National Insurance Archives | Page 2 of 3

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January 14, 2016/in Accountancy, Accountants, Auto Enrolment, Bookkeeping, Cash flow, expenses, Filing deadlines, Income & Expenditure, Income tax, London, National Insurance, NI, NIC's, Online returns, PAYE, Payroll, Real Time Information, RTI, Sage, Save money, Self-assessment, Software packages, South London, Special Offers, Tax, Tax advice, Tax advisers, Tax calculation, Tax returns, Taxfile, VAT/by Mark

[UPDATE: Please note that this offer has now expired]. Taxfile’s customers can benefit from an incredible offer on a range of Sage accounting packages at the moment. We’re offering a FREE or, in effect, heavily subsidised* Sage accounting package to all active Taxfile customers, whether existing or new. There are various different packages available so we’re sure we’ll have one which will suit every customer perfectly. The list of benefits is almost endless — here are just a few:

Firstly we’ll GIVE* Taxfile customers the package — you don’t have to pay Sage at all;
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Automatic bank statement integration makes bank reconciliation a breeze, helping when receipts go missing and even recognising – and accounting for – regular transactions;
A mobile app module allows you to simply snap a photo of your receipt and it uploads to your Sage account (say goodbye to physical receipt storage!);
Less paperwork!
Automatic tax computations performed by the software;
Report and analysis options;
VAT handling;
Automatic VAT return options (or let us handle it for you as you prefer);
Shows you the taxes and National Insurance due so you can easily pay them on time;
Fast and easier tax returns;
Help from Taxfile at any point and from Sage’s own helpful videos;
Helps you stay in line with UK laws, taxes and regulations;
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Taxfile will even be happy to set you up;
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A quick and easy payroll bolt-on is also available for limited companies, with payslips, RTI, Auto Enrolment integration etc.;
Auto enrolment communications included if you have a company pension scheme;
Option to automatically integrate online e-commerce records into your Sage account;
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But there is more major benefit – collaboration with us, your accountant!

The Sage packages we supply are not only free, or in effect heavily subsidised depending on the package involved, but also allow us, your accountant and tax adviser, to collaborate with you within your Sage package with your permission. So where you cannot do something yourself, we can log in using our own integrated Sage administration system to get involved on your behalf, for example to set things up for you, run reports, activate VAT returns, tax returns, end of year accounts, payroll and so on. It’s amazing really! So you do as much or as little as you want to … and we cover everything else!

You save money!

Using the easy but powerful Sage bookkeeping and accounting packages supplied by Taxfile
means that you’ll save money. It’s as simple as that. Customers using such packages makes our job easier, reducing our chargeable hours working on your accounts, so quite simply saves you money!

You also save time!

Our Sage packages will save you SO much time you’ll never look back! Once you’ve tried our Sage packages for a while you’ll Read more

Construction Industry Scheme (CIS): How to Claim a Tax Refund

March 24, 2015/in Accountancy, Advice, CIS, cis gross payments, CIS4, CIS5, CIS6, Construction Industry Scheme, Contractor, Contractor Monthly Return, Multilingual staff, National Insurance, New CIS, NI, NIC, Non-domiciled residents, Rebate, Refund, South London, Subcontractor, Tax, Tax refunds, Tulse Hill, UTR/by Mark

It’s now time to start the process of claiming your tax refund if you are a subcontractor working within the construction industry and have been paying tax, in advance, through the Construction Industry Scheme (‘CIS’). In this article we will tell you how you qualify and how to claim your tax refund. First, though, a little bit of background to the scheme:

