INTRODUCTION

When running a business, you can often find it difficult to cope with all the rules and regulations that you need to take into account to avoid trouble. Relax! At Together We Count, we make everything less stressful by taking charge of all your taxation compliance and accounting needs. What’s even better, you get excellent customer service.

Our business philosophy is based on the fact that we treat each and every client like they are our only client! As such, we don’t just sit around and wait until your annual accounts and tax returns are due. Instead, we talk to you throughout the year, and make sure that your tax is as efficient as it can be with pro-active tax planning, so that you get to keep more of what you make.

We have compiled the following report to outline a variety of taxes, key dates, deadlines and company director requirements. The information is only an outline and we recommend that you either call or email us at Together We Count to provide a fully comprehensive explanation and detail how each tax may affect you or your business personally.

 

Contents

INTRODUCTION.. 1

VAT (Value Added Tax) 5

VAT registration. 5

VAT Rates. 5

VAT Deadlines. 5

VAT Annual Accounting Scheme. 5

VAT Flat Rate Scheme. 6

VAT Payment details. 7

Information we require to prepare VAT return. 7

Making Tax Digital for VAT. 8

Invoicing. 9

Overview.. 9

Invoice – What they must include. 9

Sole trader invoices. 9

Limited company invoices. 9

VAT invoices. 10

Payment obligations. 10

Charging interest for late payment 11

Liability for disputed card. 11

Minimizing chargeback’s. 11

Regulation. 12

Protecting customer data. 12

Personal Allowance. 12

Corporation Tax. 13

Corporation tax return deadline. 13

Corporation tax payment deadline. 13

HMRC bank details –. 13

PAYE. 14

Payroll 14

Keeping records. 14

PAYE related forms;. 15

RTI (Real Time Information). 15

Paying HMRC.. 15

PAYE Payment details. 16

Pension Auto Enrolment. 16

Construction Industry Scheme(CIS) 16

Register as a contractor of subcontractor. 16

What you must do as a Construction Industry Scheme (CIS) contractor. 17

Record keeping. 17

SELF-ASSESSMENT. 18

Deadlines. 18

Payment. 18

Requirements. 18

Companies house requirements and deadlines. 18

Our requirements to prepare statutory accounts. 19

Confirmation statement ( Previously an annual return) 20

Company changes you must report 20

Changing your company’s registered office address. 20

Changes that HMRC must be informed. 20

Changes that must be reported to Companies House within 14days. 20

You must tell Companies House within a month;. 21

Changes that shareholders must approve. 21

New Pensions Regulation. 21

Employment allowance. 22

 

 

 

VAT (Value Added Tax)

VAT, also known in some countries as a goods and services tax (GST), is a general consumption tax added at each stage of a transaction, and is implemented as a destination tax based on the location of the customer.

The amount of VAT a business pays or claims back from HM Revenue and Customs (HMRC) is usually the difference between the VAT charged by the business to customers and the VAT the business pays on their own purchases.

VAT can be calculated based on the invoice date, the traditional scheme or payment and receipt date of transactions, known as the cash accounting scheme.

VAT registration

Your business start selling items that aren’t VAT exempt, you must register if the total value of non-exempt goods and services goes over the £85,000. Businesses that sell only VAT-exempt goods and services are not required to register for VAT

VAT Rates

            There are 3 different rates of VAT. 1-Standard rate 20%, 2- Reduced Rate 5%, 3-Zero rate

VAT Deadlines

The deadline for submitting the return online and paying HMRC are usually – 1 calendar month and 7 days after the end of an accounting period. You need to allow time for the payment to reach HMRC’s account. If deadlines are not adhered to you may be fined by HMRC.

For more information, see: https://www.gov.uk/vat-returns/deadlines

Below are some of the various VAT schemes:

VAT Annual Accounting Scheme

Usually VAT registered businesses submit VAT returns 4 times in a year, in the VAT Annual Accounting Scheme, you submit 1 VAT return a year.

 

Returns deadline: There are 12 months in your VAT accounting period. Your VAT Return is due once a year, 2 months after the end of your accounting period.

From 1 April 2019, most businesses will need to keep digital VAT records and use software to submit VAT Returns.

You can join this scheme if your estimated VAT taxable turnover is £1.35 million or less in the next 12 months. You must leave, if your VAT taxable turnover is (or is likely to be)more than £1.6 million at the end of the annual accounting year.

Payment deadlines: You must make advance payments towards your VAT bill (either monthly or quarterly) during your accounting period and a final payment when you submit your VAT Return.

