VAT on eBay & Amazon Fees - all Change for UK Sellers

VAT Clampdown for UK Sales on eBay & Amazon

VAT on eBay & Amazon Fees - all Change for UK Sellers

According to a website1 run by a campaigning group of UK eBay and Amazon business sellers, HMRC and UK traders lost out on £27 billion in sales revenue and taxes from such online marketplaces over the last three years alone. The group has campaigned for some time against over-leniency by HMRC towards overseas traders, particularly from China, who have not been charging VAT on products, despite those products being located (often via UK fulfilment houses) and supplied within the UK. Moreover, the overseas sellers’ volumes are also often well over the threshold for registering for VAT if selling from inside the UK, yet many have continued to flout the law and seem to have been getting away with it for a considerable time. That hurts both HMRC in terms of lost VAT and tax revenue, as well as making it difficult for compliant UK sellers to compete against competitor prices that seem ‘too good to be true’.

“This abuse has grown significantly and now accounts for £1 – 1.5bn of the total VAT gap. These overseas traders are unfairly undercutting all businesses trading in the UK, abusing the trust of UK consumers and depriving the government of significant revenue.”

(Source: David Gauke MP, Chief Secretary to the Treasury, 16th March 2016).

Levelling the Playing Field

However, following new changes that came into effect on 1st August, that is now starting to change. While it’s not yet a perfect system to fight VAT fraud in online marketplaces and level the playing field for legitimate UK businesses, it is at least a start. Genuine private sellers using the platforms will, though, see a small increase to their costs in the form of VAT now being levied on eBay and Amazon fees, but hopefully it’s a small price to pay to make for a more fair, and legal, system overall.

VAT Changes Starting This Month

As part of the March 2016 Finance Bill delivered by then Chancellor George Osborne, UK individuals selling on eBay will begin paying VAT on eBay charges, starting on the 1st of August (2017). The VAT rate will be the standard 20% rate and will be automatically charged on eBay fees to UK sellers who have not registered as business sellers with the company. It may at first seem odd to target non-businesses, but actually this is a way to force the likes of Amazon and eBay to put pressure on those who have not registered with them as businesses when, in many cases, they should have. Such online marketplaces will also potentially become liable for the outstanding VAT on products actually sold if they do not take measures to counter (or remove) non-compliant overseas sellers.

“HMRC will also be given new powers to make online marketplaces jointly and severally liable for the unpaid VAT of overseas businesses who are non-compliant with UK VAT rules and using their platforms to sell through … These measures will provide HMRC with the tools necessary to tackle the overseas businesses who do not comply with UK VAT rules and help level the playing field for all businesses.”

(Source)

Those businesses operating within the UK will need to properly register as business sellers, in which case they will generally also need to account for VAT as a business if their taxable turnover is above the VAT threshold of £85,000 (or £70,000 if ‘distance selling’ into the UK) over the course of a year.

UK eBay sellers, and overseas sellers supplying/fulfilling orders completely within the UK, will now Read more

TODAY is the deadline for submission of your tax return. Contact Taxfile for help filing & avoid a minimum £100 fine!

10 DAYS to the Self Assessment Tax Return Deadline!

10 days to the Self Assessment tax return deadline

There are just 10 days left in which to file your Self Assessment tax return with HMRC. Miss the deadline (11.59pm on 31st January 2017) and you’ll straight away be in for a £100 fine from HRMC, so don’t delay — contact Taxfile TODAY to book an appointment with one of our helpful tax advisors and accountancy experts.

We’ll make filling in and filing your tax return a breeze and what’s more, we’re currently open 6 DAYS A WEEK from now until the end of January (Saturday mornings by appointment). Don’t leave it to the last minute, though, as there is always a bottleneck for those who do — so come in as early as you can this week.

It doesn’t matter if you have zero tax to pay – you still need to submit your tax return on time! You also need to have paid HMRC any tax due for the 2015-16 financial year by the same 31 January deadline.

So get our professional help with filing of your tax return — you can book an appointment online, drop by the Tulse Hill shop to book one, send us an email message via our contact form or, better still, simply call us on 0208 761 8000 and we’ll book you in and help sort out your tax return accurately and on time. Don’t delay — time is quickly slipping by!

