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Dates and deadlines: March 2014

Posted by: edwinsmith on March 1st, 2014

Upcoming deadlines for businesses and individuals

1 March: Corporation tax payment for a company not within the instalment regulations: year ending 31 May 2013.

2 March: Automatic 5% penalty will be charged on any outstanding tax/class 4 NIC at this date in respect of  2012/13.

5 March: End of month 11 for PAYE (RTI). All FPS (Full Payment Submissions) due if taking advantage of concession.

7 March: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 31 January 2013.

12 March: Direct debit VAT payment will be taken: quarter ended 31 January 2013.

19 March: CIS monthly return deadline: month ended 5 March 2014.

19 March: Cheque payments for PAYE/NI, student loan, CIS  to be cleared into HMRC bank: month ended 5 March 2014.

22 March: Electronic PAYE/NI etc payments to be cleared into HMRC bank: month ended 5 March 2014.

31 March : Company tax return CT600 due to HMRC: years ending 31 March 2013.

31 March: Company accounts (Private Limited Co) due to be filed: years ending 30 June 2013.

31 March: Company accounts (Public Companies) due to be filed: years ending 30 September 2013.

31 March: End of CT 61 form reporting period - such as tax deducted on interest paid to individuals by companies.

1 April : Corporation tax payment for company not within the instalment regulations: years ending 3o June 2013.

 

Filed under: Business, Company, Dates and deadlines, Employers, Individuals, PAYE, Self Assessment

Capital allowances on expenditure on let property

Posted by: edwinsmith on February 25th, 2014

Carrying on from our previous article on repairs to let property, this article sets out guidelines for capital allowances on expenditure on let property. There are different tax rules depending on the type of property being let as below.

Residential properties - capital allowances on plant and machinery are not generally available on assets in residential accommodation. See our previous article on wear and tear allowance Tax relief on wear and tear of furniture – let property that may be claimed for furniture and equipment provided with a furnished residential letting.

Furnished holiday properties – capital allowances may be claimed on plant and machinery such as furniture, furnishings etc in the let property as well on equipment used outside the property (like vans and tools). This is because the letting of furnished holiday properties is treated as a trading activity provided certain criteria are met.

Commercial properties – capital allowances may be claimed on some items of plant and machinery if a commercial property is being let – like a shop, garage or lockup.

For the relevant type of property letting capital allowances are available for plant or machinery used or provided for use for the purpose of a rental business. Examples include:

  1. Fixtures in a let property
  2. Tools used for maintenance
  3. Office equipment used in running the rental business
  4. Vehicles

Capital allowances are calculated for a rental business as they are for a trade. Hence they are subject to the ‘wholly and exclusively’ rule and allowances on cars costing more than £12,000 are restricted.

Plant and machinery is not defined in the capital allowances legislation apart from ‘integral features’. There is legislation which details that most buildings, parts of buildings and structures are not plant and machinery and parts such as walls, doors, windows, mains services, waste disposal systems are specifically included as not being plant and machinery. Where items are not specifically mentioned in the legislation or guidance, HMRC will apply the following tests to the item:

  1. Is the item stock in trade?
  2. Is the item the business premises or part of the business premises (the premises test)?
  3. Is the item used for carrying on the business (the business use test)?

If the answers to 1 and 2 are no, and yes to 3, the item is plant.

The legislation also includes lists of assets that can be considered as plant and machinery but they would still need to pass the above tests. These included wash basins, sinks, sanitary ware, cookers, washing machines, sound insulation provided to meet the requirements of the qualifying activity, fire and burglar alarm systems, moveable partition walls etc.

Assets qualifying under the above rules would be eligible for the annual investment allowance and would go into the ‘main pool’ for capital allowances purposes attracting an annual writing down allowance of 18%.

