Apprenticeship Levy 2017

Are You Ready for the Levy?

A change is coming to large payroll businesses with effect from 6 April 2017 – the Apprenticeship Levy will apply to all businesses with annual payroll costs in excess of £3 million pa.

Apprenticeship Levy 2017. Are you prepared to pay?

The levy is being implemented by the government to help pay for an expansion in apprentice training. Employers, both public and private sector, with a wage bill over £3 million will be required to pay the levy of 0.5% of the payroll. A ‘levy allowance’ of £15,000 per year will be subtracted from the 0.5% total.

The levy must be calculated and reported monthly via an EPS report and paid over with the usual PAYE & NIC deductions by 22nd of each month. Group companies with multiple payrolls only attract one annual allowance between them.

Once you have started paying the levy you get access to funding for training apprentices through the new HMRC apprenticeship service account.  This allows you to reclaim your Apprenticeship Levy contributions as digital training vouchers.

Apprenticeship Levy details are available in an HMRC manual and there is guidance on the funding scheme too.

The Apprenticeship Levy represents another on-going business cost, and a reporting and compliance requirement for your payroll.

If you need to understand the implications for your business or just want help managing the extra work, why not talk to us today?

Lewis Smith & Co. offers both tax planning and a highly efficient payroll bureau.

Call 01384 235549 or email and set up a confidential, no-obligation discussion today.


Lewis Smith & Co. – Accountants for Sandwell Businesses

No National Insurance Rise

Hammond Hangs Head

Only days after upsetting the small business community and a substantial section of his own party, Chancellor Philip Hammond has scrapped plans to raise NICs for the self-employed.

Philip Hammond backs down in NIC row

The 2% increase in Class 4 National Insurance, which we highlighted in our Spring Budget 2017 overview, was due to be introduced in 2 stages starting in April 2018.  However, commentators quickly picked up that this move contradicted the Conservative manifesto tht declared that there woul be no NIC rises.

In the short term this is obviously good news for the self-employed. Unfortunately since there is now a reported £2bn hole in the government’s finances it won’t take long for some or all of us to be targeted to make up the shortfall.

In the meantime if all of this is leaving confused over how to plan your business finances, why not talk to Lewis Smith & Co.

Our team of tax experts and compliance experts are on hand to help you sort things out.  Call 01384 235549 or email to set up a free, no-obligation discussion today.


Lewis Smith & Co – Accountants and tax advisers for Kningswinford
Picture of Philip Hammond from Flickr courtesy of the US Government

Spring Budget 2017

Bashing Business Budget?

The Chancellor, Philip Hammond, may have expected some plaudits for his increases in social care spending and higher funding across a number of areas health, education and infrastructure.  Sadly for him the big headlines have made by his supposed attack on “white man van” – the self-employed.

Budget highlights for Dudley Borough small businesses from Lewis Smith & Co.

Here’s our pick of the highlights of the Chancellor’s first budget (and the last one to be delivered in Spring).

National Insurance
The announcement that set Fleet Street ranting was an increase in Class 4 National Insurance for the self-employed.  The rate will go up from 9% to 10% in April 2018, and then form 10% to 11% in April 2019.

The increased NI rate applies to earnings between £8,060 and £43,000.  Class 4 earnings over £43,000 will continue to be taxed at 2%.

Commentators have said that this means the self-employed could pay, on average, around £240 per year more in NI.

Dividend Tax
In an attack on both small business directors and on wealthier savers the tax-free dividend allowance will fall from £5,000 to £2,000 per year from April 2018.

Income Tax
The personal allowance will rise by £500 to £11,500 and the higher rate threshold increases to £45,000 from April 2017.

The annual ISA allowance increases to £20,000 from April 2017

Business Rates
£435 million of support has been set-aside to mitigate the affects of interest rate rises.  Pubs have been singled out for help with a £1,000 discount on rates for one year (if they have a rateable value less than £100,000.

Local authorities are being given £300m to provide discretionary relief.

