Making Tax Digital for VAT

As you are aware HMRC are introducing Making Tax Digital for VAT, for VAT registered businesses whose taxable turnover exceeds £85,000, for periods beginning 1st April 2019 onwards.  In order to submit your VAT Return under the new regime you will need to register with HMRC, please follow the steps in the link below.  When registering you will need to know your VAT number and current government gateway login information.

https://www.gov.uk/guidance/making-tax-digital-for-vat

When you have registered you will need to update the information in your software to allow submission under Making Tax Digital and you should no longer use the VAT online services to submit your VAT Return.  HMRC have stated that businesses who continue to file VAT Returns under the old regime will be penalised.

The sign up process for Making Tax Digital for VAT takes up to 72 hours to complete so will need to be completed before the VAT submission deadline.

It is not possible to sign up for the new regime until after you have submitted your final VAT return under the current system, please see below a timeline to assist in the registration process:

  Monthly return from 1st April to 30th April 2019 Quarterly return from 1st April to 30th June 2019 Quarterly return from 1st May to 31st July 2019 Quarterly return from 1st June to 31st August 2019
Submission deadline for last non MTD VAT return  

7th May

 

7th May

 

7th June

 

7th July

Earliest you can sign up to new MTD for VAT 7 days after submission of last VAT Return 7 days after submission of last VAT Return 7 days after submission of last VAT Return 7 days after submission of last VAT Return
Deadline for signing up for new regime  

16th May

 

17th July

 

16th August

 

13th September

First MTD for VAT Return submission deadline  

7th June

 

7th August

 

7th September

 

7th October

 

If you require any assistance please do not hesitate to contact us.

Businesses urged to prepare for post-Brexit Customs Declarations

HMRC is urging VAT-registered UK businesses which trade exclusively with the EU to be prepared for a no deal Brexit.

In a letter sent to 145,000 affected businesses, HMRC explains changes to Customs, Excise and VAT procedures in the ‘unlikely event’ that the UK leaves the EU without a Brexit deal.

HMRC’s letter advises businesses to take three actions ahead of ‘Brexit Day’ on 29 March 2019:

  • Register for a UK Economic Operator Registration and Identification (EORI) number.
  • Decide whether a customs agent will be used to make import and/or export declarations, or whether declarations will be made by the business via software.
  • Contact the organisation responsible for moving goods (for example, the haulage firm) in order to ascertain whether the business will need to supply additional information to complete safety and security declarations, or whether it will need to submit these declarations itself.

A report jointly published by HMRC and the National Audit Office (NAO) recently revealed that approximately 55 million customs declarations are currently made by British businesses every year. This figure may rise to 255 million when the UK leaves the EU.

HMRC intends to write to businesses in the future in order to instruct them on any additional actions they will need to take, and when. We will keep you informed of developments.

GOV.UK publicationsHMRC letter

Making Tax Digital for VAT – pilot extended

HMRC has extended its Making Tax Digital for VAT (MTDfV) pilot scheme to all eligible businesses.

For most businesses, compliance with the regulations is mandated for VAT return periods beginning on or after 1 April 2019. However, MTDfV for some ‘more complex’ businesses has been deferred until 1 October 2019. This deferral applies to: trusts; not for profit organisations not set up as companies; VAT divisions; VAT groups; public sector entities such as government departments and NHS Trusts, which have to provide additional information on their VAT return; local authorities; public corporations; traders based overseas; those required to make payments on account; annual accounting scheme users.

Commenting on the pilot scheme, Clare Sheehan, Deputy Director for MTD for Business, 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.’

HMRC has also confirmed that Brexit will not affect the introduction of MTDfV. In a recent letter, Jim Harra, Deputy Chief Executive of HMRC, wrote:

‘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.’

More information can be found at  GOV.UK publications.

Please contact us if you need help with MTDfV.

 

Increase of automatic enrolment contributions

The minimum contributions you and your staff pay into your automatic enrolment workplace pension scheme will increase from 6 April 2019. This is also sometimes known as phasing.  It is your responsibility to make sure these increases are implemented.

 

Who does this apply to?

All employers with staff in a pension scheme for automatic enrolment must take action to make sure at least the minimum amounts are being paid into their pension scheme. This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing scheme.

However, you don’t need to take any further action if you don’t have any staff in a pension scheme for automatic enrolment, or if you are already paying above the increased minimum amounts.  If you’re using a defined benefits pension scheme the increases do not apply.

 

What are the increases?

This table below shows the minimum contributions you must pay and the date when they must increase:

 

Date Employer minimum contribution Employee minimum contribution Total minimum contribution
New rate:6 April 2019 3% 5% 8%
Current rate: 6 April 2018 – 5 April 2019 2% 3% 5%

 

By law a total minimum amount of contributions must be paid into the scheme. You, the employer, must make at least the minimum employer contribution towards this amount and your staff member must make up the difference.   If you decide to cover the total minimum contribution required, your staff won’t need to pay anything.