Integral features were introduced in to the legislation to give allowances on the provision or replacement of main features such as electrical, cold and hot water systems. These assets are also eligible for the annual investment allowance but are included in a ‘special rate pool’ where the annual writing down allowance rate is lower than the main pool rate at 8%. The definition includes:-

  1. an electrical system (including a lighting system),
  2. a cold water system,
  3. a space or water heating system, a powered system of ventilation, air cooling or air purification, and any floor or ceiling comprised in such a system,
  4. a lift, an escalator or a moving walkway,
  5. external solar shading

If the expenditure on an integral feature represents the whole, or more than 50% of the cost of replacing  the feature, either all at once or within any period of 12 months, such expenditure is treated as capital  expenditure on the replacement of an integral feature for capital allowance purposes. The person incurring the expenditure is deemed to own the plant and machinery. If the expenditure is deemed to be capital then there can be no relief as an expense against the trading income from the qualifying activity.

This area of capital allowances on expenditure on features in a property is not well defined in the legislation. Please contact us if you require further advice concerning tax implications of let properties.

Filed under: Business, Company, Individuals, Self Assessment, Tax

HMRC helpline – Support for individual/businesses affected by flooding

Posted by: edwinsmith on February 19th, 2014

HM Revenue & Customs (HMRC) have recently launched a new telephone helpline for anyone affected by the recent floods.

The helpline is 0800 904 7900

The helpline will enable individuals/businesses to obtain practical assistance on a wide range of tax problems they may be facing as a result of the floods.

HMRC may be able to offer the following support:

  • agree instalments where taxpayers are unable to pay as a result of floods;
  • agree a practical approach when individuals and businesses have lost vital records to the floods
  • Suspend debt collection proceedings for those affected by the floods and;
  • Cancel penalties when the tax payer has missed statutory deadlines.

Please contact us if you require any assistance in connection with HMRC support.

Filed under: Employers, Individuals, Self Assessment, Tax

Dates and deadlines: February 2014

Posted by: edwinsmith on January 31st, 2014

Upcoming deadlines for businesses and individuals

1 February: Corporation tax payment for a company not within the instalment regulations: year ending 30 April 2013.

1 February: Late filing penalty issued for Self Assessment return not filed for 2012/13.

1 February:  Submission of form P46 (car) for changes in quarter to 5 January 2014.

5 February: End of month 10 for PAYE (RTI). All FPS (Full Payment Submissions) due if taking advantage of concession.

7 February: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 31 December 2013.

12 February: Direct debit VAT payment will be taken: quarter ended 31 December 2013.

19 February: CIS monthly return deadline: month ended 5 February 2014.

19 February: Cheque payments for PAYE/NI, student loan, CIS  to be cleared into HMRC bank: month ended 5 February 2014.

22 February: Electronic PAYE/NI etc payments to be cleared into HMRC bank: month ended 5 February 2014.

28 February: First surcharge of 5% applies for self assessment tax unpaid for 2012/13 after this date

28 February : Company tax return CT600 due to HMRC: years ending 28 February 2013.

28 February: Company accounts (Private Limited Co) due to be filed: years ending 31 May 2013.

28 February: Company accounts (Public Companies) due to be filed: years ending 31 August 2013.

1 March : Corporation tax payment for company not within the instalment regulations: years ending 31 May 2013.

 

Filed under: Business, Company, Dates and deadlines, Employers, Individuals, PAYE, Self Assessment

Tax return deadline extension in limited circumstances

Posted by: edwinsmith on January 31st, 2014

There has been no official deadline extension for 2012/13 tax returns  but HMRC have recognised a select number of tax payers who have either registered very recently for the online services or lost their user ID and password and realise that they have left it too late to enable them to obtain the relevant passwords etc and file on time. HMRC has allowed a little extra time for taxpayers who fall into these categories.

This will only apply to taxpayers who did the following between midnight on 21 January 2014 and midnight on 31 January 2014:

Either:

  1. Enrolled for the self assessment service, or
  2. Requested a replacement user ID or password.

This extension only applies to taxpayers who were already registered for self assessment and have a unique tax reference (UTR), and so this will not assist those who are late to notify HMRC of a liability to charge.

