Making Tax Digital: The Countdown Begins!

If you need to complete accounts and/or submit tax returns to HMRC, you need to know about Making Tax Digital, which starts next year. It’s the biggest change to tax since the introduction of self assessment in 1996.

Computer Mouse for Online AccountingWhat is Making Tax Digital?

This initiative will require businesses and landlords to use commercial software to maintain their business records and update HMRC quarterly.

What’s involved?

The team at Spicer & Co Chartered Accountants in Dunstable have summarised the key points of Making Tax Digital:

·       Your tax affairs are updated every three months, so no cramming it all in at the end of the year

·       Cloud software records all money in and out of your business bank account

·       You have an idea of your tax bill every quarter

·       Tax planning is easier

·       Compulsory use of technology

·       More reporting deadlines

“Making Tax Digital is good news for businesses overall,” explains Suzanne Spicer of the Chartered Accountancy practice. “It’s a huge change and many people will need to change their systems to meet the reporting requirements. However online accounting systems such as Xero offer big benefits to businesses and the self-employed. As well as easier record keeping and financial planning, digital accounting saves precious time on a day-to-day basis.”

When Will It Start?

Making Tax Digital is just a few months away! 

A phased introduction will start in April 2019. This first phase will involve businesses registered for VAT with a taxable turnover above the VAT registration threshold of £85,000. These businesses will need to keep VAT records digitally and file their VAT returns using compatible software, (this includes Xero and others).

From April 2020 (at the earliest), all other taxes – such as income tax and corporation tax – will be included. This will affect businesses and individuals with an annual turnover of more than £10,000.

How Will Making Tax Digital Work?

Firstly, businesses will be issued with a digital tax account.

Some information will automatically flow into the digital tax account (such as bank interest). Data will need to be checked and then any gaps in income and expenses completed before filing with HMRC.

What Happens Now?

Spicer & Co Chartered Accountants recommend three steps to prepare for Making Tax Digital:

1.     Check when you must start filing quarterly returns (April 2019 or April 2020)

2.     Investigate online accounting software options (if you don’t already use one)

3.     Keep up-to-date by signing up to our newsletter and keeping an eye on our blog. We will guide you through the changes with regular updates, including jargon-free explanations of the details issued by HMRC. Plus – you are welcome to contact us if you have any queries.

“The transition to the Making Tax Digital requirements will be much easier if your records are on a cloud platform accessible to both yourself and your accountant,” explains Suzanne. “Now is the time to make the changes – especially if you are VAT-registered and have a turnover of more than £85,000.”

She adds: “Above all, remember that we’re here to help with understanding how Making Tax Digital will affect your business and answer any queries about cloud-based accounting.”

Would you like to know more about how Making Tax Digital affects you?

Contact the friendly team at Spicer & Co. Our tax experts are always happy to have a chat and a coffee without obligation. Let’s talk.

National Minimum Wage: Avoid Hefty Payroll Fines

HMRC sets a national minimum wage to ensure that everyone is paid and treated fairlIMAGE - employeesy in the workplace.

Employers who pay workers less than the minimum wage not only have to pay back arrears of wages to the worker at current minimum wage rates but also face financial penalties of up to 200% of arrears, capped at £20,000 per worker.

As well as facing financial penalties, those who don’t pay their employees correctly and have payroll arrears of more than £100 are ‘named and shamed’ in a public government list. The list is available online and draws the attention of the national press. The most recent list included nearly 240 employers. £1.44m in back pay was identified for 22,400 workers, with the employers fined additional £1.97m.

The list was topped by Sportswift Limited, trading as Card Factory (failed to pay £430,097.87 to 10,256 workers) and T.J. Morris Limited, trading as Home Bargains, (failed to pay £272,228.44 to 6,743 workers).

Be aware that it isn’t just large companies and big numbers that are named publically. The list includes sports clubs, car washes, care services, newsagents and restaurants – a convenience store was listed as owing £102.19 to one worker.