 

The amount you and your staff pay into your pension scheme will vary depending on the type of scheme you have chosen and the rules of that scheme. Your staff contribution may also vary depending on the type of tax relief applied by your scheme. You can find this information in the scheme documents sent to you when you set up the pension scheme or you can speak to your pension provider.

 

Most employers use pension schemes that from April 2019 will require a total minimum of 8% contribution to be paid. The calculation for this type of scheme is based on a specific range of earnings. For the 2018/19 tax year this range is between £6,032 and £46,350 a year (£503 and £3,863 a month, or £116 and £892 a week). These figures are reviewed each year by the government.

 

When you are calculating contributions for this type of scheme you include the following:

  • salary
  • wages
  • commission
  • bonuses
  • overtime
  • statutory sick pay
  • statutory maternity pay
  • ordinary or additional statutory paternity pay
  • statutory adoption pay

Contact us for all your payroll and auto enrolment queries.

BREXIT – Deal or no Deal?

The UK will be leaving the EU on 29 March 2019. Leaving the EU with a deal remains the Government’s top priority, however the government and businesses should continue to plan for every possible outcome including no deal.

In December, HMRC wrote to VAT-registered businesses that trade only with the EU advising them to take 3 actions to prepare for a no deal EU Exit, including registering for a UK Economic Operator Registration and Identification (EORI) number. You can read the full letter here.

Businesses that only trade with the EU will need an EORI number:

  • to continue to import or export goods with the EU after 29 March 2019, if the UK leaves the EU without a deal; and
  • before they can apply for authorisations that will make customs processes easier.

If you are a UK business that trades with the EU and do not already have an EORI number then you should register for an EORI number at GOV.UK now. It only takes 10 minutes to apply. These businesses should also decide if they want to hire an agent to make import and/or export declarations for them or make the declarations themselves.

Businesses can find further guidance on customs declarations at Declaring your goods at customs if the UK leaves the EU with no deal. HMRC have also published a new ‘Prepare your business for the UK leaving the EU’ tool on GOV‌.UK to help businesses with their EU Exit preparations that provides further support and guidance at Prepare your business for the UK leaving the EU.

Make sure you are prepared for every eventuality.

HMRC reminder to employees to claim their tax deductible expenses

HMRC is reminding employees that they may be able to claim a tax rebate on their work related expenses. HMRC estimate that millions of employees, particularly those working in the service industry, could be entitled to a tax refund. Workers, including nurses, hairdressers, construction workers and those working in retail and food sectors, may be able to claim tax rebates.

Individuals in these types of roles sometimes have to pay for work-related expenses including car mileage, replacing or repairing small tools, or maintaining branded uniforms.

Where these types of expenses are incurred, employees may be entitled to claim a tax refund. HMRC is advising individuals to go directly to GOV.UK to check if they can claim extra cash back. HMRC advise taxpayers to log in to their Personal Tax Account to claim their tax relief online and that approved claims should be refunded within three weeks.

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

‘We know what a difference tax relief can make to hard-working customers, especially at this time of year. HMRC is keen to make sure customers get all the relief they’re entitled to, by using the online service.

Tax relief isn’t available for all employment expenses, so the online Check If You Can Claim tool is very helpful – then if your claim is approved, your full tax relief will be paid directly into your bank account.

The majority of claims are for repairing or replacing tools and branded uniforms, professional subscriptions and mileage. Healthcare workers, people working in food and retail, and those in the construction industry are among the top professions to claim from HMRC.

HMRC is advising that taxpayers may be able to claim tax relief on the cost of:

  • repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
  • cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
  • business mileage (not commuting)
  • travel and overnight expenses
  • professional fees and subscriptions.

Contact us if you would like help claiming tax relief on your expenses.

The Self-Assessment deadline is looming – 31st January 2019

In total, more than 11.5 million 2017/18 tax returns are due and HM Revenue and Customs (HMRC) expect the vast majority of taxpayers to complete their returns and pay any tax owed by the end of the month.

 

Approximately 52% of taxpayers have already filed their returns, as of 31 December 2018, and more than 5 million have completed their returns online (88% of the total returns filed).

 

Around 5.5 million taxpayers have less than a month to complete their Self-Assessment tax returns before the 31 January deadline.

 

You need to complete a tax return if you:

  • earnt more than £2,500 from renting out property
  • or your partner received Child Benefit and either of you had an annual income of more than £50,000
  • received more than £2,500 in other untaxed income, for example from tips or commission
  • are self-employed sole traders
  • are limited company directors
  • are shareholders
  • are employees claiming expenses in excess of £2,500
  • have an annual income over £100,000
  • earned income from abroad that they need to pay tax on

If customers completed a Self-Assessment tax return last year but didn’t have any tax to pay, they still need to complete a 2017/18 tax return unless HMRC has written to them to say it is not required.

 

For all your Tax questions call Kilby Fox on 01604 662 670 or email advice@kilbyfox.co.uk.