The CIS Scheme

The Construction Industry Scheme, or CIS, is a scheme whereby a contractor in the construction industry usually deducts a proportion of the money due to their subcontractor, at source. The deducted amount is then passed direct to HMRC and counts towards the subcontractor’s tax and National Insurance, the tax element effectively being paid in advance. The exact proportion deducted depends on whether the subcontractor concerned has registered under the CIS system. If the subcontractor has not registered, the deduction will usually be made at a rate of 30%. If they have already registered, then the deduction will usually be made at a rate of 20%. Either way, by the financial year end, the amount of tax deducted at source will usually end up being more than they really needed to have paid, simply because it won’t have factored in the personal allowance which every UK taxpayer is entitled to (most UK citizens can earn up to £10,000 before paying tax at time of writing, this figure being set to rise to £10,600 in the tax year 2015-16, 10,800 a year later then increasing to £11,000 by 2017-18 following the recent budget proposals). Hence, many subcontractors in the construction industry will be due a tax refund because of the overpayment. The good news is that the time to apply for the refund is pretty much now, so get in touch if you’d like our help claiming.

What kind of work does CIS cover?

You qualify to be in the CIS system if you are a subcontractor who supplies construction work to buildings. This includes labouring, decorating, site preparation and refurbishment but excludes things like architecture, surveying services, the hire of scaffolding without labour, the fitting of carpets, the delivery of materials, and finally non-construction type services such as site facilities (canteens etc.).

What if your business is not in the UK?

Even if your business is abroad, the same rules apply if you work as a subcontractor within the UK. However there are some slightly different rules regarding the treatment of taxation for non-resident workers from countries which have ‘Double Taxation’ treaties with the UK (we can, of course, also help with that — just get in contact).

Registering for CIS

If you haven’t already registered for CIS as a sub-contractor, Taxfile can help to do this for you. You’ll need to be registered for Self Assessment (we can also help with this) and this will give you your UTR (unique taxpayer reference) number. We’ll also need your name, National Insurance number, your legal business/trading name and contact details. Once registered with CIS one of the immediate benefits will be that you’ll then have tax deductions made at the 20% rate rather than at 30%, which would otherwise be the case. If your business is a legal partnership you will also need to register it for CIS but this would need to be done in addition to being registered as an individual or sole trader. Of course, Taxfile can help with that too. Once you have been registered with CIS and have passed certain eligibility criteria, it is also possible to apply for ‘gross payment status’ meaning that you’ll then be paid by the contractor without the usual ‘at source’ deductions. Instead you’ll need to pay any outstanding tax and National Insurance at the financial year end; however HMRC will review your business each year to check that you still qualify for this status (paying tax late and/or submitting returns late would put your gross payment status at risk).

Offsetting Expenses against your tax

Taxfile can also help you to offset certain expenses against your subcontractor income. This means that any tax refund will be larger — or any tax outstanding will be lower. We can offset Read more

Highlights from the Chancellor’s Budget, 18 March 2015

March 19, 2015/in 2015, 2016, 2017, Accountancy, Annual Allowance (AA), Annual Investment Allowance, Band rates, Budget, Chancellor of the Exchequer, Flexible ISA, George Osborne, Help to Buy ISA, Higher rate tax payers, HM Revenue and Customs, HMRC, Income tax, Investments, ISAs, National Insurance, National Minimum Wage, NI, NI Class 3, NIC, Personal allowance, Personal Savings Allowance, Self-assessment, Self-employed, Tax, Tax advice, Tax allowance, Tax bands, Tax returns/by Mark

Along with some encouraging news about the UK economy, some interesting new measures were announced in the Chancellor’s Budget yesterday and below we highlight those which we feel will directly impact the majority of UK taxpayers:

As widely forecast, the tax-free allowance will increase. The amount people can earn before paying tax will rise to £10,800 from 2016-17 and then to £11,000 from 2017-18. At the same points in time, higher earners will also receive a two stage increase to the threshold at which they start to pay a 40% rate of tax, with the threshold increasing to £43,300 by 2017-18.
The Chancellor also announced a brand new Personal Savings Allowance whereby the first £1,000 of interest (£500 for higher rate taxpayers) will be tax tree. This new allowance will kick in from April 2016 and will take 95% of taxpayers out of savings tax completely. (Fact Sheet available here).
Another new scheme announced was the introduction of a new ‘Help to Buy ISA’ aimed at prospective first time buyers. This fairly generous scheme means that the Government will chip in up to £50 extra per month (up to a ceiling of £3,000) when an eligible saver saves up to £200 per month towards their first home. (Fact Sheet available here).
In another ISA reform, savers will now be able to withdraw money from a new Flexible ISA and deposit it back later in the same financial year without losing any of their usual ISA tax benefits. £15,240 will be able to be put into this re-styled savings vehicle. Read more

How the Chancellor’s 2014 Autumn Statement affects YOU!