This Week Only – Beat the Tax Return Price Increase!

Beat the Tax Return Price Increase

Beat our 2017 price increase and get your tax affairs in order before the January rush by coming in to see Taxfile for your Self Assessment tax return before December is over.

It might be Christmas week for many but our staff are ready and waiting to help you get your figures correct and to fill out your tax return for you before the January rush. When complete, we’ll submit it to HMRC for you so you can relax for the start of the New Year, avoid any bottlenecks AND save money.

During January some of our prices will increase just a little, as forewarned in our previous post. This is simply to cover some of the overtime and extra hours that Taxfile staff will need to work during January, our busiest time of year, covering all the last minute tax returns. But don’t leave it until January — book an appointment with us during the remainder of December and you’ll save! Call 0208 761 8000 or book an appointment online here.

Act now & save on your tax return

It’s Time to File Your Self-Assessment Tax Return!

Time to file your self-assessment tax return

If you haven’t already done so, you need to file your Self-Assessment Tax Return* very soon. However, don’t leave it until January or it’ll cost you more! Think more in terms of sorting it out right now — as time is of the essence! And don’t forget, you need to submit your tax return irrespective of whether you owe any tax.

Beat the January 1st price increase!

If you need professional help filling in and submitting your tax return, contact us here at Taxfile during November or December — ideally well before Christmas — and you’ll beat our price increase that kicks in on January 1st. Why the increase? Because we have to open for extended hours and pay overtime during January to cope with all the tax returns that have been left to the last minute. So the message is avoid bottlenecks, save money, and reduce stress by contacting us now.

We also do tax refunds (including CIS), bookkeeping & accountancy work

We can also help you with your CIS tax refund application if you’re a sub-contractor working in the construction industry — if you act fast you might even Read more

Tax reforms coming in 2018

Big Changes Coming to the Tax System

Tax reforms coming in 2018

Starting on 1 April 2018, a brand new tax system, one that will affect most business owners in the UK, will begin to roll out. Whether you’re a landlord, are working for yourself as a sole trader or have a limited company, the changes will affect you.

So what’s happening?

Instead of a once-a-year tax return, HMRC will require quarterly profit and loss information. So, that’s four times a year. For Taxfile clients, that means we’ll need to know all your income and expenses during every quarter so that we can make the necessary financial data available, on your behalf, to HMRC. As well as your bank statements, we’ll need to see receipts for the expenses, whether they’re provided physically or via a suitable electronic medium (there are plenty of apps and software packages for this purpose). Once we have everything for the quarter in question, we will be able to make sure that you’re claiming for all the allowable expenses that you are eligible for and aren’t claiming for things that you shouldn’t, so that your figures are absolutely correct.

If you don’t file in time there could be an HMRC penalty, so letting Taxfile handle your quarterly reporting will help to keep you on track seamlessly when the new changes come into force. We’ll be able to confirm our own pricing nearer the time but it’s likely to be circa just £75 per quarter, excluding VAT.

A ‘cash basis’ system

The new tax system will be known as a ‘Cash Basis’ system and will also allow tax to be paid to HMRC on a pay-as-you-go (PAYG) basis. Essentially, it means that businesses need only calculate their profits based on receipts and payments, which is far more straight forward than the more complex system that currently exists. When integrated into the Government’s new ‘digital tax accounts’, the system will really help to simplify tax, make budgeting and cash-flow easier through near real-time reporting and eventually remove the need for the traditional tax return at the end of the year — that’ll eventually be the case for virtually everyone. As an added bonus it’ll also mean that business owners keep more on top of their bookkeeping and thereby avoid a last minute scramble to update records. Taxpayers will also be able to see a complete financial picture of their tax affairs in the one place — their digital account — and all their liabilities and entitlements will be clear to see and manage more effectively than ever.

