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Happy New Year! We hope you’ve had a relaxing festive season and we wish you all a successful 2017. In AccountEdge, at this time it is very easy to accidentally key in ‘2016’ onto entries which are actually for ‘2017’.  There is a simple solution.  Go to ‘Setup/preferences/security’ and set the lock period to the end of 2016.  The software will warn you if you accidentally key in a date for last year. Don’t forget to pay any Self Assessment Tax Due by 31st January. HMRC Bank account details: Sort Code: 08 32 10 Account number: 12001039 Account Name: HMRC Cumbernauld Self Assessment Payment Reference: Use your 10 digit Self Assessment number, followed by the letter K. This is sometimes referred to as a Unique Taxpayer Reference (UTR) for example 1234567890. Quote the reference number with no gaps between the characters and add a ‘K’ at the end eg. 1234567890K. You can check your reference number at www.hmrc.gov.uk/payinghmrc/referencechecker.htm   January 2017 · Contracting in the Public Sector · R&D Tax Credit Consultancies · Business is Bureaucratic · Company cars – ultra-low emissions vehicles · January questions and answers · January key tax dates Contracting in the Public Sector top   R&D Tax Credit Consultancies top The latest budget has changed the situation for Personal service companies (PSCs) providing services to public sector.  From April 2017 public sector bodies are required to assess employment status of any PSCs they contract with.  The PSC may be required to provide an opinion to back up its judgement of employment status.  Ultimately the HMRC intention is to be able to assess public bodies with PAYE and NI on payments to any consultancy supplier for which there is not a positive HMRC Employment Status Indicator judgement: http://tools.hmrc.gov.uk/esi/screen/ESI/en-GB/summary?user=guest Moreover this requirement is imposed on bodies well beyond what we might typically consider to be public sector.  Any body that is subject to Freedom of Information requirements has to meet this new requirement.   Universities, public sector charities and even certain private companies engaging a PSC will be required to deduct PAYE and NI, from the fees charged, net of VAT.  The PSC will only be able to recover the debit by making a salary payment to the director and offsetting the PAYE and NI paid. Directors are always considered employed.  Therefore Non Executive Directors (NEDs) could easily fall into this trap.  The basic premise is that NEDs are subject to PAYE on services provided as “office holders” – even if those services provided via a PSC, ie as a contractor.  As a matter of law a NED holds office in a personal capacity.  Therefore public sector bodies should avoid using a consultant as a paid ‘director’ whether they serve on the Board or not. A number of Simple Accounting clients have recently had calls and letters from consultancies representing themselves as Research and Development Tax Credit specialists.  They will typically accuse a business’ accountants of being slack at taking the opportunity of these credits.  They will encourage the business to sign an agreement to make claims through them. There is then a real problem with the arrangement is the contract.  The agreement may be binding for a long period (ten years?).  It will be exclusive.  There will be a large percentage of the R&D claimed going back to the consultancy.  There is no guarantee that the claims will follow the tax rules on the scheme.  We have even come across a case where an agreement required the claims to be made separately from the Corporation Tax return, so the accountant could not see them. If you want to make a claim for these tax credits we can make them on your behalf.  We simply need to check through your expenditure to check what costs could qualify.  We don’t charge extra for making this claim. Read More   Business is Bureaucratic top The HMRC is embarking on a new program to expand the control that they have over your business records.  Making Tax Digital is intended to allow the HMRC to impose PAYE-style interim payments of corporation tax.  But it is not like the state doesn’t already impose immense bureaucratic controls on your business.  During a year we will be filing for a typical client: Four VAT returns Payslips for all staff every week or month Twelve Real Time Information PAYE / CIS electronic returns to the HMRC P60s for all staff Four quarterly or twelve monthly payroll account reconciliations / PAYE payment requests with the PAYE payment references your business is meant to quote on the actual monthly payment. Two personal tax returns and associated schedules for the two top director/owners A Corporation Tax Return Full Accounts to go to the HMRC to accompany the Corporation Tax return A corporation tax calculation (separate from the Return itself) Corporation tax payment record Abbreviated or Full Accounts to either Companies House or Charities Commission or the Financial Conduct Authority A Companies House Confirmation Certificate (formerly an annual return) Directors Change of details forms An annual Pensions regulator return 12 or 52 uploaded submissions to the Peoples Pension or NEST. In all about 68 forms or returns annually for a typical client. Often we shall also provide or help or evaluate the following extra forms each year: SA302s for directors for mortgage application P11d forms for each employee P11dB for each P11d for the HMRC Interim personal tax code representations to HMRC. Quarterly Statistical Office returns Charity Commission returns questionnaire responses and accounts Four EC Sales lists Employment contracts Self employment contracts Compulsory insurance returns and questionnaires Company dividend minutes Dividend tax certificates per recipient Bank arrangements and applications ICO application and returns Applications for credit Credit referencing Accountant Certificate Working Family Tax Credits / Child Tax Credits Overdraft agreements Share issues/transfers National Non Domestic Rates assessments No permanent establishment declarations to avoid withholding tax on exports. Student Loan Company return Coming soon are : Four Making Tax Digital returns – These records will demonstrate the cash income and expenses earned each quarter which will then be used to calculate your business’ quarterly business tax instalments.  They are coming because of course the government cannot be entirely sure that we are not committing fraud unless it has yet more records.    Company cars: ultra-low emissions vehicles top   January questions and answers top At Budget 2016, the government said it would consult over the summer on changes to the ultra-low emission vehicles (ULEV) bands for taxing company cars to ‘focus incentives on the very cleanest cars’. As a result of the consultation, HMRC have now published details of eleven new bands, which will be introduced for ULEVs with emissions below 75gCO2/km from 2020/21, including a separate zero emission band. Some of the lowest CO2 bands are based on the ‘electric range’ of the vehicle, as well as the CO2 emissions. This is the maximum distance the vehicles can travel in pure electric mode without recharging the battery or using the combustion engine of the plug-in vehicle. The aim is to distinguish between ULEV’s with different plug-in hybrid technologies and improved battery range, which will focus incentives on the very cleanest cars that allow most journeys to be zero emissions. Read More Q. I am thinking of renting out a small outbuilding that I own to a friend so that he can store his work equipment in it when he’s not using it. The rent is likely to be less than £1,000 a year. Will I have to declare this income to HMRC on a self-assessment return? My tax affairs are quite straight-forward – I am employed and currently I don’t need to send in a tax return. Answer Q. Several of my employees have expressed an interest in purchasing electric cars but have pointed out that as our office is situated in a remote location they will be unable to make their whole commute without charging. If the business pays for an electric charging point to be installed at the business premises, would capital allowances be available for the expenditure incurred? Answer Q.Ten years ago my husband inherited a share of his father’s property when he died as a joint owner with his partner. My father-in-law’s will specified that his surviving partner could continue living in the property for as long as she wanted. Both my husband and my deceased father-in-law’s partner are on the deeds for the property. The partner has recently died and the property is empty. Will my husband have to pay capital gains tax on his share when it is sold, even though he could not live there because the partner was in residence? Answer   January key tax dates top 14 – Return and payment of CT61 tax due for quarter to 31 December 2016 19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/1/2017 or quarter 3 of 2016/17 for small employers 31 – Deadline for filing 2016 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 2015/16 – Capital gains tax payment due for 2015/16 – First self assessment payment on account due for 2016/17 – 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 2014/15 – 5% penalty for late payment of tax unpaid for 2014/15 self assessment   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 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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