Why do we recommend Xero?

We at Premier Tax Solutions recommend the cloud accounting software Xero, but what is cloud accounting? Cloud accounting allows you to keep your business books online, which includes records of income and expenses, as well as assets and liabilities. All your information is encrypted so only people with the login can view the data. All you need to do is subscribe and move all your books to the cloud. From then on you can access your accounts from any web browser, or from an app on your phone.

Running your business accounts online with Xero has many advantages:

  • Data about your income and expenses can flow straight from your bank to your Xero account meaning you do not need to spend hours typing transactions out
  • You can see your current financial position at any time provided your book keeping is up to date
  • Multi-user access makes it easier for you to collaborate online with your team and accountant
  • Because it’s online there is no installing or updating, and all your data is backed up automatically
  • You can set up a dashboard to show important financial information e.g. who owes you money, what bills are due, and how your cash flow is looking

If you are thinking of moving to Xero or are a new start up looking to get straight onto Xero get in touch on 01782 479699

What If I Cannot Afford To Pay My Self Assessment Tax Bill?

If it is you are struggling to make a tax payment you should always seek help earlier instead of burying your head as it will not just go away. For those of you struggling to pay the tax due this week a time to pay arrangement may be an option.

HMRC offer a time to pay arrangement which is based on your specific financial circumstances and can cover all outstanding amounts overdue including penalties and interest. They make sure to look at what you can afford and then use that to work out how much time you will need to pay off your tax bill.

HMRC usually expects you to pay no more than 50% of your disposable income but can be higher if you have a very high disposable income. There is no upper limit on how much time you will have to pay.

It is designed to be flexible and is not a fixed, formal contract. It can be altered overtime, so it can be shortened if your earnings rise or you receive a windfall. More importantly it can also be lengthened should your essential expenses increase, or income decrease.

For Self-Assessment, you may be able to set up a payment plan online. This would allow you to pay your Self-Assessment tax bill in instalments without contacting HMRC.

You can set up a payment plan to spread the cost of your Self-Assessment bill if:

  • You owe £30,000 or less
  • You do not have any other payment plans or debts with HMRC
  • Your tax returns are up to date
  • It’s less than 60 days before the payment deadline

For any extra information on time to pay arrangements or to set up a time to play arrangement online visit the gov.uk guidance here.

What Support Is Available For The National Lockdown 5 November 2020?

Following on from the government announcements we thought we would reach out about what support is available so far, as we go into the national lockdown on Thursday:

Coronavirus Job Retention Scheme

  • CJRS (furlough) scheme extended to December paying 80% of employees wages up to £2,500.
  • Employers will be required to cover national insurance and pension contributions.
  • Full time and flexible furlough will continue to be available.
  • Neither the employer nor the employee needs to have previously accessed the Furlough scheme.
  • All employees on the employer’s PAYE payroll by 23:59 30 October 2020 will be eligible.

Mortgage payment holidays extended

Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

Business grants available

Businesses required to close in England due to local or national restrictions will be eligible for the following through their local authority:

– For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;

– For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;

– For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

 

Self Employed Income Support Scheme

  • Claims window being brought forward from 14 December to 30 November which will cover the period November to January
  • For November it is worth 80% of average trading profits and for December it is worth 40% of average trading profits meaning the total level of the third grant is 55 per cent of trading profits. The maximum grant will increase to £5,160.
  • Claims must be done by individuals, accountants cannot do these

To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
  • are currently actively trading but are impacted by reduced demand due to coronavirus
  • were previously trading but are temporarily unable to do so due to coronavirus

 

Bounceback Loans & CBILS

 

Self Assessment Tax Deferrals

The July 2020 payment on account that was deferred to 31 January 2021 and amounts due by 31 January 2021 can be payable over a further 12 month period under a time to pay arrangement. This can be set up online by individuals here: https://www.gov.uk/difficulties-paying-hmrc

 

VAT Deferrals

Businesses that deferred their VAT during the period 20 March to 30 June 2020 to 31 March 2021 can now make smaller payments interest free up to 31 March 2022. You have to opt into this, you will find more info here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

 

We hope that you find this round up useful. Things are changing daily so please always check the up to date guidance.

What Is The Job Support Scheme?

The JSS (Job Support Scheme) has been put in place to aid those employers facing lower demand over the winter months due to Covid-19 and who will no longer be able to use the Coronavirus Job Retention Scheme. The JSS will apply from 1 November 2020 to 30 April 2021.

