12 Day of Tax Tips – Day 3

12 Day of Tax Tips – Day 3

Calculator and paper work

Accounting for Start Ups

Real time information on payroll have been in place since April 2013 (some since April 2012). A system of penalties are in place but have never been enforced. For people operating payroll with less than 50 employees, those penalties will start in March / April 2015 for missed returns.

The cost of the penalties  start at £100 for small businesses per late return, and if the return is more than 3 months late, there is a 5% additional penalty. Of course, there are other penalties if the payment is received late.

As time marches on, smaller businesses will need to comply with the pension auto enrollment rules – so all staff are automatically enrolled into an authorised pension scheme. The more up-to-date payroll information is, the easier it will be to collect the required information for auto enrollment. Should you require more information on this, please contact us and we can talk you through what is required from a business perspective.

When making your payment, you must ensure that the reference number you quote on the payment is for the correct month especially is you are paying outside the expected payment period. So the full reference will be 123PA00123456 add tax year and month, so the January 2015 period payment will have 1510 at the end of the number as January is the 10th payroll month of the year.  If payments are not correctly allocated, you could be issued with a fine even through the correct amounts have been paid in total for the year.

 

Always talk to your accountant before acting on any advice. If you’d like to talk to us about your accounting requirements, please complete the contact form >>>> HERE <<<< and we’ll get in touch.

 

 

 

 

 

12 Days of Tax Tips: Day 2

12 days of tax tips – Day 2

If you are planning a capital investment for your business, you may be used to the Annual Investment Allowance being £25,000 or £250,000 depending on the time of the investment .

The annual investment allowance changed in April 2014, and the value is now standing at £500,000 until 31st December 2015. That new print room you’ve been thinking of replacing may now be worth it as you could get the whole lot as a tax deduction. However, check with your accountant as to what is qualifying spend.

sport-car-front_f12-NYBO

 

Sorry, the new Lamborghini Aventador LP 700-4 with a recommended price from £260,040 is not allowable for the Annual Investment Allowance. (I know this is not a picture of the car !)

 

 

Always talk to your accountant before acting on any advice. If you’d like to talk to us about your accounting requirements, please complete the contact form >>>> HERE <<<< and we’ll get in touch.

 

 

 

 

 

 

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12 Days of Tax Tips: Day 1

12 Days of Tax Tips: Day 1

It’s that child benefit issue again. From 1st January 2013, child benefit was taken away from people earning over £50,000. Of course, you can still claim the benefit, but you may have to pay it back. Can be very harsh when only one person works.

Here is an example:
David & Sarah both earn £49,000 so have a total income of £98,000. They receive child benefit for their two children totaling £1,770. As they earn less than £50K as individuals, they get to keep the benefit.

James & Caroline: only James works and he earns £60,000 and they receive £1,700 child benefit for their children. However, as James earns over £50K, he effectively has to repay all the benefit as income tax by the 31st January.

TIME IS MONEY concept: alarm clock and lots of euro coins

 

So, if you earn over £50,000 and your household receives child benefit, you must complete a tax return and repay the benefit.

 

 

 

Always seek advise from your accountant before acting on this article. If you’d like to get in touch, then please complete the form >>>> HERE <<<<<and we’ll get back to you.

 

 

 

 

 

 

 

 

 

 

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Is your Internet Marketing Business Affected By The Change in EU VAT Rules

You may be aware, although many internet marketers are not, that the rules for selling to consumers & non-VAT registered business in the EU are changing.Download book

It was assumed that the changes in the rules were only for broadcasting and telecommunications but it also covers everybody that sells digitally. It can be the sale of an e-book, online courses or video education tools. Coaches that set up selling courses on “how to ….” are just as affected as Netflix selling a downloadable film.

The new rules depend on how you sell, if there is any human intervention in the sale, who you sell too and where they are based.

The new rules can be summarised in the following infographic.

MOSS VAT 2015

A blog post was created to explain in detail how internet marketers will be affected by the new rules, but it ended up being nearly five pages long and rather complicated.

How can we help?

Some aspects of the whole EU change are still being discussed and HMRC issuing advice. We are collecting all that advise so we can advise clients.

