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Guy Bridger outside the Tax Office

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

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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

Taxfile newsletter (Autumn 2015)

Save money & hassle with our latest PDF newsletter!

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Taxfile newsletter (Autumn 2015)Check out our latest A4 newsletter — which is jam-packed with ways to save money when dealing with your tax affairs and is more comprehensive than our recent e-newsletter. Savings include our 5% Early Bird discount for help with your tax return or accounts before Christmas, our offer to reduce your Taxfile bill by a further 12½% if you introduce a friend who then becomes a Taxfile client, a shout out to all sub-contractors in the construction industry who, if they act fast, can have their CIS tax refunds in time for Christmas, plus Key Dates in the tax calendar, a warning to Landlords — and a whole lot more.

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).

Beat The January Rush and Save!

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Beat The January Rush and Save 5%TaxFile are offering a 5% reduction for clients who can submit their accounts to us before December 21st this year. This helps both of us — you receive a 5% reduction in your bill and it eases the rush in the New Year, our busiest time.

For example you could use this opportunity to reduce our charges for help with your self-assessment tax return submission if you’re self-employed, or for help with your CIS tax refund application if you’re a sub-contractor working in the construction industry, or if you’re one of our many clients who simply require tax advice and accountancy-related assistance from time to time.

Don’t delay – this discount is only available for a few weeks so call us on 020 8761 8000 or call into our Tulse Hill branch in SE21 for a chat and we’ll be delighted to help. You can also email us by clicking here or alternatively you can make an appointment with one of our tax agents here.

Taxfile Newsletter November 2015

Want to save money before Christmas?

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Tax Newsletter

Taxfile tax newsletter November 2015Check out Taxfile’s latest e-newsletter to find out our latest tax news and easy ways you can save money — but only if you act fast.

Taxfile’s friendly staff are always available to help on all matters regarding tax and if you come in before 21st December we’ll give you a discount – check out the e-newsletter for full details and other ways to save even more. Up to date bulletins can also be found here on our tax blog.

If you’d like to save money on your self-assessment or tax refund, including CIS refunds for sub-contractors, call into Taxfile’s Tulse Hill Branch in SE21, or telephone 020 8761 8000.  You can also contact Taxfile online here or book a free introductory appointment with a tax advisor here.

If you’d like to be included in our future e-newsletter mail-outs, please click here. We only send a few each year and you can unsubscribe at any time with a simple mouse-click. Your details will, of course, not be passed on to anyone else — they are only used to send out our own newsletters and tax news.

George Osborne

Summer Budget 2015 – Key Tax Takeaways

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The Summer Budget was announced last week and in this blog post we’ll take a look at only those changes which will affect ordinary taxpayers and SMEs.

In his opening remarks, the Chancellor of the Exchequer, George Osborne, promised:

A Budget … to keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country.

So, taking each of those goals in turn …

Higher Minimum Wages

With regard to the higher wages promise, Osborne announced that there would be a new National Living Wage of £7.20 per hour from April 2016 for those aged over 25 and over, rising to more than £9 per hour by the year 2020.

Lower Tax

With regard to the lower tax promise, the Personal Allowance (the amount people can earn before paying any tax) will increase – as anticipated – from £10,600 in the financial year 2015-16 to £11,000 in 2016-17. A longer term plan is to increase this still further to £12,500 by 2020. The ultimate ambition is pass a law to make sure that those working 30 hours a week and earning the National Minimum Wage will pay no tax whatsoever, although clearly this will need further clarification in due course.

Dividend tax will also be reformed. Here the existing dividend tax credit (this reduces tax paid on dividends from shares) will be replaced by a new £5,000 tax-free allowance on income from shares from April 2016 and this will be available to all taxpayers. To offset the cost of this to the Exchequer, those with more significant dividend income will see an increase in the tax rate they pay.

Inheritance tax will also be subject to changes from 2017-18. The idea is to allow individuals to each have a ‘family home allowance’ which they can pass on to their children or grandchildren, tax-free, when they die. This allowance will be added to the existing Inheritance Tax threshold currently set at £325k and will potentially allow property up to the value of £1m to be passed down from 2020-21 (see table below). For those with estates valued over £2m the allowance will be gradually withdrawn.

This is how the effective Inheritance Tax thresholds will look in 2020-21: Read more

Tax Return 2014

STILL haven’t filed your tax return? You owe £410 in fines & counting!

