Download our jam-packed Autumn Newsletter right here for up-to-the-minute news, ways to save money, tips, new developments and tax information from Taxfile. Includes important news regarding tax return deadlines, refunds for C.I.S. sub-contractors working in the construction industry, key dates, ways to save money, HMRC tax news for landlords, imminent price changes plus an interesting mind map showing information about our lovely multi-lingual staff! Download the newsletter here (Acrobat PDF format – right-click to save the PDF to your hard drive then open it in Acrobat Reader or alternatively left-click the link to view the newsletter directly in most browsers).
Where possible, Taxfile customers are urged to submit their records to Taxfile before December 1st 2014 so as to beat the price increases which will come into effect from that date. Taxfile has held its prices for several years now, and unusually long for our industry, however every so often we have to take stock and catch up with inflation and the ever-increasing costs of operating a business inside London. At time of writing, Taxfile customers still have time to submit their paperwork and records for professional tax and accountancy help – for example for tax returns – so can totally avoid the price increases this year if they act reasonably fast and get their figures and records etc. to us before December 1st. This will also avoid bottlenecks as we fast approach the busiest time in the tax year. Taxfile will also be sending out reminders to its active customer database.
** New – Early Bird Reduction **
* If you miss the December 1st deadline, don’t worry because we’re offering a 5% ‘Early Bird’ reduction on prevailing Taxfile prices if you submit all your records to us before the end of December.
Taxfile would like to thank its customers for their loyalty and custom throughout the years, and for their understanding when occasionally we have to make these increases so as to keep pace with the rising cost of operating in London.
(For tax returns, figures and records are required for the year ending 5 April 2014).
Her Majesty’s Revenue & Customs (‘HMRC’) have now completed a 7 month pilot scheme, held across the North East of England, whereby they closed existing HMRC Enquiry Centres and instead offered those requiring extra help with tax-related issues assistance in a different, more tailored way. With the pilot scheme now complete and deemed a success, all Enquiry Centres across the UK will be closed by 30 June 2014 (just a few days away at time of writing) in favour of the new, more tailored system.
Since the end of May, HMRC have already been rolling out the replacement service, being “a new way to support people who need extra help to get their taxes, tax credits and child benefit entitlements right”. The new service will be more tailored to individual needs and will apparently be more efficient than the Enquiry Centres, which have seen demand drastically falling over recent years. So evidently the new service is also about saving the Government money, which is good to see as it helps to reduce the UK’s overall tax burden and mitigates possible tax increases.
The Replacement Service
The replacement service will be available by telephone or face-to-face via a mobile squad of advisers, who will deal with you on the telephone, visit your home or meet you within your local community, if preferred. The HMRC specialist involved will try to resolve, as fully as possible, all tax and tax credit-related queries during the course of the initial session. This will be aided by liaison, during that session, between the adviser and other experts from different departments within HMRC; the aim being to Read more
Despite it being an all time record year for receipt, on-line, of ‘on time’ tax returns this year, of the 10.74 million tax returns which were due by 31 January 2013, about 708,740 were – or still are – late. That represents a shortfall of 6.6% and, at a starting penalty of £100 per late return, that’s quite a hefty total penalty. However, one could argue that an additional £71 million in the HMRC coffers in these troubled economic times is very welcome for the exchequer, even if it’s small change in the big scheme of things.
So did you miss the deadline? Here’s what you can expect in terms of additional penalties:
Remember: you still have to submit a tax return even if you do not owe any tax. Taxfile are Read more
With the tax return deadline being only hours away (midnight 31 January 2014) there is still time to get professional help if you need it – particularly because HMRC often get it wrong according to new research by UHY Hacker Young.
In just one example, HMRC sent a tax bill to a pensioner which demanded over £576k in tax! With an income of only £11k per annum this was clearly incorrect but what if it had been only hundreds of pounds wrong – would the pensioner have noticed and, if so, would he have been confident enough to question it with the might of HMRC?
According to the research, HMRC employees have been making ‘basic’ errors which have led to problems such as people being on the wrong tax code and consequently underpaying or overpaying tax. While underpaying it may sound attractive on the face of it, chances are the system will catch up and then a correction will need to be made later on, leaving the taxpayer with an unforeseen bill to pay – a real blow for cashflow.
While the UHY Hacker Young research cites an error rate in 2013 of 37% in the sample tested, HMRC are arguing that the research is wrong and that their PAYE coding notices are 99% accurate. Either way, when you consider that Read more
Have you ever wondered what other services the Taxfile group can help you with? Well, find all the answers in the new downloadable brochure, which outlines services undertaken at the various different offices in both South London and Exeter, Devon. From accountancy and bookkeeping for SMBs to simple tax returns for individuals and right through to the most complex of complicated tax issues – we’re here to help and the new brochure gives you all the contact details for each office including address, email, telephone, Skype ID, how to book appointments on-line and, finally, what discounts are available – both to new and existing customers – it’s all there … or rather I should say … it’s all here! (A4 PDF format, less than 1MB).