December 5, 2014/in 2014, Accountancy, Accountants, Chancellor of the Exchequer, Chancellor's Autumn Statement, Corporation tax, Dulwich, George Osborne, ISAs, London, National Insurance, NI, NIC's, Personal allowance, Rates, SME, South London, Stamp Duty, Stamp Duty Land Tax, Tax, Tax avoidance, Tax bands, Taxes, thresholds, Tulse Hill, Value Added Tax, VAT/by Mark

George Osborne, the Chancellor of the Exchequer, announced his Autumn Statement on Wednesday (3 Dec 2014) in what could be seen as a mini budget. Here we focus on the key announcements, concentrating on those relating purely to taxation, as it is those which affect you, our customers, most directly.

1). First some good news: The UK is seeing the fastest growth out of all the G7 countries, and the number of people employed is at its highest point ever. This is good for all of us because it restores optimism in the UK economy, higher employment speaking for itself.

2). As we announced in a separate blog post, Stamp Duty (Land Tax) has been given a major shake-up and, for anyone buying a house for £935,000 or less, the amount of Stamp Duty which they’ll have to pay will be less, and sometimes very significant. See our separate blog post and infographic for more detail.

3). In the financial year 2015-16, the tax-free personal allowance (which is the amount you can earn before you start to pay any tax) will increase to 10,600 which is an increase of £600. So … more tax-free money in your pocket, which is good.

4). Economy flights will become cheaper for under 12s from 1 May 2015 and under 16s from 1 March 2016, because their tickets will become exempt from tax on those dates. So … a small concession, but another welcome one. Average 4-person families will save £26 for flights within Europe and £142 on flights to the U.S.

5). From 3 December 2014, spouses will be able to inherit their partner’s ISA benefits should their partner pass away. Currently this is not the case and the change will mean that, from 6 April 2015, the surviving spouse or civil partner will be able to Read more

The Shocking Truth about Tax on the Poor

June 20, 2014/in Council Tax, Higher rate tax payers, HM Revenue and Customs, HMRC, Income tax, London, National Insurance, NI Class 3, NIC's, South London, Tax, Tax advisers, Tax agents, Tax liability, Tax returns, Taxpayers, Value Added Tax, VAT/by Mark

Have you ever wondered how much of one’s total income is taken up in tax? And I don’t mean just Income Tax. I mean in ALL taxes paid by ordinary taxpayers throughout the course of a year. Such a figure would need to take into account National Insurance (income tax in all but name, some might say), the insidious Value Added Tax or ‘VAT’ – which on its own is a hefty 20% tax on what is often already taxed money for most ordinary taxpayers, and don’t forget to include Council Tax and finally, of course, Income Tax itself.

Well, the answer may surprise you. Before seeing the answer, though, try The Guardian’s little quiz about this and see how you get on. There are only 8 questions, and for each you simply choose from 4 possible answers – so it’s quick to complete and, once submitted, you are immediately taken to a feedback page where you will be told how your answers compared to the average respondent and, more interestingly, what the correct answers were. It’s interesting to note that, in a joint poll by The Equality Trust and Ipsos MORI, nearly 70% of people drastically underestimated how much the poorest pay in tax, as a percentage of their total income. They also over estimated how much the richest pay as a proportion of total income. This wide misconception is due to most people incorrectly focusing only on Income Tax alone which, in reality, only makes up a small proportion of total taxes paid throughout the course of a typical year.

