Sometimes some a tax payer will have their tax return amended by HMRC after it was submitted. This is a normal thing and nothing to worry about. As it means that HMRC are checking to make sure the information on the tax return matches with the information they hold from other sources e.g. PAYE, CIS etc.
An example is if your tax return did not mention a former employer in the tax year and HMRC records show there was a former employer and some income and tax paid at that employer may affect the bottom final tax figure. This means there could be a difference in the final amount of tax due or refund due from HMRC to you. Sometimes this is not even your fault as you may have handed the new employer your P45 from the previous employer and the new employer should have start your PAYE using the P45 income and tax figures and carry forward from there, but for a number of reasons the new employer could not do this and therefore the tax code is set on a default standard code meaning you have received 2 lots of tax free allowance in a year. When this happens towards the end of the tax year (April) HMRC cannot send a notice to amend the tax code to the employer in time to adjust the over / under paid tax. So, they wait instead for the information to be included in the tax return to automatically update with the full info for the year. Therefore it's not a problem but a normal procedure by HMRC to ensure a tax payer is correctly aligned with their records held and their tax paid is correct. Unfortunately for a tax payer, sometimes this means handing back some of a tax refund as paid by HMRC previously or having a higher tax bill at the end of the tax year. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. With branches in Surbiton , Worcester Park , Kingston upon Thames , Cheam and Epsom they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting business throughout the UK, they regularly help clients grow their business providing tailored advice and support. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.
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All Personal Tax returns (self assessments) have to sent to HMRC by 31.1.18 and anytime after that will incur an automatic penalty of £100, which can rise up to £1300 the longer it remains outstanding. This is even if you had no tax due, as its a penalty for late submission not late payment of tax. Late payment of tax can incur more fines and interest upon the amount calculated at a daily rate.
Below is a list to help explain the fines process:
Also penalties can be issued for incorrect tax returns:
Therefore it makes sense that everyone should seek the help and support of an experienced and qualified accountant or tax advisor. As a reputable firm of accountants, such as Tax Affinity Accountants, will usually save you far more money in saved taxes through their skill and knowledge than they will ever charge. Leaving you more time and money to concentrate on your business, especially in these difficult economic times. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. With branches in Surbiton , Worcester Park , Kingston upon Thames , Cheam and Epsom they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting business throughout the UK, they regularly help clients grow their business providing tailored advice and support. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. At Tax Affinity Accountants, we often get asked what are the differences and benefits of working through a limited company compared to an umbrella company. So we have decided to explain this in a quick easy way.
An umbrella company is like an agency with whom you are employed and therefore they are your employer and not the place where you work. They will issue you with payslips and P60, P11d and a P45 at the end of your employment. They should also pay you for any sick or maternity pay as may be required. Umbrella companies will charge you for using their services and will deduct their fees from your pay. They will also ask to be refunded their employer NIC contributions paid to HMRC on your behalf again deducting this from your pay. The income tax tends to be higher than being straight forward employed on PAYE. You do not need to worry about paperwork and record keeping as the umbrella company does all this like an employer would. A limited company is a separate legal entity to you. That you may well own as a shareholder and run as a director. A limited company can be your employer and pay you wages via PAYE like a normal employer but be contracting out your services to the place you work. And if you are the shareholder it can pay you dividends (share of the profits) periodically or on a regular basis. A limited company pays corporation tax not income tax and the tax rate is much lower than normal PAYE or via an umbrella company. There is a certain amount of paperwork and record keeping which is required and normally you will require the services of a good accountant. It is also very difficult to try to pay yourself sick or maternity pay, which is why most people do not claim these. But the plus side is as your keeping more income then this should more than make up for any loss of benefit or time spent keeping records. Tax wise it is usually much better option to be working though a limited company compared to an umbrella company as a good accountant, like Tax Affinity Accountants, should help you save much more in tax than fees they ever charge. Helping to ensure more of your hard earned income stays in your hands. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting contractors and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. As of today there are only 7 working days till the 31st January 2017, which is HMRC's online self assessment deadline.
