Updates from The John Doyle Partnership
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VAT back to 17.5% from 1st January 2010 (November 2009)
Please remember that VAT is reverting to 17.5% on 1st January 2010.
This change affects any VAT registered business that sells or purchases goods or services that are subject to the standard rate of VAT. You should charge VAT at the rate of 17.5% on any sales of standard rated goods or services that you make on or after 1 January 2010. It is important to recognise that small business taking advantage of cash accounting for VAT will need to be careful in ensuring that sales are treated correctly. It is the date of the sales invoice that is important, not the date that payment is received.
If you are an existing client and VAT registered and you would like to discuss how this will effect your business then you may contact us for further information.
Registering for a tax return if you are not self-employed (November 2009)
Non self-employed taxpayers can now be registered for self assessment at the Central Agents Authorisation Team in Longbenton rather than in local offices. A new form SA1 is available to help customers to register. If you are self employed then you should continue to use form CWF1
If any of the following applies to you then you will need to register to receive a self assessment tax return:
- You became a company director
- You have been receiving income from Land and Property in the UK
- You have been receiving foreign income in excess of £300 a year
- You receive annual income from a trust or settlement
- Your annual income will exceed £100,000
- You receive other income that cannot be collected through your PAYE tax coding
- You have a capital gaints tax liability
National Minimum Wage NMW (October 2009)
Starting on 1st October 2009 the National Minimum Wage rates have increased. It is vital that you ensure your employees are paid at least these minimum rates as it is a criminal offence to pay less. We will try to spot when you are underpaying your staff but the onus is on you to be certain that you are operating within the rules.
(1) NATIONAL MINIMUM WAGE RATES:
MAIN RATE - WORKERS AGED 22 AND OVER £5.80
DEVELOPMENT RATE - WORKERS AGED 18 - 21 £4.83
DEVELOPMENT RATE - WORKERS AGED 16 - 17 £3.57
(2) ACCOMMODATION OFFSET RATE:
DAILY RATE £4.51
WEEKLY MAXIMUM £31.57
There is more information available on this link
National Minimum Wage NMW (October 2008)
Starting on 1st October 2008 the National Minimum Wage rates have increased. It is vital that you ensure your employees are paid at least these minimum rates as it is a criminal offence to pay less. We will try to spot when you are underpaying your staff but the onus is on you to be certain that you are operating within the rules.
(1) NATIONAL MINIMUM WAGE RATES:
MAIN RATE - WORKERS AGED 22 AND OVER £5.73
DEVELOPMENT RATE - WORKERS AGED 18 - 21 £4.77
DEVELOPMENT RATE - WORKERS AGED 16 - 17 £3.53
(2) ACCOMMODATION OFFSET RATE:
DAILY RATE £4.46
WEEKLY MAXIMUM £31.22
There is more information available on this link
CIS Penalty Charges (August 2008)
The government began charging for late CIS submissions on 19th October 2007. Recent figures suggest that these penalties have become a good source of income for the treasury. Remember that over 10% of UK businesses were affected by the change.
Figures show that the number of penalty notices issued for late CIS monthly returns was 118,458 between 1st October and 31st December 2007. This has yielded at least £11.8 million because the smallest penalty is £100. Assuming that this quarter is representative of a normal three month period, this equates to over £47 million per annum.
More worrying is the fact that HMRC reviews the gross status for tax treatment every month using the Tax Treatment Qualification Test (TTQT). If returns or payments for CIS, self assessment or payroll are late then there is a very real risk of losing gross payment status.
New deadlines for Self Assessment Tax Returns (April 2008)
For 2007-08 Returns, paper Self Assessment (SA) Tax Returns must be filed by 31 October 2008. That’s three months earlier than in previous years, although you still have until 31 January 2009 to pay your tax. The deadline for filing an online Tax Return is 31 January 2009.
This change in filing deadlines is to encourage people to file their Self Assessment Tax Returns online, to bring benefits for them and for the Government. Online filing is secure, and provides an instant acknowledgement to your agent that HM Revenue & Customs (HMRC) has received your Tax Return.
The period that HMRC has to query SA Tax Returns has also changed. It is now linked to the date that your Tax Return is filed, rather than the filing deadline. So the sooner you supply information to your agent to complete your Tax Return, the sooner you can be certain that we are not going to query it.
Paper Tax Returns filed after 31 October, and online Tax Returns filed after 31 January, may result in a £100 late filing penalty. If you file a paper Tax Return after 31 October HMRC cannot guarantee to let you know how much you have to pay by 31st January, and if you are employed they may not be able to include any underpaid tax in your Pay As You Earn (PAYE) tax code for 2009-10.
Changes to the Construction Industry Scheme (October 2007)
HMRC has warned of heavy automatic penalties of £100 for every monthly return that has not been submitted either by paper or online by the due date of the 19th of each month. This includes any returns due for earlier periods that remain unsubmitted. It is also vital to ensure that zero returns are submitted when no payments have been made because penalties still apply. There is more detailed information available on the HMRC website
HMRC is also looking each year at subcontractors who are entitled to receive gross payments from contractors. If a subcontractor is also a contractor and their PAYE and CIS taxes are not up to date then they will lose the right to receive gross payment.