The return would also need to be submitted via the HMRC software and so this cannot apply to partnerships and trustees as the HMRC free software cannot be used for these returns.

The few tax payers who can benefit can avoid the late filing penalty providing their return is submitted by 15 February 2014. However, a penalty notice is likely to still be issued leaving the taxpayer to appeal against it within 30 days of issue. You would need to show that you fall within the circumstances shown above.

Tax payments

Tax due must still be paid by 31 January 2014. If it is not, interest will accrue and the usual surcharges will also apply.

If you are struggling with your taxation affairs and need assistance, then please consider contacting us.

Filed under: Individuals, Self Assessment

Employers – Eye tests and the provision of glasses

Posted by: edwinsmith on January 24th, 2014

Where an employee is required to use display screen equipment (usually a computer with a Visual Display Unit -VDU) as part of his normal duties for an employer then there are tax reliefs available to the employer and employee concerning the employer payments for eye tests and the provision of glasses.

If an employee is required to use a VDU in the above circumstances then no taxable benefit will arise on the cost of

  1.    an eyesight test, and

 2.    glasses or contact lenses required solely for VDU use that the eye test shows is necessary where

the test is required under Health and Safety at work regulations and if shown to be necessary by the test.

A special prescription should be obtained for VDU use in order to take advantage of tax relief.

 Where glasses etc are for general use, but include a special prescription for VDU use, a proportion of the cost relating to the special prescription will be exempt from a taxable benefit.

The provision or payment by an employer towards the cost of glasses etc for general use, including use with a VDU, but without a special prescription for VDU will give rise to a taxable benefit.

For Class 1 National Insurance Contributions (NIC) there are similar exemptions from liability if a special prescription for VDU use is obtained in above circumstances regardless of whether employer contracts with optician or employee arranges test etc and employer reimburses them.

However if the eye test identifies a general need for glasses (as well as special prescription for VDU use) and the employer  reimburses employee for whole costs then liability for Class 1 NICs will arise on the amount exceeding VDU related prescription. This amount will effectively be treated as part of employee’s salary and PAYE/NIC calculated on this amount in normal way for salary etc.

If the employer contracts with the optician then amount paid by employer will be disregarded for Class 1 NICs but the amount exceeding VDU related prescription will need to be treated as benefit in kind to employee and entered on the relevant year end P11d forms (Employers return of benefits and expenses paid to employees). Therefore in this situation Class 1a NIC would be payable by the employer but employee would not suffer Class 1 NIC liability.

Please contact us if you would like further advice in this area.

Filed under: Benefits, Employers, Individuals, PAYE

Latest phishing email warning from HMRC

Posted by: edwinsmith on December 18th, 2013

A number of us here received an email which appeared to be from HMRC announcing a new Employers Bulletin. We are all aware of the usual phishing emails but this one was different. It was not an unexpected announcement and could very easily have fooled some. The zip file attached raised our suspicions and so before anyone opened it, we very quickly let our staff know of the danger and forwarded the email to HMRC for review.

A day later, HMRC announced and confirmed this email as a phishing scam.

The wording is as follows:

From: HMRC Employer Alerts [mailto:employers@alerts.hmrc.gov.uk]
Sent: 17 December 2013 14:13
To: Caroline Meredith
Subject: HMRC: Important Information for Employers

Employer Bulletin Issue 45 out now

The latest version of the Employer Bulletin issue 45 has just been published.
This edition contains the latest information about filing your PAYE information in real time.

To find out more open the attached document(s)

Your next employer email alert is scheduled for February 2014
*** Please do not respond to this email
If you have any concerns regarding the validity of this or any emails received from HMRC go to our Online Security pages for more information by using the web address below [excluded].

The zip files attached should always be enough to raise suspicion as in this case. Don't get caught out.

The genuine Employer Bulletin was issued in September and does not contain a zip file. HMRC will update the HMRC Genuine Contacts page when the next genuine Employer Bulletin is due to be published in February 2014.