If you need help, please contact us and we will email a questionnaire for you to answer so we can understand more about your business. For £29.00 (no VAT charged), we will let you know how the change could affect you and possible steps to put into place in order to comply with the new regulations.

 

[email protected]  |  Tel: 01344 669084  |  Fax: 01344 449727

Tick Tock, Time To Beat The Clock

TIME IS MONEY concept: alarm clock and lots of euro coins

 

Do you have money to burn?

The countdown to the filing date for your self assessment tax return is fast approaching. You may think that the 31st January is a long way away, and I guess it is next year, but there is a deadline that few people know about.

If you get your tax return completed online and accepted by HMRC by the 30th December, then you may be able to avoid paying a lump sum on the 31st January IF you also have PAYE income, be it from employment or from a pension pot.

How?

Well, there is a box near the end of the return saying that if you owe less than £3,000 and you have PAYE income, you can have the amount taken from your tax code for the next tax year. The effect is that you can spread your liability across a whole year from 6th April 2015 to 5th April 2016. How’s that for an interest free loan !

Of course, you still need to pull all your numbers together in order to complete the return, so if you don’t feel happy doing it, or confused, or just don’t know where to start, then please complete the form at this link, and we’ll get back to you.  http://www.jotformeu.com/form/42104589265356

 

Tick Tock

Time is slipping by.

Time is slipping by.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

How Do I Change Accountants?

Time For ChangeOver the last few weeks, this topic has been discussed several times in networking meetings and also with prospective clients.

Many Accountants like to say it is a difficult thing to do and try and instill the thought that it takes time and will cost money. The fact is, it can be done fairly easily with minimum of fuss, although it is not a decision to be taken lightly if you have built a good working relationship with your accountant. But of course, businesses move on, expand, contract, and even your accountants own business may change.

Like any other service or supply to your business, you should always ask yourself if you are getting good value for money out of your accountant. They can be a necessary evil of expenditure for any business, but developing a relationship with them outside the yearly compliance role can enhance your business. Of course, they will be there if you just need compliance work and tax returns completed too.

You need to ask yourself the following questions:

  • Am I getting value for money – assuming you know the value you want?
  • Does my accountant fully understand my business needs and what the plans are to grow the business in the future.
  • Is the service satisfactory and are returns filed in good order and on time?
  • Could I get better service elsewhere?
  • Has my business outgrown my accountant?
  • Is my business treated like just another number to a large firm of accountants?

How to change in it’s simplest for is shown in the infographic below.

How to Change Accountants

In it’s simplest form if you were coming to us as you new accountant, the process involves:

  1. Professional ethics mean we need to make contact with your current accountants for clearance to act on your behalf and also to obtain past years accounts, tax returns & paperwork.
  2. Legally we need to comply with anti-money laundering laws so will need proof of identity before we can work with you.
  3. The other main element is that we need to have your authorisation to deal with your tax affairs with HMRC so a form will need your signature.

We do offer an easy change process and we’ll handle all the communication for you which will invoice you signing a couple of letters/forms.

Performance Accountancy are happy to meet with people for a no-obligation discussion on what we can offer you & your business, and what you would require from us. Price alone is never the determining factor. Call us on 01344 669084 or email on [email protected]

If you’d like to know the full process of changing accountants, here you go:

