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February 2021

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To February’s Business Companion News.

Struggling with HMRC? 
Over the past few months we have had to deal with an increasing number of problems  caused by HMRC’s poor systems.  For example, with VAT, they have failed to update Annual Accounting records following phone calls and letters we have sent. New VAT registrations and VAT corrections are taking them months to process.  For us, dealing with HMRC is all part of a normal day’s work – though it is frustrating when these follow ups shouldn’t be necessary.
Are you also struggling with HMRC?  If so as we may be able to help you sort things out.  If necessary we can ring them on your behalf.
February 2021
· Latest news round up
· Deregistering from VAT
· Self-assessment – DIY time-to-pay options
·Networking AccountEdge on a PC Server
· February questions and answers
· February key tax dates
Latest news round up top
Covid-19 – business support

Unsurprisingly, Christmas 2020 was dampened by the ongoing Covid-19 measures. The Prime Minister revised his plans to permit “Christmas bubbles” to be formed for up to five days between multiple households. In the end, such bubbles were only permitted on Christmas day, and then only for areas that weren’t in tier 4.

The New Year brought further bad news with the announcement of a third national lockdown for England starting on 6 January, lasting until at least mid-February before review. Scotland and Wales had announced similar restrictions.
Read More
Deregistering from VAT top
Self-assessment – DIY time-to-pay options top
As a result of the Covid-19 crisis, many businesses are currently experiencing reduced turnover. In many cases, the business is VAT-registered, and some owners are asking whether they can now deregister.

If you have decided to stop trading, or created a temporary reduction in turnover (a ‘Suspension of taxable supplies for 30 days or more’) then you cannot deregister.  Is the decrease in your sales both permanent and purely due to circumstances? 

Intention is key.  If you want to deregister we need to be clear that you haven’t made an intentional  decision to deliberately reduce your turnover, to avoid VAT before we deregister you.

If there are more sales in a different trade in a different legal entity then there is another anti avoidance regulation.  You are not allowed ‘artificial separation’ to a similar business.  You don’t get another crack at the £85k VAT registration threshold.  Say your VAT registered cafe closes and you take on work as a yoga teacher as a sole trader to make up your income – this new trade would not be subject to VAT.  However you would still be subject to VAT if you worked as a self-employed caterer.

To justify a deregistration we need to prepare some proof.  Can we prove that your income reduction is because your business is a victim of circumstance?  Can we demonstrate the threshold won’t been breached in the next year in the same or a similar trade?  How separate is any new trade you take on?

What are the rules here, and is it always advisable to do so?
Read More
HMRC have extended the deadline for filing 2019-20 personal tax returns to 28th February.  Although strictly you do need to pay your balancing payment by 31st January they won’t be chasing up any tax due for at least one month (although they may add a little interest). 

HMRC Payment Details
Sort Code: 08 32 10
Account number: 12001039
Account Name: HMRC Cumbernauld
Payment Reference:
Use your 10 digit Self Assessment number (UTR), followed by the letter K for example 1234567890K.

Time To Pay
If you are struggling to pay tax due you can set up an instalment plan – or “time-to-pay” – arrangement.

You can ring to arrange this on the time to pay telephone number: 0300 200 3820 (8am – 5pm weekdays, quieter first thing). Try soon after 8am?

Alternatively if you have an online tax account this can be arranged online with no need to contact HMRC by phone.

See the HMRC Website.
Networking AccountEdge on a Windows Server
PC Network Operating System:
•    Windows Server 2008 R2 or later.
•    Windows 8 or 10
•    Small Business Edition is not supported

Windows Server 2008 R2 (or later)  
Currently Windows Server 2008 R2 is a supported platform for hosting company files.  We do not run into network performance issues.

Windows 8 or 10
The server does not need specific server software.  If it is running Windows 8 or 10 the AE software will access any datafile on the server through the windows link

Windows Small Business Server
Windows Small Business Server 2011 and Windows Small Business Server 2008 (SBS) are integrated server suites from Microsoft and is designed for running a small businesses internal and external IT infrastructure.  We’ve found hosting a company file on SBS with multiple AccountEdge users connecting to it results in poor network performance. SBS contains tightly integrated server technologies to offer small businesses solutions to cover many small business IT needs. The idea is that as a small business you can have a single server take care of your email, security, web site hosting, control your domain, users, collaboration with Sharepoint and more.  Unfortunately due to all of these services running, using SBS as a file server to host an AccountEdge file is not a good fit and is currently not supported.

February questions and answers top
February key tax dates top
Q. My director’s loan account is overdrawn as we approach our year end. Usually, a dividend is credited to cover the shortfall, but my accountant says that there are not enough reserves to do that this time. We’ve looked at writing off the loan to avoid a s.455 charge as a cheaper option than an additional salary payment. Are there any problems with this? Answer

Q. I usually make regular pension contributions of approximately £10,000 per year net of relief. However, in 2017/18 I made a large one-off contribution following a capital gain. I’ve just realised that I omitted this from my tax return and, as a result, overpaid tax by nearly £8,000. Is there anyway I can amend the return? Answer

Q. I made an investment into a promising fledgling company several years ago. Due to Covid-19, the company has struggled over the last 12 months, and has just entered administration. What is the best way to secure relief as soon as possible? Answer

15 – Claim deadline for employers for furlough days in January.

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/2/2021

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, Xero, Solar Accounts, Quickbooks or Freeagent.

‘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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95 Bridge Lanes, Hebden Bridge, Yorkshire, HX7 6AT
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