Always either check with us or the HMRC website if you are unsure.


Filed under: Company, Employers, Individuals

Dates and deadlines December 2013

Posted by: edwinsmith on November 30th, 2013

Upcoming deadlines for businesses and individuals

1 December: Corporation tax payment for a company not within the instalment regulations: year ending 28 February 2013.

5 December: End of month 8 for PAYE (RTI). All FPS (Full Payment Submissions) due if taking advantage of concession.

7 December: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 31 October 2013.

12 December: Direct debit VAT payment will be taken: quarter ended 31 October 2013.

19 December: CIS monthly return deadline: month ended 5 December 2013.

19 December: Cheque payments for PAYE/NI, student loan, CIS  to be cleared into HMRC bank: month ended 5 December 2013.

20 December: Electronic PAYE/NI etc payments to be cleared into HMRC bank: month ended 5 December 2013.

30 December : Submission of electronic 2012/13 self assessment tax return if require unpaid tax to be collected by tax code.

31 December : Company tax return CT600 due to HMRC: years ending 31 December 2012.

31 December: Company accounts (Private Limited Co) due to be filed: years ending 31 March 2013.

31 December: Company accounts (Public Companies) due to be filed: years ending 30 June 2013.

1 January : Corporation tax payment for company not within the instalment regulations: years ending 31 March 2013.

 

Filed under: Dates and deadlines, Employers, Individuals, PAYE, Tax

Tax relief on repairs for let property

Posted by: edwinsmith on November 8th, 2013

Carrying on from our August article on tax relief on wear and tear of furniture for let property, this article sets out guidelines for tax relief on the replacement or repair to integral parts of the let building.

Normally tax relief can be given against rental income for the repair of an asset, i.e, the restoration of that asset by replacing subsidiary parts of the whole asset. If there is significant improvement to the asset beyond is original condition, then the expenditure will be classified as capital expenditure and relief will not be available against rental income. Consideration needs to be given also to the ‘entirety’ of the subject being repaired,  for example, if the roof of a let property is damaged, the replacement of the damaged area is a repair and the expenditure allowable against the rental income.

Examples of repairs that are normally deductible in computing rental profits are:

  1. Exterior and interior painting and decorating
  2. Stone cleaning
  3. Damp and rot treatment
  4. Mending broken windows, doors, furniture and machines such as cookers and lifts
  5. Re-pointing
  6. Replacing roof slates, flashing and gutters
  7. Replacing windows even if single glazed windows are replaced with double-glazed windows

Generally if the replacement of a part of the ‘entirety’ is like-for-like or the nearest modern equivalent, the expenditure is allowable against the rental income. For example, if a fitted kitchen is refurbished by removing the existing units, sink, worktop etc, and replacing with a similar standard kitchen, this expenditure will be a repair. If however, additional cabinets are fitted increasing storage space or additional equipment is installed, then expenditure on those items is capital and cannot be relieved against the rental income. If the whole kitchen is substantially upgraded and standard units replaced with expensive customized items using high quality materials, then all the expenditure will be classified as capital with no relief against rental income. Other examples of repair expenditure which do not give significant improvement to the property are the cost of replacing wooden beams with steel girders and replacing lead pipes with copper or plastic pipes. If however the steel girders were designed to take heavier loads or the pipes to take heavier pressure, the expenditure is likely to be capital.

Care needs to be taken when repairs are incurred after a property is acquired as to determine whether the expenditure is a repair allowable against revenue or is capital expenditure. If a property was acquired not in a fit state to let until the repairs had been carried out, then the repair expenditure will be capital. If there is expenditure which adds to or improves the land or property such as converting a disused barn to a dwelling to be let, this will be capital expenditure.

Separate tax relief may be available for capital expenditure on a property or on certain plant and machinery within certain buildings such as a lift but this will be the subject of another article.

Please contact us if you require further advice concerning the tax implications of let properties.

Filed under: Individuals, Self Assessment, Tax
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