Under this scheme the state will contribute towards employees’ wages who are working fewer hours than normal. Employers will continue to pay staff wages for the hours they work, but for hours not worked the government and the employer will pay one third of this each. This means that employees who must work shorter hours will still be paid two thirds of the hours they don’t work. Employees must be working at least one third of their usual hours and will receive at least 77% of their normal pay (after three months the government will consider increasing the minimum hour threshold).

Government contributions will be capped at £697.92 per month and employers will be reimbursed in arrears for the government contribution. The grant will not cover Class 1 employer NICs or pension contributions which will remain payable by the employer.

 

Who qualifies for the scheme?

Employees must be on an employer’s PAYE payroll on or before 23 September 2020, however employees can cycle on and off the scheme and do not have to work the same pattern each month. There will be no requirement that they were furloughed under the CJRS. All small and medium businesses are eligible, however larger businesses will need to demonstrate they have been adversely affected by Covid-19.

Under the Job Support Scheme Employees cannot be made redundant or given notice of redundancy during the period for which their employer is claiming the JSS grant for them.

 

For more information please see the Job Support Scheme Factsheet 

IR35 Reform Delayed

It was announced this evening that the IR35 reforms that were due to come in on 6 April have now been delayed by a year.

Chief Treasury Secretary Steve Barclay made the announcement as part of measures put in place to protect the economy during the Coronovirus outbreak

HMRC Insolvency Powers from April 2020

From 6th April 2020 new measures regarding insolvency will be introduced by the 2019-20 Finance Bill meaning HMRC will have increased powers.

It is proposed that Finance Bill 2019-20 will contain measures to ensure that from 6 April 2020 where a company becomes insolvent with unpaid tax liabilities which it holds in trust to pay to HMRC, these liabilities will take priority over other unsecured or floating charge creditors.  

Taxes that a company holds in trust for HMRC include VAT, PAYE Income Tax, Employee’s National Insurance Contributions and Construction Industry Scheme deductions.  Other company tax liabilities such as Corporation Tax and Employer’s National Insurance Contributions will not be affected by the measure.  HMRC will remain below preferential creditors.

Diane Dunion, Partner from Begbies Traynor Stoke has helped to expand on what exactly this means for businesses:

“The draft legislation proposes to amend The Insolvency Act 1986, giving HMRC priority in the recovery of VAT and certain other debts owed to HMRC in insolvency proceedings; by creating a new category of creditor for the purpose of the distribution of assets. 

When a business enters formal insolvency proceedings, the order in which assets are distributed is prescribed by law.  Currently, HMRC ranks as an unsecured creditor.  The introduction of the legislation will allow HMRC to rank as a “secondary preferential” creditor, which places them in a better position on the creditor hierarchy.

However, HMRC will remain an unsecured creditor, for taxes levied on businesses such as Corporation Tax and Employer NIC.

The Explanatory Note to the Legislation notes that “the Government does not believe it is fair that taxes paid by employees and customers should be diverted to other creditors, when these are only held temporarily by businesses whose role is to transfer these payments to the Government. The Government view is that this is a fair approach that balances the interests of creditors and the Exchequer, which relies on these taxes to fund public services.”  

Monies collected in respect of those taxes paid by employees and customers, are essentially held on trust for HMRC.  On that basis and in the event of formal insolvency proceedings, these funds will be paid over to HMRC – to “benefit the wider population by being utilised for their original purpose” (i.e. to fund public services).”

The new finance bill will also allow HMRC from 6 April 2020 to make directors and other persons involved in tax avoidance, evasion or phoenixism jointly and severally liable for company tax liabilities, where there is a risk that the company may deliberately enter insolvency. It is designed to prevent individuals benefitting from avoidance or evasion through the insolvency of their business when unable to pay its debts to HMRC.

The conditions for a joint liability notice are:

  • Insolvency is underway for the company or there is serious threat of insolvency
  • A company has entered into tax avoidance arrangements, or engaged in tax evasive conduct.
  • The person either was responsible for the company/LLP (perhaps as a director or shadow director), enabled the avoidance or evasion or benefited from it
  • A tax liability is expected to arise from the avoidance or evasion and there is a serious possibility that some or all of that tax will not be paid

The new rules will also allow HMRC to issue a joint liability notice to individuals whose companies have been involved with repeated insolvency or non-payment of tax with limited liability

There is a common misconception that directors/members will not be personally liable for anything, because their business has limited liability (either Limited Company or Limited Liability Partnership).  This is not always the case and more people may find themselves held accountable for their actions as a result of the changes.

