Cryptocurrency and the Tax Implications

Cryptocurrency and the Tax Implications

The world of Cryptocurrency is expanding and becoming more mainstream. More and more people are investing; therefore, the values are seeing rises significantly.

What is Cryptocurrency?

Crypto assets or currency is a virtual coinage used to purchase online goods or services. The “crypto” element means that transactions are not verified by the bank or a governing body but instead through a decentralised peer to peer system using cryptography.

People find the cryptic element appealing as they believe they have more control over their funds; however, there are risks. Without the protection of a central authority, nobody is responsible for helping you retrieve your money back if stolen.

Do I have to pay tax on Cryptocurrency?

A common question and in short form – yes.

To tackle the misconception, the government released the crypto-assets manual in December of 2019. It aims to educate individuals and businesses on the tax implications that can arise from transactions linked to Cryptocurrency.

It covers exchange tokens in which Bitcoin is an example of, making it very clear that profits made from buying and selling Cryptocurrency are subject to tax.

Tax rules for individuals

Anyone buying or selling Bitcoin or alternative cryptocurrencies as an individual will be subject to Capital Gains Tax on any gains made.

In some cases, for those who are “trading” Cryptocurrency, HMRC will look at the scale, level of organisation and frequency to see if your activity amounts to trade. HMRC will then decide to charge income tax or not. Contact HMRC for advice. Click here 

It comes down to the number of gains you have made when Cryptocurrency is sold, not the amount invested.

For Employees and Consultants

Some businesses have decided to pay staff via Cryptocurrency. In this circumstance, employees will need to pay Income Tax and National Insurance Contributions.

If you are a self-employed consultant and businesses pay for your services via Bitcoin or an alternative cryptocurrency, the responsibility to disclose and pay Income Tax and National Insurance Contributions falls to you through your self-assessed tax return.

When it comes to my tax return, do I need to declare my cryptocurrency sales?

If you are a UK resident and make gains over your Capital Gains Tax exemption, you will need to declare your profits and pay CGT. Alternatively, you will still need to say if your crypto assets fall under the CGT exemption, but you have other capital gains that together exceed the CGT threshold.

HMRC now receives information from the UK crypto exchange; therefore, failing to disclose your gains could likely launch an HMRC investigation, leading to potential penalties and fines.

If I have incorrectly reported my cryptocurrency sales, what should I do?

In this situation, make sure to contact HMRC and make a voluntary disclosure to correct the error. Don’t wait for HMRC to contact you.  If due, they will more likely lower the financial penalty you need to pay.

We are always here to help and advise you on any investments you make and how this might impact your tax liability.

Spring Budget 2021

Spring Budget 2021

In the Spring Budget 2021 the Chancellor announced the following updates.

We have summarised some of the content of the Budget which we think will apply to our clients and SME’s. Some of the full details are not known yet, so we will update you as more information becomes available.

Coronavirus Job Retention Scheme

Extension of the Coronavirus Job Retention scheme until September 2021. Also called known as the Furlough scheme, the Government will continue to pay 80% of employees’ wages for hours they cannot work. However, in July employers will have to contribute 10% in and 20% in August and September. More details here 

Self Employed Income Support Scheme (SEISS)

This has been extended to September 2021. It is estimated that another 600,000 more people who have filed a tax return in 2019-20 are now able to claim for the first time. If  you qualify will be able to claim from the end of April 2021. More details here 

VAT

Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.

Business Rate Relief

Eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.

Stamp Duty and Mortgage guarantee Scheme

Stamp Duty has been extended to 30th June 2021. After June 30, the limit will be lowered to £250,000 until the end of September, an return to the normal level on October 1, 202.

To support the housing market and protect and create jobs a new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit. This is available from major lenders.

Restart Grants

£5 billion has been allocated for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.

Recovery Loan Scheme

A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.

Apprenticeship Incentive

Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.

Personal Tax Allowance

Personal income tax allowance to be frozen at £12,570 from 2022 to 2026

Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026

Corporation Tax

To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.

Inheritance Tax

Maintaining inheritance tax thresholds at their current levels until April 2026.

If you need advice on the contents of the Spring Budget 2021 and how this applies to you and your business please contact us. Visit our contact us page here 

Posted in Website Blog | Tagged budget2021, springbudget2021

Current Covid Support for Businesses

Updated Covid Support Measures – Updated 3rd February 2021 

It remains a tough time for most businesses and we wanted to ensure you are accessing the current Covid support for businesses that is available.  Here we have summarised the initiatives you may be able to utilise to improve your cashflow, retain staff or grow your team.

Current Covid Support for Businesses

We have added links for you to find further information on the topics which are relevant to your business.