Low Paying Sectors

HMRC regularly targets sectors for investigation:

– Hospitality: 43 employers named for underpaying 5,726 workers a total of £460,459
– Hairdressing: 19 employers named for underpaying 152 workers a total of £43,938
– Retail: 18 employers named for underpaying 85 workers a total of £27,332

IMAGE - equestrian rosette wining horseAnother group in the spotlight is the equestrian sector. Some riders have been fined more than £30,000 for failing to pay their staff the National Minimum Wage (NMW). Lucy Katan, executive director of the British Grooms Association (BGA) and Equestrian Employers Association (EEA) told Horse & Hound magazine: “Non-compliant employers need to watch out, HMRC is coming to get them and they are putting their businesses at risk. The equestrian industry is not immune and as more and more people become aware [that employers must pay the NMW], more people will go to HMRC and they will investigate.”

What is the Current National Minimum Wage?

Age

– 25 years and over – £7.83

– 21 to 24 years – £7.38

– 18 to 20 years – £5.90

– Under 18 years – £4.20

Plus

– Apprentice – £3.70

(Please note that these rates are correct as of April 2018 and will change in April 2019.)

Are You Paying Your Employees Correctly?

Talk to the friendly team at Spicer & Co. We are proactive payroll experts and cut through the jargon of legislation to explain exactly what’s involved with paying your team the right amount at the right time. Contact us for an initial chat without obligation. We’re here to help.

Spicer & Co: Hand-Picked Chartered Accountants

Spicer & Co Chartered Accountants is pleased to announce that its accountancy firm is now part of Handpicked Accountants. This is an online portal which connects company directors and small business owners with qualified, reputable and trustworthy accountants in their local areas.

Wordle about accountancy“Handpicked Accountants is more than simply an online directory of accountants,” says Suzanne Spicer, Chartered Accountant and founder of Spicer & Co.

To help you make an informed choice, Handpicked Accountants has identified around 1,000 of the most reliable, reputable and experienced accountants across the UK; enabling you to search on a local level for the accountancy services you require.

“We work across the Dunstable, Luton, Leighton Buzzard and Houghton Regis areas,” explains Suzanne. “For example, if you’re looking for accountant near Leighton Buzzard to help you or your business, it’s much safer to talk to someone who has been recommended – that’s where Handpicked Accountants can help.”

Accountancy meetingHandpicked Accountants has carefully chosen a network of recommended, experienced professionals who can be trusted to do a good job, stating: “We believe that choosing an accountant is one of the key business decisions you will make. It is imperative that you can talk freely on a professional and, also, social level. Good open communication is important because you need to be able to pick up the phone and have a chat about how your business is going to grow over the medium to long term.”

You can read Spicer & Co’s profile on Handpicked Accountants here.

And the winner is… Spicer & Co Chartered Accountants!

Last Thursday was a special evening full of glamour, excitement and anticipation –  it was the awards ceremony for this year’s SME Bedfordshire Business Awards.

Dunstable’s Spicer & Co team was involved with three categories. The chartered accountancy practice was competing for two awards and its networking group, Pride of Dunstable, for another accolade. (Read more about our three nominations.)

Well… we did it!

Spicer & Co Chartered Accountants are award winners

Spicer & Co won the Dunstable Business of Year Award PLUS Pride of Dunstable was named as “Networking Group of the Year”. Wow!

Business Award winner logoThe judges commented that Spicer & Co is an “impressive Dunstable business – customer focussed and highly involved in local community.” Pride of Dunstable was described as “an enjoyable, fun looking supper club, proud of their town.” What amazing feedback!

Suzanne and Steve Spicer of Spicer & Co were at the ceremony to collect the awards. “We had a fabulous evening, made perfect by being announced as winners! We would like to congratulate all the winners and above all, we would like to thank our team for their hard work and our clients for their support.  This really is an incredible result – we are so proud!”

