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March 2019 - Monthly News

PAYE, CIS and Student Loan Deductions Due For 5th March

This is relevant for any employers who have made PAYE deductions from the salaries of their employees. It also applies to contractors paying subcontractors under the CIS.

Payments are due from employers to HMRC for income tax,national insurance and student loan deductions, while contractors are to submit payments to HMRC of tax deductions from subcontractors under the CIS.

The deadline for electronic payments will be 22nd March, 2019

Interest will be charged for late payments and penalties may also apply.

Get Ready For the End of the Tax Year 2018/2019

The deadline of 5th April 2019 is important for anyone who hasn’t been thinking about end of the tax year planning issues, including:

● Making use of the annual capital gains tax exemption.
● Making use of the annua inheritance tax exemption for gifts.
● Making use of the Individual Savings Account (ISA) investment limit.
● Making additional contributions to a pension fund.

Vigilance Recommended for Households With Landlines

With the crackdown continuing on email and SMS phishing, criminals are increasingly turning to cold-calls to publicly available landline numbers to steal from unsuspecting taxpayers. Ofcom has reported that almost 26 million UK homes have a landline which could be vulnerable to scam calls.

Such criminals often concentrate their efforts upon the elderly and vulnerable. Often they purport to be calling from HMRC with the latter having received over 60,000 reports of scam calls in only the last 6 months leading to January 2019. Just to put that into context, this represents a surge of 360% in comparison to the preceding 6 months.

Mel Stride MP, Financial Secretary to the Treasury, has said:

“We have taken major steps to crack down on text and email phishing scams leaving fraudsters no choice but to try and con taxpayers over the phone.

“If you receive a suspicious call to your landline from someone purporting to be from HMRC which threatens legal action, to put you in jail, or payment using vouchers: hang up and report it to HMRC who can work to take them off the network.”

Pauline Smith, from Action Fraud, has said:

“Fraudsters will call your landline claiming to be from reputable organisations such as HMRC. Contact like this is designed to convince you to hand over valuable personal details or your money.

“Don't assume anyone who calls you is who they say they are. If a person calls and asks you to make a payment, log in to an online account or offers you a deal, be cautious and seek advice.

“The tax authority will only ever call you asking for payment on a debt that you are already aware of, either having received a letter about it, or after you've told us you owe some tax, for example through a Self Assessment return.”

The past year has seen Ofcom and phone networks close almost 450 lines used by criminals in this way.

An Update For Employers

The latest Employer Bulletin update from HMRC, issued in February, included articles that raised important points. Amongst these were:

● Student Loan notices, and a new type of Student Loan repayment needed by employers to process via payroll
● Reporting expenses and benefits
● Updates to the Starter checklist for new employees
● Updates to P9 Notices of Coding
● Scottish Income Tax
● Welsh Rate of Income Tax and new codes for Welsh taxpayers.

Making the Most of the Tax Year for Investments

The end of the tax year is almost upon us, but there is still time to make a savvy investment to take advantage of 2018/2019 tax breaks.

Don’t forget to use as much of your ISA allowance as you can. Your ISA is a great way to save without paying any tax. Use the £20,000 annual limit for savings, a nest egg, a first home, etc. You have until 5 April to make a 2018/2019 investment.

The annual allowance (AA) for pensions generally offers £40,000 as a maximum for pension contributions for which you can still benefit from tax relief. Don’t forget that you may have a few years worth of unused AA that you can use in 2018/2019.

Rising Auto Enrolment Pensions Contributions

Employers and employees are being contacted by the Pensions Regulator to remind them that 6 April 2019 will see the minimum pension contribution rise as follows:

Duration

Employer Minimum (%)

Total minimum contribution (%)

Current Contributions

2

5

Contributions from 6 April

3

8

Increases to the Minimum Wage

Employers can incur penalties if they do not adhere to the rules for National Minimum Wage (NMW) and National Living Wage (NLW) which are due to increase from 1 April. Different people are eligible for different levels of NMW and NLW, depending on circumstances, as explained in this table. The size of a business has no bearing on the level of NMW or NLW due to the employee.