Taxfile

Nearer the time the changes come into place, Taxfile will be there to help its customers adapt to the new system and between us we’ll make sure that it’s easy and hassle-free. We’ll be able to Read more

Taxfile multi-lingual staff at a glance

Taxfile’s multi-lingual, multi-talented staff, at a glance

multi-lingual accountants and tax advisers[Updated]: It’s common knowledge that most of Taxfile’s South London staff are multi-lingual but can you guess which staff member speaks no less than four languages fluently (Russian, Pashto, Dari and English) and which staff member is into both metal music and Irish dancing? And who should you ask for if you need payroll services? And who specialises in bookkeeping … who in limited company accounts and so on? Our staff ‘mind map’ tells you a bit more about each member of the team, what their specialities are, key interests and, of course, their contact details in case you ever need their help. Take a look … Read more

Autumn Newsletter 2016

Taxfile’s Autumn Newsletter 2016

Taxfile's Autumn Newsletter 2016

Taxfile's Autumn Newsletter 2016Hot off the press is our brand new Autumn newsletter for 2016. If you haven’t yet seen it, take a look because it’s jam-packed full of useful information that’ll help you keep your tax affairs and accounts in order, save you money and keep you up to speed on tax matters. Here’s a quick flavour of what’s included (or click the thumbnail image to view or download the newsletter):

  • Act fast to save money on your 2015-16 tax return – see the newsletter’s first article.
  • Sub-contractors working in the construction industry are invited to claim their CIS tax refunds through Taxfile, so they have their refund in time for Christmas!
  • Help if you’re late with any previous years’ tax returns and tax payments — and how you already owe HMRC at least £1300 if you haven’t filed your 2014/15 tax return or paid tax for that year.
  • Try the UK’s Number 1 cloud-based accounts package FREE, for a month. No credit card required – cancel at any time – full details are included in the newsletter. [UPDATE: Please note that this offer has now expired].
  • Help if your tax affairs are in a mess — are you late filing returns or paying tax? Are you worried about HMRC penalties? Are you a foreign worker, working in the UK, and need to get your tax records up to date following the Brexit decision? We’re here to help!
  • Taxfile are Finalists in the ‘Independent Firm of the Year, Greater London’ category of the British Accountancy Awards 2016.
  • Free tax enquiry Fee Protection Insurance for Taxfile customers who file their tax returns by the statutory deadline through Taxfile.
  • How online banking may save you time and money.
  • Introduce a new client to Taxfile and save 10% on our fees!
  • Saturday opening at Taxfile (Tulse Hill office) throughout November and December.
  • Help with all your tax and accounting needs – check out our list of all the things we can help you with — now including auto enrolment!
  • And a ‘thank you’ to all Taxfile customers … Read more
Email phishing scam or genuine HMRC communication?

Received an HMRC Tax Refund Email? It’s probably a Phishing Scam!

Email phishing scam or genuine HMRC communication?Several Taxfile customers have recently told us that they’ve been receiving emails, supposedly from HMRC, inviting them to click links within the emails in order to apply for tax refunds. Regrettably, some have confirmed that they did indeed click the links then log onto fake HMRC websites, which looked every bit real to them, thereby giving away such sensitive information as their bank details and things like their mother’s maiden name. Handing over such sensitive information to fraudsters would be an expensive mistake. In view of this, we thought we’d give our readers more information on what to look out for, what to expect to receive from HMRC, and what not to.

Firstly: How to Recognise a Scam Email

Here is an example of a real phishing (scam) email recently received by one of our customers. We’ve highlighted various areas of the email to indicate some of the telltale signs that the email is, indeed, a phishing attempt by fraudsters rather than a genuine communication from HMRC.