Spoiler alert: be warned that I’m shortly going to divulge the answers Read more

RTI (Real Time Information) – last Full Payment Submission (FPS) due soon

March 6, 2014/in 2014, Accountancy, Accountants, Bookkeeping, Employee, Employer, FPS, HM Revenue and Customs, HMRC, Income tax, London, National Insurance, NIC, NIC's, Pay-as-you-earn, PAYE, PAYE threshold, Payroll, Payroll bureau, Real Time Information, RTI, Tax/by Mark

Exactly eleven months ago at time of writing, HMRC launched ‘RTI’ (Real Time Information) in the UK. This is the mechanism through which employees now have to report PAYE information for employees on the day it actually happens, or alternatively before that day, for example to confirm to HMRC each time an employee is paid through PAYE, including any NI or Income Tax deductions. RTI is, almost without exception, for all employees including those whose earnings fall below the NIC’s Lower Earnings Limit (‘LEL’), e.g. students.

The RTI reporting has to be done electronically using payroll software, whether that’s the employer themselves reporting it, or their nominated accountant, payroll bureau or bookkeeper. The information reported to HMRC will also now need to include new information which includes the usual hours worked by each employee and any unusual break in the normal working pattern, for instance if an employee takes unpaid leave. RTI also includes other changes to how various things are reported e.g. starter and leaver dates and also employers no longer need to submit end of year forms P14 and P35 because this will be handled on the last Full Payment Submission (‘FPS’) for the tax year in question – this is due in less than a month at time of writing as the new tax year begins Read more

‘Employment Allowance’ to save businesses up to £2k in NIC

January 27, 2014/in Employee, Employer, Employment allowance, National Insurance, NIC, NIC's, Tax, thresholds/by Mark

In April 2014 the new ‘Employment Allowance’ will be introduced. This will cut up to £2k off the National Insurance costs incurred by businesses and save employers nearly £5.5 billion across the UK as a whole by the end of the Parliament. This equates to £200 per UK employee.

These savings will also be helped by the abolishment of the National Insurance previously paid by businesses for employees under 21 years of age (from April 2015) and by the increase in the “threshold before an employer has to begin paying National Insurance contributions for employees” (from April 2011).

George Osborne, Chancellor of the Exchequer, said:

“Small businesses make a vital contribution to our economy, creating jobs and stimulating growth. The ones I have visited today want to expand, take on new staff and make new investments so the actions we have taken to cut the jobs tax will be a real boost to them.” Read more

Autumn Statement by the Chancellor of the Exchequer

December 9, 2013/in Accountancy, Accountants, Buy to let, Capital gains tax, CGT, Chancellor's Autumn Statement, Dulwich, Employee, Employer, IHT, Income tax, Inheritance Tax, ISAs, Land and property, Landlords, Lettings, Lettings income, London, Married couple's allowance, National Insurance, NIC, NIC's, Non-domiciled residents, Non-resident, Personal allowance, property investor, residency, savings income, South London, Tax, Tax accountant, Tax accountants, Tax advice, Tax advisers, Tax agents, Tax allowance, tax experts/by Mark

On 5 December 2013 George Osborne, Chancellor of the Exchequer, gave his Autumn Statement in Parliament. Key announcements included:

A rise for the Personal Allowance, as was long-anticipated, to £10,000 in 2014/15;
the higher 40% tax rate threshold also increasing to £41,865;
A new, transferable, tax allowance of £1,000 for married couples and those in civil partnerships from April 2015;
For employees aged under 21 employers will not have to pay Class 1 National Insurance (‘NI’) Contributions on earnings up to the Upper Earnings Limit;
Capital Gains Tax (‘CGT’) for future gains will now also apply to NON-resident individuals from April 2015 (previously this had been applied only to UK resident landlords);
For 2014/15 the annual ISA subscription limit will increase to £11,880 (of which £5,940 can be in cash);
There were also announcements relating to the continuing clamp-down on tax avoidance, improvements and plans for UK infrastructure, and the proposed inheritance tax (‘IHT’) simplification for trusts.