 

Until 31 March

From 1 April

NLW for workers aged 25 and over

7.83

8.21

NMW main rate for workers aged 21-24

7.38

7.70

NMW 18-20 rate

5.90

6.15

NMW 16-17 rate for workers above school leaving age but under 18

4.20

4.35

NMW apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship

3.70

3.90


2019/2020 Scottish Income Tax Bands

New income tax bands will come into effect for Scottish taxpayers for 2019/2020, as was announced in the Draft Scottish Budget in December 2018. The new rates and bands will be as below:

Scottish Bands (£)

Band Name

Scottish Rate (%)

0 - 2,049

Starter

19

2,050 - 12,444

Basic

20

12,445 - 30,930

Intermediate

21

30,931 - 150,000

Higher

41

Over 150,000

Top

46

Company Car Advisory Fuel Rates

New company car advisory fuel rates have taken effect from 1 March. As per the guidance: “You can use the previous rates for up to one month from the date the new rates apply...” Please note that the following figures are only for employees using a company car.

Engine size

Petrol

1400cc or less

11p

1401cc - 2000cc

14p

Over 2000cc

21p

Engine size

Petrol

1400cc or less

7p

1401cc - 2000cc

8p

Over 2000cc

13p

Engine size

Petrol

1600cc or less

10p

1601cc - 2000cc

11p

Over 2000cc

13p

Please note that these rates apply in the following conditions:

1. When reimbursing employees for travel undertaken in company cars for business, or
2. When requiring employees to reimburse the employer for fuel used in private travel.

The rates do not apply in any other situation. For my on this, please see the official HMRC guidance.

Start Date for Making Tax Digital for VAT Is On The Horizon

It has been confirmed that there shall be no further delays in rolling out Making Tax Digital (MTD) for businesses. The news came from Mel Stride, Financial Secretary to the Treasury, as he made his statement to the House of Commons.

For most businesses the start date is due to be either on or after 1 April of this year, however there shall be an opportunity for “more complex” businesses to defer their start date until as later as 1 October 2019.

HMRC Advice: Prepare for No Deal Brexit

Businesses are being urged by HMRC to have a contingency plan ready in case a no deal Brexit really does come to pass. Preparing now will at least ensure that business can continue to trade with the EU in the event of the UK leaving the EU without a deal.

HMRC’s advice:

1. Registering for an Economic Operator and Registration Identification (EORI) number will allow businesses to continue trading with the EU. At the moment only 17% of relevant businesses have an EORI number.
2. Each affected business should choose how they will make their customs declarations. Most choose to use a customs agent for this.
3. According to HMRC, registering for new Transitional Simplified Procedures (TSP) “will allow businesses to import without having to make a full customs declaration at the border, and postpone paying any import duties. For imports using other locations, and for exports, standard customs declarations will apply.” This is of particular use to businesses using roll on, roll off locations to import goods into the UK from the EU.

Mel Stride MP, Financial Secretary to the Treasury, has said:

“We want businesses to be able to continue trading with minimal disruption in any scenario but we also know that people tend to leave things until the last minute and we would urge against that.”

Spring Statement 2019

As Brexit rumbles on the typical business of the country and government also continues. 13 March saw Chancellor Philip Hammond present the latest Spring Statement.

The Chancellor used his speech to update the country on the economy. He also responded gave his take on the Office for Budget Responsibility forecasts. His speech also saw him launching new consultations and update the country on earlier ones too.

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GDPR And You: The Accountant’s Perspective

gdpr data protection able accountantsDespite what you may think, GDPR is not the responsibility of just the IT department. It also has something to do with you and every department that takes in any personal info from individuals. It doesn’t matter whether it is payment info or contact info for marketing, GDPR applies and it applies for every department

As an accountant you will have access to either client records or customer records that were previously protected by the Data Protection Act of 1988 but, as of 25th of May last year, is now protected by the General Data Protection Regulation (GDPR).
What does GDPR mean for you?

Here’s a quick-fire run through of how things will change for you.

The larger your organisation the more data your systems will have to process. Depending on how much data it has to process, or whether it is a public authority, a Data Protection Officer may be necessary.

A data privacy impact assessment may be needed if your organisation works with particularly sensitive data.

What Do You BNeed to be Doing?

● Your organisation needs to be able to evidence that all contact data is being lawfully processed. Documentation is necessary to prove “lawful processing”.

● What is “lawful processing”? This means one of two things. Either direct consent, or what is necessary to fulfil a contract. Consent is what you’ll be dealing with most of the time.

● Consent is not taken for granted to mean consent for everything. Instead it is granular, meaning individuals have the opportunity to opt in and out of particular things.