P46 and P45 forms are about to be quality checked (October 2007)
There are changes coming into effect from April 2008 that mean it will no longer be possible to set employees up on PAYE with missing details.
For many years we have attempted to ensure the quality of all documentation submitted to HMRC but have often failed because a client has not insisted that new employees complete P45 and P46 forms. HMRC will apply these checks strictly and will return all failed documents for correction.
Our advice continues to be compatible with the new requirements. We strongly recommend that all employees are encouraged to complete form P46 as part of their induction programme. In this way all of their important data can be collected and we will be able to ensure that your staff are being dealt with and paid correctly within the regulations.
We will continue to use a Basic Rate tax code at 22% tax for all employees without a properly completed P46 and/or P45.
Find all of these important forms here in PDF format. Simply print off as many as you need and send them to us, via post, fax, or email, for the first payroll run.
Statutory Holiday Entitlement increased to 24 days (October 2007)
From the start of October 2007 the minimum holiday entitlement will increase from 20 days a year to 24 days (pro-rata for part-time staff). This will increase to 28 days from 1st April 2009.
There has been some confusion as to whether bank holidays are additional to or included in the total. For the record there is no statutory right for employees to be paid for bank holidays, although it is usual for companies to pay them either as part of the old 20 day entitlement or as an addition over and above the statutory entitlement. It follows that all employers paying 20 days plus bank holidays will already be complying with the legislation. Those that pay 20 days including bank holidays will need to increase entitlements by 4 days this year and another 4 days on 1st April 2009.
For more detailed information visit the DTI website here.
National Minimum Wage NMW (October 2007)
Starting on 1st October 2007 the National Minimum Wage rates have increased. It is vital that you ensure your employees are paid at least these minimum rates as it is a criminal offence to pay less. We will try to spot when you are underpaying your staff but the onus is on you to be certain that you are operating within the rules.
(1) NATIONAL MINIMUM WAGE RATES:
MAIN RATE - WORKERS AGED 22 AND OVER £5.52
DEVELOPMENT RATE - WORKERS AGED 18 - 21 £4.60
DEVELOPMENT RATE - WORKERS AGED 16 - 17 £3.40
(2) ACCOMMODATION OFFSET RATE:
DAILY RATE £4.30
WEEKLY MAXIMUM £30.10
There is more information available on this link
Client shocked to receive spoof email from "HMRC" (August 2007)
HMRC has been warning us for some time that spoof emails exist but our client was shocked at how professional the official looking email was. We had not encountered any threats until now but this is the first, and probably not the last, involving a client of The John Doyle Partnership.
The email shows a refund due to the client and then offers a link to a page requesting credit card details so that it can be swiftly repaid. It does look official but it should be remembered that HMRC does not accept payment by credit card so why would it refund in this way?
It is fair to say that any email from HMRC should be taken with a huge pinch of salt. It does not hold your email address in any database because we always use our own email address when submitting your self assessment return.
If in doubt then run it past one of our accounts team first. Click here for further information: Spoof Email
New Construction Industry Scheme CIS (Feb 2007)
We are ready for the new CIS when it is launched in April 2007. You will be pleased to hear that HMRC has dropped the cards and vouchers in favour of a verification based scheme.
Thankfully not all subcontractors need to go through the verification process. HMRC will be sending you two lists of all your existing subcontractors. Any subcontractor appearing on your lists does not need to be verified again. It is crucial that the lists are kept safely filed for future reference.
Contacting HMRC:
CIS verification for new subcontractors can be requested by phoning HMRC on 0845 366 7899 or online at www.hmrc.gov.uk/new-cis/
When contacting HMRC you must provide: your name; your ten digit unique tax reference (UTR); and your accounts office reference (look for it on your yellow payslip booklet). Then you need to give the details of your new subcontractor. The details vary according to the subcontractors trading style. For sole traders you must provide: name; UTR; and NI number. For partnerships you must provide as for a sole trader plus partner's: name; UTR; and NI number. For a subcontractor that is a limited company you must provide: company name; company UTR; and company registration number.
There are three possible outcomes from the verification process: Gross - you pay the subcontractor without deduction; Net - you pay the subcontractor after deduction of tax at 20% (2007/8); or Unmatched - you pay the subcontractor after deduction of tax at a higher rate at 30%.
Statutory requirements:
From April 2007 each subcontractor must be given a statement at the end of each tax month declaring how much tax has been deducted from their pay. The statement can be in any format. There is no requirement to produce a statement for subcontractors receiving gross pay. It is also a statutory requirement to submit a monthly return to HMRC using form CIS300. You will receive a pre-printed CIS300 each month with all of your existing subcontractors listed.
Our Services:
The John Doyle Partnership can help you and save you time and worry by producing monthly statements for subcontractors and completing and submitting monthly returns to HMRC. We can also help you decide about a workers status and tell you whether the worker is employed or self-employed. You can read about this online at www.hmrc.gov.uk/employment-status/
If you would like to find out more about the new CIS or our services then please contact us for further details.