The submission of the personal income tax return and the payment of any tax and NI due for the period 6/4/15 to 5/4/16 is midnight 31/1/17. And anyone who has not yet had their tax return done and paid for should start to worry about the up to £1300 fine plus interest on late paid tax imposed by HMRC for missing the deadline. The self assessment / personal tax return is required from the following types of people: 1. Self Employed (even partially) during the tax year 15/16 ie 6/4/15 to 5/4/16 2. Employed and earning over 100k for the year ended 5/4/16 3. Director or shareholder of a Company and taking dividends in the period as above 4. If you have received rental income in the period 6/4/15 to 5/4/16 5. You received savings and investments income in the period 6/4/15 to 5/4/16 6. You sold something and made a profit on the item, so are required to pay the Capital Gains Tax (CGT) eg selling shares, a property, an antique, Plant and Machinery etc 7. You have received income over £50,000 and you claimed Child Benefit 8. If you have not notified HMRC that you have left self employment and they have not confirmed that you do not need to do a 15/16 return 9. A letter / email / text from HMRC has been received by the tax payer advising them that they need to submit a tax return for the 15/16 year (note: only new registrants may get a reminder as HMRC expects old registrants to already know the deadlines and protocols required). 10. You received income from overseas 11. You lived abroad and had income from the UK 12. You are retired and receive more than one type of pension and annual income payment pushing you over the personal income allowance 13. You have had a P800 from HMRC saying you have not paid enough tax in the year 14. You are minister of religion or and Underwriter 15 Even if a person has died they may still need to submit a tax return to make sure they have paid the correct tax and those that receive an inheritance may need to pay for Inheritance Tax (HMRC will advise further). 16. If you have received a P11d and not paid the correct tax for the benefit in kind eg company car, private medical, gym, travel etc So if you haven't already had your tax return done and still need to send / drop in your income and expenses information, please take heed of this final reminder. Those that have handed in their information we will make sure it is done before the deadline. We can even have your deadline extended in some cases as we are registered authorised agents for HMRC. And if your thinking of using an accountant, note, that not all accountants are the same. We recommend you use an expert in tax so he/she saves you far more in tax than you ever have to pay them for their service. With fines up to £1300 plus interest on the amount of tax due. In some cases penalties are greater than the tax that would have been due. So don't delay as you have no time left and most excuses and appeals are rejected by HMRC after a penalty has been imposed. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting business throughout the UK, they regularly help clients grow their business providing tailored advice. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. As experts in property tax we often get asked by clients who are landlords and property developers how to save tax - especially so as the cost of letting a property rises year on year.
With our experience and special insider knowledge that HMRC in 2014 - 2015 is especially looking at checking landlords who are not declaring the correct rental income and correct capital gains on second homes. This is something that is becoming more important as people realise it is harder and harder to hide their untaxed property incomes. Landlords or their accountants are required to fill the the land and property section on their self assessment tax return showing all the rental business income they have made and as many want to make sure they pay the least amount of tax possible. We have have created a simple list to help guide you. Here are Tax Affinity Accountants top tips to save property tax. 1. Claim for all your property related expenses. Its important to make sure you claim for all your expenses when submitting your tax return. These should include: • Travel costs incurred when travelling back-and-to the investment property • Estate Agent or private advertisement costs • Mobile or landline telephone calls made (or text messages sent) in connection with the rental property • Payments for safety certificates eg Gas Safety • Bank charges (i.e. overdraft, interest on mortgage) • Professional fees e.g. Architect, Solicitor, Accountant etc • Monthly payments to property investment related products and services eg Insurances etc 2. Dividing your rental income between partners. A top tip is to consider putting your buy-to-let property into joint named ownership. Then the total income can be divided into each person's income and multiplying the personal allowance claimable on the income. 3. Claim all empty period expenses. Often there are periods between lettings that the buy-to-let property is empty and the owner has to pay for council tax or utlity bills. These should be noted and claimed. 4. Claiming the home office allowance. £4 per week (ie £208 per year) can be claimed for the use of your home to manage and run your rental property income. This amount can be claimed without evidence and more can be claimed if it can be justified. 5. Interest and finance costs. Most properties are on mortgages and the interest part of any mortgage is claimable as an expense. So if you have an interest only mortgage then the whole amount is claimable per month paid. Often landlords also forget to claim for money borrowed from friends or family or taken on a credit card or personal loan for the buy-to-let property and the interest on these can also be claimed. The principal can only be claimed when selling the property against capital gains tax. 6. Dont forget to carrying forward loss from previous year Most of the time a new buy-to-let property will not breakeven in its first year and so many landlords have significant rental losses for that year. Then when they start to make income from the property most forget about this loss which can be offset against the current years income. This could even mean no tax to pay in the current year if the losses are great enough. This requires detailed technical knowledge and so any lanldord in this situation should contact an experienced accountant such as Tax Affinity Accoutants. 