Category: Universal Credits

how to avoid costly mistakes on your self assessment tax return

3/4/2022

Tax Affinity have many high street branches

HMRC relishes the idea that tax payers will make errors in their tax returns and then they will pay higher taxes or be fines for making errors. The number of errors by members of the public doing their own self assessments has been rising steeply in the last few years and HMRC has been raking in fines for errors. So its very important to try to ensure you make none.

Why? - Well simply mistakes on your tax returns could cost you a lot of hard earned money.
Solution? - Avoid HMRC penalties and charges by making sure you don’t commit these mistakes during tax return time by getting an expert like Tax Affinity Accountants (one the most highly recommended accountants in the UK) to do calculate and submit the return for you and sleep easy at night knowing you paid the least tax and everything was correct according to HMRC rules.

Key things to keep in double check:

Numbers / digits errors. Whether it’s a National Insurance or Unique Tax Reference (UTR) number for income, incorrect numbers on any form could cost you. Be mindful when entering bank account information when opting for refund. The last thing you want is for someone else to receive your refunds. You should double check all numbers entered on your tax returns.
Maths errors. Many taxpayers use pen an paper to work out numbers for submission. Even if you use a software package, it will still not catch errors for incorrect data entry. You should double check your numbers and then double check your calculations each time.
Not declaring all the earned income. You must, must report all earned income on your tax return. When HMRC find out that you did not report everything, you could owe interest and penalties in addition to the tax owed on that income. UK banks these days can report income to HMRC without the account holders knowledge.
Not staying up to date with your tax code. Check the latest changes to your tax code before filing your own tax return. New laws affect many taxpayers and they are constantly changing.
Filing an incorrect status. With many different filing status options available, the most accurate one for a taxpayer’s situation may not be easy to use. Each filing status could have an impact on the tax liability due to HMRC.
Mismatched names. This is a common mistake for newlyweds, typically when the wife takes a new last name and has not notified the NI department. Same issue may pop up for same sex marriages. The opposite applies also for divorcees who need to have a name change notified . If your name does not match the name and NI number and HMRC has on file, the tax return could be rejected or a tax refund could be delayed.
Declaring multiple country taxes. Don’t forget that income earned in another country must be reported. If you reside in one state and work in another, a non-resident tax return must be filed in the country in which you work. Only the money earned in that country needs to be reported. However, if you fail to declare this, you could face interest and penalties, in addition to the taxes owed.
Falling for tax schemes. One of the biggest concerns for the HMRC is tax fraud and identity theft. Taxpayers have lost thousands of pounds because criminals tricked them into believing they owed HMRC. HMRC will never send an unsolicited email or contact you through social media. HMRC does not ask for personal or financial information. If you believe you may be at risk for identity theft, you should contact the HMRC immediately along with your banks etc.
Missing deductions or credits. While penalties and fees mentioned above could cost you, missing a deduction or tax break could cost you by lowering a refund or increasing taxes.
Forgoting to sign and date the forms. It is an all-too-common mistake to forget to sign and date. While this may not cost you money, it will cause a delay in receiving any anticipated tax refund. Especially for those who owe HMRC and wait until the very last minute to file, forgetting to sign and date could cost you a late fee and penalty when HMRC sends it back for signature and the deadline has passed.

A good tax accountant should save you much more in tax than what he/she charges. And having a Tax Affinity accountant calculate your personal and business tax situation will lead to zero mistakes on your return and a lower tax bill first time every time. Fill out our contact us page to find an office near you and we will be happy to help you sleep easier at night.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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Last year over 30,000 people filed their tax returns between christmas eve and boxing day

12/19/2021

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Tax Affinity Accountants have branches local to you

Did you know last year more than 30,000 people in the UK did their tax return between Christmas Eve and Boxing Day?

As of writing this, there are only 20 working days left until HMRC's self assessment deadline of 31st Jan 2022. Each year millions of people leave their tax return (self assessment) to the last minute and then stress out if they declared the info correctly and if the tax due is correct.

Statistically the number one worry tends to be if their submission may trigger an HMRC investigation into their tax affairs... death and taxes being the fear we suppose.

Plus in the last tax year due to Covid 19 and lockdown's there were many other sources of income e.g. council support grants, SEISS (self employed grants), furlough, bounce back loans, universal credit, tax credits etc. Making tax returns more complicated and resulting with higher taxes due for most tax payers.

If your worried we recommend you get in touch with one of our tax experts. Because we have seen a lot more investigations this year than previous years as HMRC starts it claw back to try to shore up the UK government income and focuses even more on tax avoidance and incorrect information.

