One third of businesses overwhelmed by admin

Over 600,000 British micro-businesses admit to missing their tax return deadlines and a third to being overwhelmed by the burden and complexities of accounting.

The research, conducted by YouGov, suggests that poor organisation and inadequate systems may be one of the key reasons for accounting anxiety, as one in five (20%) micro-business owners confess that their main method to manage their financial accounts is via pen and paper, while almost one in six (17%) said they did not have immediate access to all of their important financial data.

Starting and running a business does not mean you carry on doing what you did before but get the money directly from the customer, instead of being paid by an employer.  Running a business is a skill in itself and like all skills they either require time from you, the business owner, or an investment by you to a person skilled dealing with paperwork.  We have a number of systems available that we would be happy to share with you if you are prepared to make the investment, all of which will mean that you have time to do the things you are good at and yet be completely up to date with your obligations to all creditors (not just to HMRC).  You will know at the click of a button what your profit is, how much you are owed and how much you owe to others.  This means people will be keen to do business with you because you are reliable which in turn will boost your business.

Don’t try to skimp on the administrative side of your business. If you find yourself overwhelmed, give us a call.

Making Tax Digital

Making Tax Digital – MTD for short- has been in the news a lot in 2017, but just in case you missed it.  Here is an overview.

The original finance bill was cut down from 742 pages to a just 140 and MTD went from potentially revolutionising the UK tax system to being on the shelf just a bit longer. Not toally unheard of, the government has delayed the start.

The plan of MTD is to make all companies (with a turnover above £85,000) report quarterly through a digital platform. Many companies agree that digitising the tax system is the right direction of travel. However, many have been worried about how the reforms would be done.  Mel Stride, the new minister of MTD says “We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.”

HMRC believe that digitisation of the tax system will generate £500m in tax a year as they believe there is abuse of the current system which digital reporting will close down.  We shall see.

John Preston, CIOT president, said: “Whilst we are supportive of the government’s long-term ambitions for digitising the tax system, we have always called for this to be achieved in a measured and manageable way.  This deferral will give much more time for businesses, supported by their advisers, to identify for themselves, at their own pace, the benefits of digital record keeping. It will also ensure that many more software products can be developed and tested before mandation is reconsidered.”

Fortunately those many of our clients are already on Xero and as a result will be ready for MTD.  How do we know? Because Xero, one of our favourite online accounts software providers, are working with HMRC to make sure the platform is ready for the launch of MTD meaning the interruptions that our clients may otherwise experience should be minimal.

Phishing e-mail warning from HMRC

HMRC has published guidance to help taxpayers distinguish between genuine correspondence from HMRC and fraudulent “phishing” e-mails sent by online scammers.  It features an up to date list of communication methods that HMRC uses, along with a list of warning signs and details of what to do with any suspicious messages.  According to the guidance there are six key “tells” that indicate an e-mail is fraudulent:

  1. an incorrect “from” address;
  2. the use of a common greeting such as “dear sir” or “dear madam”;
  3. requests for personal information;
  4. a request for urgent action, such as “reply within three days”;
  5. links to bogus websites;
  6. the presence of one or more attachments.

E-mail addresses that are frequently used by scammers to trick recipients into believing an e-mail is genuine include refund-help@hmrc.gov.uk, email@hmrc.gov.uk adn refunds@hmrc.gov.uk.  Suspicious e-mails should be forwarded to HMRC via phising@hmrc.gsi.gov.uk and if you think you might have given any personal information to scammers contact HMRC via security.custcon@hmrc.gsi.gov.uk, providing a description of the details disclosed, but not the actual details.

The guidance is can be found at http://bit.ly/1zS4WZh

Changes to Employment from April 2015

Despite the coalition’s efforts to cut red tape, the government’s final months in office see the introduction of one of the most complex sets of regulations that employers have ever had to handle. The implementation of shared parental leave and pay, which provides greater flexibility for parents to care for a child throughout its first year is the most significant of the varied changes to employment law, which are being introduced in April:

  1. Shared Parental Leave and Pay
  2. Changes to adoption Leave and Pay
  3. New right to Attend Adoption Appointments – The Children and Families Act introduces a new right to attend adoption appointments as of 5 April 2015. The main adopter will be able to take time off to attend up to five appointments, while the secondary adopter will be entitled to take time off for up to two such appointments. The time off is “for the purpose of having contact with the child or for any other purpose connected with the adoption”.
  4. The right to take unpaid parental leave is extended to all parents of children under the age of 18 – The right to take unpaid parental leave currently applies to parents of children under five (or 18 if the child is disabled). As of 5 April 2015, this right is extended to the parents of any child under the age of 18. Please note that this form of unpaid parental leave is different to the shared parental leave mentioned in point 1 above.
  5. New rate of statutory maternity, paternity, adoption and share parental pay is introduced
  6. Employer national insurance contributions tare abolished for workers aged under 21 – in order to encourage youth employment, employer National Insurance contributions are abolished for employees aged under 21, who earn up to the upper earnings limit. This change applies from 6 April 2015.
  7. New rates and thresholds for employers to consider
  8. Limits on tribunal awards and statutory payments increase –  from 6 April 2015
  • The maximum compensatory award for unfair dismissal increases from £76,574 to £78,335
  • The maximum amount of a week’s pay, used to calculate statutory redundancy pay and other awards, such as the basic and additional awards for unfair dismissal, rises from £464 to £475