Useful links, Blogs and articles below…
UK Business Forums – a treasure trove of useful advice for business owners – http://www.ukbusinessforums.co.uk/
Federation of Small Businesses – http://www.fsb.org.uk/
Sheffield Chamber of Commerce – https://www.scci.org.uk/
Welcome to Sheffield – http://www.welcometosheffield.co.uk/business
Chartered Institute of Management Accountants – http://www.cimaglobal.com/
Association of Accounting Technicians – http://www.aat.org.uk/
Accountingweb – useful for accounting advice – http://www.accountingweb.co.uk/
Yorkshire Grant awarding bodies –
VAT changes affecting digital sales… (summarized from AccountingWeb)
24 September 2014
“Experts have warned that businesses who make and sell apps or provide digital services to consumers in the European Union will see their paperwork increase in January due to new legislation to counter tax avoidance.” This information comes in the wake of criticism of the selling methods of Amazon and Apple.
Presently, businesses charge VAT on digital services based on the rate where they are based. For example, Amazon (criticised recently in the press) have based European headquarters in countries such as Luxembourg where VAT rates used are much lower than the UK.
However, to counteract this, from the 1 January 2015, businesses supplying broadcasting, telecommunications and digital services to consumers will have to charge customers VAT at the rate of the country where the customer buys the service from,/ where the customer is based. This is further complicated by the fact that there are different tax rates applicable in different countries – so for example, a customer based in Germany will be charged 19% but a customer based in Spain will be charged 21%.
Also, different technology platforms are also treated differently in the new changes.
Persons buying from Apple’s App Store are deemed to be purchasing directly from Apple, and thus Apple automatically account for the VAT, but purchasers using Google Play are purchasing directly from each vendor (Google Play acts as an agent and takes a commission) and thus each vendor must account for the VAT charged.
So, a supplier must consider where they sell their goods to and take action. In the UK, businesses can register once with HMRC for VAT in every EU country they supply electronic services to. The online registration – called the VAT Mini One Stop Shop (MOSS) – is intended to make it easier for businesses with sales of over £81,000 to comply with the new VAT rules. These can register now via MOSS, but the service will start on 1 January. Businesses will have to submit separate VAT returns for their cross-border digital services and pay tax due every three months.
However, Britain’s smallest businesses, which trade below the threshold for VAT registration, which is £81,000 will have to register for VAT in each EU country they sell digital services to and thus should consider whether some countries are worth targeting.
Employers NIC Rebate (April 14)
As from 6 April 2014 all businesses will be allowed to reclaim employers’ secondary NIC payable up to a £2,000 limit. Formal and accurate guidance on the NIC rebate is here:
An interesting forum thread on how some business owners and accounts are using the rebate can be viewed here:
Please note, the views expressed in the article are not provided by me, but the views are interesting nonetheless. Obviously, paying a full and complete salary for work done reduces Corporation Tax charges, versus paying a smaller salary.
If you cannot read the article, please contact me.
“Tax needn’t be taxing” – to coin a phrase… (Revised April 14)
The self employed (sole traders and partnerships), some company directors and persons receiving capital gains and other benefits should assess whether they need to file a self assessment tax return shortly. The current period of taxation is for the period 6 April 2013 to 5 April 2014. If you have been self employed or think you may have received a taxable benefit which would be assessed under Self Assessment in this period, you should be acting NOW to ensure you do not miss any deadlines. Paper filings must be made by 31 October 2014 or electronic filings by 31 January 2015.
The HMRC charge penalties for late filings.
If you are new to Self Assessment, you should visit the HMRC website and obtain an activation code.
In order to obtain an Activation Code, you will need to have your Unique Taxpayer Reference (UTR). You might have received this in a previous document from the HMRC. You will then start a registration process during which you will receive a user ID (keep note as they are generated one time only). At the end of this process you can then request the Activation Code. However – you must sign in to obtain the Activation Code by 21 January at the latest, leaving 10 days to make the electronic filing (deadline is 31 January 2015). A bit short – so don’t leave it to the last minute!
Self Assessment Tax Return
Firstly, to make the process run a little more smoothly, you must ensure that you have records of all assessable income and deductions, for example:
- your P60 form (given to you at tax year end by your employer) or a P45 if you left a job and are no longer in employment. These forms outline how much income you received through your job and how much tax you paid and are used on the Self Assessment form. Putting down the wrong numbers may result in you paying more tax than you should.
- all bank and building society interest details
- details of any dividends (for example a dividend voucher)
- details of any capital gains (e.g. shares sold for a profit)
- details of self-employment income/ freelance income in addition to your employment, together with receipts and purchase invoices, deductible from the sales of self employment (i.e. Sales less costs = arriving at a tax assessable profit figure / or loss!)
You might wish to calculate your own tax bill, but you may prefer to use an accountant with expertise in this field, to take the burden off your shoulders. For example, some people find it confusing knowing what costs are allowable deductions from their business, how mileage should be treated and how to calculate capital allowances. There are lots of online forums giving assistance also.
Paying the tax
When filing online, you must fill in various boxes depending on your circumstances and provide the necessary figures and the system automatically calculates a figure to pay (or not, sometimes!). Any taxes calculated must be paid by 31 January as that date is a payment deadline as well as a filing deadline.
If you file before the end of December, if you are in employment and if the tax due is below £3,000, then HMRC will take payment for the tax owed, month by month, from your income during the next tax year 2014-15 by adjusting your PAYE coding (the PAYE coding is a tax free allowance – changing the code up or down affects how much tax you pay by either increasing the amount of tax free pay you can earn, or reducing it). If you miss the December deadline, you will have to pay by 31 January. The choice is yours.
If you have been within self-assessment for a number of years, and usually owe tax of more than £3,000, then you are likely to be within the existing payments regime – meaning that you will make a payment on account within the tax year on 31 January.
So for the tax year 2013-14 – the tax year ending 5 April 2014 – a payment on account was required on 31 January 2014. A second payment on account is then required on 31 July 2014, and the final amount is payable on 31 January 2015, together with the payment on account for the tax year 2014-15.
There are many ways of paying tax over – such as cheques, direct debit and credit card such as Visa (but this incurs a fee).
You may be doing the HMRC a favour by assessing your own tax and submitting the return, but they love to charge a penalty for late payments!
Where you need help
If you wish to “go it alone”, there is plenty of advice on the HMRC site to help you on your way, or indeed you might even wish to call them and go through your queries (be prepared to wait on the phone though!!!). Or, you could enlist an accountant to take the headache of making an accurate calculation, filing and paying away.