JULY TAX TIPS AHEAD OF CLARKE NICKLIN’S POST BUDGET SEMINAR

Stockport Accounts and Financial practice Clarke Nicklin have published July’s tax tips ahead of their post-budget seminar taking place at their Cheadle Roya offices this Thursday morning.

Tax Reconciliation

HMRC has started the tax reconciliation process for the majority of taxpayers who are taxed under PAYE. This may include you or your relatives, as this reconciliation also covers those in receipt of the State Retirement Pension and private pensions.

If the HMRC computer system finds there is a difference between the tax collected under PAYE and the amount due for the tax year to 5 April 2015, it will issue a form P800 which includes a tax computation. Even if we are authorised to deal with HMRC on your behalf they won’t send us a copy of the P800, so please forward a copy to us if you get one. Read More

RTI Penalties

Employers are supposed to be warned in advance that a penalty for a late PAYE report is due. The HMRC computer system should send an electronic notice through the PAYE online system, but in some cases those electronic notices have not arrived. If you have received a late filing penalty for PAYE we need to check if any of the following conditions apply:

Three-day grace period

In February 2015 HMRC announced that full payment submission (FPS) reports could be submitted up to three days after the day on which the employees were paid. This change was supposed to apply retrospectively for the whole of 2014/15, but in some cases that three-day grace period has been ignored and a penalty has been issued. Read More

Cancelled Penalties after Reasonable Excuse?

If you have received a penalty for late filing of your personal tax return it is possible to get it cancelled if all of the following conditions are met:

– the penalty relates to your tax return for 2013/14;
– you have now submitted that tax return to HMRC;
– your appeal against the penalty includes a reasonable excuse for the late filing.

The reasonable excuses that HMRC will accept include; computer faults encountered while submitting the return, unexpected postal delays (only applicable to paper tax returns), life-changing events such as the death of a close family member, and fire or flood that occurred shortly before the tax return had to be filed. Read More

VAT on Pre-Trading Expenses

When you register your business for VAT you can reclaim the VAT charge on goods you acquired within the previous four years, and on services provided to your business within the last six months. As long as the items were used for your business, and you still held the goods (as stock or business assets) at the date of the VAT registration, you can claim back the VAT on your first VAT return.

However, the VAT man has recently changed his view on exactly how much VAT you can reclaim in this situation. He now says that any use of assets in your business in the period before you registered for VAT should be discounted. This is best explained by an example.

Example

Chad has a livestock transport business. On 1 April 2012 he purchased a lorry for £90,000, including VAT of £15,000, which he expects to use for 10 years. He registered his business for VAT with effect from 1 April 2015, exactly three years into the lorry’s life. Read More

July Key Tax Dates

5th      Deadline for PAYE settlement agreement for 2014/15

6th      Deadline for 2014/15 forms P11Db, P11D and P9D to be submitted and copies of P11D and P9D to
            be issued to relevant employees

            Deadline for employers to report share incentives for 2014/15 – form 42

14th    Return and Payment of CT61 tax due for quarter to 30 June 2015

19/22  PAYE/NIC, student loan and CIS deductions due for month to 5/7/2015 or quarter 1 of 2015/16 for
            small employers

            Class 1A NIC due in respect of the tax year 2014/15

31st    Second self assessment payment on account due for 2014/15

            Second 5% penalty surcharge on any 2013/14 outstanding tax due on 31 January 2015 still unpaid

            Deadline for Tax Credits to finalise claims for 2014/15 and renew claims for 2015/16

            Half yearly Class 2 NIC payment due

            Penalty of 5% of tax due or £300, whichever is greater for 2013/14 personal tax returns still not filed

July Q & A’s ….

Q. I personally own a number of buy-to-let residential properties. My son will attend a new school from September and it would be convenient for the family to live in one of those let properties. Can the cost of repairs made to that property while we are living there be claimed as expenses against the rental income from the whole property portfolio? Answer

Q. My company runs a record label specialising in club music. We used to produce the music on CDs, but now almost everyone buys music as a download or via a streaming service. I have a large number of CDs in stock which I am unlikely to ever sell. How should I value that stock in my accounts? Answer

Q. I am the director of my own company, which has kindly purchased new spectacles for me for £269. These include lenses specially formatted for the design work I do on screen. Do I need to include the cost of the glasses on the form P11D for the year? Answer

Find out more: website http://www.clarkenicklin.co.uk