Making Tax Digital...

HMRC are running events to educate accountants and tax advisers about the inevitable move towards quarterly reporting and equally inevitable quarterly tax payments....

Everyone will eventually have to report quarterly with no exceptions and there is a timetable already set by HMRC as to who will be affected and when quarterly reporting will start.

5th April 2018      Sole traders and partnerships under the VAT threshold and individuals with non PAYE income of more than £10,000 per annum.

5th April 2019      VAT Registered sole traders and partnerships.

1st April 2020      Companies

Two points to note here.  Firstly the smallest and least sophisticated businesses and individuals are being targeted first rather than those with the greatest ability to be able to cope.  Secondly with the new rules for landlords having to declare their rents gross without being able to deduct their interest payments as an expense it would appear that many small landlords will be “early adopters” whether they want to or not.

Advice for Start-Ups - Part 6: Registering for VAT and Taxable Persons and Supplies...

Welcome to part 6 of our Advice for Start-Ups series.Today we’re concentrating on Value Added Tax or, as most of you will know it, VAT. In particular, how to register, and who and what is taxable.

Before we do that, let’s just recap on the previous sections in case there’s anything you’ve missed so far. Our first instalment Part 1: Taking the Plunge gave a no holds-barred introduction to the harsh realities of starting up a business. If you made it through that, in Part 2: Who Am I? we envisaged your business as a legal entity and how it would be structured.Part 3: What does it take to succeed? examined the traits common to a lot of entrepreneurs, in order to understand why they were important to business. In Part 4: Taking on Tax we delved into the world of tax, giving key information to make sure your business operates legally. Our last section was broken down into two, Part 5a: Accounting for Bookkeeping we discussed the importance of keeping accurate financial records, with a couple of tips included to help with that. Part 5b: What Records Will You Need to Keep? explained exactly what it questioned. It helped devise what you will need to account for to create an effective financial plan.

So, to begin with, VAT is a tax on consumer expenditure. All goods and services are either VAT-rated or VAT-exempt. Within VAT-rated, the standard amount is 20% but there is also a reduced 5% and a zero rate as well.

New Zero Rate Tax Bands Confirmed...

New Zero Rate Tax Bands Confirmed…

Now that sounds exciting but in reality it isn’t.

The finance Bill 2016 was published in December and confirmed George Osborn’s announcements earlier in the year that from 2016-17 onwards individuals will be entitled to some new tax free investment allowances…

The so called Personal Savings Allowance (PSA)
which covers such income as bank interest will be:

£1,000 for basic rate taxpayers
£500 for 40% tax payers and
£Nil for 45% tax payers.
The Personal Savings Allowance will be deducted from the basic rate tax band.

Advice for Start-Ups-Part 5b: what records will you need to keep?...

Our Advice for Start-ups series has now reached the second part of its accounting and bookkeeping for your business section. In this article we are going to delve into what records your business will need to keep.

We’ve come a long way in this series so far. Way back in Part 1: Taking the Plunge, we discussed the harsh realities behind starting up a business. In Part 2: Who Am I? we looked at what form your business is going to take as a legal entity, before moving into Part 3: What does it take to succeed. In that section we discussed the various characteristics you will need, or have to develop, to make your business a successful one. In Part 4: Taking on Tax we went head to head with some of the nitty gritty behind keeping your business functioning correctly in the eyes of the taxman. Finally, Part 5a which preceded this one, highlighted the importance of keeping accurate accounts, whilst also providing you with some questions to think about when developing an accounting and financial reporting system.

The simplest way for people to create an accounting system is by developing a chart of accounts. This chart takes into consideration how your business operates and what is important to you. Basically, it logs what your business needs and uses. From there an effective accounting system can be thought out.

Excuses for not filing a tax return...

Life can be unpredictable and there are genuine excuses why tax returns are late particularly in the light of recent flooding.  In fact HMRC have opened a hot line to give practical help and advice to people affected by severe weather and flooding – 0800 904 7900.

However some excuses are just plain laughable so here are the top 10 unsuccessful excuses used in penalty appeals:

  1. My tax papers were left in the shed and a rat ate them
  2. I’m not a paperwork-orientated person – I always relied on my sister to complete my returns but we have now fallen out