HMRC News

From April 2020, private sectors will need to check whether contractors need to pay income tax and national insurance contributions. Which means shifting the responsibility to the organisation rather than the contractor.

 

If you are wondering whether you’ll be affected by this or would like more information, then please call us on 01782 479699 to speak with one of our construction industry tax specialists.

 

#Contractor #HMRC #PrivateSector #Business #IR35 #Contractors #IncomeTax #NationalInsurance

I have a limited company, what accountancy services would I need?

We offer the following services for limited companies:

  • Statutory accounts preparation
  • Company secretarial services
  • Corporation tax return preparation
  • Payroll
  • PIID
  • CIS contractor returns
  • VAT return preparation
  • Help with HMRC enquiries
  • Tax investigations insurance
  • Research & development claims
  • Capital allowances claims on commercial building
  • Tax efficiency reviews
  • Business restructuring
  • IR35 contractor reviews

For more information, please click here to contact us.

What is subsistence?

Subsistence is the accounting term used to describe food & drink and other incidental costs of travel such as accommodation. It is an allowable deduction when incurred by an employee or office holder in conjunction with a qualifying business journey such as business travel & overnight stays.

All claims must be backed up by receipts, unless you have agreed a scale rate system with HMRC.

From April 2019 there are some changes due in the area of subsistence for employees which we will take a look at along with some of the questions we most frequently get asked. Please note that the rule for employees are different than the self employed and so people can fall foul of this.

What is changing on 6th April 2019:

  • The employer will have to have a system in place to check the employee has undertaken a qualifying journey.
  • Employers will no longer need to check receipts where HMRC scale rates are used both in terms of UK and overseas scale rates

The Finance Act 2019 will put all of HMRC’s benchmark scale rates on a statutory footing.

Can I reimburse my employee for their lunch?

When they are travelling on business, entertaining customers, or when lunch is provided at a conference or meeting to ensure continuity of work it is ok to do so. For example if you have a training day and order pizza in for the staff then that would be deductible as it will ensure continuity of work.

How much can I reimburse for subsistence?

There is no upper limit however an employer can only reimburse expenses if there are actual expenses incurred. It can reimburse round sum amounts using scale rate payments

Can I claim VAT back on subsistence?

Yes provided the employee gives you a VAT receipt

If you are unsure about subsistence payments and would like more advice please call us on 01782 479699.

Do I Need A Tax Adviser?

11Quite often people think they need an Accountant & may not have heard of a Tax Adviser. Premier Tax Solutions is a Firm of Chartered Tax Advisers registered with the Chartered Institute of Taxation based in Stoke-on-Trent. Tax Advisers are trained in accounts & tax and pass rigorous exams over a number of years specifically designed around the tax legislation.

Tax Advisers are experts in Tax and keep up to date with the changing tax laws. We use our knowledge & experience to provide advisory & consultancy services to clients; ensuring they are as tax efficient as possible. We ensure they claim all allowances available & any qualifying expenditure which will save them tax.

There are 2 main areas of tax:

  • Corporate – Working with limited companies
  • Personal – Working with private individuals, the self employed & also partnerships

Here at Premier Tax Solutions we are all fully qualified tax professionals. Have a look at our video to see who we are & what we can do for you:

From the small one man band to a larger limited company or LLP we can make sure you are as tax efficient as possible. We prepare your accounts from a tax efficiency point of view, rather than ticking boxes in a compliance exercise. We actively look for ways to save you tax year after year. We offer a fixed fee service to all clients and hold meetings with you so that we can get to know you & your business and be able to advise you during the year, not just after year end. With competitive pricing & expert tax knowledge your accounts & tax affairs will be in very safe hands.

If it is that you need a tax consultant we have years of experience dealing with specialist areas of tax such as HMRC enquiries, trusts & estates, capital gains tax, inheritance tax, capital allowance claims and R&D claims to name a few.

Get in touch with us to see how we can save you tax & protect your assets on 01782 479699.

Special thanks goes to Craig at Magic Shirt Limited for producing our video!