Welcome to our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
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We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.
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The Taxman now has the power to demand tax from you if you have used a registered tax avoidance scheme, or if he thinks the tax scheme you have used is similar to one that has been judged to fail by a Court or Tribunal. – click here to read more >>
Maximising Statutory Maternity Pay
Paying statutory maternity pay (SMP) is not optional. It must be paid if your employee qualifies, but the good news is that a small business can recover 103% of the SMP paid from HMRC. A business that pays less than £45,000 of class 1 NICs in one tax year is defined as “small” for this purpose. – click here to read more >>
If you invest through a firm of financial advisers, you may well receive a repayment of commission from that firm each year. In previous years any refunded commission was rolled into the earnings from your investments or set against charges, so you may not have been aware of it. However, from 6 April 2013 the financial adviser must deduct tax from any refunded commission and show the amounts paid and deducted separately on your annual statement . – click here to read more >>
EC Sales Lists
If your business is VAT registered and you sell goods or services into other European countries you must generally also submit an additional form to the Government called an EC Sales List (ESL also known as form VAT101). There are no payments to be made or reclaimed with the ESL, as you do on your quarterly VAT return form, but you must submit the ESL on time or HMRC will charge a penalty for late submission. – click here to read more >>
August Questions and Answers
Q. In July 2011 I sold a property which had been used for my business. I planned to reinvest the proceeds in another property, but that acquisition never happened. I know I should now pay Capital Gains Tax on the gain made in July 2011. How do I go about doing that?
A. The period in which you should have reinvested the proceeds ran out in July 2014, so you do need to pay the CGT due for 2011/12 unless you get the tax inspector to agree to extend the period for reinvestment. He will only agree to an extension if you were prevented from reinvesting by circumstances beyond your control.
The disposal made in July 2011 should have been reported on your 2011/12 tax return as part of your provisional claim for roll-over relief. You should now write to the tax office to withdraw that provisional claim and declare the full taxable gain. The tax will be payable immediately and interest will run from 31 January 2013.
Q. I work as a self-employed courier for a large courier company who operates self-billing for VAT purposes and pays me monthly. I have just registered for VAT which has been back-dated to 1 May 2014. What should I do to collect the VAT due for May, June and July?
A. You should ask your customer if it is acceptable for you to issue a VAT only invoice to them. Calculate the VAT due as if the total amounts you have received in May to July under self-billing are the net amount of your fees for the period. You should also supply your customer with a copy of your VAT registration certificate, so the company knows to add VAT to your self-billing invoices in the future.
Q. My personal service company is about take on an IT servicing contract in Belgium. The customer will pay me a rate for every day I attend their premises, on top of my fee for the whole contract. This ‘per diem’ rate is less than HMRC’s benchmark rate for expenses when working in Belgium. Can it be paid directly to me personally or should it be paid to my personal service company?
A. The ‘per diem’ rate should be paid to your company and be included in its turnover for VAT purposes, so treat it as a gross receipt including VAT. Your company can pay you expenses for working abroad, at or below the HMRC agreed benchmark rates. Do not short circuit this by accepting the per diem rate straight into your personal bank account as this will create a VAT mess.
August Key Tax Dates
2 – Last day for car change notifications in the quarter to 5 July – Use P46 Car
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/8/2014