2014 January | Exchange Accountancy Services

Archive for January, 2014

Small business rates relief

Thursday, January 30th, 2014

The following information is reproduced from the GOV.UK website where you can get more information on this topic if required.

You can get small business rate relief if:

What you get

Until 31 March 2015 you’ll get 100% relief (doubled from the usual rate of 50%) for properties with a rateable value of £6,000 or less. This means you won’t pay business rates on properties with a rateable value of £6,000 or less.

The rate of relief will gradually decrease from 100% to 0% for properties with a rateable value between £6,001 and £12,000.

You have more than one property

You could get small business rate relief if the rateable value of each of your other properties is less than £2,600.

The rateable values of the properties are added together and the relief applied to the main property.

Contact your local council to apply for small business rate relief.

You’re a small business but don’t qualify for relief

If your property has a rateable value below £18,000 (£25,500 in Greater London) you’re considered a small business.

Even if you don’t qualify for small business rate relief, your business rates will be calculated using the small business multiplier instead of the standard one. This is the case even if you have multiple properties.

The multiplier shows the percentage (pence in the pound) of the rateable value that you pay in business rates. A list of current multipliers is on the Valuation Office Agency (VOA) website.

Watch out for copycat sites

Tuesday, January 28th, 2014

There has considerable press commentary during the last few weeks about a “copy-cat” website taxreturngateway.

 If you Google tax return gateway you will still be directed to https://secure.taxreturngateway.com, it’s the top listing.

The site purports to act as a channel that allows you to file your return online. When you have finished the process you will be advised that you need to pay a nominated amount, between £150 and £1000, and seems to infer that this is due to an underpayment of tax.

 DO NOT under any circumstances use this website. Any monies paid are actually a fee for using the site and will not reduce any tax owing.

 If you still need to file your 2013 tax return online go to HMRC’s official website www.hmrc.gov.uk.

Follow the relevant link in the “Do it online” panel top left on the home page. There is no separate fee for using HMRC’s online filing service…

 Don’t forget that this is the last week you can file your 2013 return without penalty. The filing deadline is Friday 31 January 2014.

The demographics of late tax returns

Thursday, January 23rd, 2014

Readers will no doubt be aware that if you are required to file a self-assessment tax return for the tax year ending 5 April 2013, the filing deadline for electronic submission is 31 January 2014. At the time this blog posting was written that leaves you just 10 days to complete the formalities.

According to HMRC residents of inner London are they tardiest: 11% of those who were required to submit returns for the previous tax year had not done so by the filing deadlines. Taxpayers in outer London were slightly more punctual.

At the beginning of January almost 30% of all self-assessment tax returns were due to be filed. This represents approximately 3.5m returns. If the UK followed the London rates this would mean that over one million returns would not be filed before the 31 January cut-off date. One can’t help but speculate that HMRC may be ambivalent about this issue; after all for every return not filed by 31 January they receive at minimum a £100 fine from each defaulting tax payer.

If your return is still sitting in your top draw, gathering dust, this may be your last chance to complete the formalities – otherwise you will be contributing to George Osborne’s £100m windfall!

Bitcoins make waves

Tuesday, January 21st, 2014

The internet currency Bitcoins is drawing the attention of US regulators. Recently New York prosecutors confiscated $28 million of the e-currency from the Silk Road marketplace. The Bitcoins were taken because they were received as payments for illegal activities.

In the UK Bitcoins may be about to get an unexpected boost from HM Revenue & Customs.

At present Bitcoins are considered to be “vouchers” and the sale of Bitcoins is therefore subject to a VAT charge at 20% – this makes the wider use of Bitcoins in the UK largely unworkable. After consultations with users HMRC is considering an about turn. They would re-classify Bitcoins as a private currency. This means that VAT will only be chargeable on commission charged by Bitcoins sellers.

It is also likely that holders of Bitcoins would be subject to capital gains tax, although HMRC have indicated that they may provide an exemption for those who hang onto their Bitcoins for more than one year.

If the UK goes ahead with these changes it will be stealing a march on the US who still have no consistent guidance on the likely taxation, or otherwise, of Bitcoin trading.

What can you dispose of and not pay capital gains tax?

Thursday, January 16th, 2014

Believe it or not there are a number of assets that you can sell that do not trigger a capital gains tax (CGT) liability. The list, published on HMRC’s website is as follows:

  • Your car
  • Personal possessions worth up to £6,000 each, such as jewellery, paintings or antiques
  • Stocks and shares you hold in tax-free investment savings accounts, such as ISAs and PEPs
  • UK Government or 'gilt-edged' securities, for example, National Savings Certificates, Premium Bonds and loan stock issued by the Treasury
  • Betting, lottery or pools winnings
  • Personal injury compensation
  • Foreign currency you bought for your own or your family's personal use outside the UK

And, you can sell your private residence without capital gains tax complications as long as you have lived in the property for your entire period of ownership.

Certain gifts to certain registered charities may also be exempt.

If you would like an opinion about the CGT implications of a disposal you are about make, or have made, please call. 

Plan for progress

Tuesday, January 14th, 2014

We are now in the last quarter of the current tax year that ends 5 April 2014. If you are in business or pay income tax at the higher rates there is a strong argument that you should consider, and invest in, a tax planning review with your professional advisor.

 Why?

