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October 2018

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To October’s Tax Tips & MYOB News.

Still using MYOB?
Maybe it’s time to move to more up-to-date software?  We recommend the Canadian version of MYOB: Acclivity AccountEdge. Still MYOB – just upgraded.  And with our support Making Tax Digital (MTD) submissions will be easy. For more information and a test drive see our website.

Paying Your Corporation tax?
CT is due nine months after the end of the accounting year, but there is no penalty if it is a little late (the CT return is not due until 12 months after the year-end!)
HMRC Payment Details:

– Account number: 12001039
– Sort Code: 08-32-10
– Account Name: HMRC Cumbernauld
– Payment reference: see payslip at the bottom of the payment letter from HMRC or just email us and we can find it for you..

For more information about paying tax and HMRC penalties see our website.
October 2018
· Making Tax Digital Not Working
· More Pay or Staff Expenses?
· VAT on holiday accommodation
· Workplace Pensions – Re-enrolment
· October questions and answers
· October key tax dates
Making Tax Digital Not Working
New forecasts by the Taxman show businesses will end up paying over £35 million extra per year in order to keep records as required by the Making Tax Digital initiative.  HMRC claimed that making filing requirements tougher would actually save money as these would supersede paper/spreadsheet accounting methods. The Taxman expects to earn £400 million less in revenue than original forecasts predicted.

Meanwhile HMRC are admitting that small businesses are complaining about increased accounting costs.

We’d also like to relate some of the comments recently made by a fellow member of our institute (ICPA) who has been testing the HMRC’s Making Tax Digital filing tools over the past year.  

He writes ‘Although there have been some positive developments in my recent experiences on the Making Tax Digital (MTD) for income tax pilot, I have reached a point where I am unable to make any more submissions for the time being.’

‘A scheduled fix by HMRC back in April has helped to resolve some issues and the good news is that I can now view past obligation periods ….  I have tested this functionality and successfully filed an amendment to an MTD submission for the quarter ending 5 July 2017 … less positive … is the inability to file or view any data for two of our clients on the pilot.  …. A fourth quarter or final MTD submission for the year ending 5 April 2018 has still not been made for any of our clients … I do have the data ready for a potential submission for the quarter ending 5 July 2018 for this client, but HMRC have asked me to hold off for now until they are sure this will not result in further problems.  I will have to wait and see what advice I receive before I can proceed with further MTD submissions for any outstanding and future periods. Fingers crossed that a solution is found soon. I have previously complained about the lack of filing confirmations and this is still the case.’

So in general, despite this practitioner’s very best effort, the HMRC side of the software remains dysfunctional for a professional.  The prospects for those who do not have representation don’t look great.  But the government still has plenty of time to finish off the Making Tax Digital for VAT systems as these only become mandatory for VAT periods starting from the end of next March…. which should slot in nicely with the administration and taxation changes they will be simultaneously introducing for Brexit.

Article written with material from ICPA magazine and . 
More Pay or Staff Expenses? 
VAT on holiday accommodation top
Clients often ask us how much cheaper is it to pay a cost from your company than to pay it personally.  Effectively there is alot to factor in.  Employer NI of 13.8%, Employee NI of 12% , Student Loan (for some) of 9%, and PAYE 20%.  Workplace pensions act as a new employment tax.  The 8% eventual pension rate will act on top of existing taxes.

The result is surprising.  Let us imagine that you could pay a £1000 cost personally.  What would it cost your company to pay you enough to cover this cost?  What would it cost the company itself to pay the cost?

If you ignore Student loans, after all the deductions the employer will have to pay you the equivalent of £1,502 for you to be able to pay the cost.  If the company pays the cost directly it will only end up with a cost of £810.

Now let us imagine the cost is subject to VAT at 20%.  Now the employer will have to pay you the equivalent of £1,802 –much higher than the £810.
Letting of residential accommodation is generally an exempt supply for VAT purposes. However this exemption does not apply to holiday accommodation (includes furnished and non-furnished holiday lettings. The definition of ‘holiday accommodation’ for these purposes includes property that is advertised or held out as holiday accommodation and those consider suitable for holiday or leisure use. It is not restricted to periods of letting or availability.

Supplies of holiday accommodation are therefore taxable supplies and should be standard-rated, which means that if the rental income goes above the VAT registration threshold (currently £85,000 per year), the landlord will have to register for VAT and collect VAT from the tenants. Read More
Workplace Pensions – Re-enrolment
As our some of our clients set up their workplace pension two or more years ago we need to start thinking about re-enrolment. 

Here are the steps we will help you with:

1) Choose your re-enrolment date – this can be done anytime within a six-month window, which starts three months before the third anniversary of your staging date.  In general we will just stick to the third anniversary!

2) R
eassess any Pension Scheme members who have opted out and re-enrol them if they earn above  £833 (the auto enrolment threshold) in the re-enrolment month. Luckily with our employer-only contribution scheme few employees have felt the need to opt out, so there is little to do.

3) Write to any employees who have been re-enrolled – and give them the option of opting out again.

4) We will complete the re-declaration of compliance on your behalf with the Pensions Regulator.

For more information on re-enrolment see the Pensions Regulator website

Also have a look at our website for details of our simple standard pension scheme.
October questions and answers top
October key tax dates top
Q. I bought my house in 1998 and I lived in it until 2000 when my employer required me to work in Spain. I returned to live in the house in 2005 and have lived there until now. I have never owned any other properties. Will I qualify for full private residence relief for capital gains tax purposes when I sell my home? Answer

Q. I would like to give a very close friend a cash wedding gift of £10,000. What are the inheritance tax implications of making this gift? Answer

Q. I do not live in the UK, but wish to set up a UK company of which I will be the only director. The company is not a property company, and there will be no UK employees in the short term. Will the company be liable to tax in the UK or, as sole owner of the company, in the country where I reside? Answer
14 – Return and payment of CT61 tax due for quarter to 30 September 2018

19 – Tax and Class 1B national insurance due on PAYE settlements for 2017/18

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/10/2018 or quarter 2 of 2018/19 for small employers
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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