Welcome to 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 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.
We’re here to help!
Creating Extra Cash-flow
Could your creative company benefit from a boost to its cash flow? If it produces computer games, films, high-end TV or animation programmes, it may qualify for a new payable tax credit. – read more >>
Understanding the CIS
If you are a contractor in the construction industry it is essential that you deduct the right amount of Construction Industry Scheme (CIS) tax from payments you make to subcontractors. – read more >>
VAT on International Services
When you sell services to businesses in other countries, the sale will generally be outside the scope of UK VAT. You don’t charge VAT on your invoice, but you need to report the value of that sale as part of the total in box 6 on your VAT return. – read more >>
The Scottish people have spoken and the majority have decided they want Scotland to remain part of the UK. However, that doesn’t mean everything will remain the same. We already know there will be two new taxes in Scotland from 1 April 2015, and a variation to income tax rates for Scottish taxpayers from 6 April 2016. – read more >>
The Majority Of Smaller Businesses Are Still Struggling To Get To Grips With Workplace Pensions And Auto-Enrolment.
Ask any accountant what issue causes the most concern amongst his or her clients, and the chances are the answer will be workplace pensions. Pensions have always been problematic, even back in the good old days when the only choices facing workers were either joining a final salary pension scheme, or taking out a personal pension. – read more >>
HMRC Urges Self-Employed Contractors To Get Expert Accountancy Advice To Review Their Working Arrangements.
Are you a self-employed contractor? Do you frequently get work through the services of an agency? If the answer to either of these questions is yes, then you should be aware that HM Revenues and Customs is stepping up its tax crackdown on construction workers. Over the course of the previous financial year HMRC increased tax revenues in the sector by almost 55 per cent, from £78.9 million to £122 million. – read more >>
Crowdfunding: Is This The Answer For SMEs Who Can’t Get A Bank Loan?
What is the biggest problem facing Start-Up businesses? Well, ask any accountant and they’ll tell that the answer to that is getting access to funding, or more specifically traditional bank lending. So what’s the problem? – read more >>
October Questions and Answers
Q. My consulting company holds a significant amount of cash and I would like it to buy a piece of artwork as an investment, what are the tax implications?
A. If the artwork is kept at your home there will be a taxable benefit in kind, which needs to be declared on the annual form P11D.
Say the artwork cost £30,000:
You will pay income tax on 20% x £30,000 = £6,000 at your marginal rate, each year. The company must also pay class 1A NICs of 13.8% x £6,000 = £828 per year.
If the artwork is to be kept in a bank vault as a pure investment, there won’t be a benefit in kind charge for you. However, the business must pay the insurance and storage costs, for which there will be no tax deduction. There is also no tax deduction for the cost of buying the artwork as it is not an item used for the business.
If the company closes, any creditors will be able to access the value of that art, just as if it was cash. If the business is solvent when it closes holding significant investments, it may not qualify for entrepreneurs’ relief, which would otherwise reduce the tax you pay on any gain made on the liquidated asset of the company down to 10%.
Q. I am currently aged 57 and while I have been out of the country, I have paid voluntary national insurance contributions to allow me to qualify for the state pension. I recently asked the Pensions Service whether I need to carry on paying voluntary NICs but I’m very confused about the answer. Do I need 10, 30 or 35 qualifying years, to get the full state pension?
A. The rules for qualifying for the State Pension will change for anyone who reaches state pension age after 5 April 2016, so that includes you. A person currently needs 30 years of NICs to achieve full entitlement to the state pension, but that is to increase to 35 years for people who reach state pension age from April 2016. You will need a minimum of 10 qualifying years to get any of the new state pension, which will be paid at a flat rate.
Q. How can I easily calculate a total amount to claim for the self-employed business I run from my home, for example the total amount of usage for rent, gas, insurance, council tax, internet usage and broadband?
A. There is an easy way to calculate the deductible amount of your home expenses, you simply record how many hours you work at home each month and claim the appropriate flat rate:
- Working 25 to 50 hours at home allows a £10 claim for the month
- Working 51 to 100 hours at home allows a £18 claim for the month
- Working 101 or more hours at home allows a £26 claim for the month
This rate covers the cost of power, telephone, internet access, but it doesn’t cover council tax, insurance, rent or mortgage interest. Those other costs should be apportioned according to the space you use for your business in the property, and how many hours you use that space. We can help you with the calculation.
October Key Tax Dates
1 – Due date for payment of Corporation Tax for the year ended 31 December 2013
5 – If a Tax Return has not been received, individuals and trustees must notify HMRC of new sources of income and chargeability in 2013/14
14 – Return and payment of CT61 tax due for quarter to 30 September 2014
19 – Tax and Class 1B national insurance due on PAYE settlements for 2013/14
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/10/2014 or quarter 2 of 2014/15 for small employers
31 – Deadline for 2013/14 self-assessment paper returns to be filed for HMRC to do the tax calculation. If a paper return is being filed also the deadline for tax underpaid to be collected by adjustment to your 2015/16 PAYE code (for underpayments of up to £3000 only)
Please contact us if we can help you with these or any other tax or accounts matters.
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