Monthly Archives: July 2022

0 Singing accountant warns performers of Very Annoying Tax (VAT) error

With rumours of a reduction in VAT gaining popularity (but still unlikely), I am urging performers to take a closer look at their earnings as the market recovers.

I am concerned that whilst performers are now starting to generate more work, some are not fully aware of how to properly account for this, especially as they approach the VAT threshold of £85,000.

Things have been taking off again in the West End and touring shows around the UK. Even understudies and deputies are getting more and more work, perhaps even MORE than pre-pandemic. However, where there’s growth, there’s tax. Especially for those who are creeping ever closer towards the VAT threshold again – maybe after they de-registered in the pandemic?’

Performers are playing “catch-up” after the last couple of years. They are squeezing more and more work into their schedules as best they can and who can blame them? The problem is, VAT is calculated on a rolling 12-month working period.

So if you’re back in the saddle, this is fab but work PRIOR to the theatres opening does actually need to be included in your sums too.

What I term the “Very Annoying Tax” (VAT) issue may become trickier still, with many performers having deregistered for VAT when work was dropping off a cliff.

As you get close to the threshold (£85,000 for anyone falling asleep at the back) you need to register for VAT and then start charging it. Now, you will need a VAT number for this which will be announced by HMRC and this is often by no means a swift process. If you are late registering for VAT, you may have to start going back several months and then “onward bill” any VAT. If this is the case, warn the production company, fixer or your agent.

This is all before we even factor in the impact of deping-out work and how that changes your VAT situation. When it comes to the VAT threshold, it is the total earned, not “made” that concerns our friends at HMRC.

The dep costs are a factor in your profits and self-assessment but not the threshold so be vigilant.

The least you need to know:

1. VAT is on GROSS fee income, before any expenses.

2. Look at it over 12 months rolling.

3. Work it out monthly and for heaven’s sake, register pronto!

Need any further help? Book a call today

0 Don’t forget the July Income Tax Payment

Well, the 31st of July is fast approaching. Not long to go now. And you know what that means?

No?

Oh, well, for those people that have to make a payment on account through their tax return for last year, then that is the 31st of July deadline. So you need to think quick sharpish, find out your paperwork, have a look at your online account and see how much you owe HMRC.

The 31st of January might fall on a weekend. So what does that mean? Well, it means you need to get your payment to HMRC by end of banking day on the Friday. What’s a banking day? Oh, I wish I was young enough not to know that. But the banking day is when the banks effectively close off transactions for that day. So you need to make sure if the 31st July falls on a Saturday or Sunday, you make the payment by 3:30 PM on the Friday.

If you don’t make the deadline, well, that’s fine. However, HMRC will charge you interest and they will also charge you late payment penalties. Yes, more of those nasty penalties can come and bite you in the rear. So those of you unfortunate enough or lucky enough, depending on how you look at it, to need to make a payment on account, make sure you get it done and it has to reach HMRC by the close of banking day on the last working day before the 31st of July.

There are other things on the knowledge base that can tell you and guide you to show you how much you owe HMRC (https://performanceaccountancy.co.uk/knowledgebase/how-much-do-i-owe-hmrc/) and also how to pay HMRC (https://performanceaccountancy.co.uk/knowledgebase/how-to-pay-your-self-assessment-tax-return) . There are various different methods. Bank transfer is normally the best way, or through your own online government gateway.

So good luck, everybody. Hope it all works out okay. And for those of you that have already done your tax return for this current year, you may find that your payment on account has changed from when you did the previous tax return. It will never go up, but it might go down depending on your level of income.

Just to repeat, if you need to make the second payment on account, then the 31 st July is that date (or the Friday prior if the weekend).

Best go and pay mine. Now – where is that passcode.

0 HMRC in “chaos” SHOCK news – refunds worth thousands delayed

Imagine my surprise (spoiler alert…none) when this Saturday’s wholesome brekka with a coffee and the newspapers was rudely interrupted by the taxman.

Not literally.

There wasn’t someone in a bowler hat rapping at the door with an umbrella.

If there was, there is always the very real threat that I might break into a Mary Poppins number!

No, sadly, it was a BLARING headline in that most steady of publications, “The Times”, that
caused me to bolt my bacon, abandon my avocado and perform a sharp egg-sit from the table.

It transpires that not only are people waiting months for money they are owed, they reported
that some tasks that should be taking 15 days are taking 10 months to complete!

Now, hyperbole aside, this is alarming.

Almost as alarming as blaming it on “fat fingers” – their words not mine – which saw one poor
business being chased for money it didn’t owe.

Making Tax “Digital” indeed!

It appears targets are being missed in 14 out of 27 service categories.
Yikes!

This includes the BIGGIES too, self assessment refunds and appeals against penalties.

So if this includes you, press on gentle reader as I guide you through the latest show of sh*t.

They’ve blamed a number of factors, with home working a convenient stick they appear to have
found in their overgrown and weed infested garden.

The Times’ analysis revealed that the worst service area was helping people to get a refund
from income tax deducted from savings, missing their 15 day target by a mere 140 days.

Meanwhile, disputes over a tax overpayment took 138 days instead of 15.

Alarmingly, with business on the up and fees increasing for many performers, making group
business registrations for VAT took 76 days against a target of 30; and registering a commercial
property for VAT took 214 days instead of 30.

More on what that might mean for you as you approach the VAT threshold next week.

An HMRC spokesman said: “We’re sorry that customers have experienced delays with some of
our services. Overall customer satisfaction is above 80%, but we know there’s more to do and
we’re recruiting more staff.”

Righto, that’s nice to know that you’re sorry HMRC.

Meanwhile, please, please, please realise that if you are banking on any kind of swift turnaround
on your affairs at HMRC, stop it.

Please also check how close you are sailing to the VAT threshold.

To recap, it is £85,000.

If you don’t get registered sharpish, you’ll be the one with egg on your face and that’s no yolk.