Edwin Smith - Chartered Accountants
  • Home
  • About Edwin Smith
  • Accounting Services
  • Contact Edwin Smith

HMRC campaign – credit card sales

Posted by: edwinsmith on April 30th, 2015

HMRC are currently running a campaign aimed at taxpayers who accept card payments for goods or services who have not declared all their UK tax liabilities.

HMRC has details of all credit and debit card payments to UK businesses which they can use to identify individuals and businesses who may not have paid what they owe.  If you have not declared all your income and HMRC catch you, you will have to pay the undeclared tax, a penalty of up to double the tax you owe, and you could even go to prison if they pursue a criminal prosecution.

It is important for individuals to use this campaign to come forward and declare all their income under a ‘voluntary disclosure’ in order to obtain best terms for penalties. Under this campaign an individual will have four months to pay any additional liabilities from the date they receive HMRC’s acknowledgement of their notification.

Further information can be obtained here on HMRC website or please contact us for further advice.

Filed under: Business, Individuals, Self Assessment, Tax

Charity audit threshold increase

Posted by: edwinsmith on April 22nd, 2015

The government has increased the income threshold for the statutory audit of charity accounts from £500,000 to £1 million. This comes into effect for charity accounts with accounting periods ending 31 March 2015 onwards.

Also where gross assets of a charity exceed £3.26 million then if the income exceeds £500k (from £250k) a statutory audit will still be required.

Charities that can take advantage of the audit threshold increase will still require an Independent Examination if their gross income is over £25,000. With an Independent Examination there is less work involved than a full audit (although there are still Charity Commission Directions that need to be completed/followed as part of examination work). Unlike a full audit the internal financial internal controls operating within the charity would not be checked. Compared to an audit report the examination report will provide a more limited form of security but the report must still, as quoted from guidance below.

‘● confirm that no evidence has been found that suggests certain things have not been done by the charity, such as not maintaining proper accounting records; and

● provide a statement on specific matters that have come to their attention as the result of the examination procedures specified in the Directions.’

Please contact us  for further advice on charity accounts etc.

Filed under: Audit, Charities

Abolition of Employers National Insurance Contributions (NICs) for under 21s

Posted by: edwinsmith on April 15th, 2015

From 6 April 2015 employers with employees under 21 will no longer have to pay Employer NICs on earnings up to the upper earnings limit (2015/16 £42,385).

The zero rate won’t apply to Class 1A or Class 1B NIC’s – e.g. where employee has a chargeable benefit in kind for NIC purposes from employment.

This measure will not affect the individual’s state pension entitlement.

Employers need to be aware that this change has resulted in new NIC category letters and if employing someone aged over 16 but under 21 then a new NIC category letter will need to be selected. It is the employer’s responsibility to ensure the correct letter is selected.

The 7 categories are:

  1. M - not contracted-out standard rate contributions
  2. Z - not contracted-out deferred rate contributions
  3. Y - mariners not contracted-out standard rate contributions
  4. P - mariners not contracted-out deferred rate contributions
  5. V - mariners contracted-out salary related contributions
  6. I - contracted-out salary related standard rate contributions
  7. K - contracted-out salary related deferred rate contributions

Three of the new letters (V, I and K) will be removed in April 2016 in line with the ending of ‘contracted-out’ status in relation to salary-related occupational pension schemes.

For full details please refer to HMRC - Abolition of Employers NICs for under 21s

Please contact us  for further advice on operating payroll etc.

Filed under: Business, Employers, National insurance, PAYE

Transfer of tax allowances for married couples and civil partners

Posted by: edwinsmith on April 8th, 2015

It was announced in the 2013 autumn statement that from 6 April 2015 tax allowances could be transferred between certain married couples /civil partnerships. Where neither spouse/civil partner pays more than the basic rate of tax then a spouse/civil partner who is unable to use all their personal allowances will be able to transfer up to £1,060 of their unused allowance to their spouse/civil partner.

This benefits couples (married/civil partnerships) where one spouse/civil partner has a total income less than their personal allowance (for 2015/16 £10,600). The recipients of the allowance will be able to reduce their tax liability by up to £212 (£1,060 x 20%).

This transfer of allowances is not eligible to:

  1. Couple/civil partnerships where one/both pays tax at the higher/additional rate.
  2. Married couple already claiming the married couple allowance – this is where at least one of the couple was born before 6 April 1935.
  3. Non UK domiciled individuals who elect to pay tax on the remittance basis of tax or who would be higher rate or additional rate tax payers if their worldwide income was within the scope of UK tax.

Please contact us if you would like further assistance.

Filed under: Individuals, Tax