Self Employed Income Support Scheme ( SEISS)

Claims for the third SEISS grant have now closed.The last date for making a claim for the third grant was 29 January 2021.Details about the fourth grant will be announced on 3 March 2021. For more information visit this page. 

Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses affected by coronavirus (COVID-19).

This scheme offers access to loans up to £5m and up to 80% of the loan is guaranteed by the government. The Government pays interest and any fees for the first 12 months.

Available for businesses with an annual turnover of up to £45M.

Applications open until 31st March 2021

The Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) has now been extended. Also known as the Furlough scheme – will remain open until 30th April 2021 with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500. The Employer must pay NI contributions and pension but no top up is required.  This current scheme, of 80%  will be in place until 31st January 2021 and then further details will be released by the Government.

You can no longer submit claims for periods ending on or before 31st October 2020

January 2021  15.02.2021

February 2021  15.03.2021

March 2021  14.04.2021

For more information on this scheme click here 

Bounce Back Loans

The repayment terms of bounce back loans and other coronavirus support loans are to be extended to help businesses with cashflow. In particular, a new Pay As You Grow scheme will allow businesses with bounce back loans to extend the term of the loan from six to 10 years.

If you haven’t applied you have until 31st March 2021

  • You can borrow between £2,000 and £50,000 The amount is capped at 25% of your total turnover (usually for calendar year 2019, or new businesses can estimate).
  • No interest will be charged, and no repayments will need to be made in the first 12 months.
  • After 12 months, all banks will charge a fixed 2.5% annual interest.
  • You can repay the loan early without penalty.Or with some banks you can part-repay or overpay.
  • The loans can now last for 10 yearsOne year interest free and the rest at 2.5%.
  • If you didn’t borrow the full £50,000 initially then you can apply for a top-up before 31st March 2021 providing you meet the eligibility criteria

Find out more here 

Business Grants

The Local Restrictions Support Grants (LRSG (Closed) Addendum) support businesses that have been required to close due to the national restrictions. The grant will help businesses in England that were open and trading as normal before being forced to close for at least two weeks because of local restrictions. You need to be paying business rates on your premises, but local councils may also offer grants to businesses that don’t pay business rates at their discretion.

Small businesses with properties that have a rateable value of less than £15,000 will get £1,334 per month.

Medium-sized businesses with properties that have a rateable value of between £15,001 and £51,000 will get £2,000 a month.

Larger businesses can claim £3,000 a month.

This is a grant, the money doesn’t have to be paid back.

You can apply by visiting your local council’s website

Find out more here 

Additional Restrictions Grant for businesses that aren’t covered by other grants

Local authorities can give out this discretionary funding to businesses that aren’t eligible for other grants. The government gives examples of who the funding could be given to:

  • businesses which supply the retail, hospitality, and leisure sectors
  • businesses in the events sector
  • business required to close but which do not pay business rates

You can’t get funding if your business is in administration, insolvent or has been struck off the Companies House register. You need to speak to your local authority about this grant.

Self Assessment Tax return

Deadline extended to 28th February 2021

Self Assessment tax bill – time to pay increased

From 1 October, the limit for time to pay, the online payment plan service used to set up instalment arrangements for paying tax liabilities, is increased to £30,000, up from £10,000.

The increased £30,000 threshold follows the Chancellor of the Exchequer’s announcement on 24 September to increase support for businesses and individuals through the uncertain months ahead

Self-assessment tax due on 31 January 2021 may be spread over 12 interest-free payments.

Any business that pays tax to the UK government and has outstanding tax liabilities will be able to apply for their case to be reviewed by HMRC with a view to arranging a bespoke time to pay agreement.

This applies to all businesses including the self-employed.

The July self-assessment tax payment has been deferred until January 2021, however this is also the date tax is due for your 2019-20 tax returns and first payment on account for 2020-21 so could add up to a sizeable tax bill.  Time to pay arrangements can now be made online via HMRC and you do not need to ring and arrange a payment plan.

Find out more here

Payment of VAT

On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.

Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.

You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.

Those that can pay their deferred VAT can still do so by 31 March 2021.

Find out more here 

VAT reduction extended

The temporary reduced (5%) rate of VAT for businesses in the hospitality sector will be extended until 31 March 2021

Mortgage Holidays

Mortgage payment holidays still apply. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file. The FCA will announce further information.

Business Rates Holiday

Those businesses in retail, hospitality and leisure will not have to pay business rates for 2020-2021 financial year. You local council will apply this automatically. More information here 

Full refund on statutory sick pay due to Covid-19

Businesses with less than 250 employees as of 28th February 2020 will get a full refund from the government on 14 day of Statutory sick pay per employee who has been off sick with Coronavirus, on or after 13th March 2020.