Shutting the stable door after the horse has bolted is a waste of time – it is like an acknowledgement that an action should have been taken earlier, and is now a futile re-enactment of something that no longer has value.

From a professionals perspective there is nothing quite as depressing as the realisation that a client is not going to benefit from a legitimate tax planning strategy and purely because information was not provided before a particular deadline – in the terms of this article, before 5 April 2014.

What sort of information should we be examining?

 If you are in business:

  1. Your current management accounts.
  2. Your plans for the coming year.
  3. Changes in tax legislation that will apply from 6 April 2014 and that will have an impact on your business: we now have published information about some of the significant tax changes for 2014-15.

 If you are a higher rate income tax payer:

  1. An estimate of your taxable income for 2013-14.
  2. An estimate of your taxable income for 2014-15.
  1. Changes in tax legislation that will apply from 6 April 2014 and that will have an impact on your personal tax liability.

So, if you have not considered these issues thus far, contact us now. We will need time to consider your particular circumstances. Please get in touch as soon as possible, certainly no later than the first week in February 2014.

Google to get �24m tax bill

Friday, January 10th, 2014

 It would seem that HMRC are making progress in their efforts to make larger concerns more responsible when paying tax.

Google have been criticised in the past for using complex arrangements to reduce their UK tax liabilities. Google have responded that they have only taken advantage of tax strategies that are legal – in effect Google are saying that if the law has created scenarios that were not intended by Parliament, then the law should be changed.

Recent press commentary has speculated that Google is about to be hit by a £24m tax demand. Apparently, Google’s UK staff in London are given shares by the US parent company as part of their remuneration package. In the past these share issues have been used to reduce Google’s UK tax bill.

HMRC, it would appear, are on the case. They seem to be clamping down on aggressive share schemes. Google have released the following comment:

“This is a matter the company is discussing with HMRC in an ongoing review initiated in 2010. The company has made a provision of £24 million for potential corporation tax for the years under review (2005-11).” 

HMRC publish oddest excuses

Wednesday, January 8th, 2014

As the rush to file outstanding 2013 tax returns gathers pace, HMRC have published ten of the “oddest” excuses for late filing of returns in previous years. Readers should note that none of the excuses were successful!

In no particular order they are:

1. My pet goldfish died (self-employed builder);

2. I had a run-in with a cow (Midlands farmer);

3. After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else (London woman);

4. My wife won’t give me my mail (self-employed trader);

5. My husband told me the deadline was 31 March, and I believed him (Leicester hairdresser);

6. I’ve been far too busy touring the country with my one-man play (Coventry writer);

7. My bad back means I can’t go upstairs. That’s where my tax return is (a working taxi driver);

8. I’ve been cruising round the world in my yacht, and only picking up post when I’m on dry land (South East man);

9. Our business doesn’t really do anything (Kent financial services firm); and

10. I’ve been too busy submitting my clients’ tax returns (London accountant).

HMRC’s director general of personal tax, Ruth Owen is quoted as saying:

 “There will always be unforeseen events that mean a taxpayer could not file their tax return on time. However, your pet goldfish passing away isn’t one of them. If you haven’t yet sent your 2012/13 tax return to HMRC, you need to do it online and pay the tax you owe by the end of January.

”With all the help and advice available, there’s no excuse not to.”

However, there are reasonable excuses that HMRC will accept. They include:

  • a failure in the HMRC computer system
  • your computer breaks down just before or during the preparation of your online return
  • a serious illness, disability or serious mental health condition has made you incapable of filing your tax return
  • you registered for HMRC Online Services but didn't get your Activation Code in time

According to HMRC a “reasonable excuse” is when some unforeseeable or unusual event beyond your control has prevented you from filing your return. It would seem that the death of a goldfish in the family is not unusual enough…

Tax Diary January/February 2014

Tuesday, January 7th, 2014

 1 January 2014 – Due date for Corporation Tax payable for the year ended 31 March 2013.

 19 January 2014 – PAYE and NIC deductions due for month ended 5 January 2014. (If you pay your tax electronically the due date is 22 January 2014.)

 19 January 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2014.

 19 January 2014 – CIS tax deducted for the month ended 5 January 2014 is payable by today.

 31 January 2014 – Last day to file 2013 Self Assessment tax returns online.

 31 January 2014 – Balance of self assessment tax owing for 2012-13 due to be settled today. Also first payment on account for 2013-14 due today.

 1 February 2014 – Due date for Corporation Tax payable for the year ended 30 April 2013.

 19 February 2014 – PAYE and NIC deductions due for month ended 5 February 2014. (If you pay your tax electronically the due date is 22 February 2014.)

 19 February 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2014.

 19 February 2014 – CIS tax deducted for the month ended 5 February 2014 is payable by today.

 1 March 2014 – Self Assessment tax for 2012/13 paid after this date will incur a 5% surcharge.

Tax office bogus emails

Tuesday, January 7th, 2014

Readers are reminded that HMRC do not send communications to tax payers by email. If you receive an email purporting to be from HMRC, it will be some sort of “scam” and should be ignored (deleted from your PC).
 

Do not under any circumstances open any attached files or disclose any personal information. Typically, the email will offer you a tax refund if you send your bank details, or some other inducement to part with similar information.
 

HMRC will either call you or send a letter if they need to communicate with you.