|
Shortly after the publication of this newsletter we will know
the political flavour of the next Government, even if a blended
variety! Hopefully before the June newsletter is distributed
we will have some idea of changes proposed to tax legislation.
Until then we are stuck with the present half-way house situation.
However there are still regulations to abide by and impending
deadlines, particularly the filing of the annual payroll returns
- all online of course!
This month we have taken a look at possible tax changes following
the general election, set out an expanded reminder section in
the newsletter for payroll compliance, included an article which
explains the importance of "Reasonable Care" when
providing information for your tax returns and finally an article
which explains how to apply for a dispensation regarding the
filing of benefit in kind forms to HMRC.
We would also like to remind VAT registered traders, with turnover
under £100,000 and who continue to send in paper returns,
that from 1 April 2010 all cheque payments made by post will
be treated as being received by HMRC on the date when cleared
funds reach HMRC’s bank account. This means that you must
allow enough time for the payment to reach HMRC and clear into
HMRC’s bank account no later than the due date shown on
your VAT Return. A cheque takes three bank working days to clear.
Banks working days are Monday to Friday, excluding bank holidays.
Our next newsletter will be published on 8 June 2010.
__________________________________________________________________________________
What can we expect after 6 May 2010?
At the time of going to press we do not know who will lead
the Government for the next few years, but whoever, it will
be a crucial time for UK plc. All parties seem to agree that
the new Parliament will need to deal with the reduction in our
national debt. Accordingly any tax concessions are likely to
be eclipsed by increased taxation in other areas. We have listed
below some of the taxes that might change post the May election:
-
VAT - not confirmed but there is speculation that the standard
rate will be increased from its current 17.5% to possibly
20%.
-
Corporation Tax - the Conservative Party have announced
a 1% reduction.
-
National Insurance - the Conservatives have pledged to
cancel the 1% increase due from 6 April 2011.
-
New higher rate taxes? In addition to the changes already
in place for high income earners, the 50% higher rate, loss
of personal allowances and restrictions on pension payment
tax relief, we may see further changes - the so-called Robin
Hood taxes.
-
Increases in annual tax-free allowances for income tax
purposes. The Liberal Democrats have promised a tax-free
£10,000 allowance for all.
-
Although the expected change to the tax status of Furnished
Holiday Lets property was abandoned prior to the close of
Parliament, the measure will probably be re-introduced following
the election.
-
Capital Gains Tax - again there is speculation that the
current 18% CGT rate will be increased to discourage schemes
that seek to have income reclassified as capital gains avoiding
the higher rates of income tax.
We shall have to wait and see. As soon as new information becomes
available following the election we will include the changes
in our newsletter.
_____________________________________________________________________________________
Payroll filing and compliance 2009/10
There are three annual payroll returns and associated payments
to HMRC that need to be made during the next three months for
the tax year 2009-10. They are:
Due date 19 May 2010
Almost without exception the annual form P35 and associated
P14s need to be filed online on or before 19 May 2010. Any PAYE/NIC
contributions due for 2009-10 should have been settled by 19
April 2010 (22 April 2010 if you paid electronically).
If you are late in filing these returns penalties will apply.
You will be charged a penalty of £100 per 50 employees
for each month or part month that your return is outstanding
from 20 May 2010 until your returns are filed correctly.(The
maximum penalties HMRC can claim are limited to one year.)
To file online you must be registered and have the appropriate
passwords. If you have not done this yet we can help. The clock
is ticking...
Due date 31 May 2010
You must give your employees a copy of their P60 for 2009/10
on or before this date.
Due date 6 July 2010
After the end of the tax year you need to complete and file
your key expenses and benefits forms - a form P11D or P9D for
each employee to whom you've provided expenses and benefits
during the tax year, and one form P11D(b) to declare the overall
amount of Class 1A NICs due on all the expenses and benefits
you've provided.
All of these forms must be submitted to HM Revenue & Customs
by 6 July. Penalties for late filing of the P11D(b) return are
the same as the P35 return - £100 per month or part month
from 7 July 2010, maximum penalty period one year.
By 6 July you must also provide your employees with details
of benefits advised to HMRC.
What about mistakes on returns?
