To the latest edition of Tax Tips & News, our monthly newsletter designed to bring you tax tips and news to keep you one step ahead.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
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.
Please contact us for advice in your own specific circumstances. We’re here to help!
New RTI Relief
Have you been struggling to send full payment summary (FPS) reports under RTI to HMRC on or before the days on which your employees are paid? This is particularly difficult when your workers receive irregular amounts of pay on varying dates. In such cases you may not know the amounts of wages and deductions to report until the workers have finished their shifts. – Click here to read more >>
Capital Allowances on Fixtures
There are a number of capital allowance claims firms targeting businesses which have recently bought or sold commercial property. These ‘experts’ suggest the business needs to pay for a special survey to claim all the capital allowances they are entitled to, and this must be done quickly in order to claim all the allowances due. – Click here to read more >>
The Government is cracking down on situations in which workers are treated as self-employed for tax purposes, and hence pay low amounts of NICs, but from the outside they appear to act as employees. The following changes in the tax law are proposed to block the use of ‘self-employed’ workers working through LLPs or who are hired-out through employment agencies. – Click here to read more >>
If your business supplies some goods or services which carry VAT, and other items which are exempt from VAT (such as charitable events and financing), the business is likely to be partly-exempt for VAT purposes. Being partly-exempt means you may not be able to reclaim all of the VAT on your purchases (input VAT). – Click here to read more >>
January Question and Answer Section
Q. I have four rental properties, and I have recently remortgaged one property to provide funds for my son’s education. Can I set the professional fees and charges connected with this re-mortgage against my letting income?
A. Normally fees connected with obtaining finance for a business (including a lettings business) are allowable against the profits of that business, but in this case you didn’t use thee additional funds for the purposes of the business, but extracted them for your own use. Therefore the fees and charges connected with the new mortgage can’t be set against your letting income.
Q.I’ve got into a muddle over childcare vouchers. When I started the voucher scheme in 2012 all my employees were taxed at 20%, so they all received vouchers worth £55 per week. Now some are paying tax at 40%, but they are still all getting the full amount of tax-free vouchers. What should I do?
A. As an employer you are required to review all your employees’ relevant earnings at the beginning of the tax year, and adjust the amount of tax free childcare vouchers for any employees who are expected to fall into the higher tax brackets. If at the time of that review it was not foreseen that some employees would be paying tax at 40% at some point later in the year, you are not required to adjust the amount of tax free childcare vouchers. The level of tax relief for the vouchers is set at the beginning of the tax year, or when the employee takes up employment with you in that year.
If your review of relevant earnings in April 2013 was incorrect, you may have given vouchers in excess of the tax free amount to some employees. In those cases the excess amounts should be reported on the P11D forms for those employees.
Q. All my employees are entitled to a bonus for exceeding performance targets in 2013, including those who left before the end of the year. How should I report the bonus due to the former employees to HMRC, and do I have to deduct tax?
A. Under RTI you need to set the ‘payment after leaving’ indicator on the full payment submission (FPS) that includes the bonus payment to your former employee. Also on that FPS use the same payroll ID for that person as applied while they were an employee, and show the date the employee actually left. The year to date figures on the FPS should include the bonus payment as well as the previous pay and deductions for the former employee. When paying the bonus to a former employee you need to use the PAYE code ‘OT’ on a month 1 basis to deduct tax and NICs.
January Key Tax Dates
1 – Due date for payment of Corporation Tax for the year ended 31 March 2013.
14 – Return and payment of CT61 tax due for quarter to 31 December 2013.
19/22 – PAYE/NIC and CIS deductions due for month to 5/1/2014 or quarter 3 of 2013/14 for small employers.
31 – Deadline for filing 2013 Self Assessment personal, partnership and trust Tax Returns – £100 first penalty for late filing even if no tax is due or tax due is paid on time.
Balancing self assessment payment due for 2012/13.
Capital gains tax payment due for 2012/13.
First self assessment payment on account due for 2013/14.
Interest accrues on all late payments.
Half yearly Class 2 NIC payment due.
Further penalty of 5% of tax due or £300, whichever is greater for personal still not filed for 2011/12.
5% penalty for late payment of tax unpaid for 2011/12 self assessment.