Hi everyone, I hope you all had good Easter breaks. Last weekend, everyone at Time Accounts took part in the Brighton Marathon 10K run to raise money for Worthing Hospital children’s ward, where my 2 year old son spent the month of January with a broken femur. The race round the Brighton streets was fantastic and we raised nearly £900!
So where to start….the countdown is on for the General Election with less than 3 weeks to go and the parties are all making their election pledges. These are varied and wide ranging and will all have a huge impact on the money in our pockets.
To win our votes the Conservatives are pledging to raise the inheritance tax threshold from £325,000 to £500,000 (or £1 million for a married couple) when a property is included in the deceased’s estate. Labour would cut tax for people on middle and lower incomes by introducing a starting 10p tax rate. The Liberal Democrats would launch a Help to Rent policy, which would provide young people living at home with a loan to help pay for a deposit on a rented home of their own. UKIP want to abolish inheritance tax and introduce a 30% income tax rate. The Green Party would look to introduce a ‘wealth tax’ of between 1% and 2% levied against the rich i.e. those with assets of £3 million or more.
The next 3 weeks and beyond are going to be fascinating and my next column will go through what effect the winning party’s manifesto will have on our finances.
My column this month isn’t focussed on one major issue but more a few interesting points that have caught my attention this month.
Class 2 National Insurance
The way in which you pay Class 2 National Insurance has changed from 6th April 2015. These changes mean that people in self-employment will now pay Class 2 National Insurance contributions as part of your self assessment tax return in January and July.
As before, your Class 2 National Insurance contributions will be calculated based on your business profits. However, the way in which you pay will change. Firstly, your current direct debit agreement with HMRC will end on the 10th July 2015.
Instead, your Class 2 National Insurance will be collected through income tax along with any Class 4 National Insurance contributions you make.
Remember, cancel your direct debit after 10 July 2015 rather than rely on HMRC stopping claiming the money!
Travel & Subsistence
There have been a number of cases in the press recently regarding what travel expenses are tax deductible. Travel from home to your office or usual place of business is not tax deductible. However if your home is your office, then surely travel from there to any other work related place should be tax deductible?
Generally yes, however this is not always the case. What has been argued and upheld by the courts is that if your travel from your home office to another business location is regular and predictable, HMRC will deem this location your place of business and as such the cost of travelling there from home is not tax deductible.
This is an area that HMRC are hot on at the moment so take professional advice when completing your tax return so as not to open yourself up to any HMRC enquiries.
Employers Allowance
This is the second year of its existence and it allows eligible businesses to receive a £2,000 deduction from their employer’s national insurance liability requirements. It previously excluded anyone who was employed for purposes connected with the person’s personal, family or household affairs. This was meant to prevent the wealthy claiming this allowance for their household staff but ended up excluding carers that help people in their homes.
As of 6 April 2015 the government extended the allowance to those households that employ care and support workers.
Payroll Real Time Information Penalties
As of March 2015, HMRC has now introduced in year penalties for late submission of payroll information.
The penalty for late submission of information starts from £100 for each month for micro employers (1-9 employee’s), £200 for 10-49 employees and even higher for larger companies.
Also penalty notification will only be sent on a quarterly basis and won’t be sent to your agent, so you could have £300 worth of penalties before you are even notified!
Thankfully your first offence is a freebie, but it is vital now to receive payroll information on or before the employee’s payment date.
HMRC have however allowed a grace period of 3 days from the date of payment for all employers to submit their RTI returns.
Important dates for your diary – Key dates coming up. Company accounts with a 31 July 2014 year end need to be filed at Companies House by 30 April or a £150 fine will be incurred for late filing! Quarter ended March VAT returns to be filed and paid by 7 May and March PAYE to be paid by 19 April. Don’t forget, your payroll end of year declaration MUST be filed by SUNDAY (19 April) or a £100 penalty will be incurred, plus employee P60’s have to be distributed to all staff still employed within a business no later than 31 May 2015.
I hope you found this article useful. Please remember to interact with me and let me know if you want anything covered in the next article.
My email address is hannah@timeaccounts.co.uk or you can follow my firm on Twitter @timeaccounts or visit our business Facebook page (Facebook/timeaccounts). Remember to like our page so you can keep on top of tax saving tips, deadlines and general Time Accounts updates.
See you next month. Next column coming Thursday 14 May 2015!
Time Accounts t/a Time Business Services are a local Hove based chartered accountancy practice dealing with all aspects of small, medium enterprises and their financial requirements, so just pick up the phone and call 01273 446595 or send us a call back request via our website Time Accounts and we’ll do the rest!