The full speech transcript can be read here or alternatively view the following video recording: Read more

Business Payment Support Service

July 11, 2009/in BPSS, Business Payment Support Service, Corporation tax, HMRC, National Insurance, South London/by Taxfile

Business Payment Support Service (BPSS) was launched on 24 November 2008. This service is designed to support businesses having trouble payment their tax bills in the current economic crisis.
Very important to realise is that this service does not deal with anyone that has already made a payment arrangement with HMRC .
Also, the BPSS does not deal with you if HMRC has already got in touch with you regarding an overdue payment.
In order for the BPSS to be able to help your business, you need to contact them before the tax, VAT, Corporation Tax, Pay As You Earn or National Insurance contributions liabilities are due.
You can contact them seven days a week on 0845 302 1435.
According to HMRC, this service “designed to assist all businesses (large and small) that will be unable to pay their tax. The service is primarily available to self-employed people and companies but can be used by any of your clients who are having difficulty in meeting their tax liabilities. It covers most taxes and duties including Income Tax, Corporation Tax, VAT, PAYE and National Insurance.”
The Payment Support service only applies to businesses that cannot genuinely meet their tax payments on time and they are likely to pay their tax over a longer period of time.

Also according to HMRC, “ surcharge(s) can be avoided on late payment of income tax where a Time to Pay agreement is entered into before the relevant surcharge date AND the terms of the agreement are adhered to.”

Although surcharges can be avoided, interest on late payment will be charged in the normal way.

If you would like to know more about this service , you can follow this link.

Taxfile‘s tax agents in South London and Exeter can discuss your business position with HMRC on your behalf and arrange a Time to Pay agreement.

Employed or Self Employed?

June 14, 2009/in Employee, Employer, HMRC, National Insurance, PAYE, Self-employed, Tax advice, Tax agents/by Taxfile

If you work for someone else, it is important to know whether you are working for that person as employed or self-employed as an independent contractor.
If you are the one having to employ somebody, it is your responsibility to correctly determine the employment status of that person.
A worker’s employment status will determine the charge to tax on income and the class of National Insurance contributions due.
It is necessary to determine whether the person works under a contract of service (as an employee) or under a contract for services (as self-employed or independent contractor).
There are some test and factors that can determine the worker’s right status. For instance if the workers are paid by the hour, week or month and if they can get overtime pay or bonus it means that they are employed. Also, if they work a certain amount of hours and they can be moved from task to task than again they are considered to be employees.
Important to establish is whether the workers can be replaced by somebody else and whether they are being told where, when and how to carry out their work. Again if the answer is affirmative than that worker classifies as an employee within the company.
If the workers are self-employed,the answer to all the following questions should be positive:
•Do they regularly work for a number of different people?
•Can they hire someone to do the work or engage helpers at their own expense (the so called right of substitution and engagement of helpers)?
•Do they carry a financial risk?
•Can they decide what work to do, how and when to do the work and where to provide the services?
•Are they providing the main items of equipment they need to do heir job?
•Do they agree to do a job for a fixed price regardless of the time it takes?

Very important to highlight the HMRC’s view of a worker : “Just because a worker is self-employed in one job, doesn’t necessarily mean he or she will be self-employed in another job. Equally, if a worker is employed in one job, he or she could be self-employed in another. ”
It is a general requirement that those wishing to take on workers consider the terms and conditions of a particular engagement to determine whether the worker is an employee or self-employed. If you any doubts, you can always ask your local Status Inspector for an opinion as to the employment status of your workers. Also there is an Employment Status Indicator (ESI) tool that enables you to check the employment status of an individual or group of workers.
Unfortunately, the status of self-employed workers is a favourite target of the Taxman, particularly during a PAYE compliance visit.
So take Taxfile‘s tax agents advice and protect yourself with a contract and and keep all the correspondence between you and the contractor covering the main points about employment status to avoid problems in the future.