Welcome to the month of October. with only 3 months to the end of 2016, we have a few interesting changes in tax administration and employer processes which you need to be aware of.
TOPICS IN THIS MONTH:
SELF ASSESSMENT DEADLINE
HMRC DIGITAL – MAKE TAX DIGITAL
JOIN OUR WEBINAR ON BUSINESS SUSTAINABILITY
HMRC SELF ASSESSMENT DEADLINE –
31 OCTOBER 2016
Don’t forget that the deadline for filing your paper self assessment returns to HMRC is on the 31st October 2016. If you are self employed or a director of a limited company you must submit a self assessment tax return even if you have no income.
Make sure you have registered for online submissions in good time if you plan to submit your self assessment online.
The deadline for online filing submissions is the 31st January but if you leave it until then you will also have to pay any tax due on the account at the same time.
We are here to help. If you need advice or support to complete your tax return please email us or call us we charge very reasonable rates for sole directors and self employed people.
WHAT IS AUTO ENROLLMENT?
Automatic enrollment has begun. This means that soon every employer will need to automatically enroll certain workers into a pension scheme and make contributions towards it.
If you employ at least one member of staff you will be required by law to provide a workplace pension for them.
The Pensions Regulator enforces the law on work place pensions and also provides guidance on the responsibilities of employers
WHAT IS THE STAGING DATE?
The comes into effect for different employers at different times starting from April 2012. The when the new law comes into effect for your business depends on your ‘staging date’. Most large and medium sized employers have already switched to auto enrollment. It will be coming into effect for many micro businesses (employing 1-5 staff) from February 2017.
To find out your own ‘staging date’ you can go to the pensions regulators website
You will need your employer PAYE reference number.
WHAT DO I NEED TO DO TO PREPARE AS AN EMPLOYER?
As an employer you will need to assess to contractual relationship with your work force to determine which of your staff are entitled to go on the auto enrollment. Then make an initial assessment of which staff you will be required to automatically enroll and which have the right to opt in.
Once you have determined that there are staff who need to be automatically enrolled then you will need to select a pension scheme that meets the automatic enrollment and qualifying criteria also known as an ‘automatic enrollment scheme’. The scheme can be based in the UK or within the European Economic Area (EEA).
Automatic enrollment duties don’t apply if a company or individual is not considered an employer. You won’t have any duties if you meet one of the following criteria:
- you’re a sole director company, with no other staff
- your company has a number of directors, none of whom has an employment contract
- your company has a number of directors, only one of whom has an employment contract
- your company has ceased trading
- your company has gone into liquidation
- your company has been dissolved
- you no longer employ people in your home (cleaners, nannies, personal care assistants, etc)
If you would like more information on automatic enrollment please contact us on 07906343050. Or by email.
MAKE TAX DIGITAL – HMRC UPDATE
HMRC announced its Making Tax Digital initiative in the 2015 budget. Just like an online bank account the government plans to modernise the tax system by replacing tax returns with an online account which brings all your taxes together in one place. In August 2016 it released a consultation document explaining how it will work and inviting small businesses and accountants to make comments and contributions.
The purpose of this initiative is to transform the tax system and end the need for tax returns by 2020. We think this is an ambitious project for HMRC.
It is hoped that a fully digital tax system will make tax administration more effective, efficient and easier for the tax payers. The changes will apply to most businesses, self-employed people, landlords and individual tax payers .
What is changing?
- Micro sole traders whose income is above £10,000 pa will have to be part of the MTD.
- Micro sole traders with income below £10,000 will be exempt from MTD
- Tax payers will be required to submit quarterly returns which is a summary of their income and expenditure
- The threshold for using cash basis of accounting will be raised so more taxpayers will be encouraged to use this method of accounting
When is the change going to happen?
It is still in consultation but has a phased roll out which has started at the beginning of 2016 and will end in 2020.
July – Dec 2017 – Digital tax accounts show tax payers all their liabilities (PAYE, Self assessment VAT, etc )in one place
July – Dec 2018 most businesses, self-employed people and landlords start updating HMRC quarterly for income tax and national insurance using accounting software
2019 – most business, self-employed people and landlords start updating HMRC quarterly VAT obligations using accounting software
2020 – the full HMRC suite of services will be available through digital tax accounts
We encourage you to read through and make comments on the consultations so that opinions and views can be aired in order to ensure HMRC produce a user friendly solution. If you would like further information on Making Tax Digital please get in touch with us or go to the HMRC website.