Your employee doesn’t need a doctor’s note from your employee, but they do have to either:

  • have had coronavirus
  • be unable to work because they’re self-isolating
  • or be shielding in line with public health guidance

Keep records of all absences and statutory sick pay payments due to Covid-19.

Find out more here 

Employing young people

There are currently 2 schemes available to support young people in to work. If you are interested in a employing a young person check out the apprenticeship scheme or kick start scheme or you can use both.

  • Apprenticeship scheme

If you are interested in employing younger staff, consider an apprentice or the kick start scheme

  • £1,500 for every out-of-work 16-24-year-old given a ”high quality” six-month work placement
  • £2,000 for every under-25 apprentice taken on until the end of January, or £1,500 for over-25s

Find out more here

  • Kick Start Scheme

The Kickstart Scheme provides funding to employers to create new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment.

This is part of the government’s Plan for Jobs and aims to create hundreds and thousands of new, fully funded jobs across England, Scotland and Wales. The first placements are likely to be available from November.

Funding will cover for each job placement:

  • 100% of the relevant National Minimum Wage for 25 hours a week
  • the associated employer National Insurance contributions
  • employer minimum automatic enrolment contributions

There will also be extra funding to support young people to build their experience and help them move into sustained employment after they have completed their Kickstart Scheme funded job.

Find out more here

The scheme is aimed at employers who want to recruit 30 or more staff. However Bedfordshire Chamber of Commerce, Wenta and Hertfordshire Chamber of Commerce are working in partnership in order to become an ‘intermediary’ for small businesses in Hertfordshire, Bedfordshire and North London to access the Government Kickstart Scheme.

If you’re a Hertfordshire, Bedfordshire or North London business, you can now register your interest for this scheme here 

Before applying, please read the below eligibility requirements.

The Kickstart Scheme job placements must:
• Be for a period of 6 months
• Be for at least 25 hours per week (employers can pay for more hours)
• Be paying at least the National Minimum Wage through PAYE (employers can pay more if they wish to do so)
• Be paying the statutory employer duties for the health, safety and welfare for young people, National Insurance and pension contributions
• Include support for young people to help them get work after they finish their Kickstart Scheme job
• Not replace any existing or planned jobs
• Not cause existing employees or contractors to lose or reduce their employment

More time to pay corporation Tax

As of 25 March 2020, if your business is registered with Companies House, you can apply for a three-month extension to the deadline for filing your accounts. Businesses granted this extension won’t get the usual late payment penalty.

Commercial Eviction Ban

Landlords cannot evict businesses out of properties if they are struggling to pay rent until end of March 2021.

The Government has published a code of practice to encourage commercial tenants and landlords to work together to protect viable businesses.Click here to read it. 

Summary

Most of this information has been taken directly from the Government website.Every business has a unique set of circumstances it is important to claim only for what you are entitled to. If we can help and advise you about any of the support on offer, please do get in touch.

Posted in Uncategorised, Website Blog | Tagged accountant dunstable, bedfordshire payroll services, business coronavirus, business loans, business survival, businessgrants

Demystifying the Domestic Reverse Charge VAT

From 1 March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services.

The charge applies to standard and reduced-rate VAT services:

  • for individuals or businesses who are registered for VAT in the UK
  • reported within the Construction Industry Scheme

Check when you must use the reverse charge on your sales, purchases or both.

  1. Find out how the charge works if you supply services.
  2. Find out how the charge works if you buy services.
  3. Read more detailed guidance about the reverse charge.

There will also be an amendment to the original legislation, which was laid in April 2019, to make it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their sub-contractors in writing that they are end users or intermediary suppliers.

The Domestic Reverse Charge VAT  is a big change being implemented in the way VAT is being collected in the building and construction industry.

This has been set up to tackle fraud. This will mean that fraudsters will no longer be able to set up a construction business, charge VAT to customer then disappear before paying the VAT to HMRC. This practice is known as missing trader fraud and the change means that the customer receiving the service will have to pay the VAT due to HMRC instead of paying the supplier. It will only apply to individuals or businesses registered for VAT in the UK (although it will not apply to consumers).
This will affect you if you supply or receive specified services that are reported under the Construction Industry Scheme (CIS).

We would like to draw your attention to the details on the HMRC website which states the following –
You need to prepare for the  introduction date by:
• checking whether the reverse charge affects either your sales, purchases or both
• making sure your accounting systems and software are updated to deal with the reverse charge
• considering whether the change will have an impact on your cashflow
• making sure all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it will operate,

What contractors need to do
If you’re a contractor you’ll also need to review all your contracts with sub-contractors, to decide if the reverse charge will apply to the services you receive under your contracts. You’ll need to notify your suppliers if it will.