 

Tax-free gifts to employees

Some employers may wish to give a small gift to their employees. As long as the employer meets the relevant conditions, no tax charge will arise on the employee.

A tax exemption is available which should help employers ensure that the benefits provided are exempt and do not result in a reportable employee benefit in kind. In order for the benefit to be exempt it must satisfy the following conditions:

  • the cost of providing the benefit does not exceed £50 per employee (or on average when gifts made to multiple employees)
  • the benefit is not cash or a cash voucher
  • the employee is not entitled to the benefit  as part of a contractual arrangement (including salary sacrifice)
  • the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties
  • where the employer is a ‘close’ company and the benefit is provided to an individual who is a director, an office holder or a member of their household or their family, then the exemption is capped at a total cost of £300 in a tax year.

If any of these conditions are not met then the benefit will be taxed in the normal way subject to any other exemptions or allowable deductions.

No more than £50

One of the main conditions is that the cost of the benefit does not exceed £50. If the cost is above £50 the full amount is taxable, not just the excess over £50.The cost of providing the benefit to each employee and not the overall cost to the employer determines whether the benefit can be treated as a trivial benefit. So, a benefit costing up to £50 per employee whether provided to one or more employees can be treated as trivial. Where the individual cost for each employee cannot be established, an average could be used. Some HMRC examples consider gifts of turkeys, a bottle of wine or alternatively a gift voucher.

Further details on how the exemption will work, including family member situations, are contained in the HMRC manual.

However if you are unsure please do get in touch before assuming the gift you are about to provide is covered by the exemption.

HMRC countdown: file your tax return

With less than 70 days until the self assessment tax return deadline of 31 January 2019, HMRC is urging taxpayers to complete their tax returns early, in order to avoid the last minute rush.

The deadline for submitting 2017/18 self assessment tax returns online is 31 January 2019. An automatic penalty of £100 applies if the return is late.

HMRC advise that last year, more than 11 million taxpayers completed a 2016/17 Self Assessment tax return, with 10.7 million completing on time. There were 4,852,744 taxpayers who filed in January 2018 (44.8% of the total), and 758,707 on 31 January, the deadline day.

HMRC is advising taxpayers not to leave the completion of their 2017/18 Self Assessment tax until the last minute.

Angela MacDonald, HMRC’s Director General for Customer Services, said:

‘The deadline for completing Self Assessment tax returns may be 100 days away, yet many of us wait until January to start the process. Time flies once the festive period is underway, yet the ‘niggle’ to file your tax return remains.’

‘We want to help people get their tax returns right – starting the process early and giving yourself time to gather all the information you need will help avoid the last minute, stressful rush to complete it on time. Let’s beat that niggle.’

Contact us for help with your self assessment tax return.

What a week!

Games Night

It’s been a fantastic week for Kilby Fox.  Tuesday, we hosted our annual Games Night at Barratts Snooker Club.  Teams were made up of four people and there were ten teams in total.  The Games consisted of, Darts, Killer Pool, Shuffleboard, Table Tennis and Table Football.  The competition is always fierce and it’s great how everyone gets stuck in.  Shuffleboard was certainly the talk of the evening as it hadn’t featured at Games Night before this year. It was very close this year between Yorkshire Bank and DFW Law, however, DFA pipped them at the post and were this year’s Champions.  It’s a favourite event of ours and seems to grow each year.  It also raised some money for Cynthia Spencer Hospice.  Thank you all that attended and made it such fun.

Mastermind Group

Wednesday, Kilby Fox hosted our first Mastermind Group with Brian Wrigley.  The session was a huge success and everyone took away plenty to think about and work on.  It’s amazing how a brainstorming session with like-minded individuals can make you see things differently.  The Mastermind Groups will be held on the 3rd Wednesday of the month at our office.  How can a Mastermind Group help you?  In 5 key points:

  • A support network, which will not only help you brainstorm challenges and business growth strategies, they can make new business introductions.
  • You will be held accountable to doing the things you commit to doing?
  • A highly experienced coach who will be there to help you when you need it. Sometimes talking you though the problem, other times telling you to get over yourself and get on with it.
  • Everything from an education viewpoint that you need to build a highly profitable business.
  • A regular place to brainstorm, mastermind and discuss everything to do with your business and more.

Contact Debbie or Martin to secure your place at the next event which will be held on 19th December.

Cynthia Spencer Dodgeball fundraiser

Thursday, Kilby Fox entered a team for the Cynthia Spencer Dodgeball fundraiser.  Martin Crooke, Frances Tebbutt, Debbie Alford, Gerry Thompson, David Deacon, Angela Johnson, Dani Rowley and Dom Baker sported their active wear for the evening.  Who knew trampolining whilst having balls thrown at you could be such fun?!  The team won two games and lost two games so weren’t successful in claiming a medal, however had a great time showing their support to Kilby Fox’s Corporate Charity Partner.  The team were also very relieved to come away without any injuries!

Bring on the Christmas festivities!

If you have any further questions, or would like to book a free
one-hour consultation with one of our partners, please get in touch.
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