● Fresh consent will be needed for any existing data, if there is no evidence that consent was granted in the first place.

● Pre-checked boxes are no longer allowed on webforms.

The Rights of Individuals

● GDPR offers individuals more rights than under the Data Protection Act.

● One of their rights is to be able to access their data and have it corrected.

● Amongst new rights is the right to be forgotten and the right to have their data directed elsewhere, as well as the right to have automated profiling using their data restricted.

What About Your Company Policies?

● The journey that data takes, as it comes in from individuals and makes its way around your company, should be mapped and understood so you can identify how permission was obtained.

● Update your internal data protection policy to incorporate everything discussed above.

● Make sure your internal data protection policy includes details on identifying data breaches, reporting and how they should be investigated.

● How about the cookie policy? Ensure that any unique identifiers are included.

● Be sure to update consent notices and your privacy policy and make sure everyone adheres to them.

What Else Can I Do?

Set up a group of relevant officers within your organisation to ensure that the accounting concerns are also represented within any audits and data mapping processes. Make sure you are up to date with all the changes occurring within your organisation and understand how those changes in data policy can affect how you manage the data as it filters through your department.

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February 2019 - Monthly News

PAYE, Student loan and CIS deductions for February, 2019.

Don’t forget to keep to the deadline of 5th February if you’re an employer who has made PAYE deductions from the salaries of your employees. It’s also relevant if you are a contractor who has paid subcontractors under the CIS.

For employers it is necessary to pay the appropriate amount of income tax, national insurance and student loan deductions to the HMRC. The HMRC should also receive from contractors the correct tax deductions from subcontractors under the CIS.

The deadline for regular payments is 5th February, but a deadline of 22nd February applies for funds to be cleared if the payment is made electronically. Any late payments will be subject to interest and penalties may also apply.

Protecting Pension Pots

Individuals have been urged by the Insolvency Service to protect their pension pots and avoid having them emptied by criminals and negligent trustees.

The service has discovered that a range of tactics are used by criminals to persuade those saving for their pensions to give up their savings by investing in unregulated schemes.

The Financial Conduct Authority (FCA) has stated that an average of £91,000 was lost to criminal activity in 2018. Cold calls and offers of pension advice are used by criminals to gain trust and persuade victims to give up their money.

Savers are urged to be suspicious of unsolicited calls and are asked to see a professional for financial advice before making any changes to their pension, or making any investments. Do not be pressured into making any rash decisions.

Consumer Minister Kelly Tolhurst has said:

“If you are approached to make an investment from your pension, always do your homework and seek independent advice, if necessary, to help you make an informed decision.

“The government continues to work closely with the Insolvency Service who are working to clamp down on rogue companies targeting vulnerable people.”

The “Unbelievable Excuses” to File Tax Returns Late

HMRC has published some of the excuses used by taxpayers to explain their late filings. Here are a few to give you a chuckle:

● Being too short to reach the post box.
● A broken boiler meaning a taxpayer’s fingers were too cold to type.
● Junior member of staff forgetting to wear glasses and accidentally registered a taxpayer for self assessment.
● A witch’s curse preventing a taxpaxer from filing a tax return.

Some of the more outlandish claims made include:

● £40 for “extra woolly underwear”
● £756 for pet insurance
● Meanwhile, a carpenter attempted to claim £900 for a 55” TV and sound bar, which he claimed would “help him price his jobs”.

HMRC Director General of Customer Services, Angela MacDonald, said:

“Help will always be provided for those who have a genuine excuse for not submitting their return on time, but it's unfair to the majority of honest taxpayers when others make bogus claims.”

Spring Statement: 13th March 2019

The forecast from the Office for Budget Responsibility (OBR) will be addressed by Chancellor of the Exchequer, Philip Hammond, in the Spring Statement on Wednesday 13th March, 2019.

He might also use the Spring Statement to reveal any tax changes and consultations.

Making Tax Digital For VAT Pilot Rolled Out For All Relevant Businesses

The pilot scheme Making Tax Digital for VAT is mandated for VAT return periods beginning on or after 1st April 2019, but more complex businesses have had theirs deferred until 1st October 2019. This applies to

● Trusts
● Non-profits
● Public sector entities
● Local authorities
● Public corporations
● Traders based overseas

Clare Sheehan, Deputy Director for MTD for Business, has said:

“The MTD pilot is now available to all businesses who will need to use the service from April. This marks a significant milestone towards our delivery of a modern tax administration.