So if you have not had your 2020/21 (6.4.20 to 5.4.21) tax return (self assessment) completed then you urgently need to get in touch today as the number of working days are fast decreasing and before you know it the time will be gone and you may end up facing badly caclulated tax return paying more tax than you need to or worse a fine by HMRC for missing the deadline.

Contact us today by clicking this link or calling us on the number above. And share this page with your friends and family.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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UK Spring Budget 2021 key points for business

3/5/2021

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Tax Affinity Accountants

UK Spring Budget 2021 key points for business owners & SME's

At Tax Affinity we believe in improving the financial lives of every person in the world. Each time the UK treasury government makes budget announcements we spend time reading through the information to help our clients support our clients with the best information to drive their businesses forward even during a down turn.

The key points are listed below for a quick guide:

Furlough (CJRS) extended to end of Sept 2021. Originally it was going to end in April 2021. But the 80% value up to £2500 maximum will only last for 2 months and then taper off in July to Sept dropping to 60% up to a £1875 maximum. The employee is still expected to receive the full 80% up to £2500 at the employer’s expense plus NI and tax etc. Therefore each employer will need to calculate how this effect’s their expenses and weigh up the benefits of keeping staff or not. The cut off date for eligibility was 2nd March 2021 a day before the budget was announced. If you are client or would like to be a client contact Tax Affinity to discuss your PAYE options and PAYE expenses.
Self Employed (SEISS) 4th & 5th grants announced running to end of Sept 2021. 4th grant (April to June) will be the same criteria as the previous ones (up to max £7500 of 80% of profits). While the 5th grant (July to Sept) will be banded with those who have seen a greater than 30% reduction in income eligible for 80% and those who have seen income fall less than 30% receiving a grant of only 30% (up to max £2,850). The cut off date for eligibility was 2nd March 2021 a day before the budget was announced. And both will take into account 2019/20 tax returns filed. Still need to qualify with over 50% of your income coming from self employment.
Business rates 100% relief will be extended to 30th June. Then the following 9 months a 66% discount up to a maximum of £2m.
VAT reduction to 5% extended for some sectors to 30th Sept. Then rate will rise to 12.5% for 6 months to 31 March 2022. After that it will return to normal 20%. If you are a client contact us for more information if this applies to you.
Stamp Duty extension of £500,000 nil-rate to 30 June. After this it will return to £125,000 as before. This is accompanied with the 5% small deposit scheme up to a limit of £600,000 which is not restricted to 1st time buyers or new build homes.
Restart Grant of £6,000 for non-essential retail to £18,000 for hospitality, leisure and personal care shops to replace the current monthly grant scheme.
Universal credit £20 increase will be extended to end of Sept 2021 with a separate one-off payment for working tax credits claimants.
Pension lifetime allowance frozen at £1,073,100 until April 2026. State pension will rise by 2.5% next year.
Corporation tax for UK limited companies with profit less than £50,000 will remain in 19% tax band for year beginning 1 April 2022. Profits above £250,000 will attract 25% corporation tax. With bands in between unspecified at this time.
Super deduction of 130% on plant, machinery and main rate assets from 1st April 2021 to 31 March 2023. This will apply to contracts started on or after 3st Mar 2021 and available for expenditure from 1st Apr 2021 to 31st Mar 2023. Plus losses created can be carried forward.
Carry back losses from 1 to 3 years extended up to max £2million of unused loses in 20/21 and 21/22 tax years.
R&D cap at £20,000 from 1st Apr 21 plus 3 x company’s total PAYE and NIC dues.
Personal Income tax rate will rise from £12,500 to £12,570 and the 40% tax threshold from £50,000 to £50,270 (ie £37,700 at basic 20% rate). CGT allowance remains at £12,300.
Apprenticeship hiring payment rise to £3000 to Sept 2021. Plus fast track visa for hiring overseas staff for tech firms. Meaning a removal of 3rd party endorsement
Recovery Loan Scheme to replace BBL / CBILS etc. Which is a shift from 100% government guarantee to 80% on eligible loans between £25k to £10m for “any legitimate business purpose, including growth and investment”. This is open til 31st Dec 2021.
Annual Investment Allowance of up to £1m is extended to 31st Dec 21.
Road Tax will rise from 1st April 21
VAT deferral scheme extended, vat registered business now have the option to have 11 months interest free instalments between 2021 to 2022 on vat payments. If you don’t take this option you must pay deferred vat by 31st March 2021 for all past vat due. You can opt in between Feb and June 2021 but with fewer instalments. If no arrangement to pay is made you will receive a penalty by HMRC.
Individual ISA limit £20k for 21/22; Junior ISA 9K; Child Trust Fund 9k;

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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coronavirus Covid-19 Assistance packages in a snapshot

