Tax Diary September/October 2019

1 August 2019 – Due date for Corporation Tax due for the year ended 31 October 2018.

1 September 2019 – Due date for Corporation Tax due for the year ended 30 November 2018.

19 September 2019 – PAYE and NIC deductions due for month ended 5 September 2019. (If you pay your tax electronically the due date is 22 September 2019)

19 September 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2019.

19 September 2019 – CIS tax deducted for the month ended 5 September 2019 is payable by today.

1 October 2019 – Due date for Corporation Tax due for the year ended 31 December 2018.

19 October 2019 – PAYE and NIC deductions due for month ended 5 October 2019. (If you pay your tax electronically the due date is 22 October 2019.)

19 October 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2019.

19 October 2019 – CIS tax deducted for the month ended 5 October 2019 is payable by today.

31 October 2019 – Latest date you can file a paper version of your 2019 self-assessment tax return.

Opening Banking is Here!

When is it happening?

14th September 2019

So what is Open Banking?

Open Banking is a series of reforms to how banks deal with your financial information, called for by competition watchdog the Competition and Markets Authority (CMA). It comes alongside a regulation with the snappy name ‘the second Payment Services Directive’ (PSD2), which also came into force on 13 January 2018.

In plain English, together they mean all UK-regulated banks have to let you share your financial data such as your spending habits, regular payments and companies you use (basically your bank, credit card or savings statements) with authorised providers offering budgeting apps, or other banks – as long as you give your permission.

The idea behind these changes is that they’ll bring more competition and innovation to financial services which, in turn, is hoped will lead to more and better products to help manage your money.

For example, you could connect your bank account to an app that would analyse your spending and recommend a new product like a credit card or savings account to save you money, or sign up to a provider which displays all of your accounts with multiple banks in one place so you have a better overview of your finances

To read the rest of this great article by Martin Lewis then click here.

What does this mean for our clients?

Check out these links on Xero and Quickbooks as it is likely that your current bank feed will need to be updated – don’t worry we are always here to help if you get stuck.

Client News – Taste Divine August 2019

Sharing some news for one of our lovely clients – Taste Divine
http://www.tastesdivine.co.uk/our-story/

Tastes Divine is having a very busy summer but as always, we will be running our 10 week  Monday evening cookery classes commencing Monday 23rd September at Cottingham High School 18.45 – 21.15 at a cost of £150 for the 10 weeks (this can be paid in 3 instalments as usual). The class is almost full with only a couple of places free so if you would like to join our lovely group, please let me know.

We will also be running our very popular Freezer Full of Christmas on 16th November at Cottingham High School from 10 – 4 at a cost of £50 for the day. This class is half full already & due to our other commitments, it is likely that we will only have the 1 session this year so please book your places early to avoid disappointment.

If you can’t make the above classes, why not consider one of our bespoke classes which are held at our catering base in Buttercrambe near Stamford Bridge, these classes are offered for groups of 5 students and can be run on any day & theme of your choice ie, Christmas cooking, baking, Thai, French, Tapas, Fish, Italian, Indian etc all ingredients, equipment & lunch are provided for you making this a stress free way to produce some lovely food as well as having a fabulous day out with your friends. If you don’t have any foodie friends but would like to attend one of these classes (which cost around £130pp for the day, depending on the cuisine chosen) please message me with the kind of cuisine you would like to do & I can put some dates & groups together.

Finally, we are now offering bespoke dining experiences for up to 10 people in our beautiful dining room in Buttercrambe. Menus can be tailored to suit or you can tell us your likes & dislikes & we will arrange a surprise tasting menu for you, you can supply your own alcohol or we can pair the wines with the food for you. These dining experiences make fabulous gifts & offer something different for your office Christmas party or family gathering.

Karen Manley – Taste Divine – 07810631216

If anyone would like to reserve any places or requires further information, please let Karen know – here.

