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April 2015

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To April’s Tax Tips & MYOB News.

Training in MYOB & Acclivity – May 2015
Halifax/ Denham (NW London)
After our successful courses last year, we are considering running training sessions in MYOB and Acclivity in May.  Provisional dates are 21st May in Halifax; 27th & 28th May in Denham (North West London). Cost will be £80/ £90 + VAT inc. lunch (free for Business Companion clients).  Please and we will send you full details. We need to have an idea of numbers before we book venues.

The Budget

To follow up from our previous resume here is the full budget briefing from our firn’s institute (the ICPA). Please call us with any questions about how the changes might apply to you. 
Budget Briefing (pdf)

April 2015
· Pension freedom or Pension slavery?
· Birthday surprise
· Tax Dashboard
· Charities and tax
· April Question and Answer Section
· April Key Tax Dates
Pension freedom or Pension slavery? top
Pension freedom is a GOOD thing. The change in law from 6 April 2015 means that members of defined contribution pension schemes who are aged 55 or more should be able to draw what they want from their pension schemes. But “pension liberation” is a BAD thing. This is when scammers use confidence tricks to separate taxpayers from their pension savings, and the taxpayer has to pay high charges and tax penalties. Can you tell the difference?

Meanwhile employers are also asking us about auto-enrolment.  Is this a good place for you to put your savings?

I expect the basic answer is ‘no’. It is not worth it for any business, economically.  Pensions don’t really save tax for Basic Rate taxpayers.  They merely delay payment of the tax to the point where you receive the pension. The only reason that an employee will gain is that the employer is being forced to pay into the fund as well.  But you could have just given the employee a pay rise!

The other people who gain are the pension providers, and all the commission-based investment advisors they use. And the rate of interest you will receive on a pension investment is miserable. In summary pension schemes are so unattractive for basic Rate Taxpayers and their employers that the Government haves to make it law to force employees to make a minimal provision.

Pensions are a good way of delaying the tax effect of salaries which would otherwise be taxed at Higher Rate. So if you are a proprietor/ owner of a business use your employer pension scheme yourself only if:
1)    If you expect to regularly earn over £42k pa and
2)    You cannot invest spare cash in something that can earn interest at over 2% (eg your business or privately owned letting property) and
3)    You don’t mind fund managers helping themselves to part of your savings.

Birthday surprise top
Tax Dashboard
Do you know when your younger workers will reach their key birthdays: 18 and 21?

It is essential to know exactly when these dates fall, as reaching such a milestone will change the level of national minimum wage (NMW) which must be paid to that worker. Read More
Are you signed up with the Government Gateway? Do you regularly check your tax details on this HMRC Online service? 

If you have logged in recently you will have seen a request to sign-up for the tax dashboard. This is a new option that will provide a single view of all your business tax liabilities from corporation tax or income tax, VAT and PAYE. The tax dashboard will show the following for each tax:

– Amount owed
– Repayments due from HMRC
– Payments already made
– Interest due on any late payments
– Penalties incurred, and
– Direct debit payment plans

You will not be able to reallocate payments between taxes, or even between periods for the same tax. The dashboard is merely a viewing facility.  You can choose not to use the new dashboard – but stick to the view you are used to.

It is sometimes important for us, as agents, to be able to see your PAYE/CIS account or VAT account – to check how much you have paid in each period.  Strangely the HMRC will not let us view this on our Government Gateway login as your agent. Therefore we may ask you to let us view your Government Gateway registrations to get this extra information.  

Please get back to us with any questions you have about your tax information on your Government Gateway. We know it can be confusing!
Charities and tax top
April Question and Answer Section top
If you help to run a charity you need to keep on top of the tax and audit regulations that apply to charities, and the gift aid scheme.

A person with earnings, dividends or pension income of less than £10,600 and interest of up to £5,000 will pay no income tax in 2015/16. These individuals should not make gift aid declarations for donations made on or after 6 April 2015, as they do not pay the income tax which the charity reclaims in respect of that donation.

As a charity you can reclaim tax online which has been deducted from bank interest, or is due back under the gift aid scheme or gift aid small donations scheme (GASDA). The charity needs to register with HMRC’s online services and opt to use the Charities Online service. Details of the donations it receives can be reported on a spreadsheet for up to 1,000 donations at a time. HMRC provide example spreadsheets to help with this process. Read More
Q. My personal company operates from a little brick building at the end of my garden, which is heated with a portable gas heater. Can the company pay me for the cost of the gas bottles used for that heater, on top of the “use of home” allowance of £4 per week? Answer

Q. Which is cheaper: the company to take out a corporate health insurance policy for its employees, or each employee to take out personal health insurance policies and the company to pay the policy premiums on behalf of the employees? Answer

Q. I started trading as a hairdresser nine months ago and have made sales of £66,000 so far. I’m worried that I will have to register for VAT soon and lose 20% of my income directly to the taxman. What can I do? Answer
April Key Tax Dates top
5 – End of 2014/15 tax year. Last day to use up your annual exemptions for capital gains tax, inheritance tax and ISA’s

14 – Return and payment of CT61 tax due for quarter to 31 March 2015

19 – Deadline for finial submission of the year – 19th April. Penalties for late submission.

19 – PAYE/NIC, student loan and CIS deductions due for month to 5/4/2015 or quarter 4 of 2014/15 for small employers. Interest will run on any unpaid PAYE/NIC for the tax year 2014/15

30 – Additional daily penalties of £10 per day up to a maximum of £900 for failing to file self-assessment tax return due on 31 January 2015
Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.
About Us top
Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Solar Accounts, Quickbooks or Clearbooks.

‘All clients using these software packages can benefit from our support. Visit our website for a look at the resource on offer.’

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