Moore Accountancy Update

Happy New Year!
Moore Accountancy wish you, your families and businesses a happy and healthy 2019!

GIFTS OF UP TO £50 TO EMPLOYEES

From April 2016 new rules were introduced to allow employers to provide their directors and employees with certain “trivial” benefits in kind tax free.

The new rules were brought in as a simplification measure so that certain benefits in kind do not now need to be reported to HMRC as well as being tax free for the employee. There are of course a number of conditions that need to be satisfied to qualify for the exemption.
Conditions for the exemption to apply

the cost of providing the benefit does not exceed £50
the benefit is not cash or a cash voucher
the employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme
the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)

So this exemption will generally apply to small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers.
Note that where the employer is a “close” company and the benefit is provided to an individual who is a director or other office holder of the company the exemption is capped at a total cost of £300 in the tax year.
Please feel free to contact us if you are considering taking advantage of this exemption.

NEW YEAR RESOLUTIONS TO SAVE TAX

Many of us will have made personal resolutions over the last week; and it is also a good time to start planning your tax affairs before 05/04/19 tax year end.
Here are a few starters:

ISAs - maximise your ISA allowance for the 2018/19 tax year (currently £20,000 each)
Pensions - increase your pension savings before 05/04/19, as the unused annual pension allowance is lost after 3 years.
- The maximum contribution is £40,000 pa, depending on earnings (dividends for example, are excluded) and you should ensure you do not exceed any limits if you are an additional rate tax payer or are near your life time allowance.
Wills - review or make a will to ensure your hard earned assets are distributed to whom you want in a tax efficient manner

ADVISORY FUEL RATE FOR COMPANY CARS

These are the suggested reimbursement rates for employees' private mileage using their company car from 01/12/18. Where there has been a change the previous rate is shown in brackets.

These should also be used to work out the VAT element of any mileage claim on employees expenses claims:

Engine Size	Petrol	Diesel	LPG
1400cc or less	12p		8p (7p)
1600cc or less		10p
1401cc to 2000cc	15p		10p (9p)
1601 to 2000cc		12p
Over 2000cc	22p	14p (13p)	15p (13p)

VAT example:
Your staff member drives a 1600cc petrol car and has driven 225 miles this quarter which you will be reimbursing at 45p/mile.
Total payment to staff is £102.25, of this £33.75 (15p x 225) is the fuel component and therefore the VAT element of this is £5.63.
If you have bookkeeping software then your travel expenses cost is £96.62, your VAT is £5.63 and £102.25 was paid out of the bank.

SELF ASSESSMENT (SA) AND COMPANY DIRECTORS

For many years HMRC stated that all directors HAD to file a SATR, despite legislation stating otherwise.
Recently, HMRC have updated their guidance and clarified that company directors with income taxed at source and with no further tax to pay do not need to complete a tax return - Whoop!

Anyone chargeable to Income Tax or Capital Gains Tax must tell HMRC they are chargeable to tax if they have
• not received a notice to file a return or
• received a notice to file a return and HMRC have agreed to withdraw the notice.

Information on how to do this is available on the Check if you need to send a Self Assessment tax return page on GOV.UK.

There are some exclusions, including:

• individuals in receipt of a Simple Assessment (unless they are chargeable on anything that is not included in the assessment)

• individuals whose income has been taxed at source

• individuals not liable to the high income child benefit charge.

Many company directors are taxed under PAYE and so will not need to give notice of liability to tax, provided they have no other untaxed income. If dividends over £2k are taken however then they probably will have untaxed income.

HMRC can choose to issue a notice to file a return to any individual; and anyone receiving a notice must file by the required deadline, or they may be liable to a late filing and/ or a late payment penalty.

If an individual has received a notice to file and has no other taxable income to report, they can ask for the notice to file to be withdrawn. However, HMRC may decide that they still require a return and if so, the return must be submitted, otherwise penalties may be incurred.

KEY DATES

19/01/19 - PAYE & NIC deductions for month ended 05/01/19 (December payroll)

31/01/19 - Self Assessment Tax return filing deadline for tax year 2017/18 (to 05/04/18)

31/01/19 - Self Assessment Tax payment for tax year 2017/18 and any 50% payment on accounts for tax year 2018/19

31/01/19 - Corporation tax payment for year to 30/04/18

19/02/19 - PAYE & NIC deductions for month ended 05/02/19 (January payroll)

28/02/19 - Corporation tax payment for year to 31/05/18

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Moore Accountancy · 1 Northway · Altrincham · Cheshire, WA14 1NN · United Kingdom