What sub-contractors need to do
If you’re a sub-contractor you’ll also need to contact your customers to get confirmation from them if the reverse charge will apply, including confirming if the customer is an end user or intermediary supplier.

The reverse charge does not apply to consumers or final customers of building and construction services. Any consumers or final customers who are registered for VAT and Construction Industry Scheme will need to ensure their suppliers do not apply the reverse charge on services supplied to them.

For reverse charge purposes consumers and final customers are called end users. They are businesses, or groups of businesses, that do not make onward supplies of the building and construction services in question, but they are registered for CIS as mainstream or deemed contractors because they carry out construction operations, or because the value of their purchases of building and construction services exceeds the threshold for CIS.

Services affected by the domestic reverse charge
The reverse charge will affect supplies of building and construction services supplied at the standard or reduced rates that also need to be reported under CIS. These are called specified supplies.
There is an important difference between CIS and the reverse charge where materials are included within a service. The reverse charge applies to the whole service whereas CIS payments to net status sub-contractors are apportioned and no deductions are made on the materials content.
The reverse charge does not apply if the service is zero rated for VAT or if the customer is not registered for VAT in the UK.

It also does not apply to some services.

These are those supplied to end users or intermediaries connected with end users. Find out more found in the End users and intermediary supplier businesses section.
Employment businesses who supply staff and who are responsible for paying the temporary workers they supply, are not subject to the reverse charge. Read the Applying the domestic reverse charge for construction services to certain sectors or types of transactions section for more information.

You will have to apply the reverse charge if you supply any of these services:
• constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services
• constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours
• pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence
• installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure
• internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
• painting or decorating the inside or the external surfaces of any building or structure
• services which form an integral part of, or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works

For more detailed information please visit the HMRC website or give us a call to check what you need to do if you are affected by this change. Click here

Please also see our graphic below which explains this in simple terms!

Posted in Website Blog | Tagged constructionaccounts, domestic reverse charge vat, vat

Be Brexit ready

How will Brexit affect your business?

The UK will leave the EU at 11 pm on the 31st of January 2020.

On the 31st of December 2020, the Brexit transition period will end. This means that the EU laws we’ve continued to operate under as part of the Withdrawal Agreement Act will no longer apply.

As a member of the EU, we had access to a single market with no tariffs or border checks and combined VAT systems. From the 1st of January 2021, how we trade internationally is going to change.

The finer details are still very much under negotiation, and no formal deal has been reached at the time of writing this blog post.

The transition will not be plain sailing, but whilst so much is still unclear, there are things you’ll need to do in advance to prepare.

So, how does this affect you?

If your business operations include: import and export, transport and logistics, product safety, copyright, GDPR compliance, hiring EU citizens, environmental standards, emissions, licencing, then you’ll need to revise your processes in line with new regulations coming in.

Brexit Rules So Far.

Here’s what we know currently 

  • Postponed VAT: If you import business goods from anywhere outside GB you can use postpone VAT accounting to pay import VAT immediately
  • Importing goods: The process will be similar to that of importing goods from non-EU countries. Different rules apply to postal goods.
  • Third-party import/export: If you use a third-party customs expert, they’ll need to be based in the UK to complete customs formalities on your behalf.
  • Exporting goods: When exporting goods to non-EU countries, you’ll need to follow the World Trade Organisation (WTO) Most Favoured Nation (MFN) rules.
  • Product certification: The government has issued guidance relating to manufactured products requiring certification are manufactured and put-on sale. More info 
  • Get your professional qualification recognised by EU regulates. This will enable you to service clients in the EU.
  • Selling goods: Goods that require a CE mark will need to be replaced with a UKCA mark. Rules for Northern Ireland are still being negotiated.
  • Travel: Burgundy passports can still be used once the transition period has ended, but will need at least 6 months left if you wish to travel to most EU countries. If your passport expires sooner or is over 10 years old (since the date of issue and regardless of extra months added), you’ll need to apply for a new one.
  • Check if a visa or work permit is required to travel to the EU for work purposes. You may face issues or delays at the border when travelling for work purposes if you do have the correct documentation. You must comply with EU27 immigration requirements when travelling after the 1st of January 2021.
  • Hiring EU citizens: As now, you’ll need to continue to check ‘right to work’ for EU/EEA/Swiss job applications til the 30th of June 2021. From the 1st of January 2021, EU citizens moving to the UK for work will need a job offer from an approved employer sponsor to apply for a visa. If you recruit from the EU, you should apply to become an approved sponsor (8-week process).

