Paying your self assessment tax bill
Self assessment tax liabilities can be paid by various methods including:
- by debit or credit card online
- transfers from your bank account by Faster Payments, CHAPS or BACS
- at your bank or building society branch, under some circumstances
- via direct debit
- via a budget payment plan
- by cheque through the post
- through your tax code.
From Friday 15 December 2017 taxpayers will not be able to pay their self-assessment tax bills at the Post Office
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.
Fancy giving or receiving a discount for cash?
DON’T DO IT. “Why not?”, you ask. Read on ….
Do you know about the Criminal Finances Act 2017? Probably not – 76% of UK businesses are unaware of the new measures. Maybe you think it doesn’t affect you because you are very honest and have absolutely no intention of defrauding anyone. Don’t be fooled – if you run a business you need to know what the implications for you could be.
The new law will make businesses liable of criminal acts committed by employees who encourage or assist tax evasion by other individuals eg customers and suppliers. Businesses will be liable even in cases where senior management were either uninvolved or unaware of the acts. They apply to UK and non-UK businesses.
So if anyone in the business encourages “cash in hand” transactions which mean a lower rate either to your business or their business, then you will be caught by the act. It will result in a criminal prosecution and in many cases such action could ruin a business. Other more complicated transactions with the purpose of evading tax will also be caught by this legislation.
This means as a business owner you not only have to ensure your business is run properly, you have to be aware of the actions of your staff. You cannot hide behind the defence of ignorance and anything illegal, worst case scenario could destroy your business and send you to prison.
The Budget March 2017
The chancellor caused quite a stir by raising Class 4 national insurance for the self employed. But that is of course, not the only change he made and the points likely to be of interest to you are included in our Guide to the Budget 2017 which you can download for free. If you operate through a limited company, you won’t be too worried about the increase in national insurance for the self employed but you will be keen to know about the further increase in tax for those in receipt of dividends, by lowering the tax free amount from £5,000 to £2,000. If you are aware of Making Tax Digital, and you are self employed or in a partnership with a turnover (sales) below the VAT registration threshold (currently £83,000 per year) then you have an extra year before you have to comply with the MTD regulations.
Download our free Guide to the Budget 2017.
Download our free Tax rates and allowances 2017
If you want help with advice on anything in this budget please call Dionne on 07977 169206.
The Autumn Statement
Corporation tax will fall to 17% by 2020.
The tax and national insurance advantages of salary sacrifice schemes will be removed from April 2017 except for arrangements relating to pensions, childcare, cycle to work scheme and ultra-low emission cars. Arrangements in place before 5 April 2017 will be protected until April 2018.
Starting threshold for employee and employer National Insurance will be aligned, costing employers an additional £7.18 per employee per year. No additional cost to the employee.
The personal allowance increase to £11,500 is confirmed from 2017.
The national min mum wage and the national living wage will increase.
A new savings bond with NS&I will be detailed in the next budget, providing investors with a 2.2% gross return on a three year bond.
The number of free childcare hours is to be increased from 2017.
No rise in fuel duty, but insurance premium tax will increase by 2% from 1 June 2017
Rural rate relief will increase to 100% from 1 April 2017, bringing it in line with small business rate relief.
Letting agency fees are to be borne solely by landlords. Tenants will not bear any of the letting agency fees.
A response to the Masking Tax Digital consultation will be published in January 2017.
From Autumn 2017, the budget will be in the Autumn and the spring will see a Spring Statement. We can look forward to two budgets in 2017.
Omitting low-cost expenses adds up to £239 million a year
According to a study from software provider ‘FreeAgent’, small businesses across the UK are losing out on a collective £239 million each year by failing to submit expense claims of less that £10. Using a sample of 2.5 million expenses submitted by its customers, ‘FreeAgent’ found the average micro-business owner had around £216 worth of expenses with an individual value of less that £10.
Using the results of an earlier survey of web professionals where 22% said they didn’t think it was worth claiming anything costing £10 or less – the newer study projected across the UK’s estimated 5 million small business to reach it total.
Digital Tax Concerns
‘ICAEW’ carried out a recent survey in March 2016 in which it was discovered that a lot of firms in the UK are not ready for the changes to the tax system in which they will have to keep digital tax records by 2020.
A warning has been issued by the ‘ICAEW’ that a very large burden will be on businesses in 2020 as business owners will also be required to provide digital tax reports every quarter to ‘HM Revenue & Customs’ (HMRC). From the Survey, 75% of respondents said they do not prepare their accounts using accounting software and 41% of construction and manufacturing firms rely on paper-based tax records.
Even though 55% of the firms supported the changes, only a very small 18% believe that they should be a statutory requirement. Paul Aplin, Chairman of the ‘ICAEW’s technical committee said: ‘Businesses should be able to move to the new system over time when they are ready. Government claims that these proposals will contribute to reducing business tax compliance costs by £400m, but we fear that many small businesses will in fact face additional costs when digital record keeping is made mandatory’.
Read more about the survey at http://bit.ly/1Th5iSM
British Accountancy Awards
No I didn’t win an award, but Xero did. From a shortlist of 10, Xero won the award for Client Software Product of the Year. This is the industry telling us that Xero is a great product for our clients to use. It beat the likes of Sage and Quickbooks Online, as well as some widely used but lesser know products such as FinancialForce.com, Clearbooks and FreeAgent. I have been promoting Xero for 7 years now and it looks like I have backed a winner. If you don’t already use Xero, have a look and see if it can help you manage your business more efficiently.
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.
Phishing e-mail warning
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:
- an incorrect “from” address;
- the use of a common greeting such as “dear sir” or “dear madam”;
- requests for personal information;
- a request for urgent action, such as “reply within three days”;
- links to bogus websites;
- 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 email@example.com, firstname.lastname@example.org adn email@example.com. Suspicious e-mails should be forwarded to HMRC via firstname.lastname@example.org and if you think you might have given any personal information to scammers contact HMRC via email@example.com, 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:
- Shared Parental Leave and Pay
- Changes to adoption Leave and Pay
- 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”.
- 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.
- New rate of statutory maternity, paternity, adoption and share parental pay is introduced
- 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.
- New rates and thresholds for employers to consider
- 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
The 20 latest Blog Posts
- Paying your self assessment tax bill
- How do you view your accountant?
- Fancy giving or receiving a discount for cash?
- The Budget March 2017
- The Autumn Statement
- Omitting low-cost expenses adds up to £239 million a year
- Digital Tax Concerns
- British Accountancy Awards
- One third of businesses overwhelmed by admin
- Making Tax Digital
- Phishing e-mail warning from HMRC
- Changes to Employment from April 2015
- Client help videos – Limited company
- Client help videos – Sole Trade
- Contact Us
- Making the most of your customers
- What Our Clients Say
- Why Choose Us?
- Accounting support and business help for Businesses
- Budget October 2018, Tax rates and allowances
- How we price our services
- About Us
- Bookkeeping Services
- Your 21st Century Advisors
- Business Growth Services
- Our Services
- Business Start-up Support
- Cloud Accounting