2014 September | Exchange Accountancy Services

Archive for September, 2014

Tax Diary October/November 2014

Monday, September 29th, 2014

 1 October 2014 – Due date for Corporation Tax due for the year ended 31 December 2013.

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

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

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

 31 October 2014 – Latest date you can file a paper version of your 2014 Self Assessment tax return.

 1 November 2014 – Due date for Corporation Tax due for the year ended 31 January 2014.

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

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

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

 

Autumn statement 2014

Monday, September 29th, 2014

HM Treasury has announced that this year’s Autumn Statement will be made on 3 December 2014. Historically, this has been used to showcase the Government’s expected tax changes in the following year’s finance act.

If you have any suggestions the Government is seeking your views on what you would like to see in the Statement. According to the GOV.UK website:

“In the interest of open and transparent policy-making, the Government welcomes original and innovative ideas, which will be considered by HM Treasury as part of the policy-making process.

Business, charities and members of the public can submit these views via email to autumnstatementrepresentations@hmtreasury.gsi.gov.uk

For information on the correct procedure for submitting your representation, please view the guidance.

To allow for full consideration in advance of the Autumn Statement, any submission should be sent to HM Treasury by 17 October.”

The clock is ticking!

Business rates relief

Monday, September 29th, 2014

There are a number of reliefs available to owners or tenants of smaller business premises. This article lists a number that can be claimed.

Small business rate relief:

You’ll get 100% relief (doubled from the usual rate of 50%) until 31 March 2015 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

Retail relief:

Some local councils will give you up to £1,000 off your business rates if you occupy a retail property with a rateable value of £50,000 or less. To be eligible the property must mainly be used as a shop, restaurant, cafe or drinking establishment.

You’re usually not eligible if your business provides financial services, medical services or professional services like legal advice or accounting.

Empty properties re-occupation relief

 You may get 50% off your business rates if you start occupying a retail premises that’s been empty for one year or more.

Rural rate relief:

 You may qualify for the rural rate relief if your business is in a rural area with a population below 3,000. The relief is between 50% and 100% off your business rates.

 You can get rural rate relief if your business is:

  • the only village shop or post office with a rateable value of up to £8,500
  • the only public house or petrol station with a rateable value of up to £12,500

 Local councils can also:

  • top up the mandatory 50% relief to 100%
  • give relief to other rural retail businesses of up to 100% (for properties with a rateable value under £16,500)

 The availability of the various reliefs will depend where you business is based. If you think you may qualify for any of the rates relief discuss your options with your local council.

HMRC delays RTI penalties

Monday, September 29th, 2014

From 6 October 2014, HMRC was due to include smaller employers in the penalty regime for late filing of Real Time Information (RTI) payroll returns for 2014-15.

HMRC have announced that this penalty process will be delayed for a number of smaller employers.

They will now start from:

  • 6 October 2014 for employers with 50 or more employees
  • 6 March 2015 for employers with fewer than 50 employees

The size of the late filing penalties depends on the number of employees within the PAYE scheme.

 

Number of employees

      Penalty per PAYE scheme

1 to 9

£100

10 to 49

£200

50 to 249

£300

250 or more

£400

HMRC will use the latest information available to determine the number of employees, and the size of the filing penalty for each period where a return is late.

Wear & Tear Allowance (WTA)

Monday, September 29th, 2014

If a property is let furnished – with sufficient furniture, furnishings and equipment for normal residential use – landlords can only claim tax relief for the furniture and equipment by way of the WTA. Prior to April 2013, landlords had the option of claiming the cost of replacement furniture instead.

 The WTA is calculated as 10% of the gross rents less any tenant’s costs (e.g. water rates and council tax) met by the landlord.

WTA does not cover repairs, which continue to be tax deductible. The question is then raised can replacement of an item be counted as a repair? In this respect, landlords that let furnished property need to distinguish between:

  1. Replacement of items that are integral to the building, and
  2. Replacement of items that are not integral to the building.

 Needless to say there are grey areas!

 Replacement of items that are integral to the building

 Fixtures integral to the building are those that are not normally removed by either tenant or owner if the property is vacated or sold. Examples include:

  • Baths
  • Washbasins
  • Toilets
  • Immersion heaters
  • Fitted kitchens and fitted white goods.

