VAT

VAT flat rate scheme – be aware of the pitfalls

Posted by: edwinsmith on November 2nd, 2012

Although there are benefits to the VAT flat rate scheme which is available to small businesses there are some pitfalls that can easily be overlooked. For further details on scheme HMRC - VAT Flat rate scheme for small businesses.

The main principle of the Flat Rate Scheme (FRS) is that the VAT paid to HMRC is based on a flat rate percentage (determined by type of business) being applied to the gross income of the VAT registered trader.

Gross income includes all business income (zero rated and exempt) unless it falls outside the scope of VAT. As land income is considered as business related under the VAT regulations then VAT could become payable on property rental income.

Therefore under the FRS it would be quite easy to overlook paying VAT on zero rated and exempt income related to the business such as property rental income and sale of business cars.

As an example a sole trader who has rental income (even if income separate to business such as income from a residential letting) then VAT would be payable on the rental income at the flat rate applicable. This would not apply to jointly owned properties in this scenario.

When assessing the advantages of using the FRS the effect of any zero rated/exempt exempt income should be considered.

Please contact us for further advice or assistance concerning the VAT Flat Rate Scheme.

Filed under: VAT

Dates and deadlines: October 2012

Posted by: edwinsmith on October 1st, 2012

1 October: Corporation tax payment for company not within the instalment regulations: year ending 31 December 2011

1 October: National Minimum Wage increase comes into effect

2 October: HMRC Tax return initiative deadline

5 October: Notify HMRC of chargeability to Income Tax / Capital Gains Tax from this date if not within Self Assessment for 2011/12

5 October: End of month 6 for PAYE

7 October: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 31 August 2012

12 October: Direct debit VAT payment will be taken: quarter ended 31 August 2012

14 October: CT61 quarterly return and payment deadline: quarter to 30 September 2012

19 October: CIS monthly return deadline: month ended 5 October 2012

19 October: Quarterly nil payment notification: quarter to 5 October 2012

19 October: Cheque payments due for PAYE/NI, student loan, CIS and PAYE Settlement Agreements: month ended 5 October 2012

22 October: Electronic PAYE/NI etc payments (inc PAYE Settlement Agreements) to be cleared into HMRC bank: month ended 5 October 2012

31 October: Deadline for submission of paper self assessment returns for 2011/12

31 October: Company tax return CT600 due to HMRC: years ending 31 October 2011

31 October: Company accounts (Private Limited Co) due to be filed: years ending 31 January 2012

31 October: Company accounts (Public Companies) due to be filed: years ending 30 April 2012

1 November: Corporation tax payment for company not within the instalment regulations: years ending 31 January 2012

2 November: Submission of form P46 (car) for changes in quarter to 5 October 2012

Filed under: Company Secretarial, Dates and deadlines, National insurance, PAYE, Self Assessment, Tax, VAT

VAT registration – keep a watch on your turnover

Posted by: edwinsmith on September 28th, 2012

The basic rule

If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current VAT registration threshold of £77,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT. This must happen within 30 days of exceeding the registration threshold of £77,000 to avoid penalties and interest. Details of how to register can be found on the HMRC website or contact us for information.

If you took over another VAT-registered business within the last 12 months, then when you regularly check your turnover for the previous 12 months against the threshold, you should take into account the turnover of the business before you bought it as well as your own turnover.

Temporarily exceeding the threshold

If your turnover has gone over the registration threshold temporarily, then you may be able to apply for an exception from registration if you can demonstrate to HMRC that in the longer term you will only be trading below the de-registration threshold of £75,000. To apply for exception you will still need to complete a VAT registration form and state why you are applying for exception.

How do I calculate the taxable turnover

Your VAT taxable turnover includes the value of any goods or services you supply within the UK, unless they are exempt from VAT. This means you must also include any supplies you make that would be zero-rated for VAT.

When calculating your VAT taxable turnover you will include your sales, but for VAT purposes, you should also include the value of certain other types of supply:

goods or services that you exchange or barter
supplies of certain services that you receive from suppliers in other countries that you have to 'reverse charge'
where you use your own labour to construct certain building or civil engineering works for your own business use with an open market value of £100,000 or more

You must not attempt to avoid registration by artificially separating business activities to reduce your turnover. If you run more than one business, the sales in all those businesses must normally be added together to determine whether or not you must register for VAT.

However, if you are involved in the running of several separate legal entities, you may not need to combine the sales of those businesses to find whether you need to be VAT-registered.

For further help and advice please contact us.

Filed under: VAT

Dates and deadlines: September 2012

Posted by: edwinsmith on September 1st, 2012

1 September: Corporation tax payment for company not within the instalment regulations: year ended 30 November 2011

5 September: End of month 5 for PAYE

7 September: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 31 July 2012

12 September: Direct debit VAT payment will be taken: quarter ended 31 July 2012

14 September: HMRC E-marketplaces campaign, time to disclose and pay

19 September: CIS monthly return deadline: month ended 5 September 2012

19 September: Cheque payments due for PAYE/NI, student loan, CIS: month ended 5 September 2012

22 September: Electronic PAYE/NI etc payments to be cleared into HMRC bank: month ended 5 September 2012

30 September: Company tax return CT600 due to HMRC: year ended 30 September 2011

30 September: Company accounts (Private Limited Company) due to be filed: year ended 31 December 2011

30 September: Company accounts (Public Company) due to be filed: year ended 31 March 2012

1 October: Corporation tax payment for company: year ended 31 December 2011

1 October: National minimum wage increases from this date

2 October: HMRC tax return initiative deadline

Filed under: Company Secretarial, Dates and deadlines, National insurance, PAYE, Tax, VAT

Advisory fuel rates 1 September 2012

Posted by: edwinsmith on August 30th, 2012

H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows:

Engine size	Petrol	LPG
1400cc or less	15p	10p
1401cc to 2000cc	18p	12p
Over 2000cc	26p	17p

Engine size	Diesel
1600cc or less	12p
1601cc to 2000cc	15p
Over 2000cc	18p

The changes this quarter are the decrease of 1p per mile in LPG for engines sizes 1400cc or less and 1401cc to 2000cc, and the decrease of 2p per mile in LPG for engines over 2000cc.