Changes to private residence relief

If you rent out all or part of your home this may create a Capital Gains Tax (CGT) charge when you sell the property.

Presently, HMRC excludes the last 18 months of your ownership – even if the property is let for this time – when assessing any CGT liability. In a draft of the Finance Bill released last month, HMRC have confirmed that this 18 month period will be reduced to 9 months from April 2020.

The exemption for disabled property owners or those in a care home will continue to be 36 months.

The draft Finance Bill also confirms a change to the letting relief rules.

Letting relief is an extra deduction you can make from any CGT payable as a result of letting your home. You can claim the lowest of the following three amounts:

  1. The same amount that you can claim as private residence relief.
  2. £40,000.
  3. The same amount as the chargeable gain you made from letting your home.

From April 2020, you will only be able to claim this letting relief if you are in shared occupancy with the tenant.

Property owners contemplating the disposal of their home – which is or has been let for any period – may be advised to complete their sale before April 2020. In this way they will benefit from the 18 month exemption and the more flexible lettings relief.

Internet giants face tax-hike

It has been confirmed that from April 2020, the government will introduce a new 2% Digital Services Tax (DST) on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users.

This is an attempt to tax, in the UK, revenues earned by these social media platforms from customers resident in the UK. At present, significant profits are being earned in the UK but transferred off-shore thus avoiding UK taxation.

In the notes confirming that these changes would be included in the Finance Bill 2019, HMRC said:

The revenues from the business activity – subject to DST – will include any revenue earned by the group, which is connected to the business activity, irrespective of how the business monetises the platform. If revenues are attributable to the business activity and another activity, the business will need to apportion the revenue to each activity on a just and reasonable basis.

A UK user is a user that is normally located in the UK.

The Digital Services Tax will apply to businesses that provide a social media platform, search engine or an online marketplace to UK users. These businesses will be liable to Digital Services Tax when the group’s worldwide revenues from these digital activities are more than £500m and more than £25m of these revenues are derived from UK users.

New homes to have car charge-points

In a bid to accommodate yet more electric vehicles on our roads, the government has launched a consultation aimed at increasing the number of homes with electric car charge-points. In a recent press release they said:

“All new-build homes could soon be fitted with an electric car charge-point, the government has outlined today (15 July 2019) in a public consultation on changing building regulations in England. The consultation comes alongside a package of announcements to support electric vehicle drivers and improve the experience of charging.

The proposals aim to support and encourage the growing uptake of electric vehicles within the UK by ensuring that all new homes with a dedicated car parking space are built with an electric charge-point, making charging easier, cheaper and more convenient for drivers.

The legislation would be a world first and complements wider investment and measures the government has put in place to ensure the UK has one of the best electric vehicle infrastructure networks in the world – as part of the £1.5 billion Road to Zero Strategy.

The government has also set out today that it wants to see all newly installed rapid and higher powered charge-points provide debit or credit card payment by Spring 2020.”

The government has already taken steps to ensure that existing homes are electric vehicle ready by providing up to £500 off the costs of installing a charge point at home.

Low paid workers to qualify for sick-pay

The government has started a consultation to transform support for sick and disabled staff and remove barriers for employees.

The Department for Work and Pensions has recently set out new measures to transform how employers support and retain disabled staff and those with a health condition.

Under the new measures the lowest paid employees would be eligible for Statutory Sick Pay (SSP) for the first time, while small businesses may be offered a sick pay rebate to reward those who effectively manage employees on sick leave and help them get back to work.

Under current legislation, to be eligible to receive SSP you must:

  • be classed as an employee and have undertaken work for your employer,
  • have been ill for at least 4 days in a row (including non-working days),
  • earn an average of at least £118 per week, and
  • tell your employer you’re sick before their deadline – or within 7 days if they do not have one.

Each year more than 100,000 people leave their job following a period of sickness absence lasting at least 4 weeks, and the longer someone is on sickness absence the more likely they are to fall out of work, with 44% of people who had been off sick for a year leaving employment altogether.