To discuss any accountancy needs and discover why Spicer & Co Chartered Accountants is Dunstable’s best business, call in for a no-obligation chat. We finished the bubbly, however we promise to put the kettle on!

Accounting Excellence Award Nomination for Spicer & Co

2018 is turning out to be the year of awards for Spicer & Co Chartered Accountants! Fresh from being nominated for two SME Business Awards and two British Accounting Marketing Awards, the Dunstable practice is proud to be shortlisted for the 2018 Accounting Excellence Awards.

“We are thrilled to be nominated for the Best Small Practice award,” says Suzanne Spicer, founder of Spicer & Co and Chartered Accountants. “This is a hotly contested category with only six finalists chosen from across the UK.”

The Practice category of Accounting Excellence Awards is for accounting firms that are leading the way with forward-thinking, innovative growth strategies, and are pushing the standards of excellence in the profession.

Accounting Excellence is AccountingWEB’s programme of excellence, inspiration and celebration for the accounting profession. Now in its eighth year, AccountingWEB’s annual awards programme has evolved to reflect the contribution of the whole accounting industry.

The winners of the coveted awards will be announced at a glittering black-tie event on 20 September in London. The team at Spicer & Co will have their glad rags on and everything crossed.

“Obviously it would be great to win the award,” adds Suzanne. “However we are so proud to be finalists that we’ll be definitely be celebrating – as winner or finalist!”

Business Award Recognition for Spicer & Co Chartered Accountants

Spicer & Co is proud to be involved as a finalist in three categories of this year’s SME Bedfordshire Business Awards.

SME Bedfordshire Business awards logo“Competing for three awards is amazing!” says Suzanne Spicer who founded the accountancy practice in 2001, working with clients across Dunstable, Leighton Buzzard, Houghton Regis and Luton. “We are proud finalists for two awards as Spicer & Co and are especially delighted that our networking group ‘Pride of Dunstable’ is a finalist in the ‘Networking Group of the Year’ category.”

Spicer & Co Chartered Accountants are finalists in the categories:

·       Bedford Borough Council Business of the Year less than 50 Employees Award and

·       Dunstable Business of the Year Award

Speaking about the award nominations, Suzanne adds: “Community, collaboration and equality are very important to us, underpinning how we work with our clients and get involved with our local community. It’s great that these qualities have been recognised by the judges.”

Spicer & Co Chartered Accountants jointly created Pride of Dunstable, a networking group for professional businesses based in Dunstable. Steve Spicer is Vice President of the group. He says: “Pride of Dunstable holds regular networking events to support our clients and other local organisations to build their businesses and work with each other. To be a finalist for the SME Bedfordshire Business Awards is a tremendous achievement and everyone involved with the networking group is very excited about the awards evening.”

The winners of each category will automatically go through to the finals of the SME National Business Awards a Wembley in December – a huge opportunity for recognition on a UK-wide scale.

A glittering awards ceremony takes place on 5th July 2018 where the winners will be announced. Here at Spicer & Co we’ll be crossing everything and enjoying our big night out!

Dunstable’s Spicer & Co Chartered Accountants is a Double Accounting Awards Finalist!

Spicer & Co Chartered Accountants has been selected as a finalist in two of the 2018 British Accounting Marketing Awards.

“We are delighted to announce our selection as a finalist in two categories of the British Accounting Marketing Awards 2018,” says Suzanne Spicer of the Dunstable-based practice. “We are one of only three finalists selected from across the UK in both the Event Marketing and Brand Building categories.”

Suzanne is the founder of Spicer & Co Chartered Accountants. She adds: “Being selected as a finalist in these inaugural awards is a team achievement and one which we’re very proud of. We are very enthusiastic about our marketing and are keen to ensure its style and content reflects the approachable, professional service that we provide to all of our clients.”

The British Accounting Marketing Awards, organised by TwentyTwo Agency in association with Accountex and My Firms App, showcase the best marketing from firms the length and breadth of the UK. They acknowledge firms who have made significant steps in connecting with, educating and providing value to their audience in innovative and inspiring ways.

