC have told us that the deadline for MTD submissions will be inline with the current 1 month & 7 days.

Businesses will be required to setup an online business tax account – once setup businesses will have to sign up for MTD through this account. Clients that we currently complete VAT returns for will be signed up through our agent account and will therefore not need to complete this.

 

IR 35 – Private sector April 2019

What is IR 35?

IR 35 is the rule that ensures those who work and enjoy the benefits as employees are taxed as employees.

Having a person as a subcontractor rather than employee has obvious benefits but the main point being not having to pay Employer’s National Insurance.

The Changes.

In April 2017 HMRC introduced the new rules to Public sector organisations. From April 2019 (at the earliest) these rules will apply to private sector companies.

The previous responsibility of whether a worker was a subcontractor or employee was placed on the worker themselves. The changes in 2017 moved this responsibility to the organisation. The biggest case so far relating to these changes has been the BBC with presenters being told to setup services companies. HMRC has since challenged this and sent increased tax bills to the presenters to cover the loss in tax if they had been employed. Many of the presenters have since been employed by the BBC.

HMRC investigations are complex and time consuming when looking into IR 35 cases. Many are taking 18 months or longer to complete often ending up at a tribunals.

What can you do?

With this in mind getting the IR 35 decision right from the start is becoming a must. HMRC released a Toolkit relating called CEST. This is a great place to start when determining the status of a worker.

However with most things involving HMRC the CEST Toolkit is not 100% accurate and HMRC have been challenging organisations on the results. Therefore if you do have workers that may fall into the IR 35 rule do get in touch and we will be able to assist with the decision process.

As always if you have any questions about the above information please do let us know on 01480 300945.

 

Richard at TG

GDPR – 2018

TG_logo_small_opaque

Taking your data protection seriously.

  1. Due to technological advances the amount of personal data generated has rapidly increased. This is why the law has needed to be updated to help protect everyone. As part of General data protection regulations (GDPR) all companies must review how personal data is managed. All data such as client e-mail addresses to employee bank details fall under the new regulations and companies must be ready by 25th May 2018.
  2. GDPR gives you more control of your data, what data companies have and how they use it. This should give you greater confidence that the information companies have on you is accurate, up to date and properly managed.
  3. In the next few months you will likely receive information/consent requests from companies ensuring they are compliant for GDPR. To be compliant these requests must be clear and straightforward free of legal terms.
  4. If you give an organisation permission to contact you in a certain way or not at all this doesn’t mean you can’t change your mind. With the new rules, it should be easier and simpler to update your preferences on how the company communicates with you.
  5. GDPR ensures that all companies/organisations holding personal data have the right processes in place to protect it. If they do not they will face severe penalties.

 

What happens next?

As a client of Tacconi Green & Co we will be in touch shortly to ask how you wish to communicate and share data. We are required by law to keep data for certain periods. Once this time period has finished we will ensure your data is erased securely.

Tacconi Green & Co has an online portal – this is our most secure way to share information with you, however we understand that this might not be for everyone so we will ensure other options are available such as passphrase protected PDF’s via e-mail.

 

We have completed our GDPR review and are now compliant with the May 2018 Regulations

  • We only use your data provided to help us produce the accurate financial information required
  • We respect your privacy and will work hard to ensure our systems are regularly reviewed to ensure we meet the strict regulation requirements.
  • We do not sell your personal data to third parties

 

End of the Flat Rate Scheme for VAT? Not quite…

Businesses with few VAT expenses have been able to pay HMRC a reduced output liability percentage on their Gross turnover called the flat rate scheme. This is because some businesses have very few expenses and having to pay 20% output VAT without the Input Vat to offset would appear unfair.

For example a consultancy firm may use a flat rate of 12%. They would charge the customers the full standard rate of 20% yet only pay 12% of the gross turnover in VAT to HMRC.

There were a few minor restrictions but pretty much anyone could use the flat rate scheme with an annual turnover of £150,000 or less. However HMRC have again published a consultation in December 2016 announcing plans to introduce a further restriction called “limited cost trader”.