Payment Deadline
Monthly Due at the end of months 4, 5, 6, 7, 8, 9, 10, 11and12
Quarterly Due at the end of months 4, 7 and10
Final payment Within 2 months of month12

 

More information on this scheme can be found on:

https://www.gov.uk/vat-annual-accounting-scheme/return-and-payment-deadlines

VAT Flat Rate Scheme

With the Flat Rate Scheme:

  • you keep the difference between what you charge your customers and pay to HMRC
  • you can’t reclaim the VAT on your purchases – except for certain capital assets costing over £2,000 (including VAT)
  • To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC.
  • You pay a fixed rate of VAT to HMRC
  • The VAT flat rate you use depends on your business type. If the rate changes, you must apply the new rate from the date it changes. The details of the rates can be found on: https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
  • We recommended that you review your rate once a month.
  • If you’re in your first year as a VAT-registered business, reduce the VAT flat rate by 1%. The reduced rate lasts until the day before your registration anniversary.

For more information, see:https://www.gov.uk/vat-flat-rate-scheme

VAT Payment details

Payment can be made to the following HMRC Account

SortCode:                       08 32 00

Account number:             11963155

Account name:                 HMRC VAT

Reference number: [Companies 9-digit VAT registrationnumber]

Please refer to HMRC website for more details: https://www.gov.uk/pay-vat/bank-details

Information we require to prepare a VAT return

To ease the pressure, we can prepare and submit your VAT return for you on your behalf. Please provide us with your management accounts for the latest period as well as the following items (where applicable):

  • Your cash book.
  • Petty cash records.
  • Sales and purchase daybooks.
  • Any ledgers that you keep.
  • All business bank statements.
  • Purchase invoices.
  • Sales invoices/details of takings
  • Cheque books and paying in stubs.
  • Your payroll records for the year together with details of PAYE calculations for payments to the HMRC.
  • Copies of any new loan or HP agreements taken out during the year.
  • Details of any business income or expenditure that didn’t go through your business bank account.
  • Property purchase details
  • Finance lease agreements
  • Details of investors, capital introduced etc.
  • Anything else you feel may be relevant – if in doubt, include it.

 

Making Tax Digital for VAT

Most VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85,000) are required to keep digital VAT business records and send VAT returns using Making Tax Digital-compatible software from 1 April 2019.

  • Sign up for Making Tax Digital for VAT at least one week before your VAT Return is due.
  • You’ll receive an email within 72 hours to confirm that you can submit returns using software that’s compatible with Making Tax Digital for VAT.
  • After you’ve signed up, you cannot use VAT online services to send VAT Returns.

 

Please refer to the HMRC website for more details on MTD compatible software

https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat

Please ensure that all of your purchase invoices are correctly made out to your business or company name. HMRC can disallow invoices which are not correctly addressed.

Please keep all accounting records for seven years. HMRC can investigate a business and go as far back as 6 years. HMRC may check your records to make sure you’re paying the right amount of VAT at any time so please ensure that your finances are in order.

Invoicing

Overview

Your invoice is a document that you send out from your business, so make sure that it reflects your brand – fonts, think logo, colours, and wording of the item descriptions and of your payment terms. An invoice is not the same as a receipt, which is an acknowledgement of payment.

Invoice – What they must include

It is very important that you clearly display the word ‘invoice’ on your invoice. You must include:

  • A unique ID number
  • The invoice date
  • Your business name, address and contact details
  • Correspondence business name and address
  • A clear description of what is being charged
  • The date the goods or services are provided (which is otherwise known as the supply date)
  • The date of the invoice
  • The amount(s) that is being charged
  • The total amount owed
  • VAT amount (if applicable)

Sole trader invoices

If you are a sole trader, your invoice must also include:

  • Your name and any business name being used
  • A contact address where legal documents can be delivered to you if you are using a business name

Limited company invoices

If you’re running a limited company, you must include the company’s full name as it shows on the certificate of incorporation.

You must also include your company registration number and what part of the UK your company is registered in.

If you decide to put the name of a director/member on your invoices, you must include the names of all directors/members.

VAT invoices

If you’re registered for VAT, it is compulsory that you include your VAT number on your invoices and complies with HMRC’s rules concerning VAT invoices. These rules include that an invoice must show:

  • A unique invoice number which follows a sequential order from the number of the previous invoice (if you cancel a serially numbered invoice, you must safe keep it to show to a VAT officer at your next VAT inspection)
  • The invoice date
  • The seller’s VAT registration number
  • The seller’s business name and address
  • A good description of goods or services supplied
  • The time of supply (also known as the tax point)
  • Customer’s name and address
  • The rate of cash discount
  • The total amount of VAT charged.
  • VAT registration number
  • The amount of VAT on each item
  • The VAT rate charged on each item

Payment obligations

You can set your own payment terms, such as payment upfront and discounts for early payment.

Either way, it is also important to make payment as easy as possible for customers to pay you. And make sure to include your bank account details on your invoices if you are making use of online banking or BACS as a means of payment.

