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July 2019

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To July’s Tax Tips & MYOB News. Sorry if it’s a little late this month!

Payments on Account Due
Note that any second self assessment payments on account for 2018/19 are due by 31st July.  No late payment penalties will be applied to the Payments on Account if they are paid late.  But the HMRC will add interest. If you are not sure how much you are due to pay drop us an

Past Advice
You might like to take some time to review the content and (hopefully) useful advice in our past newsletters  We have copies of newsletters since 2011 in our newsletter archive.

July 2019
· Leave MTD for VAT to us
· Opting Out – not so easy!
· Tax-free childcare – don’t miss out!
·Modern Consultancy and Employment Contracts
· July questions and answers
· July key tax dates
Leave MTD for VAT to us
If you are one of our Business Companion clients, please don’t sign up for HMRC’s Making Tax Digital (MTD) for VAT!

We will do this for you as part of our Business Companion Service.

You may have received an Invitation to join Making Tax Digital for VAT.

The act of signing up for MTD effectively closes off the current VAT return submission area of the HMRC portal for the business. All the details held by HMRC for the business will move to the new MTD area and if the business tries to submit a VAT return using the old process, ignoring any warning messages that appear, it is understood the return will submit but will effectively be ‘lost’ in HMRC’s systems as they will not be able to match the return to the business!

As explained in previous newsletters most of our clients are now on VAT Annual Accounting with a year-end of August. Their first MTD returns will not be due until the end of October 2021. We will be submitting these for our clients using bridging software which takes the output directly from MYOB/ AccountEdge. For those on Annual Accounting the VAT returns for this year and next year will be submitted in the normal way using the existing HMRC portal.

If you are not yet a client but would like us to help you with your MTD for VAT returns give us a ring on 01422 847500
Opting Out – not so easy!
Tax-free childcare – don’t miss out! top
Provide a pension scheme that your staff are happy with and they won’t want to opt out. That is why we recommend employer-only contributions.

Recently three employees (of different clients) have tried to opt out of their pension schemes. Each time it has proved difficult.  I have spoken to the pension providers and the Pensions Regulator to get a definitive answer about the correct ‘opting out’ procedure in each case, but advice has been  inconsistent.  Ultimately it seems to rest with the terms and conditions of individual pension schemes.

Unrealistic Assumptions
One problem is that the pension decision makers make the following unrealistic assumptions about employees – that they:
  • keep and read their pension packs
  • set up an online account for their pension immediately they join
  • make a decision about whether to opt out within 30 days of joining. 

Opt out Period of 30 days
Strictly an employee can only ‘opt out’ within 30 days. Contributions (employer and employee) will be refunded and the member’s scheme will then be closed.  During this period the employee should opt out via their online account or the pension’s opt out telephone line:
 Peoples Pension: 0300 330 1280. 
 Aviva: 0800 056 3192.
 Nest: 0300 0200 090.

After 30 days
However if, as is usually the case, the employee makes the decision after 30 days, they are not strictly opting out but ceasing contributions. They will not be refunded and their pension pot stays intact for their retirement. The advice for the correct procedure here is vague.

We recommend that if an employee wishes to opt out at any stage – they inform both their pension scheme and our (via you the employer) at the same time.  This will hopefully make sure it goes smoothly.

Opting In and Out at Re-enrolment
Every three years you will have to go through the re-enrolment process with the Pensions Regulator.  At this point every employee who has opted out must be opted in again!  And they again have a 30 day period in which they will get contributions refunded. What fun!

If you have any further queries about your workplace pension ring us on 01422 847500.
Last year the employer childcare voucher scheme closed to new applicants. However for employees already using the scheme to help with childcare/ tuition fees they may still continue to do so.

HMRC are currently running a campaign to remind people that they could get up to £2,000 per child, per year, towards childcare costs. This is
their new ‘tax-free-childcare’ scheme available to all working parents.  Unfortunately one key difference is that childcare vouchers were available for children aged up to 15 (16 if disabled) whereas the new scheme only helps for children up to the age of 11 (16 if disabled)!

Broadly, under tax free childcare eligible parents/guardians may receive government top-ups of £2 for every £8 that they pay into a tax-free childcare account, up to a maximum of £2,000 per child (or £4,000 for disabled children). There is an overall maximum limit of £10,000.

Read More
Modern Consultancy and Employment Contracts top
We try to keep a series of basic legal and employment documents available for our Business Companion clients to use.  These are for most usual situations, and are mainly designed to prevent the more obvious HMRC questions about the tax status of payments to the self employed.  We do not want the HMRC deciding that your firm’s payments should have been made after deduction of PAYE and NI.  Our latest has just been amended for a particular client. 

Therefore we have revised our standard model contract for our other Business Companion clients to use.  You will find the link in our Resources Personnel section
July questions and answers top
July key tax dates top
Q. If my husband and I give our house to my children but continue to live in it, will inheritance tax be chargeable on the property when we die? Answer

Q. My child’s school is asking parents to make a one-off donation to help with much-needed school funds. If I complete a gift aid form for my donation, will I be able to can claim tax back on the payment? Answer

Q. I borrowed some money from my company to lend to my brother. He is paying it back in monthly instalments over three years. I am the sole director and shareholder of the company and I am not charging my bother interest on the loan. Are there any tax implications I need to consider? Answer

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/7/2019 or quarter 1 of 2018/19 for small employers
Class 1A NIC due in respect of the tax year 2018/19

31 – Second self assessment payment on account due for 2018/19.  If you are not sure how much you are due to pay drop us an .

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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