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September 2020

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To September’s Tax Tips & MYOB News.

Pension Re-enrolments
For employers with workplace pension duties, every three years you must go through the re-enrolment process. This applies even if you don’t currently have any staff in a pension scheme.

Here are the steps that we will be completing for our clients:
a) 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.

b) Reassess any Pension Scheme members who have opted out and re-enrol them if they are ‘eligible’ and earn above the £833 (the auto enrolment threshold) in the re-enrolment month. Luckily with employer-only contribution scheme few employees have felt the need to opt out. Those who’ve opted out within the 12 months prior to your re-enrolment date won’t need to be re-enrolled on this occasion, but will on the next re-enrolment date instead.

c) Write to any employees who have been re-enrolled – and give them the option of opting out again – this must be done within one month in order to get their contributions reimbursed.

d) We will complete the re-declaration of compliance on your behalf with the Pensions Regulator.
September 2020
· Checking your payslips – furloughs from September
· VAT Annual Accounting Returns & MTD
· Helping employees with cheap loans
· Applying for a customs grant
· September questions and answers
· September key tax dates
Checking your payslips – furloughs from September
As the Coronavirus Job Retention Scheme becomes more complicated, there is more work for our team calculating pay, preparing payslips and making the furlough claims.  Unlike other accountants we are not charging extra for this work.  To help us at this time please send us your payroll details as soon as possible each month.  It is also important that you check and understand the payslips and reports we send you. Please email us back promptly if the pay rates are not as you expected.

As explained in previous newsletters, under the furlough scheme, from September the Government will only be refunding 70% of furloughed employees’ wages and from October this will fall to 60%.  Meanwhile employers must pay the employees on furlough at least 80% of their usual wage. This means that all furlough wages will be ‘topped up’ by employees. Another complication is that staff may take leave whilst on furlough which must be paid at 100% of the normal wage rate – although again only 70% will be refunded in September. Meanwhile if they are on part-time or flexible furlough, employees may also work during a month – or take annual leave which is not part of their furlough arrangement.

This all means that payslips have to include different pay lines.  Payslips are primarily prepared for the employees – therefore we do not seek to detail the furlough claim on an individual’s payslip.  Instead we will list the separate payments made to employees for each type of pay (this could be payments for furloughed hours, for worked hours, furlough leave and normal annual leave).  Employees do not need a breakdown of what is paid by employer v HMRC – we will email details of the furlough claim made to the HMRC to the employer separately for checking. 

Example payslip showing four different lines of pay.

example payslip small2.png

VAT Annual Accounting Returns & MTD
Helping employees with cheap loans top
We have always recommended the VAT Annual Accounting scheme to clients who have an estimated VAT taxable turnover at the threshold of £1.35 million or less.  It is an excellent scheme that simplifies bookkeeping and reduces the requirement for submissions to HMRC.

Now with the advent of Making Tax Digital (MTD), VAT Annual Accounting has proved to be even more useful.
For those on Annual Accounting, with an Annual Accounting year end of August, their first MTD return will be for the VAT year starting 1st September 2020 and ending 31st August 2021, with a submission deadline of 31st October 2021.
so if in the meantime you may get a reminder from HMRC about MTD just forward this on to us.

For clients with a year-end of August we do need your up-to-date books or bank statements so we can complete your VAT returns – the deadline is the end of October.

If you are not already a client but you would like us to simplify your journey to MTD just give us a call on 01422 847500.
In the current difficult economic client, employees may need to approach their employer for financial assistance in the form of a loan. Under the strict letter of the law, a tax charge will arise where a director or employee obtains a benefit by reason of their employment when they, or any of their relatives, is given a cheap or interest-free loan. The tax charge generally arises on the difference between interest at the appropriate ‘official rate’ (currently 2.25%) and the interest, if any, actually paid. Such loans are called beneficial loans.
Read More
Applying for a customs grant top
The next phase of the customs grant scheme is now open for applications. It sees a record £50 million investment as part of the measures to accelerate growth of the customs intermediary sector and help meet the increased demand it will see from traders at the end of the transition period.

Broadly, there are three grants available to help businesses complete customs declarations.
Read More
September questions and answers top
September key tax dates top
Q. I am approaching retirement age and I am looking forward to receiving my state pension. Will I have to pay tax on it? Answer

Q. I have recently been able to reopen my small hotel and I am selling face value gift vouchers which can be redeemed against room reservations and/or in the dining room and bar. I have previously charges VAT at the standard rate for all supplies. How does the temporary VAT rate affect my business? Answer

Q. My mother is a widow in her nineties but still lives in the same house that she and my late father bought in the early 1960s. I also lived there from birth until I married and moved out in 1990. Will I be able to claim inheritance tax (IHT) relief for the time that I lived there? Answer
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/9/2020
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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