Archive for August, 2014

Car clubs get cash boost from Department of Transport

Tuesday, August 12th, 2014

Car clubs are set to receive a £500,000 boost to drive forward their work, Transport Minister Baroness Kramer has announced.

As part of a wider visit to Norfolk, 28 July 2014, the minister announced that the Department for Transport will provide the funding to support two pilot programmes which will promote much wider access to car clubs.

Baroness Kramer said:

“Car clubs cut congestion, reduce carbon and save people money while still giving people the freedom and flexibility to use a car when they want to. Interest in car clubs is already gathering pace and we want to give that interest added momentum.

This funding will highlight their many advantages to even more people and help take car clubs up a gear.

The proportion of carless households has been growing across the country since 2005. At the same time, because people value the convenience that access to a car brings, interest in car clubs is growing.

There are already over 150,000 car club members in England and government is keen to support their growth.

They make much more efficient use of the limited space available on the road, with estimates suggesting that one rental car can take the place of 17 individually owned vehicles.

Car clubs can also help save drivers money – potentially thousands of pounds per year.

The evidence suggests that pay-as-you-go car use encourages people to walk and cycle more often and make more frequent use of public transport, and car club vehicles tend to have lower emissions than the average car.”

When should you contact HMRC?

Friday, August 8th, 2014

A cynic might say that you are required to contact HMRC when you are likely to owe them more money. Realistically, the opposite is also true: you should advise HMRC of any changes that could reduce your tax position.

 The following notes are extracted from HMRC’s website and set out their requirements. You'll need to tell HMRC if you:

  • get married or form a civil partnership
  • start getting a second income
  • become – or stop being – self-employed
  • start or stop getting company benefits – like a company car or medical insurance
  • start getting taxable benefits

You'll also have to let HMRC know if other income that you get – like savings or rental income – increases or reduces.

All these things and more can affect the amount of Income Tax that you have to pay.

Marriage or civil partnership where one partner was born before 6 April 1935

Tell HMRC if you get married or form a civil partnership and at least one partner was born before 6 April 1935 – you may be eligible for the Married Couple's Allowance if you pay tax.

If you get divorced or your civil partnership dissolves or you separate and you were getting the Married Couple's Allowance you will no longer be eligible so you need to let HMRC know.

Death of a spouse or civil partner

If your husband, wife or civil partner dies you need to contact HMRC if either of the following applies:

  • you are claiming Married Couple's Allowance
  • either of you claims Blind Person's Allowance and some or all of this was transferred to the other spouse or civil partner

Starting/stopping self-employment

You must tell HMRC that you're self-employed as soon as possible – even if you already fill in a tax return each year. If you don't tell them as soon as you begin self- employment you may have to pay an initial penalty.

Starting/stopping to receive company benefits

If you start to get taxable company benefits you should tell HMRC right away so that you don't get a large tax bill at the end of the year. Employers don't have to tell HMRC about any company benefits you get until the end of the tax year, unless it's a company car. HMRC will adjust your code number and start collecting all or some of the extra tax sooner. If you get a company car or change your company car, you only need to report the details to HMRC once you have the use of the car.

You should also tell HMRC if you stop getting taxable company benefits. They can change your tax code and make sure you don't pay too much tax.

Starting/stopping state benefits

If you start or stop getting state benefits it may affect your tax bill. The sooner you get in touch with HMRC, the sooner they can adjust your tax code to make sure you always pay what's due.

Reporting changes to your income

Changes in the level of certain types of income you receive needs to be communicated so that you don’t under or over pay tax.

And finally, if you change address

If you change address it's important to let HMRC know – even if you pay some or all of your tax through PAYE and have already told your employer or pension provider. Under the Data Protection Act they can't pass on your new address to HMRC.

UK economy recovers

Wednesday, August 6th, 2014

Its official, in the second quarter April – June 2014 the UK gross domestic product grew by 0.8% and is now bigger than it was before the financial crisis that began six years ago.

The state of the economy always attracts politically biased commentary, but reading between the lines it would appear that we are making steady progress.

Interestingly, most of the growth in the second quarter came from the services sector. In the same period the agricultural sector fell by 0.2% with a similar reduction in the construction sector.

These internal differences in the rate of growth, or lack of it, mirror expectations for the global economy. The current conflict in Eastern Ukraine, the Gaza strip and Syria continue to destabilise economic activity.

Overall the IMF has reduced its growth forecast for the global economy from 3.7% to 3.4%.

The largest upgrade in expectations is for the UK. The IMF now considers that our economy will grow by 3.2% (previous forecast was 2.8%) during 2014.

George Osborne has commented:

"Thanks to the hard work of the British people, today we reach a major milestone in our long term economic plan. But there is still a long way to go – the 'great recession' was one of the deepest of any major economy and cost Britain six years.

"Now we owe it to hardworking taxpayers not to repeat the mistakes of the past and instead to continue with the plan that is delivering economic security and a brighter future for all."

Be interesting to see how this increase in our national economic fortunes spills down to the British people.

Tax Diary August/September 2014

Friday, August 1st, 2014

 1 August 2014 – Due date for Corporation Tax due for the year ended 31 October 2013.

 19 August 2014 – PAYE and NIC deductions due for month ended 5 August 2014. (If you pay your tax electronically the due date is 22 August 2014.)

 19 August 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2014.

 19 August 2014 – CIS tax deducted for the month ended 5 August 2014 is payable by today.

 1 September 2014 – Due date for Corporation Tax due for the year ended 30 November 2013.

 19 September 2014 – PAYE and NIC deductions due for month ended 5 September 2014. (If you pay your tax electronically the due date is 22 September 2014.)

 19 September 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2014.

 19 September 2014 – CIS tax deducted for the month ended 5 September 2014 is payable by today.

VAT – pick and mix

Friday, August 1st, 2014

There are a number of VAT schemes that benefit registered businesses. For example:

 Cash accounting

If you are eligible and the scheme is suitable for your business, then using the cash accounting scheme enables you to pay VAT when your invoice is paid and not when you issue the invoice to your customers. You are also restricted when claiming back input VAT on purchases and expenses to the date you pay the bill, not the date you receive the invoice from your supplier.

You can use cash accounting if your estimated VAT taxable turnover during the next tax year is not more than £1.35 million and you can continue to use cash accounting until your VAT taxable turnover exceeds £1.6 million.

Annual accounting

Annual accounting allows you to send in just one return a year. This offers some relief from the chore of submitting quarterly returns. Using the Annual Accounting Scheme, you make either nine interim payments at monthly intervals, or three quarterly interim payments, throughout the year. You only need to complete one return at the end of each year. At that point you must pay any outstanding amount or, if you have overpaid, you will receive a refund.

You can use the Annual Accounting Scheme if your estimated VAT taxable turnover for the coming year is not more than £1.35 million. Your VAT taxable turnover includes any standard, reduced and zero-rated sales and other VAT taxable supplies, but excludes the VAT itself, VAT-exempt supplies and capital asset sales.

Once you are using annual accounting you can continue to do so as long as your estimated VAT taxable turnover remains below £1.6 million.

You can also combine these two schemes. In this way you can have the cash flow benefits of using cash accounting and some relief from the administrative chores by submitting one return a year.

Before making a decision you will need to take advice as not all businesses will benefit.

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