This list is not intended to be complete but gives an idea of the assets that are integral to the building and fall outside the wear and tear allowance. As these items are integral to the building, the cost of replacing these items is normally an allowable expense as a repair to the building.

 Replacement of items that are not integral to the building.

 Expenditure of this type will be covered by the WTA. Examples given on HMRC’s website in this category include:

  • movable furniture or furnishings, such as beds or suites,
  • televisions,
  • fridges and freezers,
  • carpets and floor-coverings,
  • curtains,
  • linen,
  • crockery or cutlery,
  • beds and other furniture

Unfortunately, these examples are not definitive: is a carpet glued to the floor a permanent fixture, or not part of the integral features?

International tax avoidance

Thursday, September 25th, 2014

Britain is to take the lead in the clamp down on international tax avoidance, Financial Secretary to the Treasury David Gauke announced Saturday 20 September. UK-based multinationals will have to report to HMRC where they make profits and pay taxes around the world.

The UK is the first of 44 countries to formally commit to implementing the new country-by-country reporting template, which was this week unveiled by the OECD.

The template is designed to help tax authorities gather information on multinational companies’ global activities, profits and taxes, enabling them to better assess where risks lie and where their efforts to counter tax avoidance should be focused.

The UK initiated the country-by-country reporting template during its G8 Presidency last year, calling on the OECD to develop the template as part of its project to strengthen international standards on Base Erosion and Profit Shifting (BEPS).

The OECD will present the reporting template to G20 Finance Ministers this weekend.

Financial Secretary to the Treasury David Gauke said:

“The UK has been at the forefront of tackling international tax avoidance. We believe that country-by-country reporting will improve transparency and help identify risks for tax avoidance – that’s why we’re formally committing to it.

In time improved transparency between business and tax authorities will also help developing countries in dealing with compliance, as they often lack the capacity to collect this information themselves. Reporting high level information using a standardised format across all jurisdictions will ensure consistency, give tax authorities the information they need and minimise the additional administration burden on business.”

VAT registration dilemma

Tuesday, September 23rd, 2014

James is very industrious gent’s hairdresser. He just manages to keep his turnover below the VAT registration limit. Apart from his rent, which was not subject to a VAT charge, his overheads are minimal.

He is considering the purchase of his first home and needs to raise a deposit. To do this he calculates that he can just about fit in enough additional clients to bring in an extra £5,000 a year in income without increasing his costs.

If he pursued this plan, James would need to register for VAT (the current VAT registration threshold is £81,000) and add 20% to his prices. This would be a problem. He works in a competitive market and if he had to increase his prices by 20%, to cover VAT, he would not be able to maintain his turnover: clients would go elsewhere. James was fairly certain that if he started to charge VAT he would lose more clients in the short term than he would be able to take on and therefore his profits would likely decrease.

The only solution seemed to be absorbing the VAT: keeping his prices at the present level and treating any VAT payable as an overhead. He decided he’d better have a chat with his accountant to see what effect this would have on his profits.

His accountant said that he could use the VAT Flat Rate Scheme and in his first year of registration he would pay over 12% of his VAT inclusive sales. As his turnover was planned to be £85,000, including VAT, (so he didn’t have to increase his prices) this would mean a payment to HMRC of £10,200. James was not impressed. By increasing his takings by £5,000 he was paying out £10,200 in VAT and would actually, be £5,200 worse off. His accountant advised that he would save on income tax but not enough to compensate for the VAT payable.

This example illustrates the value of planning. If James had gone ahead with his increase in sales without considering the VAT consequences, he would have taken a step back not a step forward financially.

£1,000 business rates discount for High Street.

Monday, September 22nd, 2014

In her first major speech new High Streets Minister Penny Mordaunt tells retailers that business rates support is now helping all parts the country.

Six months after it was introduced the £1,000 business rates discount for local shops, cafes, restaurants and pubs (up to a rateable value of £50,000) is estimated to be giving nearly 300,000 premises more than £272 million of tax relief this year.

The minister called on all local authorities, businesses and citizens to follow this example and use government tax breaks as a springboard to shaping the future of Great British high streets across the country so they can remain a vibrant, viable part of the community where people live, shop, use services, and spend their leisure time.

High Streets Minister Penny Mordaunt said:

“We must help all respond to the needs and wants of the consumer so the high streets remains at the heart of our communities – more than simply places to shop.

