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Welcome… To March’s Tax Tips & MYOB News, which leads with our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman. Our lead article this month focusses on entering wages in MYOB. If you need further assistance just let us know or you can send us a question for our Question and Answer Section.   March 2013 · Booking Salary Costs in MYOB/ Acclivity · Annual Payroll and RTI · Room Hire and VAT · Self-Employed Travel Expenses · March Question and Answer Section · March Key Tax Dates Booking Salary Costs in MYOB/ Acclivity top We have reconsidered our advice on the way that users should be entering wages transactions into the MYOB software.  We’ve changed our minds about complicated journals.  We have never advised the use of a Salary control account.  And why doesn’t the system warn you when PAYE and Pension liabilities are due to be paid by a business?! Instead of using journals we suggest you enter the net pay as a ‘Spend money’ on the date of payment.  This will almost invariably be in the month for which the wage or the salary was due.   Do not enter the gross pay as we might have advised before.  Enter the amount due either individually for each wage earner, or in aggregate for all the staff together.  Book all the costs to 6-1xxx N-T. Then add another purchase invoice dated the last day of the month for the PAYE and NI, student loan.  Again book all the costs to 6-1xxx N-T.  Note that the Card used needs to be ‘HMRC PAYE’ or similar.  Any other deductions (Pension, attachment of earnings, trade union / association subs or similar) should be entered with similar purchases and similar cards. Sometimes staff can suffer deductions because they are paying back floats or advances.  If so enter the net pay from the payslips only with a spend money.  Enter a receive money for the amount that you have to deduct from their wages.  Then actually pay the staff the net pay less the advance.  See the guide for more detail about how to book staff floats.  If you have expenses to pay to staff at the same time enter a second spend money on the same day.  Book the cost to 6-2xxx.  The PAYE and pension deductions are then paid off as they fall due.  The outstanding PAYE/NI should appear on the trade creditors list.  Enter the due date properly and the system should even tell you when to pay the PAYE alongside the other liabilities. You can find out more from our MYOB Tricks of the Trade manual.    Annual Payroll and RTI top   Room Hire and VAT top Under real time information (RTI) PAYE reporting, a Full Payment Submission (FPS) report is required to be made to HMRC every time an employee is paid, not just once after the end of the tax year as is currently the case. RTI will be compulsory for most employers from the first pay date following 6 April 2013. Many one-person companies may wish to pay the director just once a year and avoid monthly RTI reporting. If you want to do this, you must first check that your payroll software will cope with an annual payroll, as many main-stream payroll software packages do not. The second stage is to understand what reports HMRC will require under RTI. An annual payroll must be registered with HMRC. The current advice on the HMRC website says: “If all payments on which tax and NICs are due are paid to your employees annually in a single tax month, you can ask HMRC to be treated as an ‘annual payer’. You must use the same month every year, so if this changes or you start paying your employees more frequently, you will need to tell HMRC.” There should be more guidance on the HMRC website about annual payrolls soon. If you do not register the payroll as being annual you will need to submit an Employer Payment Summary (EPS) to HMRC every month, which shows nil payments made to the employee. Read More  The letting of land is exempt from VAT unless it falls into one of the many exemptions from the exemption for VAT. One of those exemptions to the exemption is where accommodation is provided in hotels, inns, boarding houses and similar establishments, including rooms provided for the purpose of catering, i.e. an eating and drinking occasion. If you hire a room in a hotel for a group function including a meal, and the hotel supplies the catering, the whole fee is subject to standard rate VAT. If the catering is supplied by an outside caterer, the Taxman used to take the view that the room hire would be exempt from VAT, whilst the catering cost would carry standard rate VAT (if the caterer was VAT registered). However, the Taxman changed his mind on this point in October 2011, and updated the VAT Notice 709/3: Hotels and holiday accommodation. Read More   Self-Employed Travel Expenses top   March Question and Answer Section top If you are self-employed you may have a number of customers you go to regularly to work at their premises. This could apply to mobile hairdressers, cleaners, gardeners, and even medical professionals who work at private clinics. The miles you drive to reach each of your customers from your business base are used to calculate the amount of travel expenses you claim in your business accounts. This is all good, but the Taxman has recently argued in a tax case that where the business is based at the person’s home, that home-office can’t be treated as the starting point for travel when the work is performed almost entirely at customers’ properties. The Taxman has particularly challenged travel expenses claimed by doctors who work at private clinics and do not see patients at their home-office. The Taxman has tried to ignore the necessary preparation and report writing work the doctor has to perform at his home-office. Read More Q. The Taxman has sent me a new PAYE code for 2013/14, which includes about £1000 of savings income taxed at 40%. I don’t know how he got that figure as I don’t have any savings, and I only draw dividends from my company up to the limit of the 20% tax band. Answer Q. I run a small B&B which has three let bedrooms, my family uses the other two bedrooms of the property. How should I calculate how much of the property’s running costs relate to the B&B business? Answer Q. My family business is very traditional; the factory-floor workers are paid weekly, the management are paid monthly and the senior directors are paid quarterly. How will I report all these different pay dates under real time information (RTI)? Answer   March Key Tax Dates top 19/22 – PAYE/NIC and CIS deductions due for month to 5/3/2013 31 – Last minute tax planning for the 2012/13 tax year. Ensure you use up all exemptions to which you are entitled.   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. 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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