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Open Banking has now been introduced and will focus on how banks handle your financial information, this means the connection between your bank and your accounting software may change.

With Open Banking, you can choose who gets access to your data. You can grant permission (or withdraw it) at any time.

What you need to do:

These new feeds are now live, you’ll see a banner on the Banking page and if you’re the Master Admin you’ll get an email explaining the steps you need to take to update your bank feed.

For more information please call us now 0161 4954700

For over 20 years the government has viewed independent contractors as tax avoiders if they work through their own Personal Service Company (PSC). This is why the IR35 rules were put in place – to get the contractor to pay approximately the same tax and NIC as an employee – if they work under conditions identical to the employees of their customer (the engager).

In truth, the IR35 rules are frequently ignored, as in the private sector it has been up to contractors to apply the rules to themselves. In the public sector, since April 2017, the engager has had to decide whether the contract is effectively one of employment and thus whether tax and NIC should be deducted under PAYE.

From 6 April 2020, large engagers in the private sector will have to determine the employment status of their contractors and thus whether to apply payroll taxes. The engager must issue an employment status determination for each contract worked by a freelance contractor.

This decision will be passed down the chain of agencies until it reaches the contractor. In this way, each link in the chain should be informed of the engager’s decision about the contractor’s status.

As a contractor you can object to the employment status decision, giving reasons, and the engager has 45 days to respond. Meanwhile if the engager has decided that the off-payroll rules apply, it must continue to deduct tax and NIC from your fee.

Small private sector engagers won’t be required to apply these rules to their contractors. In those cases, contractors will carry on making that IR35 decision for each contract, as they do now.

For these purposes a small engager is one that meets at least two of these conditions for the accounting period ending in the previous tax year:

• less than £10.2m turnover
• less than £5.1m balance sheet value
• no more than 50 employees

Leaving the EU without an agreement in place (no-deal Brexit) is going to create some VAT challenges for businesses which import goods.

Currently, import VAT is payable on goods imported from non-EU countries, and that has to be paid up-front. This import VAT would also have to be paid up-front on any goods coming in from EU countries after Brexit, unless other arrangements are put in place.

The Government is proposing that, immediately following a no-deal Brexit, all import VAT will be paid on a postponed basis. This means VAT-registered businesses will account for import VAT on their VAT return, rather than paying import VAT at the time that the goods arrive at the UK border. This procedure will apply to all imported goods from the EU and from non-EU countries.

Customs declarations and the payment of any other duties will still be required at the border, but at least the VAT problem will be parked.

This will of course open up the possibilities for VAT to go missing in the supply chain and no doubt the Government will have to put in other measures to counter that.

Many businesses start slowly. At first there are a few occasional sales, and only after the individual has convinced themselves they can effectively deliver the product or service will the entrepreneur enthusiastically launch their business.

You should tell HMRC about the start of your new business within six months of the end of the tax year in which it started. To do this you need to decide exactly when the new business commenced. Is it when the first sale was made, or was it much later when a viable business seemed possible?

If you have had a stop-start business launch, the Trading and Miscellaneous Income Allowance (TMIA) can help you out.

The TMIA can cover up to £1,000 of trading or other sundry income per tax year. It doesn’t matter when the sales were made within the tax year, if the total is less than £1,000 the TMIA will cover them, and the allowance doesn’t have to be claimed on the tax return.

Example
Liam quit his job to launch his baking business in June 2019, having made a few test sales in January to March 2019 which amounted to £300.

The sales before 6 April 2019 can be covered by the TMIA of £1,000, so the real business can be said to start in June 2019 within the tax year 2019/20. Liam has until 5 October 2020 to tell HMRC about his new business and register for self-assessment.

Liam won’t have to complete a self-assessment tax return for 2018/19 as his taxable income was fully reported and taxed under PAYE for that year.

Where individuals don’t submit an annual tax return, HMRC reconciles the tax which has been deducted from their pay or pension under PAYE with the total tax which should have been paid for the year. This reconciliation for the tax year 2018/19 takes place between June and November 2019.

Where there is a discrepancy (under or over), HMRC will issue a tax computation on a form P800, or it may issue a form PA302, which will ask for tax to be paid.
If you receive either type of tax statement, check the figures against other statements you have received from your employer or pension provider, such as forms P60, P45 or an expenses and benefits declaration. You should check whether something has been counted twice or is missing.

Where your tax computation includes bank interest or dividends received, check these figures agree with the savings income paid into your bank accounts between 6 April 2018 and 5 April 2019. It is not uncommon for the amount of interest to be estimated based on a previous year.

Finally, check that all the allowances you have claimed are included in the tax computation. There has been a recurring problem with the transferable marriage allowance going missing when it has been claimed.

We can help you check the figures on your tax computation.

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Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.