Archive for January, 2015

Work out your tax position sooner rather than later

Tuesday, January 6th, 2015

If you are required to file a Self Assessment tax return there are compelling arguments to support the notion that you should calculate your tax position as soon as you can after the 5 April. Don’t forget, it is possible to work out your tax position for 2014-15 and consider your planning options before you file the return. Certainly, we can undertake this for you.

 By the end of May or early June 2015 you should be able to draw together most of the information you need to complete your return for 2014-15.

 Here are three reasons why you should seriously consider this early-bird approach, and there are many more:

  1. You will be aware of any underpayment of tax to 5 April 2015, and more importantly, how you will fund the payment that will become due on or before 31 January 2016.
  2. If your tax arrears include Income Tax at the higher rates, you may want to consider making a charitable donation before you file your 2015 return. It is possible to carry back charitable donations made after the 5 April 2015 as long as you make the claim before you file. Knowing your tax position at an early date will give you an opportunity to consider this option.
  3. If you have overpaid tax for 2014-15 why leave it in the Treasury’s bank account? Getting the job done as soon as you can, after 5 April 2015, should ensure your refund is quickly received.

Planning your business year end

Tuesday, January 6th, 2015

Most of the tax planning that can be employed to reduce your business tax liabilities need to be considered and implemented prior to your year end date.

If you are in business, you should consider at least one planning meeting with your professional advisor before the end of the tax year. This should be a priority.

Here’s why:

  1. You may make an ill-considered judgement to make, or refrain from making, the purchase of equipment or vehicles without considering the tax effects. As there are significant investment allowances available, appropriate action can result in cash flow advantages – securing tax relief sooner rather than later.
  2. In a similar vein, there is still an opportunity to maximise tax relief by considering the timing of significant overhead payments that are not reccurring – for example, repairs to plant or buildings or significant training costs. Should you commit before or after the tax year end?
  3. If you operate your business as a limited company have you ensured that you have sufficient post tax profits, for the current year and brought forward, to cover dividend payments to shareholders?
  4. Again, in a company environment, are directors’ loan accounts overdrawn? Can this be rectified before the end of the trading year? What are the personal and Corporate Tax consequences?

For many of our business clients this pre-year end planning is the norm – an essential part of our service. If you would like to organise your planning session please call and make an appointment; once your trading year end, or the tax year end passes, opportunities to save tax may be lost.

What are your business and tax online filing obligations

Monday, January 5th, 2015

We though you would be interested to know what your legal obligations are to file information online.

 Limited companies

All companies are required to file a corporation tax return together with an electronic copy of the statutory accounts to H M Revenue & Customs. The returns have to be filed online, generally within 12 months of the end of your accounting period for corporation tax purposes. Penalties will be charged if you miss the filing deadline.

Additionally, companies need to file an annual return and a further copy of the annual accounts with Companies House. At present the requirement to file online is optional although filing fees are reduced in some circumstances if you do file online. Penalties may apply if you miss the relevant filing deadline.

 Self-employed business owners

If you are a sole trader or in partnership you are required to prepare and submit a personal self-assessment tax return. (If you are in partnership the business and partners will all have to file returns.) Self-assessment returns can still be filed as a paper version but you get an additional 3 months to file return if you file electronically. For example the paper version of the 2013 return has to be filed by 31 October 2013; the deadline for filing the same return online is 31 January 2014.

 In both cases penalties will be charged if you miss the filing deadline.

 Business owners with employees

 Employers are required to provide details of the amounts and deductions from their employees' wages and salaries when they are paid. This Real Time Information process replaced the need for annual filing of payroll data from 6 April 2013, for smaller businesses, and for all employers by October 2013.

 The information has to be filed electronically in the majority of cases and most payroll software providers allow for this. Penalties will be applied if you are late in submitting the data to HMRC.

 Building contractors and sub-contractors

 At present there is no requirement to file Construction Industry returns online. Contractors have the option to send in paper returns or file electronically.

 It is probably easier and more certain to meet filing deadlines by using software or HMRCs CIS Online facility. Penalties for late submission of monthly and other returns apply.

 VAT registered business owners

 All VAT registered businesses are legally obliged to submit their VAT returns online and pay any VAT due electronically. Only a few traders are exempt from this requirement.

 Penalties and interest apply if you are late filing or paying your returns.

 Pension scheme administrators

 Administrators of pension schemes must use Pension Schemes Online service to:

  • register a pension scheme
  • change the scheme administrator for a pension scheme – notifying that you're no longer the Scheme administrator or making the administrator's declaration and telling HMRC you're a new Scheme administrator
  • submit an Event Report
  • submit a Registered Pension Scheme Return
  • submit an Accounting for Tax (AFT) Return – including making an amendment to a previously submitted AFT Return.


Excise Movement and Control System

 Since January 2011 all intra-UK duty suspended movements of goods are tracked online. The EMCS process allows real time notification of despatch and receipt of duty suspended excise goods to HM Revenue & Customs.

 Customers in EU

 You will need to complete and file an EC Sales List (ESL) showing each of your customers in the EU and the £ value of the supplies you've made to them. You must make a separate entry for each type of supply to each customer.

 There is no minimum amount you must list every supply, no matter how small. If you haven't made any supplies (or issued any credit notes) in the reporting period, you should not submit an ESL and the Online service will not allow you to submit a nil declaration.

 In summary

 If you are a client and we are instructed you will be pleased to know that we meet these obligations on your behalf. If you are not a client, and would like a quote to outsource this work, please call…