7. Capital gains avoidance If landlords who are planning to sell their property, need to plan months or even a year ahead to increase their options of minimising capital gains tax which will arise on the sale of the property. This is usually best done getting expert advice from an accountant experienced in tax and property such as Tax Affinity Accountants. What top property developers and landlords know that mostly the fees paid to a good accountant are far less in comparison than the tax he/she will save you. 8. Wear and tear allowance Letting your property as furnished as opposed to unfurnished can allow you to claim up to 10% of the gross income as a valid expense for the upkeep and repair of furtniture in the tax year. 9. Make Sure to avoid HMRC interest and penalties Sound obvious but far to often, we see penalties and interest charges for late filing of tax returns and missed deadlines for documents to HMRC. The deadline for a paper return to HMRC is 31st Oct and online 31st Jan each year. Please also not that landlords will not be able to submit their return electronically if there are any capital gains elements on the return. ie the sale of any property. An experienced accountant needs to be contacted for this purpose which if knowledgable enough could ensure all capital expenditure is claimed to reduce the capital gains liability as low as possible. By Andrew at Tax Affinity Accountants. Tax Affinity Accountants are experts in Tax and Accountancy. Based in Kingston upon Thames they are considered to be property tax experts helping and supporting ladlords across the UK. They regularly help new landlords and property developers and provide valuable ongoing support. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. Growth Vouchers Scheme can be invaluable for business to gain the advice and support needed to expand and grow their profits and business.
This government programme is basically designed to help small businesses get strategic business advice on:
The voucher can pay for up to half of the cost of the advice from a recognised business adviser such as Tax Affinity Accountants can serve as a real helping hand to boost your business. It is structured in such a way that the supplier will claim this fee from the programme making it easier for the business owner to quickly get the support and advice he/she needs. There are some simple eligibility criteria as below: Your business must:
And then you will need the following things to complete your application, as available by your accountant:
So how does it work? Either speak to your chosen adviser and they will make the necessary arrangements for you or sign up on the government’s growth voucher website (open until March 2015). Once you have received the voucher, simply use it for the advice and support. The growth voucher scheme has been running for few months now and it is growing in success. However, be careful because the scheme is not intended for company owners seeking to subsidise practical guidance on how to engage in precise tasks relating to running a business. It’s for tactical advice that will lead to growth of the businesses. The quickest way to get support for the is to call 0800 043 4051 or visit www.taxaffinity.com and speak to one of our experienced business adviser's and growth coaches at Tax Affinity Accountants. By Tahir Malik at Tax Affinity Accountants Tax Affinity Accountants are experts in business coaching and are based in Kingston upon Thames they are considered to be experts in their field. Helping and supporting businesses and individuals throughout the UK. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. HMRC can open an investigation into your tax affairs at anytime, and can request to go back up to 20 years (although it is normally no later than 6 years). When you receive a letter stating HMRC are pending an investigation, it can be a very tense and stressful time even if you have done nothing wrong. Investigations can occur for a variety of reasons. The most frequent is an obvious mistake that HMRC can see whilst looking through the information you have submitted to them. The mistake can be on any scale of seriousness so should not be taken lightly. If you spot a mistake and tell HMRC about it, they will still have to open an investigation still but it will be less severe and strict. Sometimes, a business selected for an investigation is totally random, HMRC will pick a few businesses in an area, maybe that are tax-fraud hotspots, just to make sure there is no tax evasion going on. HMRC are also the epitome of suspicious. If your sales figure has gone drastically up or down from one year to the next or are hugely different to the industry average, they will look into why this is. The letter from HMRC will normally have clues on it as to why you are being investigated. It will also detail what direction the investigation will be taking. When you receive this letter, the emphasis is to act fast as if you do not have all the required information ready and at hand when the investigation starts, you will be seen as unorganised. HMRC have the ability to request information from third-parties such as banks and other businesses. This is the extreme as normally they will look for co-operation, from the person being investigated, which will not only speed the whole process, but reduce any fines or penalties incurred. This can be just allowing them access to your files or it could be letting them interview you for a day. If you have made clear and obvious mistakes but do not allow HMRC access to your documents, the fine can be doubled, making it much worse for you. The effect of not co-operating on your business is as follows:
The general trend is that it is at this stage people will go and ask for professional help. The best people to see are tax accountants such as Tax Affinity Accountants who can help in various ways with the investigation. Some are below:
Even when the investigation has finished, there is no guarantee that you will not be investigated again. If you were randomly investigated one year and then the next year your profit figure increased dramatically, you could well actually be at risk of being investigated again. HMRC will not take to kindly either if you have already been found to be responsible in a previous investigation and then continue to make mistakes in subsequent years. This blog might seem all doom and gloom but regulations are in place for the amount of tax that should be paid by either businesses or individuals. HMRC just apply this regulation as it would be unfair for some people to get away with not paying enough tax. If you have done nothing wrong, or even make an innocent mistake, HMRC will not be aggressive or disruptive. If you co-operative with them, they will ensure the investigation is as pain free for you as possible. A Tax Accountant’s expertise and experience will help you greatly both financially and emotionally. As the fees that you may have to pay will be far outweighed by the amount of tax saved in direct negotiations with HMRC. They know what the situation is and what the next move by HMRC will probably be. This means that anything unusual going on by HMRC will be noticed and prevents you from submitting too much information or making the investigation drag on longer than it should. The key is to co-operate with both your Tax Accountant and HMRC so the investigation is over quickly and as By Owen Cain at Tax Affinity Accountants Many business owners wonder whether hiring an accountant is worth the extra expenditure. From the viewpoint of an accountant, it would be hypocritical for me to say that you’re better off doing all the accounting work yourself. In some respects that may be true. You may save some money by not having to pay accountancy fees. However, over the long run, you will probably realise that the time spent on dealing with your tax affairs and managing the company accounts can be used much more productively. Image the time is used earning a few more sales per week compared to being counted as dead time doing admin.
The phrase that time equals money is heard commonly. Not only do accountants save you both time and money; they also become an invaluable asset to your business. On that can become worth so much more than a simple financial cost. Here are a few things that we can add real “value” to your business: Proper Book-Keeping Keeping your financial records organised and up to date is the most important factor to dependable financial statements. But why hire an accountant as opposed to a book-keeper. Unlike the duties of a book-keeper, an accountant can help interpret the results, offer professional advice and present the financial statements in a format that allows decisions to be made by business management. You would get a greater insight to your business and be able to plan ahead using forecast estimates. Allowable Expenses Many business expenses are deductible. However, most of the rules and regulations change on a moving basis and vary from business to business. A good accountant will always be updated on the changing laws and regulations. And therefore should be saving you far more in paying less tax per annum than he/she should ever charge in fees. Their knowledge and experience will add real value to your business. Compliance There are standard formats for filing your accounts and various other tax returns to HMRC. An accountant can ensure that the relevant information is submitted to HMRC in the correct format before the due date. If there is one thing that panics business owners more than anything is a letter from HMRC about a mistake in their tax return and accounts. An accountant can deal with any issues in that regard in an efficient manner. So many clients turn to an accountant after having incurred fines and penalties that they often wonder why they just didnt do it before. Tax Advice Being aware of tax savings does not necessarily translate to actual tax savings. An accountant’s job is not only to tell you how much tax you owe but how you can save tax. The accountant should work with you throughout the year and offer advice on how to operate your business in a manner that will provide the most tax savings. This can save you substantial amounts of money in the long run - again far more than he/she should ever charge. Business Consulting Business advice from an accountant can help grow your business. They can assess your current problems and provide solutions to fix them. Or if your business just needs a fresh but experienced perspective on how to expand. The advice can be on inventory management, risk management, lease and buy decisions, internal controls or pricing strategies, HR issues, mergers, sales and takeover of the whole business even. Develop a Business Relationship Lets be clear in our extensive experience there are a lot of arrogant and selfish accountants out there. People regularly come to us saying their previous accountant was not doing enough and was charging them for every little thing. A good accountant wont mind spending as much time as you need to make sure you get all the help and support required. Their fees should be transparent and fixed, with no surprises. Speaking with an accountant can get you the advice in regards to your tax affairs or business operations. He/She can help identify problems in your financial statements and consult you about it. They can often with a little direction from you, supply you with the ideas and expertise that you desire to push your business to places your imagined. After all the biggest businesses in the world trust some of the biggest firms of accountants to help them with their plans for global expansion and growth. By Wilson Law at Tax Affinity. Tax Affinity Accountants are experts in Tax and Accountancy. Based in Kingston upon Thames they are considered to be small business experts helping and supporting business in the UK. They regularly calculate and submit tax returns, year end accounts and so much more for their clients peace of mind. Whilst always ensuring great value for money service. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. |
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