  1. Select a changeover date that is going to cause the least disruption in your business. The most obvious change date is the end of the business financial year. If you change mid-year, you may end up having additional catch up fees as your new accountant needs to re-create what your old accountant has already done. This is especially true if your old accountant is also doing the bookkeeping for you.
  2. Ensure all financial responsibilities to your accountant are discharged i.e. all outstanding bills paid.
  3. Inform your current accountant that you are planning to change and they have permission to converse with your new accountant for the purpose of handover of paperwork and information. Of course, if you want to avoid the possible awkward call or email to say you are leaving them, we can draft a letter for you to sign and send it on your behalf.
  4. Your old accountant should produce a disengagement letter stating what work they have done; key dates and information, and they will want a sign off from you.
  5. Your new accountant will write to the outgoing accountant asking for professional clearance along with any relevant paperwork. In this letter, we will ask your old accountant if there is any reason why we cannot take you on as a client. This is a professional formality and does not normally present any problems.The information collected will include previous year’s accounts & tax returns, reconciliations and any bookkeeping work they may have done on your behalf. Your old accountant should provide the information within a “reasonable time” for which there may or may not be a fee. It should not be more than an hour charged.
  6. Your new accountant will usually send some type of registration form to capture your personal and limited company information. For Performance Accountancy, this takes place as a secure on-line form. Your new accountant will also need to carry out an anti-money laundering check on you – this is a legal requirement. A ‘Letter of Engagement’ sets out the expectations and requirements between the client and the accountant which needs to be agreed and signed. Usually there are standard terms of business and a separate fee letter. Make sure this is signed and returned to your new accountant otherwise it is assumed to be agreed after 31 days from the date issue.
  7. The final stage is to assign authority to your new accountant for your tax affairs. This means that your accountant can file on your behalf personal tax returns, partnership returns and all the limited company tax and companies house issues. Your new accountant will be the first port of call from HMRC. This authority (64-8) does not absolve your responsibility for the tax returns; your accountant is just doing it on your behalf. The final responsibility for correct submission of tax returns and so forth lies with you, not your accountant.
  8. After a few weeks, assuming there are no hold ups, all your accounting information should have been transferred and you will be safely on board with your new accountant. Please, never leave this until January for self-assessment, as the transfer of records and authority won’t have time to go through.

 

 

 

 

 

 

 

 

 

 

Claiming VAT back on business expenses in the E.U

How to claim VAT back from business expenses acquired in the E.U. 

Read on if you want free money…

The Trevi Fountain - to match blog content claiming V-A-T on business expenses whilst travelling

Do you want your VAT back?

…If you often travel into Europe on business and your business is VAT registered, you may be able to claim EU VAT back on things like your hotel bill, subsistence, travel (if VAT is charged in the first place), events you have attended and all sorts of other things.

VAT reclaim on E.U business expenses. 

For getting your VAT back  there is a reclaim process that you can use after the end of a calender year whereby you collect all your eligible receipts, add them up, and if greater than €50, make the claim back VAT via the relevant  HMRC website. 

The Rules for claiming back V.A.T on your business expenses in E.U Member states…

  • You cannot be VAT registered in the country you wish to make to a VAT refund from;
  • To claim V.A.T back you can’t  have a place of business or a residence in that country;
  • The expenses incurred were in the course of business and not pleasure;
  • You don’t make any taxable supplies in that country (a couple of exceptions to that);
  • To claim back V.A.T for the expenses you have made whilst on business in the E.U you must be in business and be VAT registered.

You can only apply for a VAT refund once the cost is over 3 months old, and must not be over 12 months old. 

The refund period for claiming back Value Added Tax is based on a calender year, and there is also a minimum amount you can request to be refunded.

Although the amounts can vary per country, the standard amounts used are based on when you are applying for a refund of V.A.T

  • €400 minimum if you start to make the claim during the calender year;
  • €50 minimum if your claim is for a whole calender year.

This encourages you to make one refund of Value Added Tax claim once  the calender year has ended. €50 worth of VAT can quickly mount up. For example, a 2 night stay in a 4* hotel in Copenhagen costs around DKK1700.  With VAT at 25%, that is about €45 of VAT. A bit of subsistence, car rental or conference cost (transportation is not allowable for Denmark) and you are over that minimum €50 level.

Each country is different in what you can claim. Denmark allows the VAT on accommodation to be refundable, but Belgium, Greece, Ireland, Italy, Norway & Portugal don’t allow that VAT to be recovered.

There is a table buried deeply on the internet that shows what can be claimed for in each country, but if you are unsure, then drop us a quick note.

How to claim back VAT for European Expenses.

In order to be able to make your EU VAT recovery reclaim, you need to login to your VAT portal. Instead of going for “Submit a new return”, click on “Services you can add …. Enrol for online services” and then register.

Once it is all confirmed, you can then press ahead with the reclaim process.

As the reclaim process is done on line, you normally don’t have to send copies of invoices/receipts with the request unless the claim is above a certain amount.

It is not a quick process. Once the claim has been submitted, you get a confirmation that the request has been received within 16 days.

