UK BUDGET DATE ANNOUNCED

The Chancellor of the Exchequer, Philip Hammond, has announced that the Budget will take place on Monday 29 October.

Breaking with the tradition of a Wednesday in November, perhaps in a bid to avoid the ongoing Brexit negotiations, the government is expected to set out its plans ‘to build a stronger, more prosperous economy, building on the recent Spring Statement and last year’s Budget’.

The government announcements are expected to include updates on draft legislation and consultations, and proposed tax rates and reliefs.

SELF-EMPLOYED CLASS 2 NATIONAL INSURANCE WILL NOT BE SCRAPPED

The government has decided not to proceed with plans to abolish Class 2 National Insurance Contributions (NICs) from April 2019.

Class 2 NICs are currently paid at a rate of £2.95 per week by self-employed individuals with profits of £6,205 or more per year. The government had planned to scrap the Class 2 contribution and had been investigating ways in which self-employed individuals with low profits, could maintain their State Pension entitlement if this inexpensive contribution had been abolished.

In a written statement to MPs, Robert Jenrick, Exchequer Secretary to the Treasury, stated that:

‘This change was originally intended to simplify the tax system for the self-employed. We delayed the implementation of this policy in November to consider concerns relating to the impact on self-employed individuals with low profits. We have since engaged with interested parties to explore the issue and further options for addressing any unintended consequences.’

‘A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the State Pension rise substantially. Having listened to those likely to be affected by this change we have concluded that it would not be right to proceed during this parliament, given the negative impacts it could have on some of the lowest earning in our society.’

SOFTWARE SUPPLIERS – MAKING TAX DIGITAL FOR VAT

HMRC is working with more than 150 software suppliers who have said they will provide software for Making Tax Digital for VAT (MTDfV) in time for April 2019.

From 1 April 2019, businesses will be mandated to use the MTDfB system to meet their VAT obligations under MTDfV. Only businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to use MTDfV, however HMRC is piloting the new system, on a small scale, from April 2018.

HMRC has advised that more than 40 suppliers have said they will have software ready during the first phase of the pilot and other software suppliers are expected to follow.

Contact us for help with Making Tax Digital for VAT.

Internet link: GOV.UK software suppliers

STAMP DUTY CUT

 

According to the latest statistics 121,500 first-time buyers have saved a total of £284,000,000 following the introduction of a relief for first-time buyers under the Stamp Duty Land Tax rules.

Over the next five years, it is estimated that this relief, part of the UK government’s housing policy will help over 1 million people getting onto the housing ladder.

First-time buyers purchasing homes of £300,000 and under pay no stamp duty at all, and those who bought properties of up to £500,000 will also have benefited from a stamp duty cut.

Bank of England raises UK interest rates

The Bank of England has raised the interest rate for only the second time in a decade.

The rate has risen by a quarter of a percentage point, from 0.5% to 0.75% – the highest level since March 2009.

While the decision means that the 3.5 million people with variable or tracker mortgages will pay more, the rise will be welcomed by savers.

 

  • On a £150,000 variable mortgage, a rise to 0.75% is likely to increase the annual cost by £224
  • A Bank rate rise does not guarantee the equivalent increase in interest paid to savers. Half did not move after the last rate rise
  • No easy access savings account at a major High Street bank pays interest of more than 5%

What happens next?

The Bank is sticking to its guidance that interest rates will continue to head higher, but only at gradual pace and to a limited extent.

The financial markets have taken this on board and are forecasting one, and perhaps two, rises of 0.25% before 2020.

Xero Cloud Accounting

Xero is an online accounting platform, allowing you to deal with your business finances on the go. It brings together your real-time bank transactions, invoicing and expenses in one simple dashboard, easily accessible wherever you are.

It saves you time, hassle – and money, too. Because everything you can see, we can see at the same time – putting us in the perfect position to advise you on your financial situation.

WHY XERO REALLY ADDS UP…

Xero is the world’s leading online accountancy platform, already helping more than 200,000 businesses to streamline their financial data. They all love it. We love it. 

Modern cloud accounting software, like Xero can help you in a variety of ways,

  • Manage invoices, expenses & cashflow in real time
  • Send invoices automatically and get paid online
  • Get balances, sales figures & bills on the move
  • Use simple budgeting tools to keep on top of spending
  • Integrate with more than 700+ brilliantly useful apps

Click the link below to find out more about Xero.

https://www.xero.com/uk/features-and-tools/accounting-software/

 

HMRC EXTENDS RTI LATE FILING EASEMENT UNTIL APRIL 2019

 

HMRC has extended the payroll Real Time Information (RTI) late filing easement until April 2019.

Under RTI payroll obligations employers must submit details of payments made to employees on or before the day that wages are paid via a Full Payment Submission.

The updated guidance extends the easement, introduced in April 2015 to April 2019. The easement applies where an employer’s FPS is late but all reported payments on the FPS are within three days of the employees’ payday. This easement applies from 6 March 2015 to 5 April 2019. However, HMRC go on to clarify that employers who persistently file after the payment date but within three days may be contacted or considered for a penalty. Potential monthly penalties range from £100 to £400 depending on the size of the employer.

WALES TO SET DEVOLVED INCOME TAX RATES

From April 2019, the National Assembly for Wales will be able to vary the rates of income tax payable by Welsh taxpayers.

Responsibility for many aspects of income tax will remain with the UK government, and the tax will continue to be collected by HMRC for Welsh taxpayers.

THE PROCESS FOR SETTING WELSH RATES OF INCOME TAX

From April 2019, the UK government will reduce each of the three income tax rates: basic, higher and additional rate, paid by Welsh taxpayers by 10 pence.
The National Assembly for Wales will then decide the three Welsh rates of income tax, which will be added to the reduced UK rates. The combination of reduced UK rates plus the Welsh rates will determine the overall rate of income tax paid by Welsh taxpayers.

If the National Assembly for Wales approves each of the Welsh rates of income tax at 10p, this will mean the rates of income tax paid by Welsh taxpayers will continue to be the same as that paid by English and Northern Irish taxpayers. However the National Assembly for Wales may decide to set different rates ‘to reflect Wales’ unique social and economic circumstances’.

Welcome to the team Owen

 

We are delighted to welcome Owen Bellfield to our firm. Owen joins us on the 5th of June 2018 as a trainee accountant and we would like to officially welcome him to the team.

Owen is currently studying towards gaining the AAT qualification in Coleg Menai, Bangor. Once completing this Owen is looking to study towards becoming a Chartered Certified Accountant. He will be gaining experience in payroll, accounting and taxation to help us deliver excellent service to all of our clients.

In his spare time he enjoys playing football for Llanfairfechan Town FC.

P11D DEADLINE APPROACHING

 

The forms P11D which report details of benefits and some expenses provided to employees and directors for the year ended 5 April 2018, are due for submission to HMRC by 6 July 2018. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.

Employees pay tax on benefits provided as shown on the P11D, generally via a PAYE coding notice adjustment or through the self-assessment system.

Regardless of whether the benefits are being reported via P11D or payrolled the employer has to pay Class 1A National Insurance Contributions at 13.8% on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form. The deadline for payment of the Class 1A NIC is 19th July (or 22nd for cleared electronic payment).

HMRC produce an expenses and benefits toolkit. The toolkit consists of a checklist which may be used by advisers or employers to check they are completing the forms correctly.

If you would like any help with the completion of the forms or the calculation of the associated Class 1A NIC please get in touch.