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Welcome… To May’s Tax Tips & MYOB News, our newsletter of 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! Don’t forget our Resources section (tab above) which has a weath of advice about software and tax.   May 2013 · RTI Round Up · Loans to Participator Trap · Beware Pension Liberation · Don’t Rely on HMRC VAT Advice · May Question and Answer Section · May Key Tax Dates RTI Round Up top Real time information (RTI) has had a bumpy start. In brief these are the major problems and work-arounds discovered so far. Annual PAYE Schemes If you expect to pay all of your employees just once in the tax year, and all on the same date, you can register your PAYE scheme with the Tax Office as an annual scheme. HMRC’s official guidance was that annual schemes only had to submit one FPS (full payment submission) under RTI for the month the payments were made, no nil EPS (employer payment summary) were required for the other 11 months of the year. However, in practice any PAYE schemes registered as annual in 2013/14 are not acknowledged as ‘annual’ by the RTI system. This means nil EPS returns have to be submitted for every month when employees are not paid. The RTI system will be fixed on 17 May 2013 to cope with registrations of annual PAYE schemes, but you need to wait until after that date to tell HMRC you want the PAYE scheme to be annual. In the meantime carry on submitting nil EPS returns. Read More   Loans to Participator Trap top   Beware Pension Liberation top The 2013 Budget announcements included a brief outline of how the law will be changed to tax loans taken out of owner-managed companies by the shareholders/directors (known as participators). We have now seen the draft legislation so we can give you further details of how the tax law will apply for loans or repayments made on and after 20 March 2013. Where a participator borrows from his company and repays the loan within nine months of the end of the accounting year in which the loan was taken, there is no tax charge for the company. However, where the loan is outstanding for longer, the company must pay 25% of the loan balance as corporation tax to HMRC. This corporation tax charge is then repaid when the loan is fully repaid. Four changes may affect when or if this corporation tax is payable: 1. Thirty day rule Where a loan of £5,000 or more is repaid to the company, but within 30 days amounts totalling £5,000 or more are borrowed by the same borrower or one of his associates, the first loan is treated as not having been repaid and is treated as continuing for the purposes of calculating the corporation tax charge. 2. Intention or arrangements in place Where the loan is £15,000 or more, the thirty day rule is ignored if at the time of the repayment of the first loan, the borrower intends to borrow again from the company or has arrangements in place to do so. If those later loans are made they are treated as a continuation of the first loan. 3. Using a third party Loans channelled from the company through LLPs or partnerships in which the participator is a member are treated as if the loan was made directly to the participator. This also applies if the loan is advanced to a trust of which a participator in the company is a beneficiary, or potential beneficiary. 4. Conferring a benefit This is intended for the situation where an arrangement, perhaps a partnership structure between the company and a participator is used to transfer value from the company to the participator. It is unclear how this will work in practice, but any partnerships involving a company and one of more individuals will have to be reviewed.  Have you been approached by firms that promise you instant cash from your pension fund? This known as pension liberation, and involves taking cash from your pension fund before you reach the retirement age set by your pension scheme. Unscrupulous firms persuade individuals to apply to move their pension funds out of their current scheme, in order to permit an early release of funds, either by a direct transfer out or by a loan. In some case the individual is told there are no tax implications – but there are. Read More   Don’t Rely on HMRC VAT Advice top   May Question and Answer Section top If you are uncertain about whether you can make a claim for VAT you have incurred, or how to treat a certain transaction for VAT purposes, you could try searching the HMRC website for a solution to your query. Alternatively you may ring the HMRC VAT helpline but the adviser is likely to send you a copy of a VAT leaflet which is available on the HMRC website. This may, or may not, answer your query. If you do get a straight answer out of the VAT helpline, be careful to record what you said, and exactly what the HMRC adviser to told you. This is important as if the advice from the helpline is later found to be incorrect you need to be able to prove you presented the full facts for the reply which you relied on. Even then a subsequent VAT inspection may determine you were wrong all along and charge you penalties and interest on any under-paid or over-claimed VAT. Read More Q. My company has been trading since 1 March 2013, but my first sales invoices haven’t been paid yet, so there is no cash available to reimburse me for the expenses I’ve incurred personally. Do I have to complete a P11D for 2012/13? Answer Q. I’ve heard about the great tax breaks available under the SEIS scheme. Is this something I can use for my business? Answer Q. I am employed by my company M Ltd, and my wife’s company T Ltd. M and T have completely separate trades and operate independently. I currently take no salary from M Ltd and have a modest salary from T Ltd. However, HMRC have split my personal allowance 2/3 to the PAYE code issue to M Ltd and 1/3 to T Ltd. Can I get this changed, and if so how? Answer   May Key Tax Dates top 2 – Last day for car change notifications in the quarter to 5 April – Use P46 Car 19 – Deadline for Employers’ 2012/13 end of year PAYE Returns (P35, P14, P38 & P38A). Penalties for non submission. 19/22 – PAYE/NIC and CIS deductions due for month to 5/5/2013 31 – Deadline for copies of P60 to be issued to employees for 2012/13   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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