You will get a decision on whether or not you will get a refund within 4 months.

They may ask for more information at this stage which much be provided within one month. If there are no hiccups, you should receive the refund within 4 months and 10 days.

Is there a deadline for recovering E.U VAT?

If you are going to save up your receipts and make one claim after the end of the calender year, then the claim must be done by the 30th September in the following year.

Please note that this is done by calender year and not UK tax year. I know, I can hear you saying “is it taxable?”.

Well, getting a reclaim reduces your costs, so you will have less costs to go against your income, which effectively make it taxable. If I can get €50 back and only have to pay €10 for it, i’d do it.

 So there you have it. A way to get a little bit of money back in your pocket, by claiming back VAT from your European business trip

Expenses for Home based businessess.

This subject seems to be one that many clients ask. Self employed people mainly base their work place at home, although work takes place at customer locations. This applies to many trades & professions from plumbers, accountants, chiropractors, computer technicians etc.

As you visit customer sites, it would be reasonable to be able to charge to your business the cost of getting to the customer locations. But, there is a little bit of an issue if when you walk in after being at customer locations and your trading activity stops as you get home.  If no work was done at home, it implies that home is not the true base of your business. You need to make sure that business happens in the home.

In order to claim costs to travel from home to a customer location, you need to keep records of what you do at home in relation to the business. The type of records would be:

  • A diary of time spent working on your business administration such as raising invoices, dealing with your bookkeeping, writing proposals and quotes, white papers, report and on-line educations, plus social media & marketing tasks;
  • The proposals & invoices that you do all have your home address as the business base;
  • Complete and accurate records of all the travel you do to the customer locations – be it mileage, public transport even air & boat fares;
  • If you have any insurance policies to cover your business, they would normally be addressed and registered to where the business is based, so this should be the home if that is where the business is based.

It is the same if you are a company, so in the ideal world, the registered office should be at the business base. However, this address is a matter of public record and once set up, will remain so.

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You probably all do this type of work at home but not think about it or record it.   Don’t be a monkey, keep records as you go along, as it is so much easier to justify the travel expenses from home.

 

Will your bookkeeping records stand up to an HMRC check?

The business records check is coming up again but this time “creatives” are being identified as potential groups of people to perform checks on.

We all know that paperwork and creativity do not go hand in hand, so we are seen as easy targets. Be prepared !

These are examples of the questions asked: • Do you understand your obligations to HMRC?

• Do you need help understanding forms from HMRC?

• How long have you been in business?

• Can you tell from your record keeping which transactions/expenses are personal and which are for business?

• How many payments do you receive each month, how many of them are in cash and how often do you write up your books recording this?

• How many payments do you make each month, how many of them are in cash and how often do you write up your books recording this?

So – don’t leave it too late to get your books and accounts sorted. HMRC can impose fines and with money hard enough to make, you don’t want to loose it because of a few hours a month on admin.

August Accounting Content Kicking Off

treble clefWell, I made a promise myself that I would spend August working on my business and building lots of accounting content and useful tools for clients to use, as well as getting round to writing an e-book or maybe even a real book by the end of the year. The trouble is, that was due to be August 2013 when I first planned it in May 2013.

August 2014 has arrived and I am actually doing it. Useful accounting content will slowly come out on my website and social media pages that can be used by all small businesses, and there will be content for my specialisms area of performers. The first of these initiatives was launched in June, and it is a paper dedicated to the expenses that performers can claim against their tax. All those singers, actors, musicians, dancers, entertainers sitting in the green rooms worried about their tax. ouch.

This paper will develop over time as people ask questions about its content, or questions that I had not considered putting an answer to. Debbie Christie – thank you for the couple of topics which will land in the next version. If you have no clue what I am talking about, then pop over to the performers page by clicking >>> HERE <<< , sign up, and check your spam for the confirmation email, and then the link to the pdf document will be sent to you.

August is always a quiet month for accountants as who wants to ruin their summer by thinking of tax returns and documentation. Should you want to talk to an accountant, then give us a bell on 01344 669084 or if you are shy, drop us a message by clicking >>> HERE <<<. We don’t bite – only when I am peckish or bored.

See you next time.

Louise

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