Time to declare offshore income gains and assets warns HMRC

HMRC is urging UK taxpayers to come forward and declare any foreign income or profits on offshore assets before 30 September to avoid higher tax penalties.

New legislation called ‘Requirement to Correct’ requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax.

Some UK taxpayers may not realise they have a requirement to declare their overseas financial interests. Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad, could mean taxpayers face a tax bill in the UK.

From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received or be faced with higher penalties.

The most common reasons for declaring offshore tax liabilities are in relation to foreign property, investment income and moving money into the UK from abroad. Over 17,000 people have already contacted HMRC to notify them about tax due from sources of foreign income, such as their holiday homes and overseas properties.

Vacancy for receptionist/administrator at our Wigton Office

We are seeking a full-time experienced receptionist/administrator for our Wigton Office.

The ideal candidate will be conscientious, self-motivated and of smart appearance.  They will also be IT literate having a detailed working knowledge of Microsoft Office.  Please Email your C.V explaining why you are suitable for the role to Andrew Irving wigton@saint.co.uk  by 30th September 2018.

Advisory fuel rates from 1 September 2018

COMPANY OWNED VEHICLES

HM Revenue and Customs have announced revised tax free advisory fuel rates from  1 September 2018 which may be paid for business journeys in a car owned by the business.   Rates for the previous quarter are shown in brackets.

Engine size Petrol Diesel LPG
1,400 cc or less  12p (11p) 7p (7p)
1,600 cc or less 10p (10p)
1,401 cc to 2,000 cc 15p (14p)  9p (9p)
1,601 cc to 2,000 cc 12p (11p)
Over 2,000 cc 22p (22p)  13p (13p) 13p (14p)

These rates may be used in the following circumstances:-

  1. Where employers reimburse for business travel in company cars.
  2. Where employers provide fuel for company cars but employees are required to reimburse the cost of fuel for private use.

 

INPUT VAT CLAIMS ON MILEAGE PAID FOR COMPANY CARS OR EMPLOYEE OWNED VEHICLES

HM Revenue & Customs will accept the above figures for claiming input VAT on fuel for company cars, provided a VAT receipt is available to cover the cost of the fuel.  They will also accept use of the above rates by the employer when calculating input VAT on the fuel element for employees using their own vehicles and claiming mileage under the tax free approved mileage rates for business travel of 45p for the first 10,000 miles and 25p thereafter.

If you have not already done so, please update any spreadsheets you may use.

If you have any queries regarding the above or require any further information please do not hesitate to contact us.

Find Out How Cloud Accounting Can Make MTD a Smoother Transition

Making Tax Digital

Technological hitches and Brexit-related delays aside, Making Tax Digital (MTD) is going to happen. One way or another, the UK’s tax system is going digital, and it’s vitally important that you take the correct measures now to avoid scrambling at the last minute two years from now.

In this brief blog post, we explain why switching to cloud accounting today can make MTD a smoother, more effective transition in the future.

A reminder: What is Making Tax Digital?

We’ve previously blogged about what Making Tax Digital is and how it will affect you, but if you’re still not sure, here’s a quick reminder:

Making Tax Digital is a government initiative designed to streamline and simplify tax, and bring about the end of paper accounting for millions across the UK. Instead of a yearly tax return, businesses will be tasked with setting up a digital tax account and filing an online return once per quarter.

If it all works as intended, MTD will make tax more straightforward, accurate, and far less stressful.

Why make the switch now?

From a compliance point of view, if your business does not exceed the VAT threshold, you will not be mandated to keep digital records and submit quarterly returns via digital accounting software. Or, in other words, if you’re not turning over £85,000 and above, you can breathe easy about implementing new software.

However, there’s still an argument that you should make the switch to a cloud-based accounting system well in advance of the inevitable expansion of MTD, set to take place in or around April 2020.

Why? Well, cloud accounting can save you time and save you money. It makes financial admin easier, and will ultimately result in a more effective and efficient tax return, regardless of whether or not your business is compelled to comply with MTD.

