Abbey

Chartered Tax Advisers
Old Bishops' College
Churchgate
Cheshunt
Hertfordshire
EN8 9XP

T: 01992 642024

E: abbey@abbeyaccountants.com

Smiling businessmen and women

  TAX E-NEWS - September 2017


Welcome to the September monthly tax newsletter.  These newsletters are designed to keep you informed of the latest tax issues.

Please contact us if you need further information on any of the topics covered.

Peter McDaid
CTA ATT TEP
Director



AUTO ENROLMENT STAGING DATE

Historically existing employers have been given several months advance notice of their staging date i.e. the point when they have to commence an auto enrolment pension scheme for their employees. From the 1st October 2017 all new employers now have an immediate obligation to operate an auto enrolment pension scheme as soon as they start employing staff. There is now no breathing space and implementing a scheme at the inception of a business will be part of the setup process.


REPORTING VAT ONLINE - AREN’T WE DOING THAT ALREADY?

We reported that the government had announced the delay of Making Tax Digital for Business (MTD) to 2020 at the earliest but that quarterly VAT reporting, using the new system will be mandatory from 2019.

Surely we are doing that already you might say. However, currently businesses are only required to complete 9 boxes when they submit their quarterly, monthly, or annual VAT return online. Under the latest proposal for MTD the business will be required to submit the detailed transaction data supporting the output tax and input tax figures on a quarterly basis. This will therefore require those businesses affected to keep their accounting records digitally from the 2019 start date.

These changes won’t affect businesses that are not VAT registered such as buy to let landlords for whom MTD will not apply until 2020 at the earliest, and even then only if their gross rental income exceeds the VAT registration threshold.

MAKING TAX DIGITAL/CLOUD COMPUTING

Making Tax Digital is delayed but is not dead. The government and HMRC want all businesses and most taxpayers to keep their records using dedicated software that can link and communicate with government websites. Over the next few years businesses/taxpayers will have to adapt and be ready for this change-over. We suggest that you do it earlier rather than later and recommend cloud based software such as Xero for bookkeeping/VAT.

What is the cloud? And why is cloud accounting software the solution? Similar to internet banking, you use a cloud platform making all data and software accessible anytime, anywhere via any accessory. You no longer have to carry around a heavy hard drive to access all your files.

Anytime you have an internet connection cloud based software works, giving unlimited access to data, meaning with the use of online accounting, small business owners stay connected to their data and their accountants. Cloud based software is integrated with all systems allowing for multiple add-ons. It is easy to use and paid for by monthly subscription making it very cost effective.

The main benefits to your business are:

Clear, real-time overview of your current financial situation.

No installation and everything is backed up meaning your data is more secure.

Reduced business costs. Issues such as; upgrades, maintenance, system administration and service failures are all handled by the cloud service provider.

Banks feeds of your bank transactions/statements straight into your book keeping system.

Multiple user admittance allows for easy collaboration with your team and advisors.

Finally, connectivity with HMRC online systems.

Please call us for more advice and information on implementing a cloud based solution.

 
















REPORTING EXPENSES AND BENEFITS PROVIDED TO EMPLOYEES

HMRC toolkits are designed to help minimise the risk of errors in returns and computations and their use, although voluntary, will be taken into consideration in determining whether or not reasonable care has been taken in the completion of a return such as a form P11d reporting expenses and benefits.

Reminder: It is no longer necessary to obtain a reporting dispensation from HMRC for certain reimbursed expenses such as travelling and subsistence. But it is still important for the employer to keep records to demonstrate that such expenses have been reviewed to ensure that they have been incurred wholly, exclusively and necessarily in the performance of the employee’s duties. The toolkit reminds us to keep a record of the date and details of the expenses and benefits provided with associated documentation and also a record of any contributions made by a director or employee towards the cost of expenses and benefits provided to them. This recording also includes the new exemption for the provision of trivial benefits to employees.

TRIVIAL BENEFITS

Remember that from 6 April 2016, benefits are exempt from tax and NICs if all the following conditions are satisfied:

• the cost of providing the benefit does not exceed £50;

• the benefit is not cash or a cash voucher;

• the employee is not entitled to the benefit as part of their employment conditions; and

• the employer does not provide the benefit in recognition of particular services provided by    the employee.

Where the employer is a close company and the benefit is provided to an individual who is a director or other office holder of the company (or to a member of their family or household) the exemption is capped at a total cost of £300 in the tax year.

CHANGING YOUR COMPANY CAR? WHAT ABOUT A HYBRID NEXT?

The next Finance Bill will include legislation to reduce significantly the taxable benefit on the provision of low CO2 emission cars from April 2020.

From 2020 there will be a 2% benefit in kind for company cars that emit no CO2 such as electric and hydrogen powered cars. At the same time the system for taxing hybrid company cars will also be significantly changed. For example, a hybrid car emitting less than 50g CO2 per kilometer will also have a 2% P11d benefit provided it has a range on its electric motor of at least 130 miles. For example, a BMW i3 hybrid costing £30,980 has a range of 181 miles.


TAX DATES AND PAYMENTS

 

Date

What’s Due

19th September

PAYE & NIC deductions, and CIS return and tax, for month to 5/9/17 (due 22/09 if you pay electronically)

1st October

 

Corporation tax for year to 31/12/16  (unless paid quarterly)

5th October

 

 

Deadline for notifying HMRC of chargeability for 2016/17 if not within Self-Assessment and  receive income or gains on which tax is due

19th October

PAYE & NIC deductions, and CIS return and tax, for month to 5/10/17 (due 22 October if you pay electronically)


If you have any questions about this newsletter please contact us, we will be happy
to help.