We announced the biggest package of business rates support in over 20 years to support local shops, pubs, cafes, and restaurants. Overall, this is worth £1 billion to business with half of that backing high street shop and retailers in England.

Around 300,000 retail premises are getting our new £1,000 retail discount and our comprehensive list shows where those shops are located in the country. A typical small business could now be saving 30% extra or more compared to last year’s bill.”

The full list of the present business rate support measures are:

  • a new reoccupation discount of 50% for 18 months for new occupants of retail premises that have previously been empty for a year or more
  • allowing businesses to pay their bills over 12 months (rather than 10), which will help every firm with their cash flow
  • a 2% cap on business rate inflation increase
  • the new £1,000 business rates discount for local shops, cafes, restaurants and pubs (up to a rateable value of £50,000) estimated as more than £272 million of tax relief this year
  • the doubling of the extension of the small business rate relief until 31 March 2015, which will mean 360,000 business properties pay no bill at all

&pound1,000 business rates discount for High Street.

Monday, September 22nd, 2014

In her first major speech new High Streets Minister Penny Mordaunt tells retailers that business rates support is now helping all parts the country.

Six months after it was introduced the £1,000 business rates discount for local shops, cafes, restaurants and pubs (up to a rateable value of £50,000) is estimated to be giving nearly 300,000 premises more than £272 million of tax relief this year.

The minister called on all local authorities, businesses and citizens to follow this example and use government tax breaks as a springboard to shaping the future of Great British high streets across the country so they can remain a vibrant, viable part of the community where people live, shop, use services, and spend their leisure time.

High Streets Minister Penny Mordaunt said:

“We must help all respond to the needs and wants of the consumer so the high streets remains at the heart of our communities – more than simply places to shop.

We announced the biggest package of business rates support in over 20 years to support local shops, pubs, cafes, and restaurants. Overall, this is worth £1 billion to business with half of that backing high street shop and retailers in England.

Around 300,000 retail premises are getting our new £1,000 retail discount and our comprehensive list shows where those shops are located in the country. A typical small business could now be saving 30% extra or more compared to last year’s bill.”

The full list of the present business rate support measures are:

  • a new reoccupation discount of 50% for 18 months for new occupants of retail premises that have previously been empty for a year or more
  • allowing businesses to pay their bills over 12 months (rather than 10), which will help every firm with their cash flow
  • a 2% cap on business rate inflation increase
  • the new £1,000 business rates discount for local shops, cafes, restaurants and pubs (up to a rateable value of £50,000) estimated as more than £272 million of tax relief this year
  • the doubling of the extension of the small business rate relief until 31 March 2015, which will mean 360,000 business properties pay no bill at all

�1,000 business rates discount for High Street.

Monday, September 22nd, 2014

In her first major speech new High Streets Minister Penny Mordaunt tells retailers that business rates support is now helping all parts the country.

Six months after it was introduced the £1,000 business rates discount for local shops, cafes, restaurants and pubs (up to a rateable value of £50,000) is estimated to be giving nearly 300,000 premises more than £272 million of tax relief this year.

The minister called on all local authorities, businesses and citizens to follow this example and use government tax breaks as a springboard to shaping the future of Great British high streets across the country so they can remain a vibrant, viable part of the community where people live, shop, use services, and spend their leisure time.

High Streets Minister Penny Mordaunt said:

“We must help all respond to the needs and wants of the consumer so the high streets remains at the heart of our communities – more than simply places to shop.

We announced the biggest package of business rates support in over 20 years to support local shops, pubs, cafes, and restaurants. Overall, this is worth £1 billion to business with half of that backing high street shop and retailers in England.

Around 300,000 retail premises are getting our new £1,000 retail discount and our comprehensive list shows where those shops are located in the country. A typical small business could now be saving 30% extra or more compared to last year’s bill.”

The full list of the present business rate support measures are:

  • a new reoccupation discount of 50% for 18 months for new occupants of retail premises that have previously been empty for a year or more
  • allowing businesses to pay their bills over 12 months (rather than 10), which will help every firm with their cash flow
  • a 2% cap on business rate inflation increase
  • the new £1,000 business rates discount for local shops, cafes, restaurants and pubs (up to a rateable value of £50,000) estimated as more than £272 million of tax relief this year
  • the doubling of the extension of the small business rate relief until 31 March 2015, which will mean 360,000 business properties pay no bill at all