Venture Capital Trusts were schemes introduced in 1995 to encourage individuals to invest in high-risk trading companies.
With a VCT the risk of the investment is spread over a number of companies.
VCTs must be approved by HMRC and must meet a certain qualifying conditions.
If you have subscribed for shares in Venture Capital Trusts and you are 18 or over when the shares were issued you are entitled to a few tax reliefs.
According to HMRC, these are the tax reliefs for investing in VCTs:
Income tax relief:
One of the income tax reliefs of VCTs is that you are exempted from income tax on dividends from ordinary shares. This is called dividend relief;
Another very important tax relief when investing in a VCT is called income tax relief .
The amount of the tax relief will be the smaller of the amount subscribed up to a maximum of £200,000 at 30% or the amount that reduces the tax bill to zero for the year.
The rate of 30% applies in the tax year 2006/07 and onwards and for subscriptions for shares issued in previous tax years the rate is 40%.
Capital gains tax (CGT) relief :
One of the CGT reliefs when investing in VCT schemes is called disposal relief as you may not have to pay CGT on any gain you make when you dispose of your shares. In order to qualify for the reliefs certain conditions need to be met. You can find more about them on HMRC website.
Fostering is looking after someone else’s children in your own home at a time when his or her family is unable to do so. Foster care relief applies to people who get income from providing foster care to children and young people.
Anyone receiving this type of income is considered by the tax office to be self-employed and therefore liable for tax.
If total receipts from fostering no dot exceed a certain amount, often referred to as qualifying amount, than the foster carer will be exempt from income tax for that year.
A qualifying amount is made up of two elements added together.
One element is the fixed amount of £10,000 per year for each household. Only a proportion of the fixed amount can be claimed if the foster carer is registered for less than a year.
The second element consists of an amount per week for each foster child which varies depending on the child’s age.
If total receipts from fostering exceed the qualifying amount than there are two ways of calculating your tax. One is called the profit method and it is calculated by deducting the allowable expenses from the receipts.
The other one is called the simplified method and is calculated by deducting from the receipts the qualifying amount with no additional relief for expenses. Capital allowances are not available if such a claim is made. The election must be made on or before the first anniversary of 31 January next following the end of the year of assessment to which it relates. If they do not make such an election the will need to calculate their profit in the normal way (the profit method).
As profits from fostering as treated as earnings from self-employment, than National Insurance Contributions will be due (Class2 £2.30 per week and Class4 8% on the profit).
As a foster carer need you to keep good records consisting of total receipts for the year from their local authority, HSS trust or independent fostering provider.You also need to keep a record of the number of weeks that you care for each child placed with you in the year.
Also you need to keep a record of the date of birth for each child.
If your total receipts from fostering exceed the qualifying amount and you are using the profit method than you would need to keep records of your expenses as well.
If you are a foster carer and need help with filling in your tax return, Taxfile‘s tax agents in South London and Exeter are here to help.
If you are self-employed, there is a type of relief called use of home as office that can be offset against your tax liability.
If you run your business partially from home you can could set a proportion of your home running costs against income tax.What sounds like a very easy task for any tax accountant has proven to be quite difficult as the HM Revenue & Customs can easily argue the figures as there are no clear rules that can be applied.
Among the expenses allowed in this category we can mention the following: Council Tax, Mortgage interest, Rent, Repairs and maintenance, Cleaning, Heat, light and power, Telephone, Broadband, Metered water charges.
The factors to be taken into account when apportioning an expense include according to HMRC:
•the area used for business purposes,
•the usage in connection with electricity,gas or water and
•the time used for business purposes compared to other use.
By following this link you can see some examples provided by HMRC related to ways of approaching the use of home as office.
This is what the courts have approved in terms of apportioning expenditure for home as office:
“… it is possible to apportion the use and cost of a room on a time basis, and to allow the expense of the room during the hours in which it is used exclusively for business purposes, in the same way as it is possible to calculate the business expenses of a car which is sometimes used for business purposes exclusively and sometimes used for pleasure.” (Templeman J in Caillebotte v Quinn  )
Very important is to retain good records to evidence whatever claim you make for using your home as office in case the taxman argues your figures. For more help in understanding tax reliefs for self-employed, Taxfile in South London and Exeter is here to help.
Sat: 9-1 (Nov-Jan & Apr-Jun only)