It might be tempting to dismiss MTD as yet another HMRC obligation, but the truth is, the move towards a fully digital and largely automated accounting process will improve your business tenfold. You’ll have instant access to real-time, up-to-date numbers which will, in turn, help you make better decisions in your pursuit of growth and profit.

So, the question ought to be “which cloud accounting software do I choose?” and the answer is simple – Xero.

How can Xero help?

Xero is by far the most popular cloud accounting software in the UK – and with good reason. It acts as the financial hub of your business, bringing together important functions such as bookkeeping, accounting, invoicing, and reporting.

Whether you have MTD in mind or not, making the switch to the cloud with Xero will undoubtedly bear fruit for your organisation. In fact, the features and benefits are there for all to see:

  • A clean and clear dashboard provides an at-a-glance overview of your key numbers, meaning you’re always in control.
  • A live bank feed keeps everything up-to-date.
  • Online invoicing means you can invoice directly to customers, log sales straight into Xero, and follow up with late payers in a timely and efficient manner.
  • Financial reports give you the opportunity to see your balance sheet, profit and loss, or cash report at any given time, and all with real-time, accurate numbers.

Where Making Tax Digital is concerned, Xero is already a step ahead. It can:

  • Automatically calculate tax (including VAT and payroll tax).
  • Pull financial data directly from your bank, invoicing software, or point of sale system.
  • Update transactions daily, keeping you on top of bank reconciliation.
  • Create digital records of paper receipts and bills via its smartphone app.

All of this combines to provide you with a clear picture of your business’s financial performance and tax liabilities, keeping you organised and ready to meet your next tax payment, or sidestep your next cash flow concern. In short, by introducing a cloud accounting system like Xero, you’ll take the change to Making Tax Digital in your stride.

Get Ready for MTD with Saint and Xero

There are no two ways about it, change is scary. Especially if it means implementing technology you’ve never used before. But Making Tax Digital could be a huge positive for your business. Filing returns quarterly could make tax less taxing, and allow you the opportunity to better plan for the future.

And by making the switch to Xero, not only will you be prepared for MTD, you’ll also have accurate financial information at your fingertips, helping you spot opportunities and threats faster than ever before.

If this sounds like something you’d be interested in, simply click the link to Get Started with Xero, or call us on 01228 534 371 to chat with one of our friendly advisors.

Welsh income tax starts 6 April 2019

From 6 April 2019, the Welsh Government (like the Scottish Government) will be able to set and vary the rate of Income Tax paid by Taxpayers who live in Wales.

As in Scotland the system will be administered by HMRC. Taxpayers resident in Wales who are employed or in receipt of a taxable pension will have the letter “C” as a pre-fix to their tax code to ensure the correct amount of tax is deducted under PAYE.

Ask Alexa to contact HMRC for help

HMRC has launched new and innovative technology to help more than 3 million customers renew their tax credits. HMRC has developed a customer-focused service through Amazon Alexa specifically for those seeking help with their tax credits renewals.

Customers with Amazon Alexa-enabled devices can ask Alexa to ‘open HMRC’ and ask for help and information with a change of circumstances, payment information, or a renewal. No personal information is stored on Alexa and customers cannot renew their tax credits using Alexa.

It’s just one part of HMRC’s growing online services. Tech-savvy customers can also use the HMRC App on their smartphone to:

  • renew their tax credits
  • check their tax credits payments schedule
  • find out how much they have earned for the year

Spreading the 2019 loan charge

Last month we alerted you to the requirement to register with HMRC by 30 September 2018 in order to settle on preferential terms before the outstanding loan charge arises on 5 April 2019.

This new tax charge applies to any outstanding loans that exist as a result of a disguised remuneration tax avoidance scheme used by your employer such as those involving Employee Benefit Trusts (EBTs).

HMRC have now announced a spreading provision that will allow individual taxpayers with total income of no more than £50,000 in 2018/19 to spread the charge over 5 years

Capital gains tax (CGT) on property sales due within 30 days from 2020

Draft legislation in the next Finance Bill will introduce significant changes to the reporting of residential property disposals and the payment of CGT from 6 April 2020.

Currently non-UK resident taxpayers disposing of UK residential property are required to report the disposal to HMRC within 30 days. The new legislation extends this reporting obligation to UK resident taxpayers and at the same time will introduce a new payment on account regime.