It is possible to verify your returns before you press the
button to file online. This should clear up most of the basic
errors. However if it is subsequently discovered that there
are still errors in the filed information it will be rejected
and you will be notified. Beware as from a penalty point of
view your returns are only deemed to be filed on the first occasion
they are filed correctly!
____________________________________________________________________________________
Reasonable care
HMRC expects that you take reasonable care in preparing information
that underpins entries made on your tax returns.
For all returns made for 2009/10 they are entitled to judge
the accuracy of your returns based on three criteria:
-
Lack of care
-
Deliberate mis-statement, and
-
Deliberate & concealed mis-statement
If you underpay tax as a result of an incorrectly filed return
HMRC are now empowered to charge a penalty which can range up
to a maximum of 100% of the additional tax due following an
investigation.
If HMRC due consider that you have taken reasonable care, but
they still discover tax has been underpaid, no penalty will
be charged.
____________________________________________________________________________________
Benefits in kind, making your life easier
During the next two months those involved with payrolls will
be working to prepare the forms P11D which advise HMRC of benefits
paid to employees and directors. If your business provides any
sort of beneficial payment or gift of goods to employees, generally
speaking these are reportable on form P11D and most will be
taxable as a benefit in kind - as if they were payments of salary
etc.
To make your life easier there are some beneficial payments
that you can include in a dispensation. For example the provision
of certain business travel for employees. Items covered by a
dispensation do not have to be returned on the annual P11D form.(Payments
for the use of a company car or van are not included here as
they are covered by separate rules.)
Essentially you can apply to HMRC to dispense with the need
to include expenses or benefits for which your employee gets
a full tax deduction. If the employer does not have a dispensation
then all reimbursed expenses must be reported on the relevant
form P11D.
For many businesses this could take some of the pain out of
this annual chore.
HMRC require that you need to have the following systems in
place to qualify for a dispensation:
You must have an independent system in place for checking and
authorising expenses claims. At a minimum, this means having
someone other than the employee claiming the expenses check
that:
If it is not possible for you to operate an independent system
for checking and authorising expenses claims, for example, because
you are the sole director of your company and you have no other
employees, you will only be able to obtain a dispensation if
you:
-
ensure all expenses claims are supported by receipts for
the expenditure
-
demonstrate that the claim relates to expenditure that
can be covered by a dispensation, your receipts may be sufficient
for this purpose, but if not you must retain additional
information.
Once a dispensation is granted it will last indefinitely although
HMRC may review from time to time to make sure the conditions
under which the original grant was made still apply.
Generally speaking dispensations are granted from the application
date. However HMRC may agree to apply the dispensation from
the beginning of the tax year in which you apply. As we are
now at the beginning of a new tax year, 2010/11, this is a good
time to send in a claim for dispensation. Please call if you
would like assistance to do this
____________________________________________________________________________________
Tax Diary May/June 2010
1 May 2010 - Due date for corporation tax
due for the year ended 31 July 2009.
19 May 2010 - PAYE and NIC deductions due
for month ended 5 May 2010. (If you pay your tax electronically
the due date is 22 May 2010)
19 May 2010 - Filing deadline for the CIS300
monthly return for the month ended 5 May 2010.
19 May 2010 - CIS tax deducted for the month
ended 5 May 2010 is payable by today.
19 May 2010 - The payroll forms P35 and P14s
must be filed by this date - employers late in filing these
forms may receive a penalty.
31 May 2010 - Ensure all employees have been
given their P60s.
1 June 2010 - Due date for corporation tax
due for the year ended 31 August 2009.
19 June 2010 - PAYE and NIC deductions due
for month ended 5 June 2010. (If you pay your tax electronically
the due date is 22 June 2010)
19 June 2010 - Filing deadline for the CIS300
monthly return for the month ended 5 June 2010.
19 June 2010 - CIS tax deducted for the month
ended 5 June 2010 is payable by today.
DISCLAIMER - PLEASE NOTE: The
ideas shared with you in this email are intended to inform rather
than advise. Taxpayers circumstances do vary and if you feel
that tax strategies we have outlined may be beneficial it is
important that you contact us before implementation. If you
do or do not take action as a result of reading this newsletter,
before receiving our written endorsement, we will accept no
responsibility for any financial loss incurred. |