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If you STILL haven’t filed your tax return despite the end of May being almost upon us, you’ll owe £410 in HMRC penalties by the end of this week. Continue to throw money down the drain at the rate of £10 extra per day thereafter if you still don’t submit your return.

As we explained in our last post, missing the original January 31 deadline meant an automatic HMRC penalty of £100 (on top of tax owed, of course) at that time.
But, with the additional penalty of £10 per extra day extra having been piling up since 1st May, it means you’ll need to add £310 to the original £100 penalty by the end of this week. Carry on like this for yet another month and by the end of June you’ll owe a whopping £710. It doesn’t end there — by the end of July it’ll be worse still as there is an additional £300 penalty levied by HMRC. Yes, that’s on top of the daily £10 fine and the original £100 penalty, meaning that the total penalty will then be £1300 as a bare minimum (it can be worse still if HMRC deem your case to be particularly serious). All this simply because your tax return is late.

All these penalties are in addition to the actual tax you owe!

Don’t forget … even if you owe no tax, you still need to submit your tax return so aren’t immune to the penalties. Take another look at the full post for more detail or, better still, contact us here at Taxfile urgently if you’d like our professional help in filing your tax return on your behalf — and minimising the penalties you’ll need to pay to HMRC. Call 0208 761 8000, click here to contact us or book an appointment with one of our tax advisors here and we’d be delighted to help. We are based in Tulse Hill, South London.

Tax Return 2014

Still Haven’t Filed Your Tax Return? Expect a Nasty Bill from HMRC!

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Tax Return 2014If you still haven’t filed your tax return for the financial year up to 5 April 2014 you can expect the penalties from HMRC to begin racking up daily — and potentially very significantly — starting from Friday 1 May.

If you missed the 31 January Tax Return deadline …

If you missed the 31 January 2015 deadline for tax returns, you already owe HMRC £100 in fines on top of any tax you owe. If you don’t owe any tax whatsoever, HMRC still require a tax return from you, plus that £100 in penalties.

If you still haven’t filed your return by 1 May …

From 1 May 2015 you can also expect a £10 daily penalty to kick in, on top of the £100 fine above, up to a maximum addition for the period of £900 (90 days) extra. But it gets even worse…

If you STILL haven’t filed your return by 30 July …

After the 90 day period beginning on May 1st, if you STILL haven’t filed your tax return you’ll receive a further £300 penalty (or 5% of the tax due; whichever is highest) plus a possible additional fine equivalent to 100% (or more) of the tax due, depending on how serious the case is.

Each of these individual penalties is in addition to the preceding ones.

So, to conclude, if by 30 July 2015 you STILL haven’t filed your latest tax return you will be in for a minimum penalty of an incredible £1300.00 and that’s in addition to the tax you owe. Also, Read more

CIS - tax refunds for construction workers

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

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CIS - tax refunds for construction workersIt’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

George Osborne

Highlights from the Chancellor’s Budget, 18 March 2015

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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
Tax return help & accounting advice for taxi drivers, cabbies, cab firms, couriers, limos and private hire firms. We're accountants in Tulse Hill, South London, SE21.

Missed the Tax Return Deadline?

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[Updated 3 February 2020]: If you missed the deadline for submission of your tax return to HMRC (that was 12 midnight on Saturday 31 January) here’s what you can expect in terms of a fine:

Table of penalties showing fines if you are late submitting your self-assessment tax return

In case you didn’t realise, you still had to submit a tax return even if you did not owe any tax and the longer you leave it, the more it will cost you — as you can see in the table above. Alternatively, use this excellent estimation tool to work out your exact penalty at any given point in time. Not sure if you even need to submit a Self Assessment tax return? No problem; there’s a tool for that too (here).

Statistically speaking, women seem to send in their returns on time more often than men; 18 to 20 year olds of either sex are the very worst with around 11% of them sending in their returns late in recent years, while those over 65 seem to be statistically the most reliable of all, with only around 1½% of them having filed tax returns late. We’ll have to wait and see how it panned out this year when the figures are in.

Taxfile are here for you if you need to get your tax return sorted out whether you’re on time or not – but the earlier the better if you’re to minimise any penalty from HMRC. We are professional accountants and tax advisors, are based in South London, and will help to get your tax affairs in order with minimal fuss. We will ensure that all your figures are correct so that you pay only the right amount of tax – no more, and no less. For professional tax help contact us or book an appointment on-line.