4/14/2020

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Tax Affinity Accountants local branch

Statutory sick pay relief package for small and medium sized businesses SMEs
12-month business rates holiday for all retail, hospitality and leisure businesses in England
£10,000 grants for all businesses that are eligble for small business rate relief or rural rate relief
£25,000 grants for businesses in retail, hospitality and leisure that have a rateable value between £15,000 and £51,000 Loans of up to £5 million for SMEs through the British Business Bank as part of the Coronavirus Business Interruption Loan Scheme
A new lending facility from the Bank of England to support cash flows for larger businesses Help with tax through the HMRC Time To Pay Scheme VAT deferrals. With interest free initial 12 months.
No business will pay VAT from now until end of June. Suspended for the next quarter. VAT returns still need to be submitted. You have until 31 March 2021 to pay any liabilities that have accumulated during the deferral period. Deferred amounts will not be subject to interest or penalties.
Coronavirus Job Retention Scheme - Grants covering up to 80% of the salary of workers kept on by companies.
Self-Employed Income Support Scheme - Grants covering up to 80% of a self-employed person's average income over the last three years (including freelancers and sole traders) - 18/19 self assesssments (tax returns) deadline extended - it needs to be submitted by 23/04/2020.
Changes to insolvency laws and the ‘wrongful trading’ rules
Covid-19 Corporate Financing Facility (CCFF) - Bank of England will buy short-term debt from larger companies.
Claim for universal credit of £94.25 per week for anyone out of work due to the coronavirus COVID-19
IR35 restrction for contractor pushed forward to 2021.
Companies House year end company accounts filings extended by up to 3 months to avoid penalties.
Delay on self assessment payments on account that were due by 31 July 2020 until 31 January 2021
HMRC helpline for those who cannot pay taxes on time
Commercial and residential mortgage payment holday for up to 3 months

If you need help with your applications for government grants, loans and allowances as described above then as authorised HMRC agents and expert tax accountants Tax Affinity Accountants are available to support your business at this critical time. Urgently contact us by clicking here and we will use our expertise to support your business through this difficult time.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames and Epsom they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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CORONAVIRUS COVID-19 KEY POINTS FOR Self-Employment (SOLE TRADER) Income Support Scheme (seis)

3/27/2020

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Claiming a grant through the coronavirus (COVID-19) self-employment income support scheme (SEIS) worth 80% of trading profit

You can use this scheme if you're self-employed or a member of a partnership and have lost income due to coronavirus.

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months payable after HMRC checks your last 3 years tax returns filed. This may be extended by the government if needed.

Who can apply for this
You can apply if you’re self-employed (sole trader) or a member of a partnership and you:

have submitted your Self Assessment income tax return for the tax year 2018-19
have traded in the tax year 2019-20 - you have a limited time extension to back date and submit by 23/04/20 if this return was not done
are trading when you apply, or would have been doing so except for COVID-19
definitely intend to continue to trade in the tax year 2020-21
and have lost trading/partnership trading profits due to COVID-19

Your self-employed profit before tax must also be less than £50,000 and more than half of your income must come from self-employment. This is determined by at least one of the following conditions:

have trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
have average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years you filed a Self-Assessment tax returns.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020. We can help you do this and you need to get in touch today.

HMRC said they will use data on 2018-19 tax returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way. If you have tax to pay for your 2018-19 tax return then this will need to be up to date.

How much will you get from hmrc
You can get a taxable grant which will be 80% of the average profits from the tax years (if all 3 available):

2016 to 2017 ie 6.4.16 to 5.4.17
2017 to 2018 ie 6.4.17 to 5.4.18
2018 to 2019 ie 6.4.18 to 5.4.19

To work out the average HMRC will be adding together the total trading profit for the 3 tax years (if all 3 available) then divide by 3 and then further divide by 12 to calculate a monthly amount.

They say it will be up to a maximum of £2,500 per month for 3 months. And they will pay the grant directly into your bank account, in one instalment. The bank details on your 18-19 tax return will most likely used as it is already in their records.

How to apply for it
You cannot apply for this scheme yet yourself. HMRC say they will contact you if you are eligible for the scheme and invite you to apply online. This may take some time as staffing levels are affected by COVID-19.

Individuals are advised they do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

You will access this scheme only through GOV.UK. website so be careful of fraud - And if someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied for it
Once HMRC has received your claim and you are deemed eligible for the grant, they will contact you to tell you how much you will get and the payment details. Previously this was by letter to the tax payers home for income tax refunds - it may be by text or emails also if HMRC has these records for you.

Note: If you claim tax credits you’ll need to include the grant in your claim as income. This income is taxable.