The finalists across the four award categories are those who have made the biggest impression and impact over the past 12 months.

The finalists will now vie to be crowned the winner at the BAMA’s award presentation on May 23rd at Excel London.

Spicer & Co Accountant Elected to Industry Committee

We are proud to announce that our very own Suzanne Spicer has been elected to the ICAEW Practice Committee. Huge congratulations Suzanne!

Suzanne heads up Spicer & Co Chartered Accountants in Dunstable. She was one of seven applicants to be elected, gaining the second highest number of votes of all the candidates.

The Institute of Chartered Accountants in England and Wales (ICAEW) is a world leading professional membership organisation that promotes, develops and supports more than 147,000 members worldwide. The Practice Committee is a representative voice for practice within ICAEW. Suzanne will help guide on the development of services, plus advise on communications and the impact of regulations.

“After working within an established accountancy practice for 10 years, I appreciate the challenges and opportunities facing ICAEW members with smaller accountancy practices,” says Suzanne. “I am thrilled to be elected to the Practice Committee – especially as involvement is voted for and supported by members.

“Community, collaboration and equality are very important to me – both personally and professionally. Being elected to the Practice Committee gives me an opportunity to proactively support others in my accountancy profession.”

Suzanne joins the Practice Committee at an interesting and exciting time for accountancy and business. Cloud technology has had a huge impact upon how businesses and accountants work. Making Tax Digital is set to have an even greater impact. “ICAEW has an opportunity to help members through this change. In the same way that we offer our clients reassurance, I relish the opportunity to be part of this vital support for members.”

We wish Suzanne luck in her new role. We know that she relishes a challenge and hope that she enjoys her time on the ICAEW Practice Committee.

Dividend Tax – All Change from April 2018

What is Dividend Tax?

If you own shares in a private or a public limited company, you may receive dividends. This dividend income is taxable, and the tax on it is called dividend tax.

New Tax Threshold for Dividend Income

Currently, each person can receive £5,000 tax-free dividend income per year. From 6th April 2018, this amount is changing. The amount of dividend income you will be able to receive tax free as an individual will reduce to £2,000 per annum. This change will apply to all shareholders – from pure investors to director shareholders.

“Many small business owners trade through their own limited company and pay themselves via a small salary plus a dividend out of the retained profits of the business,” explains Suzanne Spicer of Spicer & Co Chartered Accountants in Dunstable. “The new, lower threshold for applying dividend tax may mean that a review is needed. This will ensure that each owner’s business and personal finances remain as tax-efficient as possible.”

This new threshold for applying tax to dividend income is expected to raise an extra £800m to £900m per year for the Treasury. (Source – budget documentation.)

Dividend Tax Exemptions & Rates

Dividend income from ISA investments is exempt from tax. Your first £2,000 income from non-ISA dividends is also tax-free. If you receive more than £2,000 income from your dividends, the tax rates that apply are:

– 7.5 per cent for basic-rate taxpayers

– 32.5 per cent for higher-rate taxpayers

– 38.1 per cent for additional-rate taxpayers.

How Does This Change Affect Small Limited Companies?

Small businesses often face the choice of being set up as a limited company, or operating as a sole trader/partnership. “Despite the changes to dividend tax, it is still more tax efficient to be a limited company at certain levels of income,” says Suzanne. “It’s best to check with your accountant, as your circumstances beyond your dividend income should be considered.”

Is Savings Interest Affected?

There is no imminent change to how your interest from your savings is taxed, although we think that dividends will be brought into line with savings eventually.

The threshold for paying interest on savings income is:

– £1,000 for basic rate taxpayers

– £500 for higher rate taxpayers

– Nil for additional rate taxpayers (all savings interest income will be taxable)

What Should You Do Now?

If you’d like to discuss how the change in dividend income tax thresholds affect you and/or your business, pop in for a chat. We’re here to help and always welcome the chance for a coffee!