Tax Newsletter July 2018

Our newsletter this month includes: changes to VAT in the construction sector, an update on the government’s Making Tax Digital roll-out, commentary on self-employed tax liabilities and the setting of salary levels for directors.

Our next newsletter will be published on Thursday, 2nd August 2018.

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Newsletter July 2018


Energy Saving Grants -are you eligible?

Low Carbon Workspaces match-funded grants of up to £2,500 in Buckinghamshire and £5,000 in Hertfordshire and the Black Country are available to fund a variety of measures to reduce the use of resources and utility overhead costs, including:

  • Energy efficiency installations (LED lighting, energy efficient boilers, double glazing and more)
  • Electric and plug-in hybrid electric fleet vehicles
  • Fleet management systems
  • Water efficiency measures
  • Waste reduction measures
  • Renewable heat and electricity generating technologies
  • Battery storage systems

Non-domestic electricity and gas prices have gone up by 280% and 165% respectively since the start of 2004. Petrol and diesel pump prices have increased by 167% since June 2006 and the Landfill Tax continues to rise. The grant could help mitigate the impacts of rising resource costs on your business.

If you’d like to find out more about the Low Carbon Workspaces grant visit www.lowcarbonworkspaces.co.uk or book a chat with a member of their team to discuss in more detail.


 

 

Grants for Growth

If you are based in Bucks take a look at Bucks Business First - https://bbf.uk.com

A constant source of useful information for local businesses - they are currently promoting a European Union Regional Development Fund grant of up to £1,000 that is available to businesses with a plan for growth. 

If that sounds of interest to you then get in touch with them and they will help you through the application process.  You can do this by emailing growth@bbf.uk.com or calling on 01494 927130.


 

Director minimum salary levels 2018-19

Many director shareholders take a minimum salary and any balance of remuneration as dividends. This tends to reduce National Insurance Contributions (NIC), and in some cases Income Tax.

The planning strategy is to pay a salary at a level that qualifies the director for state benefits, including the state pension, but does not involve payment of any NIC contributions.

For 2018/19 the NIC rate is set at 0% for annual earnings in the range of £6,032 to £8,424 inclusive. Earnings in this band range qualify for NIC credit for state benefit purposes. At up to £116 per week (£6,032 p.a.) no NIC credit is obtained for state benefit purposes. At over £162.01 per week (£8,424 p.a.) employees’ NIC starts to be paid at the rate of 12%.

Directors, who are first appointed during a tax year, are only entitled to a pro rata annual earnings band that depends on the actual date appointed. Care needs to be taken in these circumstances not to incur an unexpected liability to pay NIC.

Directors resigning during the year still have the full annual earnings band quoted above, and so care is needed to ensure that earnings for the whole tax year are within the range of £6,032 to £8,424.

Careful planning is also required to ensure that any impact of the National Living Wage regulations is considered, this may be particularly important for women who would like to claim statutory maternity benefit at some future date.

Directors considering their planning options for the first time are advised to take professional advice when setting the most tax/NIC efficient salary. Of course, as our clients will testify, this forms an important part of the advice and assistance we provide.


 

Making Tax Digital

A reminder that with the introduction of Making Tax Digital (MTD) next year we are going to see a fundamental change to the administration of the tax system.

The April 2019 launch will only apply to VAT registered businesses. More specifically, MTD will apply to businesses who have a turnover above the VAT threshold of £85,000- the smallest businesses will not be required to use the system, although they can choose to do so voluntarily.

It is a requirement of MTD that each and every transaction must be recorded electronically, it will not be acceptable to maintain paper or excel spreadsheet based records and then manually transfer totals into MTD compliant software. Penalties can be applied where businesses fail to keep electronic records.

If we review your businesses quarterly VAT return and we consider that your records will not be compliant then we will be contacting you over the next couple of months with suggestions as to how this might best be addressed.  If we do not review your quarterly VAT returns and you are concerned about whether or not you will be compliant then please email your client manager and they will be able to advise you.


 

 

Tax Diary July/August 2018

1 July 2018 - Due date for corporation tax due for the year ended 30 September 2017.

6 July 2018 - Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2018 - Pay Class 1A NICs (by the 22 July 2018 if paid electronically).

19 July 2018 - PAYE and NIC deductions due for month ended 5 July 2018. (If you pay your tax electronically the due date is 22 July 2018)

19 July 2018 - Filing deadline for the CIS300 monthly return for the month ended 5 July 2018.

19 July 2018 - CIS tax deducted for the month ended 5 July 2018 is payable by today.

31 July 2018 – Deadline for payment of second instalment self-assessment for 2017-18.

1 August 2018 - Due date for corporation tax due for the year ended 31 October 2017.

19 August 2018 - PAYE and NIC deductions due for month ended 5 August 2018. (If you pay your tax electronically the due date is 22 August 2018)

19 August 2018 - Filing deadline for the CIS300 monthly return for the month ended 5 August 2018.

19 August 2018 - CIS tax deducted for the month ended 5 August 2018 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.