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December 2014

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

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

Please contact us for advice.
We’re here to help!
December 2014
· Let Properties – Repairs, Renewals or Improvements
· R&D Enhanced Deductions
· Email Scam – UK Corporate Portal
· RTI fines
· December Questions and Answers
· December Key Tax Dates
Let Properties – Repairs, Renewals and Improvements  top
If you let out residential property you need to know whether you can receive a tax deduction for the cost of replacing or repairing furniture and fittings provided inside that property. The cost of equipment used to maintain the outside of a property, or used in the communal areas of a building containing multiple dwellings, is always deductible.

When you fit something for the first time to a property, such as a fitted kitchen, that cost will form part of the capital cost of the building and will only be deductible when you sell the property. If you repair a fitting or replace the fitting with something of the same quality, the cost counts as a repair which can be deducted from the rental income. Read More

When your property is rented fully furnished you can claim a wear and tear allowance (10% of the net rents), each year to cover the cost of replacing furniture and furnishings such as carpets and curtains. You can only claim capital allowances for furniture used inside a property which is let out commercially as furnished holiday accommodation for at least 140 days a year (other conditions also apply).

But the rules on allowable expenses for landlords are tightening up. A key extra Statutory Concession is being removed. Before 6 April 2013, the taxman allowed landlords of unfurnished and partly furnished properties to claim for the cost of items provided in those properties under the “renewals basis”. Now the taxman has changed his guidance, saying that claims for “renewals” can only apply to small items such as toasters, lamps, or rugs.

This denies a tax deduction for the cost of larger loose items such as fridges, cookers, carpets and curtains. The cost of replacing items which are fixed to the building, such as a fitted oven or hob in a fitted kitchen, are counted as “repairs”, and are deductible as described above.

Example: imagine you have a broken down washing machine. If replaced £180, the cost, would not be allowable. However if instead you got it repaired, at a higher cost of say £220, this would be allowable at 20% or 40% (depending on your tax rate).  A boiler replacement like for like is regarded as a repair, because it is only part of a heating system. Therefore it is better to repair or replace in parts (in tax terms) than to replace with new.

 Read More

R&D Enhanced Deductions top
Email Scam – UK Corporate Portal
Companies (but not unincorporated businesses), can claim enhanced deductions for qualifying costs they incur on research and development (R&D) projects. For small companies the deduction can be 225% of the qualifying costs, and since April 2012 there is no minimum spend required in an accounting period.

The major barrier to claiming this tax relief is simply working out whether your project qualifies as R&D. To qualify it must push the boundaries of scientific or technical knowledge.

Ask yourself:
a)Has anyone else done what we are trying to achieve with this project?
b)If another business has achieved that goal, have they kept their discovery secret? Read More
One of our clients recently received a letter entitled, ‘Publication of companies and VAT Registration Numbers in the UK Corporate Portal 2015’. The letter looks very official – it has a bar code on the right hand side, it is signed by ‘Managing Director’. It invites you to complete your details on the attached form for entry on the ‘UK Corporate Portal!

If you receive one, DO NOT COMPLETE THE FORM. This is a scam.

Unfortunately for those who have already returned this form, they later received an invoice asking for 1 payment of £797. The invoice claimed that they have signed up to pay this amount for 3 years for inclusion on which is a directory of UK businesses owned by a German company.

If you ever have a concern about a possible regulatory request like this …it’s cheaper to phone us to be sure.
RTI Fines
December Questions and Answers top
Fines have been recently deferred for smaller employers. However, RTI fines for companies and businesses employing less than 50 employees are still coming in from 6.3.15 – late filing is therefore a problem from the tax year 14/15 onwards.

The fines will be £100pm for less than 10 employees and £200pmif you have between 10 and 50 employees.  The fines are so significant that we think that the only economic solution is to use a payroll agent.  If you are not already using one, consider our accounting service, which is all inclusive for software and accounts, and includes a payroll agency as well as personal tax and much more.

See more details on our Business Companion Service.
HMRC has reminded me to claim the employment allowance for 2014/15 worth £2000. My company doesn’t pay any employers’ NI on my very low salary, so I thought I couldn’t claim the employment allowance. But the Government website referred to in the HMRC letter says I can get a refund of my VAT, PAYE or corporation tax as I haven’t used the full employment allowance for the year. How do I get my hands on this money?Answer

I started my new business this summer and raised my first invoice on 1 August, with no VAT added. I realised I would need to register for VAT very soon, so I applied online. The VAT registration confirmation said my business is VAT registered from 4 August 2014. Do I need to do anything about invoice number 1? Answer

Q. My company is closing down. All the bills are paid and I want to close the PAYE scheme. If I am not on your Business Companion Service, how do I do that under the RTI system?Answer
December Key Tax Dates top
10 – CIS Declaration Deadline

– PAYE/NIC, student loan and CIS deductions due for month to 5/12/2014

30 – Deadline for 2013/14 self assessment online returns to be filed if you are an employee and want tax underpaid to be collected by adjustment to your 2015/16 PAYE code (for underpayments of up to £3000 only)

31 – Deadline for submission of company accounts for those companies with a year end of 31 March.

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 Online, Yodlee, Wave 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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