Tax Free Christmas Gifts

HMRC spreads some Xmas cheer

As of 6th April 2016 employers can provide staff with some “trivial” benefits in kind, tax free.  The rules were designed to allow companies to give small gifts at Christmas or for birthdays.  They save employees from having to report the benefit on their P11D, or employers dealing with tax and NI.

tax free gift for your employees from the HMRC

The benefits need to meet the following conditions:

  • The cost must be £50 or less and not given as cash or a voucher.
  • The benefit shouldn’t be something an employer was already entitled to.
  • The benefit is not given in recognition of normal employment duties.

This is in addition to £150 per employee tax free allowance for Christmas party expenditure.

Happy Christmas HMRC.

If you want any help sorting out the implication of this benefit then please get in touch today.

Call 01384 235549 or email info@lewissmith.com to set-up an appointment.

 

Lewis Smith & Co.  –  Accountants for businesses in Brierley Hill

 

 

 

Payroll News November 2016

There have been some important changes recently in payroll-related subjects that you need to know about.

nov-payroll-news

 

Auto Enrolment Pension
You are probably aware that Auto Enrolment applies to all employers however large or small. If you haven’t started the process of setting up a workplace pension yet, remember that Lewis Smith & Co. can help. We are able to give any information you need and get you up and running really quickly.

Check the Pensions Regulator website (http://www.thepensionsregulator.gov.uk/en/employers) for more details on what Auto Enrolment means for you.

National Minimum Wage
This has risen from the 1st October 2016 (notification previously sent) with a headline rate of £7.20 for over 25s.

Check the government National Minimum Wage rates page (https://www.gov.uk/national-minimum-wage-rates) for the rates for all wage groups.

 

Construction Industry Scheme (CIS)
If you are a contractor you must follow a number of CIS rules. These include checking with HMRC that your sub-contractors are registered with the scheme and providing them with a deduction of tax certificate.

If you aren’t sure of your obligations visit the government’s CIS webpages (https://www.gov.uk/what-you-must-do-as-a-cis-contractor/overview).

Online Payslips
Lewis Smith & Co. can now offer online payslips to its payroll customers. It’s another step forward in the digitisation of your business.

Find out more in our Online Payslips news item.

Holiday Pay and Annual Leave
The rules on the amount of leave and how much pay employees should receive are complicated and frequently change.

Find out more about what you need to do in our Holiday Pay and Annual Leave news item.

 

If you would like to discuss any of the topics detailed above then please call us today on 01384 235549 or email info@lewissmith.com.

 

 

Lewis Smith & Co. – Management accountants for Midlands business

 

 

Holiday Pay and Annual Leave

Are you up to speed on the rules?

impact of annual leave and holiday pay rules on your payrollThis is an area that has caused concerns for many employers and is something that is constantly changing as tribunal rulings and new legislation are updated.

Currently the statutory holiday leave for a full-time employee is 28 days, while part-time employees’ entitlement is adjusted pro-rata.

By law employers cannot pay for untaken holiday, it is at the employers discretion if any untaken holiday can be carried forward.  Additional care required when considering holiday pay for staff members working overtime and commission, and where there are accrued entitlements from maternity, paternity, adoption and sick leave.

Further guidance on holiday entitlements can be found on both the government website (https://www.gov.uk/holiday-entitlement-rights/entitlement) and the ACAS website (http://www.acas.org.uk/index.aspx?articleid=4109).

If you want to discuss the issues of holiday pay and annual leave on your business please call 01384 235549 or email info@lewissmith.com today.

 

Lewis Smith & Co. – HMRC investigations are on the increase. Do you need our fee protection service?

Online Payslips

Another step forward in business digitisation

online payslips for small businessesThis is a new, digitally secure way of sending payslips to your employees.

By law you have to give your employees a payslip. By using the online payslips system, your employees will all receive their weekly/monthly pay information directly (by electronic means).

Should they lose copies, all previous payslips are stored securely in their own private online space ready to download. It also saves time distributing paper payslips or printing emailed group payslips.

To add an extra professional edge, we can also customise payslips with your company logo and information if required.

To find out more setting up online payslips for your business please call 01384 235549 or email info@lewissmith.com today.

 

Lewis Smith & Co.  –  Need help with tax planning?

 

VAT MOSS compliance

Follow the rules for Electronically Supplied Services in the EU

If you offer electronically supplied services such as information downloads and eBooks to consumers in the EU then you need to follow the VAT rules.  Since January 1st 2015 VAT needs to be calculated on the basis of the appropriate rate in the purchaser’s country.

register for VAT MOSS if you sell electronic services into EU countriesFortunately you don’t need to VAT register in every single EU country.  Instead you can register in the VAT mini-one-stop-shop (MOSS) which allows you to submit a single VAT MOSS return and payment to HMRC once a quarter. HMRC then sends the relevant information and payment to the appropriate tax authorities.