Tax Diary August/September 2019

1 August 2019 – Due date for Corporation Tax due for the year ended 31 October 2018.

19 August 2019 – PAYE and NIC deductions due for month ended 5 August 2019. (If you pay your tax electronically the due date is 22 August 2019)

19 August 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2019.

19 August 2019 – CIS tax deducted for the month ended 5 August 2019 is payable by today.

1 September 2019 – Due date for Corporation Tax due for the year ended 30 November 2018.

19 September 2019 – PAYE and NIC deductions due for month ended 5 September 2019. (If you pay your tax electronically the due date is 22 September 2019)

19 September 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2019.

19 September 2019 – CIS tax deducted for the month ended 5 September 2019 is payable by today.

Update on the VAT reverse charge for building contractors

From 1 October 2019, contractors who employ subcontractors, will need to assume responsibility for declaring and paying the VAT that was previously settled by their VAT registered subcontractors.

From this date, registered subcontractors will no longer add VAT to their invoices and main contractors will pay this net of VAT amount.

Now the challenging part.

The main contractor will then add the appropriate subcontractor VAT to their VAT return and add the same amount to their input tax. These two amounts will contra so apart from the hassle of organising the accounting entries both parties, the subcontractor and the main contractor will be in the same position as before.

So why, you may ask, were the changes made?

Unfortunately, in the past many subcontractors have registered for VAT, invoiced for their services and collected the VAT inclusive amount from their contractor customers, and then disappeared without paying over the VAT they had collected.

The new system, implementing the so-called “reverse charge” process outlined above, simply shifts the responsibility for settling the VAT from the subcontractor to the main contractor.

All that is required from the contractor’s viewpoint is a tedious change to the way you code and enter subcontractor invoices in your accounting software. We can help you make these changes.

As highlighted above, the cash effects of the changes are neutral. Main contractors pay the net amount to subcontractors, add the deemed VAT that should have been charged to their VAT return, and then deduct the same amount as input VAT.

Which supplies will be affected?

HMRC have said that the domestic reverse charge will only affect supplies at the standard or reduced rates where payments are required to be reported through the Construction Industry Scheme (CIS).

Therefore, supplies between sub-contractors and contractors, as defined by CIS, will be subject to the reverse charge unless they are supplied to a contractor who is an end user.

End users will usually be recipients who use the building or construction services for themselves, rather than sell the services on as part of their business of providing building or construction services.

The legislation also allows for those connected to end users, including landlords or tenants, to also be treated as end users. Therefore, intra-group and leasing re-charges of building and construction services connected to the end user are also excluded from the reverse charge.

Get ready for the changes

If you are likely to be affected, please call and we will organise any changes to your accounts software – most systems accommodate the reverse charge process – and show you how to process transactions affected after 1 October 2019.

You would also be wise to ensure that VAT registered subcontractors know what they need to do from 1 October 2019.

Reconsider cycle to work scheme

The government have recently announced that they are to extend the criteria for an approved, and therefore tax-effective, cycle-to-work scheme as part of their drive to reduce pollution and CO2 emissions in urban environments.

E-bikes have an integrated motor that helps a cyclist pedal, allowing them to reach speeds of up to 15.5 mph in the UK. They are seen as a game changer for their potential to make it easier for older or less fit people to make cycling a part of their commute.

The refreshed guidance will make it easier for employers to provide bicycles and equipment including e-bikes worth over £1,000, by making it clear that FCA authorised third party providers are able to run the scheme on their behalf.

According to their press release, the government is also working to drive down emissions across all modes of transport, committing to end the sale of new conventional diesel and petrol cars and vans by 2040, investing in hybrid trains, doubling investment in cycling and walking since 2010, and launching the £2.5 billion Transforming Cities Fund which will develop innovative public transport schemes in some of England’s biggest cities.

Employers who draw their workforce from the local community might like to take a fresh look at adopting a formal scheme for their business.