My business is in the UK and only has UK customers, will Brexit affect me? 

Pretty much all businesses in the UK will need to make changes. Your business may only deal with UK customers, but the products or parts you sell/use could well be manufactured outside of the UK or centrally warehoused in the EU.

You could run into custom delays following the end of the transition period, or extra costs involved with customs import duties. To combat this, you may have to source new local suppliers which takes time and money.

There’s also the issue of data sharing. The customer and supplier data you hold could include EU citizens, which will impact how and if you can share it. More information on how Brexit will affect GDPR is available here.

In some way, shape or form – all UK businesses will be impacted by the end of the Brexit Transition Period. The message is to “Act Now” to avoid any disruption to business-as-usual.

The government is providing a range of support to help you through this process: gov.uk/transition-webinars and to take advantage of the many new opportunities that being an independent trading nation will bring.

Posted in Website Blog | Tagged brexit, brexit for business, businessandbrexit

The tax rules of Christmas gifts and celebrations

Its the end of year and it has been a tough one! So its important to treat your clients and staff with some festive Christmas treats. But even though its Christmas HMRC still have rules which are applied to giving gifts.  Here we clarify the essential information on the tax rules of Christmas gifts and celebrations. We have detailed below how gifts can be given and the tax implications so you can remain compliant and not get a nasty surprise in your Christmas Stocking!

Christmas Cards

You can send Christmas Cards as a tax-deductible expense. Many companies do not send cards in favour of donating to a charity. Your limited company can pay less Corporation Tax when it gives money to a charity or community amateur sports club (CASC). Deduct the value of the donations from your total business profits before you pay tax. Find more information here on donating to charity.

A £50 gift to yourself and your staff!

If you are a Limited company, then you can give yourself a gift at Christmas as the company is giving the gift and not you! You can also give gifts to your employees. The limit is £50. This counts as a trivial benefit exemption so no Tax or NI is payable. But this does not apply to cash – so it must a gift. Non-cash vouchers up to £50 may be exempt under the trivial benefit rules. Where the voucher exceeds £50, you will need to report these on a P11D form to HMRC.  So, a couple of bottles of wine and some chocolates would count as a trivial benefit. Unfortunately, gifts to employees are not a tax-deductible expense for the business.

If you spend more than £50

Buying a gift that costs more than £50 (and this includes delivery charges) will count as a taxable perk for the employees that receive it. They will then have to pay tax and you as the employer will have to pay National Insurance. For example, if you were to give a £60 gift it will cost you a total of £85 because of the tax and NI due.

The gifts must carry a clear advertisement for the business (e.g. with branding or logo) which must be on the gift itself, not just the wrapping. They can’t be alcohol, food, drink, tobacco (unless they are your business) or vouchers. Non-promotional gifts and larger gifts are classed as entertaining and are not tax-deductible as an expense.

VAT and gifts

If you are not using the Flat Rate Scheme you are able to reclaim the VAT incurred on purchasing the gift.

But you may, however, have to account for VAT on the value of the gifts if the gifts received by the recipient are more than £50 in a year. If a gift is exempt or zero-rated (i.e. a book) you will not have to account for the VAT.

Gifts for your clients – direct tax deductions

The gifts must carry a clear advertisement for the business (e.g. with branding or logo) which must be on the gift itself, not just the wrapping. They can’t be alcohol, food, drink, tobacco (unless they are your business) or vouchers. Non-promotional gifts and larger gifts are classed as entertaining and are not tax-deductible as an expense.

Cash bonus

Any cash you give to employees as a Christmas bonus counts as earnings, so you’ll need to:

-Add the value to your employee’s other earnings

-Deduct and pay’ Pay As You Earn’ (PAYE) tax and Class 1 National Insurance through payroll

Virtual Christmas Party

As work parties have been cancelled this year HMRC will still let you have a virtual Christmas party and you can still have the £150 allowance per employee.

The costs can include food, drink, virtual pantomimes, online entertainment events and postage costs.  The full details are here.

This online event must be made available for all staff to attend. The VAT is reclaimable, but only for the staff costs, not partners.

Salary sacrifice arrangements

You do have to report how much social functions and parties are worth to each employee if they are a part of a salary sacrifice arrangement.

But we have no employees just directors!

If your business does not have employees but just one of more directors, then the rules are different. The cost of providing entertainment only to directors or partners does not qualify for tax relief or VAT deduction

If the event takes place away from the usual place of work and as part of a business trip, for example, to see a client, then the meal would be eligible.

