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Welcome… To June’s Tax Tips & MYOB 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 on your own specific circumstances. We’re here to help!   June 2016 · Getting your VAT Coding Right · Changes to NICs for the Self Employed · Auto-Enrolment Workplace Pensions · Free pension advisory services to be merged · June Questions and Answers · June Key Tax Dates Getting your VAT Coding Right top We often find clients’ datafiles have some lines with incorrect VAT codes. The reason is often poor set up of the database. When your VAT return is calculated it depends on the coding of each individual transaction.  Now there is a competition between two source for the VAT codes in the software.  The default code can come from the item.  Look at inventory\ item list \ .  Now find the item code that interests you \selling details.  Now see ‘Tax code when sold’.  This can set the VAT code for the specific sales line.  Less important is the other source.  The default code can also come from the customer card.  Look at card file\ cards list \ .  Now find the customer that interests you.  Click \selling details.  Now see ‘Tax code’.  This sets the VAT/tax code only IF the item code in the sale has no VAT default. Now we’ve checked which defaulting system works better.  There are two choices.  If you export to the EU and also sell in the UK then the items sales codes generally need to be blanked.  We can trust the customer or supplier code as long as each supplier or customer is given a VAT code suitable for their location.  If you are selling different items which have different VAT rates then the opposite is true.  Remove all the customer or supplier VAT codes, and rely on the VAT codes in the item details alone.   Changes to NICs for the Self-Employed top   ‘Auto-Enrolment’ Workplace Pensions top From 2015-16 onwards, the collection of Class 2 contributions will be through the self-assessment system. This means that Class 2 NICs can now be paid together with income tax and Class 4 NICs in one chunk on the 31 January following the end of the relevant tax year. In the past, most people have paid Class 2 contributions monthly by direct debit. Following the final payment in July 2015, HMRC have cancelled such direct debit payments, ready for the switch over to the new system of payment under self-assessment. However, those who wish to continue paying their contributions more regularly can set up a Budget Payment Plan (assuming they are up to date with their self-assessment payments) and make payments weekly or monthly by direct debit in advance of the payment deadlines. For further information see the Gov.uk website. The government announced its intention to abolition of Class 2 NICs, however the self-employed will continue to pay Class 4 NIC. The proposed changes raise a few issues – in particular, whilst abolishing Class 2 NIC will be a welcome simplification to the current system, it is essential that a self-employed individual’s contributory benefits entitlement is not eroded by the change. For example, for 2015-16, it is not possible for a sole-trader to pay Class 4 NIC unless their profits exceed £8,060; however, they can still make Class 2 NIC payments, even if their profits are below the small earnings exception threshold (£5,965 for 2015-16), and this, in turn, will retain entitlement to various contributory state benefits. For those who do not opt to use a Budget Payment Plan, the payment date for the 2015-16 liability (£145.60) will be due on 31 January 2017. Self-employed traders will need to budget for this lump sum payment accordingly. As more of you get close to your staging date here is a reminder of the main steps we need to take together. 1) Check whether your business is an ‘Employer’ We consider whether your business will be considered as an ’employer’ by the Pensions Regulator. If not, we can de-register you and your duties stop here. 2) Nominate your contacts with the Pensions Regulator.  We are happy to do this for you. We need your ‘Letter Code’ from the Pensions Regulator – please pass this to us when it arrives. 3) Set up a pensions scheme.  For our clients this will normally be with the Peoples Pension. 4) Assess the eligibility of your staff. If you have ‘eligible’ employees at your staging date they must be auto enrolled into your workplace pension and you must contribute towards it. Eligible employees may opt out.  Other employees may opt in. We will look at this with you a month or so before your staging date. 5) Send letters to your staff explaining the Pensions Scheme. We will need details of all your staff including postal addresses. 6) From Staging Date upload monthly payroll data. We will arrange file uploads into your pension scheme every month.  Your pension contributions will be taken out by Direct Debit (DD). You must complete a DD mandate & provide evidence of your babk account. 7) Update staff data and enrol new staff.  You will keep us informed as new staff join or become eligible – so they may be enrolled into the Pensions Scheme if appropriate.  8) Send a Statement of Compliance to The Pensions Regulator to confirm that all steps have been completed. Read More   Free pension advisory services to be merged top   June Questions and Answers top Pension Wise, the free advice service set up to promote and advise on pensions reform and annuity freedoms, is to be merged with other publically funded advice services on pensions, to create a single website and advisory service. Read More Q1. I am thinking of purchasing a new house that I will use as my main residence, but I will still own other properties. Will I be liable to the new 3% stamp duty land tax (SDLT) change? Answer Q2. I commenced trading as a service provider on 1 September 2015 and now wish to complete my 2015/16 tax return. I have not incurred any capital expenditure and my turnover is less than the current VAT threshold. Should I use 30 March (or 5 April) as my accounting year-end? Answer Q3. How do I register as a self-employed subcontractor in the construction industry? Answer   June Key Tax Dates top 19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/6/2016   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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