“We encourage all eligible businesses to join and try out the service before they are mandated to use it.”

Separately, Jim Harra, Deputy Chief Executive of HMRC, has confirmed that Brexit will not impact MTDfV. He has written:

“Our system is already live and by the end of February we'll have written to every affected business, encouraging them to join the thousands of others who have registered.”

Post-Brexit Customs Declarations

VAT-registered UK businesses are being urged by HMRC to prepare for a no-deal Brexit. 145,000 letters have been sent out to relevant businesses, that trade exclusively with the EU, explaining Customs, Excise and VAT procedure changes that may occur if the UK leaves the EU without a Brexit deal in place.

According to the HMRC there are three steps to take ahead of the deadline date of 29th March 2019:

1. Register for a UK Economic Operator Registration and Identification (EORI) number.
2. Decide how export declarations will be made: customs agent, or via software.
3. Find out whether the organisation transporting the goods will need additional information for safety and security declarations.

At the moment roughly 55 million customs declarations are made by UK businesses each year, but this may rise to 255 million after Brexit.

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The Stats Behind Valentine's Day

valentines day stats able accountantsYes, Valentine’s Day is that time of year when we try to make an extra connection with the ones we love, or the ones we hope will love us, but what are the facts and figures behind this day? How much money does this Valentine’s Day actually generate each year and is it rising? How do we spend our money?

It goes without saying that the days of our better halves being satisfied with a card and some petrol station flowers are long gone. That was the simpler Valentine’s Day of yesteryear. The modern Valentine’s Day demands intricate planning and lots of surprises that tantalise the senses.

Stick with us and let’s go through some Valentine’s Day spending trivia that you should definitely share around.

Would it surprise you to learn that the average man spends £40 on Valentine’s Day, while women spend £24? While the average may be £40, one in ten men will spend more than £75 on their partners. Is that you? Men are also three times as likely as women to be spending larger amounts of more than £201.

Jewellery shops report that their sales peak around the 8th of February, while lingerie purchases double in the days leading to the big day.

How about different groups? Well, those aged between 25 and 34 will spend the most with an average of £33. The Scottish are the thriftiest of V-Day spenders, averaging £26. That might not sound particularly romantic, but people in Wales and the South West of England are least likely to celebrate Valentine’s Day at all! The people of London are the keenest when it comes to celebrating Valentine’s Day with 23.1% making the effort. Those in the East Midlands are not far behind with 22.5% celebrating the day.

In the US our cousins across the pond spend a stunning $231,000,000, on just their pets, while 15% of US women end up sending flowers to themselves!

In the UK most of us do choose to spend our money on each other, but we also spend on our pets with 4.5% of us spending on our dogs. However, cats aren’t so lucky as only 3% of us spend on our feline friends. This adds up to 3.1 million of the British population spending money on pets on Valentine’s Day. It isn’t news that Millennials are very keen on their pets and they are predictably the most likely to spend money on their pets for Valentine’s Day with 8.7% of them spending some money on their furry friends.

Women are significantly more likely than men to spend money on their children for Valentine’s Day, but they are also keener to treat themselves on Valentine’s Day. 2.5% of women treat themselves on Valentine’s Day while only 1.7% of men do the same.

However you choose to spend Valentine’s Day this year, and whomever you choose to spend your money on, have a great one and take the opportunity to let someone know that you think the world of them.

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January 2019 - Monthly News

What would we not give to know the future? Well you’re in luck as you don’t need to give up anything to know what will be coming up in January. Here’s the latest rundown of the accounting events that you can expect to come across in the following months.

Income Tax Changes Following Scottish Budget

Wednesday 12th December saw Finance Secretary Derek Mackay delivering his 2019/2020 Scottish Draft Budget, after Chancellor of the Exchequer Philip Hammond’s UK Budget.

