PAYE payment dates for September

We would like to remind employers about electronic PAYE payment dates. The due date for electronic PAYE payments is the 22nd of the month and a payment on the day usually suffices.

However, where the due date falls on a non-banking day (weekend or bank holidays) HMRC must have cleared funds by the last bank working day before the 22nd. This advice is particularly relevant this month i.e. for electronic payments due on 22 September 2013 which this year falls on a Sunday. This month’s electronic payments must therefore clear HMRC’s bank account by Friday 20 September 2013.

Electronic payments sent using the Faster Payments Service (FPS) are able to clear into HMRC’s account on a non banking day - a Saturday, Sunday and most Bank Holidays. The service enables electronic payments to be made and processed in hours rather than days.

Payments made by cheque should be posted to reach HMRC by 19 September 2013.

Catching up with Tax Returns

Until 15th October 2013, HM Revenue & Customs (HMRC) are running a campaign to encourage personal taxpayers to submit their overdue tax returns.


The campaign, called “My Tax Return Catch-up,” is aimed at individuals who have been sent a personal tax return form (or notice to complete a tax return) for the 2011/2012 tax year, or earlier. It is intended to offer a quick and straightforward way to bring your tax affairs up to date and by taking part you will receive better terms than would normally be the case.

To take part in My Tax Return Catch Up there are three steps – firstly to advise HMRC that you want to join the campaign; secondly to complete and submit all your outstanding returns; finally to pay the sum owed (or claim any repayment that might be due).

The 15th October is the deadline for submitting outstanding returns and is also the date for paying any tax which is due. However, if

payment in one lump sum is not practical, then you are able to ask for the tax bill to be spread over a number of monthly payments.

The incentive for joining this catch-up campaign is a reduced penalty for late submission of returns or late payment of tax. Therefore, this opportunity to get your tax affairs in order should not be missed.

If you have found the completion of tax returns to be a daunting task and would like help, please contact the office on 023 8023 4222

Auto Enrolment for workplace pensions

All employers need to be aware of their responsibilities under the new Pension

Legislation - they are not optional!

The only exception will be if employees decide to opt out, but this will be subject to

close scrutiny, to ensure that employers are not coercing their employees into opting

out.

Any employee who does opt out will need to renew their decision every three years, or by default they will be enrolled into a pension scheme automatically.

One type of workplace pension scheme is NEST (National Employment Savings Trust) but other types of pension arrangements are available. The start date that auto-enrolment rules come into effect is called the Staging Date and is staggered depending on the size of the business.

It is the smaller employers, probably with little experience of pensions, who are more likely to find it difficult to cope with these changes. The message to employers is to start preparing at least a year before their staging date, to ensure a smoother

transition and less upheaval.

Prepare now by nominating a contact point within your business and check your staging date.

Plan now for action at least a year before your staging date by:

• Assessing your workforce to identify eligible jobholders, non-eligible jobholders and entitled workers

• Reviewing your pension arrangements – you may already have an existing scheme that can be adapted for auto-enrolment.

If you would like help in finding out your staging date, or if you need guidance around any part of the administration process please contact me.

Change in IHT Tax Loans

A change in the way that loans are treated for inheritance tax (IHT) purposes could increase the taxable value of your estate on death, and therefore the amount of tax payable. This change will affect IHT calculated on deaths occurring after the Finance Act 2013 is passed - expected within the next month - but it will apply to loans which are already in place.

At present, any debts owed by a deceased person’s estate are deducted from the net estate after tax reliefs such as business property relief (BPR), have been given. However, after the Finance Act 2013 is passed, the value of a loan will have to be deducted from the asset that it was used to acquire.

What does this change mean, in practical terms? Well, if a business owner has borrowed against their home and invested the loan money in their business, and if the loan is still outstanding upon death, then the IHT calculation will require the loan to be deducted from the value of the business, and not from the value of the home. This reduces the value of the estate that is exempt from IHT under business property relief, and therefore increases the taxable value of the remaining estate.

There are plans that can be made to make sure that your estate is as tax-efficient as possible, and those plans depend on individual circumstances. If you would like to discuss your situation please contact me.

Cracking down on outstanding VAT Returns

HM Revenue & Customs (HMRC) are currently looking closely at the tax affairs of businesses which have not submitted all their VAT returns.

All businesses which are VAT registered but which had VAT returns outstanding (and may therefore have underpaid VAT) were given until the end of February to bring everything up to date, under the VAT Outstanding Returns Campaign.

This was an opportunity for businesses to submit outstanding VAT returns and also bring payments up to date. To have taken advantage of the best possible terms you would have needed to complete and submit all your outstanding returns by 28 February 2013.

If you missed that opportunity and still have some VAT returns outstanding, it is really important to submit them now. You may have already incurred some surcharges / penalties if you have underpaid VAT - but don’t allow these extra costs to continue to mount up further.

In addition to financial penalties, failure to lodge VAT returns could well trigger an HMRC investigation into other aspects of your tax.

Virtually all VAT-registered businesses must now submit their VAT Returns online and make payments to HMRC electronically. If you are experiencing any difficulties with getting the right processes in place, or would like help to bring outstanding returns up to date so that you can move forward on the right footing, please contact Gareth Stokes.

Losing the Benefit …

The changes in Child Benefit which have caused much debate over recent months, will come into effect next month.

As from 7^th January 2013, anyone with an annual income exceeding £50,000 or anyone who is the partner of someone with an income of over £50,000 will be affected by the changes.

For incomes above £60,000 per annum it will not be worth receiving child benefit as the tax charge on it will be the same as any benefit received. However a taxpayer can continue to receive it but will need to declare it on their self assessment tax return and pay the tax due on it.

For incomes between £50,000 and £60,000 the additional tax due will be on a sliding scale.

If you opt to stop receiving child benefit, an online form should be completed by the person who receives the benefit. However, a claim should always be made for child benefit on the birth of a child as this preserves the right of the claimant to state pension and some other benefits. It also ensures that the child receives their National Insurance Number at age 16.

Parents who have the ability to structure their own income levels (such as company directors and shareholders) should take tax planning advice if their income is around the £50,000 level. Equalisation of income in family companies, salary sacrifice schemes, and a review of pensions and investments may all be appropriate to consider.

Planning for 2013 and beyond...

The economic recession has changed the way in which business owners plan for the future.
Many have become reactive by planning for the things that are vital in the short term – such as tight control over cashflow, and cutting costs. This is, of course, inevitable and prudent during times of uncertainty, when the priority is to stay afloat, but it often means that longer term planning is overlooked.

That, in turn, can put the business in a weaker position when economic recovery arrives, as the business strategy may be unclear, and a lack of preparation can leave you lagging behind your competitors.

So, as well as short term financial forecasting, it is important to consider your longer term strategy. With a new year now not far around the corner, now is an ideal time to consider taking a few hours out of the day to day running of your business to formualte your strategic plans.
You may well have a “vision” in mind, of where you would like your business to be in the future - perhaps in terms of location, customer base, staff numbers or service-offering. You may have a desire to free up some of your own time, by developing others within your organisation, to take more responsibility.

However, have you worked out how to achieve those aspirations in practical terms, and set a time-based plan of the steps required ?

HJS run strategic planning workshops. If you would like more information please contact me on 02380 234 222.