Any VAT suffered on the cost of travel, accommodation and meals can be reclaimed. The rules for tax relief would mirror this, and this also applies to employees, sole traders, partners, and subcontractors who are part of the team and treated as employees.

 Be less Scrooge at Christmas!

As an additional staff benefit which costs nothing and attracts no tax, why not allow an extra half a day’s holiday for Christmas Shopping?

-Consider extra time off to allow parents or grandparent to watch the school play.

-Maybe you could arrange a team- building day with a local charity to help at a Christmas event in your area.

-This all adds to building staff morale and shows you are a caring employer!

 

Needs more help and advice?

Call us to check if your circumstances do not fit what we have discussed in this blog. We are always happy to help.

There are some useful links to the HMRC website here –

Expenses and benefits: gifts to employees

Expenses and benefits: entertainment 

Specific deductions: entertainment: gifts: overview

 

Posted in Website Blog | Tagged christmas gifts and tax, christmas giving, tax at christmas

Why you need Cloud-based Accountancy Software

 

We believe in keeping your accounting as straightforward as possible. This is why we recommend using online Cloud based accounting software to manage your financial records.

There are many benefits to using cloud based accountancy software like Xero.

You gain instant access to financial information, compliance with ‘Making Tax Digital’ (MTD), simplified data entry, automated business processes and reduced costs.

Making Tax Digital

In 2019 the government introduced MTD; an initiative designed to streamline the UK tax system to make it easier for businesses and individuals to submit tax returns. For many, completing a tax return is an absolute mine field and one that can result in substantial penalties if incorrect.

In 2018/19 the Exchequer reported a ‘tax gap’ (the difference between the amount of tax which should be paid to HMRC, and what actually is) into the billions.

Today, MTD means all VAT registered businesses with turnover above the £85k threshold must keep digital records and submit tax returns via recognised accounting software.  With plans to extend MTD to corporation tax and income tax in the future, switching to cloud-based software has never been more important.

Upgrade 

Picking the right user-friendly accounting system will help streamline your business, and save time and money.

Here’s just some of the reasons why you should upgrade your approach to accounting:

  • Your accountant can have direct access to the software, removing the need for you to collate financial data for them.
  • 24/7 access to financial data on the go. All you need is an internet connected device to gain instant access to data which can enable you to make informed business decisions, quickly.
  • Preparing accounts, invoicing, payroll etc. is a much faster and streamlined process. It’s also a more efficient as it removes the potential for human-error.
  • You can take advantage of built in functionality to analyse your business performance. Plus use it to identify potential business opportunities or areas of concern.
  • When technology can automate many of the mundane tasks traditional accountants would have to do manually, the result is a cost-saving to you.

Seems like a no-brainer, right?

Why choose Xero for your business?

As with anything in life, it can be difficult to know which software is right for you. As a Xero gold-partner and the number one firm of accountants in Luton and Dunstable using Xero, we’re well-positioned to help you understand the plethora of opportunities this software has to offer.

We’ve covered the benefits of using online accountancy software, so here’s some of the features and tools you can expect from Xero:

  • Bank reconciliation
  • Contacts – Keep track of suppliers and customers
  • Dashboard
  • Expense claims
  • Files – Attach documents to your financial data
  • Financial reporting
  • Free, unlimited email support
  • Inventory
  • Invoicing – Create and send invoices automatically
  • Log in from anywhere
  • Mobile apps (Android, iPhone/iPad)
  • Multi-currency
  • Online accounting – Access Xero anytime, anywhere
  • Payroll
  • Purchase orders
  • Quick and easy to use
  • Receive bills electronically
  • Fixed assets
  • Smart lists – Segment contacts based on purchase history
  • VAT returns.

*Information on features and tools taken from the Xero website.

Professional Support

The team at Spicer & Co are always happy to help. Combined with Xero’s expert support and excellent training videos, you’ll have access to all of the support you’ll need to make the most of the next generation accounting.

If you would like to explore how Xero could work for your business, get in touch and we can chat it through over the phone or over a coffee – socially distanced of course!

 

Posted in Website Blog | Tagged accountant dunstable, accountant luton, bedfordshire payroll services, changing accountants, income tax, tax, xero, xero gold partner

Rishi Sunak’s Summer statement

Rishi Sunak’s Summer statement

This is a summary of Rishi Sunak’s Summer statement 2020 which details the support and changes which will be taking place over the coming months.

Support for businesses

Several support measures have been announced by The Chancellor, Rishi Sunak, to support employers and employees These new measures are designed to support businesses and to protect jobs. There is a drive by the Government to support youth unemployment and give support to the economy.