As you’ll know, the Scottish government enjoys devolved powers. This means they can set their own rates and bands of income tax for Scottish resident taxpayers. The new rates and bands will be considered by the Scottish Parliament before they come to an agreement about the Scottish Rate Resolution that will determine the rates and bands for 2019 and 2020. Here is how the figures are at the moment:

2018/19

2019/20

Band Name

Rate

Over £11,850 - £13,850

Over £12,500 - £14,549

Starter

19%

Over £13,850 - £24,000

Over £14,549 - £24,944

Scottish Basic

20%

Over £24,000 - £43,430

Over £24,944 - £43,430

Intermediate

21%

Over £43,430 - £150,000

Over £43,430 - £150,000

Higher

41%

Over £150,000

Over £150,000

Top

46%

Personal allowances are currently set to £11,850 for 2018/2019, but the personal allowance limit will be £12,500 for 2019/2020. The higher rate tax point for the UK in 2019/2020 is set at £50,000.

Changes to the Property Taxes Following Scottish Budget

Derek Mackay announced, in the Scottish Draft Budget of 2019/2020, that there would be changes coming to Scottish Land and Buildings Transaction Tax (LBTT). The primary LBTT concern remains to assist first-time buyers, and others, in navigating the property market. LBTT helps over 80% of taxpayers by making sure they pay less tax than in England. Here are the rates and bands as they are now:

Residential property

Rate

0 - £145,000

0%

£145,001 - £250,000

2%

£250,001 - £325,000

5%

£325,001 - £750,000

10%

£750,001 and over

12%

First-Time Buyers

For first-time buyers of properties up to £175,000 in value, there is relief that in the form of a zero tax threshold. This threshold applies for buyers purchasing a property between £145,000 and £175,000 in value. Benefits also exist for those buying a property over £175,000.

Additional Residential Properties

Certain residential properties are subject to higher rates of LBTT. These include buy to let properties and additional homes that are particularly subject to higher rates. If an individual owns two, or more than two, residential properties the Additional Dwelling Supplement (ADS) may apply. ADS is due to increase from 3% to 4% from January 25th, 2019.

Non-Residential Rate and Band Changes

The lower non-residential rate of LBTT is due to decrease from 3% to 1%, while the upper rate is due to go up from 4.5% to 5%. The starting threshold of the upper rate is due to decrease from £350,000 to £250,000. These changes are due to come into effect from 25th January. The rate and band changes are as follows:

Non-Residential Transactions

Purchase price

Rate

Up to £150,000

0%

£150,001 - £250,000

1%

Over £250,000

5%

Non-Residential Leases

Net present value of rent payable

Rate

Up to £150,000

0%

Over £150,000

1%

Reminder for Tax Deductible Expenses for Employees

HMRC is keen to remind employees to submit paperwork to claim tax rebates on any work related expenses. It is estimated that the employees eligible for such a rebate number in the millions. This is particularly relevant to those in the service industry. Nurses, those working in construction, as well as employees in the food and retail industries, could all claim tax rebates.

Many working in the above sectors have to pay for work-related mileage, uniforms, and tools. Individuals may be eligible to submit for a tax refund and claim extra cash, and they are advised to visit www.gov.uk to make the necessary checks.

Increases to the Pension Contribution

From 6th April, 2019, contributions to the workplace pension will increase to 8% and The Pensions Regulator (TPR) is kee to remind everyone.

Employers will be contributing 3% of the amount, at least. TPR is contacting employers to remind them and there is further information about the changes on their website.

It’s important for employers to check that the changes are reflected with their payroll software provider and pension provider. This will make certain that the changes are in place ahead of April 6th.

Deliberate Tax Defaulters

The list of deliberate tax defaulters has been updated by HMRC. Those deemed deliberate tax defaulters are those who have received penalties for:

● Deliberate tax return errors
● Deliberate failure to make good on their tax obligations

HMRC has the right to publish such information when an investigation has been conducted and led to the taxpayer being charged a penalty for deliberate defaults on tax of over £25,000.

Self Assessment Deadline

Don’t forget that the deadline for the 2017/2018 self assessment tax return is January 31st, 2019. This deadline does not only apply to tax returns, but also applies to payments due to HMRC and Classes 2 and 4 National Insurance Contributions (NIC), as well as capital gains tax and High Income Child Benefit Charge responsibilities.

The penalty stands at £100 for a late tax return, even if there is no tax due, or if a refund is due.

Balances on outstanding income tax, NIC, capital gains tax and High Income Child Benefit Charge for year ending 5th April, 2018, is also due by 31st January, 2019. Interest will be charged on any late payments.

First payments for income tax, class 4 NIC, or High Income Child Benefit Charge, on the are also due by 31st January, 2019.

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