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Welcome… To January’s Tax Tips & News, 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 in your own specific circumstances. We’re here to help!   January 2013 · Using MYOB/ AccountEdge more simply · RTI – More Information · New Tax Free Allowance · Increased Annual Investment Allowance · January Question and Answer Section · January Key Tax Dates Using MYOB/ AccountEdge more simply top There is a surprisingly wide range of functions available in AccountEdge/ MYOB software. Many of these functions are hidden from view and some are only important for businesses with particular needs. We often come across people using very complex processes to record simple transactions – in many cases we can help them with simpler alternatives.  One useful alternative method we have used is to think of creative uses for nominal accounts using the ‘Credit Card’ account type.  These accounts can be used to simply account for: Loans Mortgages Expenses paid by Directors Intercompany Loans Intragroup transactions Supplier Deposits Hire Purchase Director Loan Accounts To find out more have a look at the credit card section in MYOB/ AccountEdge Tricks of the Trade. Do call us with any questions you have on simple accounting techniques.   RTI – More Information top   New Tax Free Allowance top The rules for reporting wages, hours worked and payroll deductions under real time information (RTI) are still being written. What to report RTI reports will need to be made where at least one employee is paid above the lower earnings limit (LEL), (£109 per week for 2013/14). For wages between the LEL and the Primary threshold (£149 per week for 2013/14) the worker is given NI credits although they don’t actually pay any NI, so the level of their wages needs to be reported. A major difference between RTI and the current system, is that once the employer is reporting under RTI, reports must be made for each employee even if no tax or NI are deducted for a particular period. This because RTI has two functions; – to report deductions to HMRC and to report net pay for each worker to the Department of Work and Pensions (DWP) to allow the DWP to calculate top-up benefits such as Tax Credits and the new Universal Credit.Read More The standard personal allowance (amount of tax-free income) for 2013/14 will be £9,440. We had been expecting a smaller increase to £9,205. The new higher allowance allows an individual to earn £181.54 per week (about £787 per month) tax free. But the NIC thresholds will not increase by as much, so an employee starts to pay NICs on income way below the tax-free threshold. In 2013/14 the class 1 primary NI earnings threshold for employees will be £149 per week (£7755 per year). Employers will pay class 1 NI on wages of £148 or more per week (£7700 per year). You need to consider the NI costs for both you and your company when deciding how much you can extract from your own company as salary.Read More   Increased Annual Investment Allowance top   January Question and Answer Section top The annual investment allowance (AIA) gives a 100% deduction for tax purposes for the cost of plant, equipment and certain fixtures in buildings, which qualify for capital allowances. The AIA has an annual cap. This started at £50,000 in 2008, was increased to £100,000 by the previous government, and was cut to £25,000 in April 2012 by the current incumbents. Now the AIA cap will temporarily increase to £250,000 for expenditure incurred in the two years from 1 January 2013. Equipment bought on and after 1 January 2015 will be subject to the reduced AIA cap of £25,000, unless the Chancellor of the day has another change of mind. Expenditure that qualifies for capital allowances, but which exceeds the available AIA cap for the business is given tax relief at the rate of 18% or 8% per year, depending on the nature of the item purchased.  Read More Q. If I purchase a Land Rover Defender for use in my partnership business can I reclaim the VAT paid on the purchase? I will use the Land Rover 75% for business and 25% for private journeys.Answer Q. The Christmas feasting has taken its toll on the waistlines of everyone in our company. Can I give the workforce a boost by having the company pay for gym membership for me and all my staff? Answer Q. My business has started exporting goods. I’ve heard I need an EORI number. What is it, and how do I get one? Answer   January Key Tax Dates top 14 – Return and payment of CT61 tax due for quarter to 31 December 2012 19/22 – PAYE/NIC and CIS deductions due for month to 5/1/2013 or quarter 3 of 2012/13 for small employers 31 – Deadline for filing 2012 Self Assessment personal, partnership and trust Tax Returns – £100 first penalty for late filing even if no tax is due or tax due is paid on time Balancing self assessment payment due for 2011/12 Capital gains tax payment due for 2011/12 First self assessment payment on account due for 2012/13 Interest accrues on all late payments Half yearly Class 2 NIC payment due Further penalty of 5% of tax due or £300, whichever is greater for personal tax returns still not filed for 2010/11 5% penalty for late payment of tax unpaid for 2010/11 self assessment   Video Guidance top   New Clients Welcome top Want to improve your knowledge of MYOB/ AccountEdge? Have a look at our comprehensive set of video tutorials. These cover the introductory and advanced features of MYOB/ AccountEdge.  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. We offer a range of accountancy services despite being specialists. ‘All clients using these software packages can benefit from our support. Visit our website http://www.simpleaccounting.co.uk for a look at the resource on offer.’   If the images do not show. If the images contained within this email do not show correctly please add this email to your safe senders list.

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