Limited cost traders can still use the flat rate scheme, but their percentage will be 16.5%. A limited cost trader is defined as one that spends less than 2% of its sales on goods (not services) in an accounting period. It is the fact services don’t count that means many business will fall into the limited cost trader trap.

In summary if you fall into the definition of a “limited cost trader” your company or business may be better off coming out of the FRS altogether. At least using the standard scheme you can offset any services such as accountancy fees against your output vat albeit at 20% again. Each clients situation will be different. If you are concerned this will affect your business please contact us and we can provide advice and assistance in working out your status.

If we do the book keeping for your business already we will be touch when completing your VAT returns.

A note should be added that the consultation ended in late December 2016. We are yet to receive HMRC’s final rules regarding this. We will of course keep you updated via this blog,  our website and clients we provide book keeping services for we shall be in touch very soon.

UPDATE: As this post described what was proposed – all of this came in to force on the 1st April 2017. Therefore is you are worried about anything here please to get in touch.

Any questions please feel free to get in touch at 01480 300945.

Richard at TG.

 

MTD. What we know now.

Over the last couple of years we have been hearing little bits of information provided by HMRC regarding Making tax digital. The principle remains the same with the quarterly reporting of company financial information however the timescale has been altered slightly.

Those companies & businesses with a turnover greater than the VAT threshold (£85,000) will need to report quarterly from 1st April 2019. The reports must be submitted within 1 month. (Unlike with VAT when entities have 1 month and 7 days)

Those businesses with a turnover below this and landlords with rents less than the £85,000 figure will at present start reporting quarterly from 1st April 2020 at the earliest. Please note HMRC have not confirmed the deadline they have only said that the need to file quarterly will be 1st April 2020 at the earliest. This could still be extended.

To help limit the work required we are starting to introduce clients to cloud based bookkeeping software solutions. This type of software has many time saving solutions for both clients and accountants. Quarterly reporting will inevitably increase the work required by Accountants or bookkeepers however by streamlining the process as much as we can the delivery of MTD should not be too great a burden on businesses.

Software – at Tacconi Green & Co we have become certified many of the MTD software products, we have attended training courses so we are up to date to meet clients needs and support those that wish to report in house. Our present software recommendations are Quickbooks online, Xero & Sage one. All of these are cloud based solutions and all have similar features. No one software provider will fit all our clients so do contact us to discuss your needs before making the decision. We also get partner rates with the providers which are often better than individuals will get going directly to the software companies.

If you wish to discuss this further please do give us a call on 01480 300945 and your partner will be able to talk you through the process. It may seem like this could be a large increase in admin but with the right advice and software to help we can make sure the process is a simple and painless as possible.

Updates to follow when we get them.

 

Richard at TG.

Making Tax Digital

Please see MTD what we know now. post for amended dates provided by HMRC

Last year HMRC announced a consultation that will revolutionise the way in which individuals and businesses will report financial information. Making tax digital sounds simple. It will in fact be a huge change, the fact that we are still in the consulting period shows how tricky it is proving to be. The full roll out of this is expected to be completed by 2020.

The basic idea is that any individual/company with a turnover greater than £10,000 will be required to report on a quarterly basis via accounting software. This has now been relaxed slightly to include excel but must be converted by your adviser (accountant or bookkeeper) to the relevant software.

Here at Tacconi Green & Co we are currently gaining full certification on the relevant software that we will be using and advising our clients to use. We feel getting started now will help our clients make a smooth transition to MTD. We don’t of course know the full extent of the change as it remains in its consulting stages, you will of course be kept up to date via this blog, our website or most commonly with a letter through the post.

The software that we have selected for this will be Xero, Quickbooks Online & Sage one. We will of course continue with other software that our clients may already use. You may have noticed that all of these are cloud based solutions. “The cloud” is certainly the future. It allows us real time access to your data and likewise you will have instant access once we have amended, updated or finalised your figures. This is extremely helpful when it comes to cash flows and management figures. (We will have a more detailed software post shortly).

For now we must start preparing. Starting to think about the processes that can help your business transfer as seamlessly as possible. We will keep you updated with each HMRC announcement.

If you have any questions please don’t hesitate to contact us on 01480 300945.

Richard at TG