To July’s Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
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 all our clients don’t pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We’re here to help!
Expenses and Benefits Reporting
The deadline for submitting the annual returns of expenses and benefits (forms P11D and P9D) to HMRC is 6 July 2013.
The form P11D (P9D for those paid less than £8,500), is used to report the provision of benefits such as company cars or health cover to your employees, and to you where you are a director of your own company. Other benefits which may have to be reported include loans from the company to the employee/director, or the loan of assets such as a motorbike, boat or accommodation. – click here to read more >>
Research and Development Claims
Did you know there is a tax relief for companies which invent stuff? The process of inventing and solving the associated problems is called research and development (R&D). Companies can more than double the tax deduction given for the costs of R&D. – click here to read more >>
RTI Relaxation Extended
The temporary relaxation of the RTI reporting requirements for small employers has been extended to 5 April 2014. It was due to apply only until 5 October 2013.
Under RTI you are supposed to send a full payment submission (FPS) report to HMRC every time you pay employees, on or before the date of payment. This could mean sending a FPS every week, or even every day if you pay some casuals daily. – click here to read more >>
Machine Games Duty
If you run a pub or other establishment which contains gaming machines, you should have already registered to pay machine games duty (MGD), which replaced the amusement machine licence duty (AMLD) from 1 February 2013. – click here to read more >>
July Question and Answer Section
Q. My company provides website hosting for businesses based in the UK and in other countries. For VAT purposes is this treated as a sale of goods or services?
A. There is an easy rule of thumb to decide whether something is goods or services for VAT purposes: can you pick it up and hold it? Yes: goods, No: services. Website hosting can’t be physically picked-up therefore it’s a service. There are some complex VAT rules for selling services across international borders. You need to know whether your customer is in business or not. Broadly if the customer in another country is a business you do not charge VAT. We need to talk through the detail of what you declare on your invoice and what evidence to collect from your customer.
Q. I run my own consulting company in the UK, which pays my Brazilian wife a small wage for answering the phone and preparing marketing materials. Can the company pay for her to complete an advanced English course at the local college?
A. Training for any employee can be charged through the company if it is relevant to the employee’s duties or future duties. An ability to speak and write correct English is necessary for your business so the proposed English course is work-related training for your employee. Your company can pay for the course, and receive a tax deduction for that cost. There will be no benefit in kind charge for your wife. The company can also pay for travel to the course. You should list the duties your wife performs for the company, and both sign the document as part of her employment terms with the company. This description of her duties will justify the training cost, should the Taxman ever ask.
Q. I bought a 200 acre farm last year, where I will be raising rare-breed animals for the high-end restaurant market. I’ve incurred a lot of costs on fencing and equipment. Can I claim back the VAT on those costs? I’ve not registered for VAT yet, as my sales have been low so far. I understand there is a simple flat rate scheme I could use.
A. You can’t claim back VAT on your costs until your business is VAT registered. However, at VAT registration you can reclaim VAT paid on goods purchased in the four years before registration which are still held at registration date. VAT on pre-registration services can be reclaimed but only for services purchased in the 6 months before registration.
As your main product will be meat, which is zero rated for VAT purposes, you are likely to reclaim VAT every quarter, rather than paying VAT to HMRC. The flat rate scheme for small businesses is not suitable for businesses that regularly reclaim VAT. There is a flat rate scheme just for farmers, but it is very rarely used. We need to discuss the details of your proposed sales to see which VAT scheme may be suitable.
July Key Tax Dates
5 – Deadline for PAYE settlement agreement for 2012/13
6 – Deadline for 2012/13 forms P11Db, P11D and P9D to be submitted and copies of P11D and P9D to be issued to relevant employees
Deadline for employers to report share incentives for 2012/13 – form 42
14 – Return and Payment of CT61 tax due for quarter to 30 June 2013
19/22 – PAYE/NIC and CIS deductions due for month to 5/7/2013 or quarter 1 of 2013/14 for small employers Class 1A NIC due in respect of the tax year 2012/13
31 – Second self assessment payment on account due for 2012/13
Second 5% penalty surcharge on any 2011/12 outstanding tax due on 31 January 2013 still unpaid
Deadline for Tax Credits to finalise claims for 2012/13 and renew claims for 2013/14
Half yearly Class 2 NIC payment due
Penalty of 5% of tax due or £300, whichever is greater for 2011/12 personal still not filed