The new rates will be effective from1 September 2012. However, for the first month employers may continue to use the previously published rates if they choose to.

These rates will be reviewed again in November 2012 and any changes made will be effective from 1 December 2012. The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.

Advisory fuel rates can be used to calculate the following:

Reimbursement to employees of fuel used for business travel in a company car
Repayment by employees of fuel used for personal travel in a company car
Allowable input VAT on business mileage claims

A more detailed explanation of the use of these rates is on the HMRC website.

The rates applying for earlier periods are also on the HMRC website.

If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.

Filed under: PAYE, Tax, VAT

Revised advisory fuel rates 1 June 2012

Posted by: edwinsmith on June 7th, 2012

H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows:

Engine size	Petrol	LPG
1400cc or less	15p	11p
1401cc to 2000cc	18p	13p
Over 2000cc	26p	19p

Engine size	Diesel
1600cc or less	12p
1401cc to 2000cc	15p
Over 2000cc	18p

The changes this quarter is the increase of 1p per mile in LPG for all engines sizes and reductions of 1p in diesel for engines sizes of 1600cc or less and over 2000cc.

The new rates will be effective from 1 June 2012. However for the first month employers may continue to use the previously published rates if they choose to.

These rates will be reviewed again in August 2012 and any changes made will be effective from 1 September 2012. The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.

Advisory fuel rates can be used to calculate the following:

Reimbursement to employees of fuel used for business travel in a company car
Repayment by employees of fuel used for personal travel in a company car
Allowable input VAT on business mileage claims

A more detailed explanation of the use of these rates is on the HMRC website.

The rates applying for earlier periods are also on the HMRC website.

If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.

Filed under: PAYE, Tax, VAT

VAT Fuel Scale Charges From 1 May 2012

Posted by: edwinsmith on April 27th, 2012

VAT fuel scale charges, for taxing private use of road fuel, were amended for periods commencing on or after 1 May 2012.

The scale charge for a particular vehicle is determined by its CO2 emissions figure. Where the CO2 emissions figure of a vehicle is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used. For cars which are too old to have a CO2 emissions figure HM Revenue & Customs (HMRC) have prescribed a level of emissions by reference to the vehicle's engine capacity (cc).

The HMRC website has details of the CO2 emissions amounts and the related fuel scale charges. The tables on the HMRC website show VAT inclusive scale charges applicable in each accounting period, depending on whether it is a 12 month, three month or one month accounting period.

Filed under: VAT

[Archive] VAT returns online for all VAT-registered businesses

Posted by: edwinsmith on March 27th, 2012

From 1 April 2012, all VAT-registered businesses must send their VAT returns online and pay their VAT electronically. Currently, only newly-registered businesses, and those with turnovers of more than £100,000, have to file and pay their VAT online. The new rules will cover VAT returns filed for accounting periods beginning on or after 1 April 2012.
To file your VAT return online, you'll need to register for HMRC Online services. Further help and advice is available from the HMRC website or contact us.

Filed under: VAT

Revised advisory fuel rates 1 March 2012

Posted by: edwinsmith on February 29th, 2012

H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows:

Engine size	Petrol	LPG
1400cc or less	15p	10p
1401cc to 2000cc	18p	12p
Over 2000cc	26p	18p

Engine size	Diesel
1600cc or less	13p
1601cc to 2000cc	15p
Over 2000cc	19p

The changes this quarter is the increase of 1p per mile in diesel for engines sizes of 1600cc or less and over 2000cc.

The new rates will be effective from 1 March 2012. However for the first month employers may continue to use the previously published rates if they choose to.

These rates will be reviewed again in May 2012 and any changes made will be effective from 1 June 2012. The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.

Advisory fuel rates can be used to calculate the following:

Reimbursement to employees of fuel used for business travel in a company car
Repayment by employees of fuel used for personal travel in a company car
Allowable input VAT on business mileage claims

A more detailed explanation of the use of these rates is on the HMRC website.

The rates applying for earlier periods are also on the HMRC website.

If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.

Filed under: PAYE, VAT

HMRC Now Using Faster Payments Service

Posted by: edwinsmith on December 22nd, 2011

HM Revenue & Customs (HMRC) can now accept payments made using the Faster Payments Service. This will allow taxpayers to make faster electronic payments, typically via internet or telephone banking, enabling them to be processed on the same or next day.

Taxpayers should contact their bank or building society before making a payment to confirm:

the services available
whether there are any single transaction or daily limits on the amount that can be paid
their latest cut off times for making a payment

When making a payment to HMRC please make sure you always use the correct bank account details and reference number. This will ensure that the payment is received, and will help to avoid incurring a penalty, interest or surcharge for late payment.

You can find further information by following the links below.

Faster Payments

How to make a payment to HMRC

HMRC bank accounts

Filed under: PAYE, Tax, VAT