Example of a phishing email

Some of the many telltale signs that this email is fake include:

  • The sender is from a non-official domain (hmrcupdate.com is *not* a genuine HMRC website). Be careful, though, because some of the more advanced phishing emails do include genuine HMRC domains through what’s known as domain ‘spoofing’.
  • The recipient is not identified by name in either the ‘To’ field nor in the salutation (‘Dear Sir | Madam’ is a dead giveaway, as is the fact that the email was sent to ‘undisclosed recipients‘!). Genuine HMRC emails will always address you by the name you provided them.
  • Phishing emails often include silly errors that simply would not be published by the likes of HMRC. Under the logo, the date is wrong — it does not even mention a month!
  • The email states that you ‘are due some refunds‘ (plural). If HMRC did send emails announcing that a refund was available (and it doesn’t) then it would be singular, not plural! This is one of many hints that the sender has poor English (read on).
  • Press here‘ is another example of poor English. Of course, in the UK, we’d say ‘Click here’.
  • Povide us‘ is clearly spelt wrong — there should be an ‘r’ in ‘Provide’. Spelling errors are a common indication that the email is non-genuine and has instead come from overseas where English spelling and grammar are often not as accurate as they should be.
  • Further down it says ‘for refund‘ whereas it should say ‘for the refund’. Poor English/grammar again and another hint that this is a scam.
  • When you hover over the link included in the email (*without* clicking it), if your email application’s “status bar” is showing at the bottom of the screen, you can see where the link is pointing to. In this case it’s pointing to a goo.gl domain and this simply wouldn’t be the case if this was a genuine HMRC email.
  • Lastly, the email states that you have only 5 days to action the request. That is yet another telltale sign that this is a phishing scam. Fraudsters try to panic you into acting whereas HMRC would not make such a statement in a genuine email.

So you can see, when you look very carefully, that this is clearly a scam email. However, we should warn readers that other phishing emails are not so obvious. In fact, we’ve seen some real improvements in scam emails in recent months. One recent email was so genuine-looking that we’re not even 100% sure ourselves whether it’s a scam or not.

So what do you do if you are still not sure if an email is genuine?

If, after close scrutiny, you are still not sure whether the email is genuine, there are several things you can do … Read more

Guy Bridger outside the Tax Office

“Pay As You Go” Self-Assessment is on it’s way!

Pay-as-you-go Self AssessmentA few years ago Guy Bridger, from Taxfile, was helping to advise The Office of Tax Simplification and the then Director Michael Jack. Guy proposed that, while the bulk of the working population have their taxes calculated by their employer and thereforGuy Meets Rt. Hon Michael Jacke pay taxes in ‘real time’ with clarity, ease and convenience, the same was unfortunately not true for the UK’s small business owners and the self-employed. For those, it is too often the case that taxes are paid as much as 18 months in arrears because of limitations in the existing tax system. This time lag often means that the tax due to be paid has been spent already, simply because that old system had too large a reporting and payment window. So Guy suggested that ‘real time’ reporting and payments of tax would be significantly more convenient and beneficial to the small business owner and self-employed individual. It would enable them to keep on top of taxes and, as an added bonus, their accounts records too.

The Government has now recognised this good advice. In a new system nicknamed ‘Pay As You Go Self-Assessment’, the Chancellor has announced that small businesses, landlords and self-employed workers making more than £10k in profit each year will be able to account for tax in virtually “real time”. This will be made possible via Read more

Landlords warned over tax on Income from lettings & property investments

Buy-to-let Changes Are Coming — Landlords Beware

Landlords warned over tax on Income from lettings & property investmentsA warning and reminder to landlords: the Chancellor’s Summer budget back in July will hit buy-to-let investors’ profits once the changes kick in, so now is the time to start planning ahead. Not all landlords will be affected though; if their rental property is mortgage free or if they sell within the next 2 years these changes won’t affect them. However those landlords that are Higher and Additional taxpayers will notice their tax relief reduce by 2020. Also, investors near the tax threshold could find themselves in the next tax bracket, which could have a knock-on effect and increase their tax exposure.

So what are the proposed tax changes?

There are basically two:

  1. Firstly, the amount of tax relief landlords can claim on their mortgage interest will now be capped at basic rate and;
  2. Secondly, landlords will no longer be able to subtract their mortgage interest from their rental income before they calculate their taxable profit.

One in five landlords are expected to have to pay more tax because of these changes, however the new rules will not be phased in until between 2017 and 2021 according to the latest information.

What steps can landlords take?

There are several steps that investors can take to conserve as much profit as possible and to limit the amount of any extra tax payable. For example: Read more