Job retention bonus

The Government will pay a one-off bonus of £1,000 to employers for each of their furloughed employees who returns to work and remains continuously employed until 31 January 2021.

To be eligible for the bonus, the employee must have been paid an average of £520 per month between November and January.

Full details of the scheme are expected at the end of July.

Furlough Scheme

Coronavirus Job Retention Scheme will finish at the end of October 2020 and will not be extended.

New ‘kickstart’ jobs scheme

To assist with youth unemployment, the Chancellor announced a ‘kickstart’ plan.

Employers will receive funding if they create a new job with a minimum of 25 hours per week for a person aged between 16 and 24-years-old who is at risk of long-term unemployment and claiming Universal Credit.

The available funding will pay for the employee’s National Minimum Wage for 25 hours a week (plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions) for six months.

Employers will be required to provide training to the new employee and support them in gaining a permanent role. The scheme will run from August 2020 with jobs expected to start in the Autumn.

 Apprenticeships and traineeships

From August 2020 to January 2021, the Government will pay employers to create new apprenticeships.

Employers will be eligible to receive £2,000 for each new apprentice they hire who is under the age of 25 and £1,500 for each new apprentice aged 25 or over. This is in addition to the existing £1,000 payment the government already provides for new 16 – 18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

The Government also plans to triple participation in traineeships by funding employers who provide trainees with work experience at a rate of £1,000 per trainee.

Stamp Duty

There has been a temporary change in Stamp Duty to try and ignite the housing market. Until now, in England and Northern Ireland, stamp duty has been paid on land or property sold for £125,000 or more. There are different rates and systems in Scotland and Wales.

Buyers usually pay their duty based on the price on the day the sale is completed and pay HM Revenue and Customs within 14 days. This threshold in England and Northern Ireland will increase – with immediate effect – to £500,000 until 31 March.

Eating out and going away in the UK

The sales tax – VAT – included in the cost of food, accommodation and attractions will be cut until mid-January from 20% to 5%

VAT will be charged at 5% (rather than 20%) from 15 July 2020 to 12 January 2021 on the following supplies:

  • food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises; and
  • accommodation and admission to attractions across the UK.
  • The temporary cut should see prices fall when eating out or going out which it is hoped will encourage people to go out to restaurants.

Further details to be released by HMRC

Introduction of “Eat Out to Help Out” scheme.

In a further measure to encourage consumers back to bars and restaurants this scheme will entitle every diner to a 50% discount on their meal, up to £10 per head (including children). There will be a list of participating restaurants, cafés, pubs or food service establishments. These businesses will be reimbursed fully for the discount applied.

The discount can be used an unlimited amount of times, but it is only available Monday to Wednesday during August. It applies to any eat-in meal and includes non-alcoholic drinks.

Qualifying Business will need to register to reclaim the value of the discount.

Home improvements

A scheme, which starts in September, the government will pay at least two-thirds of the cost of home improvements that save energy. This will be paid as a voucher when the work is approved.

 

We will update when more details become available but do call us if you need any help with your accounting or tax advice. 

Click here to contact us

Posted in Website Blog | Tagged Furlough Scheme, Job retention bonus, New ‘kickstart’ jobs scheme, Rishi Sunak's Summer statement, summerstatement

Payroll doesn’t have to be painful

 

payroll services

Our Payroll services mean this doesn’t have to be difficult or painful!

As soon as your business employs somebody, you need to meet your obligations as an employer. Payroll Services will be one of the aspects to consider. This affects anyone who employs at least one person – including individual directors who pay themselves via their limited company.

Payroll isn’t confined to limited companies. Services are needed when sole traders and partnerships employ someone too.

Good news! Payroll can be much easier than you think!

Payroll is More Than a Payslip!

Of course, paying employees is the main goal of payroll services. But – it’s paying everyone the right amount that counts. There are several aspects to take care of:

Deductions
There are laws and legislation which dictate how much Income Tax and National Insurance should be deducted from each person’s salary and paid to HMRC.

Pension Contributions
You need to pay the correct contributions on time to your staff pension scheme. If you don’t, you risk being fined by the regulator. Current pension contribution for employers is at 3% for employers and 5% for employees with no further changes expected. For more details on pension contributions visit the pension regulator website here.

Employee Changes
From new joiners to leavers and employees on sick/maternity/paternity leave… staff changes can affect the payroll system operating within the business. You need to be aware of the current requirements and levels at all times.

Payroll can be run weekly/fortnightly/monthly depending on the needs of your business. Linked to payroll services, we can offer advice for directors of companies about taking tax efficient wages alongside dividends.