This is yet another attack on buy to let landlords who currently pay CGT on property disposals on 31 January following the end of the tax year in which the disposal took place so this change will be a significant acceleration of the payment date.

Rules for “rent a room” relief to be tightened up from 6 April 2019

HMRC propose to restrict the availability of “rent a room” relief to situations where the taxpayer is living in the let property for at least some of the time that the accommodation is let. Hence renting out a house during Wimbledon fortnight while the owners are absent would not qualify from 6 April 2019!

Rent-a-room relief was introduced in 1992 to encourage individuals to make spare capacity in their homes available for rent. The government intended this to increase the quantity and variety of low-cost rented accommodation, giving more choice to tenants and making it easier for people to move around the country for work.

Currently rent-a-room relief gives relief from income tax for up to £7,500 of gross rental income to individuals who let furnished accommodation in their only or main residence.

From ‘Xero Worries’ to ‘Zero Worries’: How we helped Coomara overcome cloud accounting apprehension

Xero worries to Zero worries

For many business owners, cloud accounting plays an essential part in their day-to-day. Both short and long-term plans are confidently put into action, underpinned by real-time, accurate, and up-to-date numbers.

But for some, the idea of switching to the cloud is, well, clouded by trepidation.

They just can’t overcome their concerns regarding security, usability, or accessibility, and sometimes there’s a reluctance to abandon a familiar (if outdated) spreadsheet or desktop accounting system.

As newly crowned Xero Platinum Partners, we see it as our duty to lead the way when it comes to cloud accounting, helping those apprehensive to make the switch see the light. And that’s precisely what we did for Pete Denston of Coomara Veterinary Practice.

About Coomara

A small, independent vet practice specialising in small and large animal care, Coomara is the quintessential family business, led by husband and wife team Pete and Charlotte Denston and their team of vets and support staff. They cover Carlisle and the surrounding areas and have done so since 1989. However, Pete and Charlotte first became involved with, and bought, the practice in 2013, which is when our working relationship with Coomara began.

Pete approached us and two other accountancy firms for advice prior to purchasing the business. We quickly spotted the viability and, backed by careful analysis and cash flow forecasts, this information encouraged Pete and Charlotte to take the leap.

A Major Challenge

Coomara is a well-established and well-liked business in Carlisle (one glance at their reviews will attest to this). But even the most successful of businesses will encounter tricky challenges sooner or later. For Pete, Charlotte and Coomara, this came in the shape of financial admin and internal accounting processes.

They needed help with bookkeeping, balancing records, and VAT returns, among others, and were in desperate need of a simple, easy-to-use accounting system. We were only too happy to help.

The Solution? Enter: Xero

Pete required an accounting system that provided access to real-time, up-to-date numbers, and gave him an accurate picture of his practice’s financial wellbeing at the drop of a hat. For us, there was only one solution: Xero.

It’s known as the world’s most beautiful cloud accounting software for a reason, and after demoing the platform and taking Pete through its various capabilities, he was on board.

We took the lead with regards to set up and training, and now offer ongoing support to Pete and his team as they continue to use Xero to run and grow Coomara.

The result? Life is less stressful, there’s more time to run the business rather than getting bogged down in admin, and the access to real-time numbers has helped significantly improve decision making.

“Helpful and supportive…”

We continue to work closely with Pete, Charlotte and their team to ensure they’re making the most of Xero, its core features, and its wide range of add-ons.

Here’s what a far less apprehensive Pete had to say about his introduction to Xero and the cloud:

“The team at Saint has been very helpful and supportive in the running of my business. If I ever have a problem with Xero, I know that they’ll be able to either help resolve the problem or advise me on how best to sort it out myself if needed.”

Find Out How Xero Can Help Your Business

If you’d like to experience the benefits of Xero and cloud accounting, just like Pete and Coomara, we can help. Our team of Xero Champions are ready to show you the ropes. You’ll be saving time and money before you know it!

Simply click the link to Get Started with Xero, or call us on 01228 534371 to chat with one of our friendly advisors.

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