If your turnover is below the VAT threshold you will have to register for VAT before you join the MOSS scheme.  You then send in nil UK VAT return.

VAT MOSS will still be applicable (in a slightly different form) even when the UK leaves the EU. So it pays make sure you are compliant.

More details on the scheme are available on the HMRC website.

If you have any questions about the VAT MOSS system or you need help sorting out VAT MOSS returns contact Lewis Smith & Co. today.

Call 01384 235549 or email info@lewissmith.com to set up an appointment.

 

Lewis Smith & Co. – Tax Planning Experts. CGT, CT, Income Tax and VAT

 

 

Declared Your Credit Card Sales?

HMRC says tell us now or face the consequences

HMRC’s Credit Card Sales Campaign is a voluntary disclosure facility for businesses who take credit card and debit card payments and who may not have reflected all of the transactions in a tax return.

HMRC credit card sales campaign. Declare your credit card and debit card income today

The campaign is an opportunity to come clean about both accidental and deliberate non-disclosure.  You will have to disclose all the income that was previously unreported and work out how much tax you owe.  The number of years you need to go back in your disclosure depends on why you didn’t disclose correctly in the first place.  If you deliberately misled HMRC then you must make a disclosure for a maximum of 20 years. You may also need to pay interest on unpaid tax and penalties too.

If all of this sounds like a lot of trouble to go through then remember that HMRC now has access to information on all credit and debit card payments in the UK.  They have said they will match that data with existing information received from businesses and open enquiries if they spot inconsistencies. They can go back up to 20 years and the more serious cases can lead to criminal prosecution.

If you don’t take this opportunity for disclosure then you are likely to face higher penalties if HMRC subsequently discovers the income.  You might even face criminal prosecution.

Our advice is to bite the bullet and go through the notification and disclosure process as soon as possible. Disclosure takes into account allowable expenses (if they haven’t already been declared), personal allowances and even tax credits, so it can get complicated.

Lewis Smith & Co. are here to help if you need it.  Call us today on 01384 235549 or email info@lewissmith.com to set up an appointment today.

 

Lewis Smith & Co. – Accountancy services for Stourbridge business.

 

Personal Savings Allowance

A little bonus for your tax return?

personal savings allowance - impact on your tax returnBack in April we highlighted that HMRC had introduced a tax-free allowance of £1,000 on savings interest.

Since many of you will be busy preparing your tax returns (you are doing that aren’t you?) it is worth reiterating some of the details of the allowance.

Basic rate taxpayers are entitled to the full £1,000 personal savings allowance, which is equivalent to the interest you would receive on £75,000 in some of the top savings accounts.

Higher rate taxpayers (earning £43,000 to £150,000) will be able to earn £500 interest with no tax, while those of you with income over £150,000 a year will be taxed in full on their interest income.

Interest income from most current and savings accounts from banks, building societies and credit unions is counted towards your allowance. Other less common sources include bonds, gilts, life annuity payments and interest distribution for some forms of investment like unit trusts.

Interest from tax free mechanisms such as ISAs and Premium Bonds isn’t included in your allowance.

The personal savings allowance is generally quite straightforward.  However your tax calculations might be a little more difficult if your savings income added to non-savings income takes you into a higher rate tax band or if your partner is already on a higher rate.

If you are unsure how the personal tax allowance affects your tax position then talk to Lewis Smith & Co. today.

Set up an appointment by calling 01384 235549 or email info@lewissmith.com.

 

Lewis Smith & Co – Providing accountancy services for Kingswinford businesses for more than 30 years.

Tax on Children’s Income

Children’s income is theirs, but…

For taxation purposes a child’s income (where children refers to stepchildren, illegitimate and adopted children) is theirs regardless of their age. In addition they benefit from a full personal tax allowance and are subject to all of the normal tax bands and rates.

Here comes the “but”.expert tax planning giving money to children

For unmarried children under the age of 18 income that comes directly or indirectly from a parent is treated as the parent’s own income, and tax is applied appropriate to that parent.  That means just “splashing the cash” on your offspring may have some unpleasant tax consequences

Fortunately there are some exceptions to the rule that you can take advantage of including;

  • Each parent can give monetary gifts to each child and provided any income generated from the gift is less than £100 for each child from each parent, then the income is taxed as the child’s.  If the income (interest from bank accounts for instance) exceeds £100, the whole amount and not just the excess over £100 will be taxed on the parent.
  • The return on National Savings ‘children’s bonds’ for under 16 year olds is tax exempt.
  • Personal pension contributions of up to £3,600 a year on behalf of a child are allowable.
  • Child Trust Fund Accounts can be established by parents for their children.

Interestingly grandparents aren’t treated as strictly as parents where it comes to helping out the children. So it might be worth a few conversations.

If you want to understand more about the tax implications of giving money to your children, why not talk to Lewis Smith & Co.?

Set up an appointment today by calling 01384 235549 or emailing info@lewissmith.com.

 

Lewis Smith & Co. – Expert tax planning in Dudley