Payroll and Beyond

Many businesses especially value the services beyond the number crunching. Our clients enjoy peace of mind due to the extra support that’s available from our Payroll Services team, such as:

Pension Schemes
We can provide full support and help to set up your pension scheme, including:
– providing letters and information to your staff about your auto-enrollment
– enrolling employees in the chosen pension scheme and completing your compliance
declaration – which is a legal requirement
– updates on changes with the workplace pensions

PAYE Updates and HMRC Advice
You’ll receive monthly information regarding PAYE and National Insurance amounts due. Plus we offer support and advice about how to make payments to HMRC in the correct time frame to avoid penalties. Plus, we’ll provide P45’s and P60’s when required.

Employment Allowance Claim – up to a maximum of £4,000 for 20/21 tax year. ( This was £3000.00) 
Employers are entitled to claim £4,000 allowance each tax year. This allowance helps towards your contributions reducing payments throughout the year. Are you claiming yours? More details here 

HMRC Liaison
Do you need to raise a query with HMRC? Maybe ask questions about reclaiming statutory payments such as Statutory Maternity Pay? Or have queries regarding PAYE payments and account details? Help is at hand! We will call HMRC on your behalf with any queries regarding your payroll scheme.

Real Time Information Reporting (RTI)
RTI was introduced in April 2013 – the largest change to PAYE since it was first introduced in 1944. We track and send submissions to HMRC ensuring they are sent on time in line with RTI requirements. This is a legal requirement of employers and if PAYE information is not reported on time it is subject to penalties.

Legislation Updates
Notification of changes in the law like the change in minimum wage rates and ensure that as an employer you are in line with the law. We will keep you updated.

Current rates for the minimum wage are –

25 and over £8.72 £8.21
21 to 24 £8.20 £7.70
18 to 20 £6.45 £6.15
Under 18 £4.55 £4.35
Apprentice £4.15 £3.90

For more information visit this page 

Why Outsource Payroll?

To save money and time! These are the key reasons that clients ask us to look after their payroll. Involving our expert support also offers you tremendous peace of mind. Outsourcing ensures that your business:
– complies with current legislation
– avoids late filing penalties
– operates a Payroll system that is accurate and correct
– receive full support with payroll – from wage slips to leavers and starters as well as pensions
and payments to HMRC

At Spicer & Co, we believe that every business is unique. Talk to us about our Payroll Services, without obligation. We will offer a flexible and tailored payroll package that allows peace of mind with friendly experts on hand for any questions or queries.

If you are based in the Dunstable, Leighton Buzzard, Houghton Regis or Luton areas, call us to arrange a no obligation discussion on our payroll services.

Posted in Website Blog | Tagged bedfordshire payroll services, payroll, payroll services, payroll services dunstable

Government Support Update

Three major changes to support due to the Corona Virus pandemic have been announced today, 29th May 2020 by the Chancellor Rishi Sunak.

Employers to start paying share of furlough scheme

Furloughed workers will continue to receive 80% of their pay, but from August it will include a growing employer contribution. It will start with employers paying NI and pensions in August, plus 10% of pay in September, rising to 20% in October.

During August the government will pay 80% of wages up to a cap of £2,500. Employers will have to pay NI and pension contributions. For the average claim, that’s 5% of the gross employment costs the employer would have incurred had the employee had not been furloughed.

In September, the government will cut its grants to 70% of wages up to a cap of £2,190. Employers will pay NI and pension contributions and 10% of wages to make up the 80% total up to a cap of £2,500. That works out at 14% of the average gross employment costs the employer would have incurred.

In October the government grant will be cut to 60% of wages up to a cap of £1,875. Employers will pay NI and pension contributions and 20% of wages to make up the 80% total up to a cap of £2,500. That’s 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.Fl

Flexible Furlough Scheme Announced

From 1 July 2020 businesses will be allowed to bring furloughed employees back part-time, a month earlier than previously announced. The move is aimed to help support people back to work.

It will be down to individual firms to decide what part-time means. They will be able to set the hours and shift patterns staff will work when they return, but companies will have to pay 100 per cent of wages while they’re in work. The rest of their salary can be claimed via the furlough scheme up to the allowance as per the details above.

The Self Employed Income Support Scheme Extended

Those eligible for the Self-Employment Income Support Scheme (SEISS) will be able to claim the additional grant in August, which will be worth 70% of their average monthly trading profits, capped at £6,570 overall. The money will again be paid out in a single installment covering June, July and August.
Applications for the second grant will open in August.

Posted in Website Blog | Tagged furloughscheme, seiss, self employed help corona virus