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April 2019

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To April’s Tax Tips & MYOB News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

Pension Contribution Rates Increasing
Note: from April 2019, the Pensions Regulator has increased minimum contribution rates to 8% of ‘banded qualifying earnings’ – of this at least 3% must be paid by the employer.

We propose that the Employer pays the full 8% with no employee contributions.
Read More

April 2019
· Making Tax Digital – impact for businesses, including those below VAT threshold
· Workplace Pensions for Temporary Workers
· Employee mileage allowances
· NMW and NLW increases take effect
· April questions and answers
· April key tax dates
Making Tax Digital – Impact for businesses, including those below VAT threshold top
If you run a VAT-registered business with a taxable turnover above the VAT registration threshold (currently £85,000) you will be required to keep digital VAT business records.  MYOB AccountEdge and our recognised softwares are all digital records in this sense.  For those on quarterly reporting, the first quarter end subject to MTD reporting is 30/6/2019.  From this period onwards we will send returns using Making Tax Digital (MTD)-compatible submission software.

Many of our clients are on VAT Annual Accounting with a year end of 31st August 2019.  These will have no MTD obligations until the end of their first full annual VAT period.  We expect this to be 1 September 2020 to 31 August 2021.  These clients will submit their digital VAT records to us by end October 2021. As before we will send returns using Making Tax Digital (MTD)-compatible submission software from 2021.  See our December newsletter article.  

Below VAT threshold?
Any business with taxable turnover below the VAT threshold is automatically exempt and does not need to apply to HMRC.  However HMRC is encouraging VAT registered businesses below the VAT threshold to sign up for MTD anyway.  Our advice is that you shouldn’t sign up to MTD voluntarily.

You do need to monitor your annual turnover each month, as if it increases to above £85,000 you will be required to comply with the MTD for VAT rules.

If you initially sign up to MTD, but your taxable turnover later drops below the VAT registration threshold you are still required to continue to follow MTD requirements.This obligation doesn’t apply if you de-register from VAT or if you are exempt from MTD for VAT.

Will HMRC contact businesses to confirm if MTD applies to them?
HMRC say they will be writing to all businesses whom they consider will be obliged to comply with the MTD for VAT rules. We would be interested to know if you have already received a letter about this. If you are one of our clients please drop us an to let us know.
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Workplace Pensions for temporary workers
Employee mileage allowances top
Even if staff are temporary or seasonal you have to give them the option of joining your workplace pension scheme, as you would do any other employees.   However, you can use postponement (of up to three months)  to postpone the date you assess whether they are eligible to join the pension scheme. So if they work for you less than three months you won’t need to enrol them.  But you must give them a letter within six weeks of starting which includes the postponement date. 
See Guidance from the Pensions Regulator.

The Pensions Regulator have confirmed that if you have seasonal workers who come back for a second (or several) periods of work with you, each one can be treated as a completely separate employment – so you can use a three month postponement each time.  Each employment must be separate so they must have to have a P45 when they leave and a new work contract when they restart.  It is important that you keep records of the postponement letters issued. We can provide suitable letters for you.
Confusion often arises over differing tax treatment of mileage allowances paid to employees using their own cars for business, and those provided with a company car.

An employee using their own car for work can claim a mileage allowance from their employer, which is designed to cover the costs of fuel and wear and tear for business trips. The mileage allowance will be tax-free if it does not exceed HMRC’s Approved Mileage Allowance Payment(AMAP) rates, which are currently as follows:
Read More
NMW and NLW increases take effect top
New rates for the National Minimum Wage (NMW) and National Living Wage (NLW) (aged 25 and over) apply from 1 April 2019, and employers must ensure that they implement them accordingly. The rates are as follows:

– 25 and over – £8.21 per hour;
– 21- to 24-year-olds – £7.70 an hour;
– 18- to 20-year-olds – £6.15 an hour;
– under 18s – £4.35 an hour; and
– Apprentice rate – £3.90 an hour.
Read More
April questions and answers top
April key tax dates top
Q. I have some permanent employees and I also pay temporary workers as and when I need extra help. I understand that changes have recently been to the rules concerning payslips. Could you please provide some clarification? Answer

Q. I have been running my own business for several years and my turnover has recently exceeded the VAT registration threshold. I have registered with HMRC and am waiting for my VAT number and certificate. Can I claim back VAT on purchases made by the business before the registration date? Answer

Q. I inherited my late father’s house in March 2018, which I subsequently sold in December the same year. I have never lived in the house. The total value of my father’s estate is less than £175,000. Will I have to pay tax on the proceeds of the sale? Answer
1 – Making Tax Digital mandated for VAT customers, except those that have been deferred

5 – End of 2018/19 tax year. Last day to use up your annual exemptions for capital gains tax, inheritance tax and ISA’s

6 – Start of the 2019/20 tax year
Minimum Workplace pension contribution rates increased to 8% of qualifying earnings.

14 – Return and payment of CT61 tax due for quarter to 31 March 2019

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/4/2019 or quarter 4 of 2018/19 for small employers. Interest will run on any unpaid PAYE/NIC for the tax year 2018/19

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 2019

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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