Tax Avoidance
Measures have been put in place to stamp down on tax avoidance.  These include:

  • Greater regulation of pension transfers to foreign schemes
  • Imposition of VAT on mobile phone use by UK residents when outside of the EU
  • Penalties on professionals who sell tax avoidance schemes that are later found to be unlawful.

Unsure What This Means for You?
There are a number of Budget changes that will impact our small business clients.  If you aren’t sure how this will affect you and your business in the months and years ahead then Lewis Smith & Co. can help.

Simply call 01384 235549 or email to set-up a free, no-obligation discussion about your tax situation.


Lewis Smith & Co. – Local accountants for Sandwell businesses.
Picture of Philip Hammond from Flickr courtesy of the US Government

April 5th deadline is looming

A couple of things to do before the new tax year

Here are a couple of tax planning ideas to take care of before the new tax year begins on April 6th.

2016-2017 tax year, tax planning tips from Dudley accountant Lewis Smith & Co.

Use your 2016/17 ISA allowance

The ISA allowance for 2016/17 £15,240, so if you haven’t used it all up yet get investing soon. The £15,240 limit includes shares, bonds, cash (there is no restriction on the proportion you can invest in cash) or certain other investments.

Make pension pension payments

The current annual pension limit remains at £40,000. In addition, unused relief from the previous three tax years may be utilised once the current £40,000 limit has been used. However, the relief from 2013/14 will lapse on 6 April 2017.

If, for example, you have £10,000 unused allowance from 2013/14 you would need to make pension contributions of at least £50,000 by 5 April 2017 to avoid losing your 2013/14 relief. Remember also that pension savings continue to qualify for higher rate tax relief and may help to reduce your payments on account.

If you need any advice on tax planning then talk to us today.  We’ll make sure you pay no more tax than you should.

Call 01384 235549 or email to set-up an appointment.


Lewis Smith & Co. – Need help sorting wages and payslips? Try our payroll bureau service.

Flat Rate VAT Increase

Are you a “limited cost trader”?

Flat rate VAT is rising to 16.5% from 1st April for businesses that HMRC designates as limited cost traders.  This is defined as businesses that spend less than 2% of their sales on goods (not including capital goods, food and drink, and vehicles) for a given VAT accounting period.  You will also be classed as a limited cost trader if you spends under £1,000 per year on goods even if that is more than 2 per cent of your total turnover. If you aren’t sure whether you are a limited cost trader then HMRC has provided a handy calculator tool on its website.

If you are a limited cost trader then your Flat Rate VAT will rise to 16.5% in April

If your expenditiure on goods is greater than these limits then you will continue paying at your current flat tax rate.

The change is designed to stop businesses manipulating their accounts to qualify for the benefits that accrue from the flat rate scheme.  It’s also a response to the rise in the numbers of self-employed and “labour only” businesses, which was highlighted as a cause in declining tax revenues.

The impact of the changes will vary according to which rate of VAT flat rate your are currently using.  For service providers such as IT Consultants, Bookkeepers and Care Providers the increase will be around 2%.  For some categories such as farmng, sport or recreation, and photography, however, the increase could be as much as 10%.

For some businesses on the cusp of the spending and turnover limits it may be advantageous to switch to standard VAT accounting. That has the benefit of allowing you to reclaim VAT on expenses, although it also means completing and filing a VAT return every 3 months.

Lewis Smith & Co. is here to help you make any VAT decisions and to sort out the admin if you need it.

Why not set-up a free, no-obligation discussion with one of our tax experts today? Simply call 01384 235549 or email to book an appointment.


Lewis Smith & Co. – Accountants for businesses in Kingswinford.



Have you claimed the transferrable marriage allowance

Don’t miss out on £220!

HMRC has put out a reminder about a tax break that three quarters of eligible recipient haven’t claimed yet.

Claim your £220 transferrable marriage allowance

The transferable marriage allowance came into action back in April 2015.  The allowance allows couples (who are married or in a civil partnership), where one person pays no tax because their income is less than the personal allowance of £11,000, to transfer £1,100 of personal allowance to the tax paying partner.