Other help you can get as well
The government stated it is also providing the following additional help for the self-employed:

deferral of Self Assessment income tax payments due by 31 July 2020 (19/20 payment on account) and VAT payments (VAT regsitered business) due from 20 March 2020 until 30 June 2020
grants for businesses that pay little or no business rates - apply to local council
increased amounts of Universal Credit to £94.25 per week - apply direct to that dept
Business Interruption Loan Scheme - apply direct to bank

If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme (read her for more about this).

If you need help with your applications for government grants, loans and allowances as described above then as authorised HMRC agents and expert tax accountants Tax Affinity Accountants are available to support your business at this critical time. Urgently contact us by clicking here and we will use our expertise to support your business through this difficult time.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames and Epsom they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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Coronavirus government support key points

3/21/2020

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A large number of clients are asking us for help in understanding how the UK Government is going to support the employed, self employed & SME businesses during the coronavirus COVID-19 pandemic. The Prime Minister & Chancellor announced billions of pounds would be used to prevent businesses going under and support workers who have suddenly become unable to work.

Below is a helpful list of key points:

Salaried Employees - the Coronavirus Job Retention Scheme

All registered employers in the UK are eligible via HMRC
Government grants will cover 80 % of the salary of retained workers up to a total of £2,500 a month. Employer has to apply.
This cover is for workers if employer is unable to pay, or are unable to work due to the coronavirus outbreak.
Will become 'furloughed' and should not be working while under the scheme.
Scheme will cover wages lost backdated to March 1, and applications will open before the end of April.
Scheme will last until June 1, with potential to be extended & unlimited funds will be available.

For Self employed, contractors and freelancers

Unfortunately - No specific plan to compensate contractors, freelancers and self-employed.
Chancellor advised those self employed affected by coronavirus to apply for the Universal Credit scheme, which has had its requirements and conditions changed for this crisis.
Self-employed will not have to make the self assessment (tax return) payment on account that was due by 31 June 2020 now until 31.1.2021. This effectively means the 31 June 2020 payment of tax is suspended.
The minimum income floor for Universal Credit is to be suspended, meaning all those who are self-employed can access Universal Credit at the rate equivalent to statutory sick pay for employees ie £94.25 a week.

Universal Credit and tax credit increase

Standard Universal Credit allowance and Working Tax Credit basic allowance are both being increased by £1,000 a year to help families ie both will increase by £20 per week on top of planned annual uprating.
New claimants will not need to prove 'gainful self-employment' if they are self employed and applying for Universal Credit.
Claimants with Covid-19 or are self-isolating can receive advance payment upfront without having to go to a jobcentre.

SME Small & medium businesses - Coronavirus Business Interruption Loan Scheme

Interest-free loan scheme announced last week has been extended from six months to 12 months. Scheme starts Monday March 23.
The next quarter of VAT payments due from companies at the end of March has been deferred until the end of June. The VAT return still needs to be filed but it does not need to be paid if the business is struggling - allowing it to use the VAT 20% collected as cashflow for the short term.
Additionally all businesses and self employed workers in financial distress and with outstanding tax liabilities, may be eligible for HMRC's Time To Pay service - ie HMRC allowing up to 12 months to pay off debts

For renters

After announcing mortgage 'payment holidays' for up to three months for homeowners last week, a £1 billion package to support renters is announced by increasing the housing benefit under Universal Credit.
Recipients would receive welfare to pay at least 30 percent of market rents for their local area.
No rental pause from the government.

Other help

Mortgage lenders have agreed that they will allow up to 3 months mortgage holiday for customers experiencing financila difficulty.
Relaxation of planning permission to allow pubs and restaurants to start providing takeaway services without planning application
Insurance claims for loss of earnings should be valid if your business is effected by a government requirement to close eg pubs, bars, cafe, nigh clubs, gyms, restaurants etc
Business Rates discount up to 100% for 1 year for leisure and hospitality, contact your local council for more info
Grants of up to £25,000 to retail, hospitality & leisure businesses operating from small premises with rateable value between £15k to £51k
One off grant of £10,000 to around 700k businesses eligible for small business rate relief (SBBR) to help meet on going business costs
Bank of England base rate dropped to 0.10% interest will help those with variable interest rate loans and mortgages by reducing their monthly payments - press your bank to adopt immediately and not delay by months as they normally do

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames and Epsom they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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how to avoid costly mistakes on your self assessment tax return

Last year over 30,000 people filed their tax returns between christmas eve and boxing day

UK Spring Budget 2021 key points for business

coronavirus Covid-19 Assistance packages in a snapshot

CORONAVIRUS COVID-19 KEY POINTS FOR Self-Employment (SOLE TRADER) Income Support Scheme (seis)

Coronavirus government support key points

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