The tax break, which amounts to a benefit of £220, applies in all sorts of situations; where one person works part-time, has taken early retirement or is simply taking a career break for instance.

Even better HMRC will allow couples haven’t claimed the allowance to backdate their claim to the previous tax year, and receive a payment of up to £432.

You can apply today for the transferrable marriage allowance at the HMRC with just your National Insurance numbers and one of a range of acceptable forms of ID.

If you have any questions about the tax allowance or its impact on your tax affairs talk to Lewis Smith & Co. today.

Call 01384 235549 or email to arrange a discussion with one of our experts.


Lewis Smith & Co – Need someone to manage your payroll?

Increase in HMRC Fines for Tax Return Errors

Key question is did you take “reasonable care”?

The Daily Telegraph recently reported a rise of nearly 40% rise in the number of people fined by HMRC for deliberately understating income on their annual returns (28,663 fines in 2015-2016 compared to 20,740 in 2015-2015).

HAve you received a tax return penalty notice

A number of commentators have suggested this demonstrates a hardening of attitudes by the taxman to tax returns errors in line with the increase in investigations. So don’t be surprised if your self-assessment return gets singled out.

The table below, taken from HMRC CC/FS7a (PDF opens in new window), highlights the penalties arising from different levels of infringement behaviours.

 Type of BehaviourUnprompted Disclosure Prompted Disclosure
Reasonable CareNo penaltyNo penalty
Careless0% to 30% 15% to 30%
Deliberate 20% to 70% 35% to 70%
Deliberate and Concealed 30% to 100% 50% to 100%

As you can see penalties only apply if errors on a return are seen to be “careless”, “deliberate” or “deliberate and concealed”.  So what is the dividing line between making a mistake despite taking “reasonable care” and being deemed “careless”?

According to HMRC examples of ways you can take “reasonable care” include;

  • keeping enough records to make accurate tax returns
  • keeping those records safe
  • asking us or a tax adviser if you are not sure about anything and following any advice given

In the HMRC Compliance Handbook CH81130 some examples are provided of situations where errors have been detected but no penalties are due.  These include circumstances where you thought the rules meant one thing but they actually mean something else, arithmetical or transpositional inaccuracies or where the effect of the inaccuracies as not significant in relation to overall tax liability.

In other words there is quite some leeway in the interpretation and imposition of the rules.

If you find yourself on the receiving end of a penalty notice for problems with your tax return – especially if they are defined as “careless” – then you may be able to make a successful appeal.  It is important to highlight to HMRC your circumstances (for instance that you can’t afford a tax advisor) and abilities (for instance inexperience at using a spreadsheet) in your correspondance.

Of course if you need help then Lewis Smith & Co. can act on your behalf and apply over 30 years of experience in dealing with HMRC to your case.

Why not contact us today for a free, no-obligation discussion with one of our expert team.  Call 01384 235549 or email


Lewis Smith & Co.  – Tax accountants for Stourbridge

No Excuses – National Minimum Wage

Minimum Wage Obligation

You must pay National Minimum Wage at the appropriate rateWhether or not you believe in a National Minimum Wage, you have to pay it to those of your staff who are eligible.

HMRC has started a £1.7m campaign to remind employers of their obligation after investigators uncovered many instances of underpayment.

As part of the publicity for the campaign HMRC has released a list of excuses given by employers for their misdemeanour.

Here’s three of our favourites:

  • “I’ve got an agreement with my workers that I won’t pay them the National Minimum Wage; they understand and they even signed a contract to this effect.”
  • “My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone.”
  • “The employee wasn’t a good worker so I didn’t think they deserved to be paid the National Minimum Wage.”

As a reminder the current minimum wage for workers aged 25 or over is £7.20 rising to £7.50 on April 1st 2017 (take a look at Minimum Wage Rates 2017 for full details).

If you are concerned about managing wages and payroll in your business why not set up a confidential discussion with Lewis Smith & Co. We offer expert advice and a hands-on payroll bureau to help you manage all of your payroll issues.

Call 01384 235549 or email today.


Lewis Smith & Co. – Chartered Accountants for businesses across Brierley Hill