If you choose to send your invoices through email and a service such as GoCardless or PayPal to collect payment from customers, make sure to include a link when sending the invoice via the email, so that customers can pay with one click.

Remember that it’s up to you to decide how quickly you want to get paid. So, ensure to set your payment terms and also make sure your customers keep to them!

Charging interest for late payment

You have the right to charge interest for late payment under the law, but you can choose not to.

Liability for disputed card

If a customer asks their credit or debit card issuer to revert a transaction, they have the right to reclaim the value of the transaction they made with you. This is known as a ‘chargeback’.

Cases for a Chargebacks include:

  • Untimely arrival of items purchased
  • When items aren’t as described
  • And also when a customer’s card was used in a fraudulent manner to purchase an item

You can as well be charged up to 120 days after a transaction has been debited or from when the goods or services are due to be received.

Minimizing chargeback’s

If a customer uses their PIN for the transaction, you’ll only be prone for a chargeback if the goods are faulty or aren’t as described.

However, if you can’t accept a PIN, a clear signature will really help but there is no guarantee against a chargeback in this case.

For card-not-present transactions, such as online trading, their will be very high tendency of a chargeback.

Regulation

If you have plans of setting up a business that takes a sum amount of money from a customer every time, they make use of the service, for example, online trading, you may be required to be authorised by the Financial Conduct Authority.

If customers settle you in large amounts of cash, your business may need registration with an anti-money laundering scheme.

Protecting customer data

You must follow the rules already laid down on safekeeping customer data so as to protect their financial information

Personal Allowance

The standard Personal Allowance is £12,500, which is the amount of income you do not have to pay tax on.

Income tax

The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £12,500.

Band Taxable Income Tax rate
Personal Allowance Up to £12,500 0%
Basic Rate £12,501 to £50,000 20%
Higher Rate £50,001 to £150,000 40%
Additional Rate Over £150,000 45%

 

You do not get a Personal Allowance on taxable income over £125,000

Corporation Tax

This is a tax on the company’s profits for the accounting period being prepared. A company tax return is prepared and submitted online; this form is called a CT600.

The Corporation Tax rate remains at 19% for the 2019/20 tax year. Government plans to reduce the rate to 17% for the 2020/21 tax year.

Corporation tax return deadline

Usually 12 months after the end of your accounting period. For more information, see:

https://www.gov.uk/company-tax-returns

Corporation tax payment deadline

The deadline for your payment depends on your taxable profits.

  • Taxable profits of up to £1.5 million: You must pay your Corporation Tax 9 months and 1 day after the end of your accounting period.
  • Taxableprofitsofmorethan£1.5million:

For more information, see; https://www.gov.uk/pay-corporation-tax

HMRC bank details –

Account name Sort code Account number
HMRC Cumbernauld 083210 12001039
HMRC Shipley 083210 12001020

Reference number: Use your 17-character Corporation Tax payslip reference for the accounting period you’re paying. HMRC will send you a payment slip, with the 17-character Corporation tax reference on it, once the CT600 has been submitted. Corporation tax can also be paid online when logging into your HMRC gateway. For more information, see: https://www.gov.uk/pay-corporation-tax/bank-details

PAYE

Payroll

If you decide to run payroll yourself, you need to complete certain tasks to pay your employees for the first time. You can choose when and how often to pay your employees.

 

More information on: https://www.gov.uk/paye-for-employers/setting-up-payroll

Keeping records

You must collect and keep records of:

  • what you pay your employees and the deductions you make
  • reports and payments, you make to HM Revenue and Customs(HMRC)
  • employee leave and sickness absence
  • tax code notices
  • taxable expenses or benefits
  • PayrollGivingSchemedocuments, including the agency contract and employee authorisation forms

 

Your records must show you’ve reported accurately, and you need to keep them for 3 years from the end of the tax year they relate to. HMRC may check your records to make sure you’re paying the right amount of tax.

See further details on: https://www.gov.uk/paye-for-employers/keeping-records

PAYE related forms;

  • P45: Shows how much tax has been paid on salary so far in the tax year
  • P46hassincebeen replaced by the starter checklist and provides a new employer with information about the employee transitioning part way through the year

More information can be found on: https://www.gov.uk/government/publications/paye-starter-checklist

 

  • P60: Shows tax paid on salary in the full tax year to 5 April
  • P11D: Tells HMRC about an employee’s benefits in kind

 

More information on this can be found on: https://www.gov.uk/paye-forms-p45-p60-p11d

RTI (Real Time Information)

HMRC require the payroll-related information to be reported in Real Time (RTI). To do this, payroll software would be required, which could either be free or Paid-for software.

The software will help with;

  • recording your employees’ details
  • working out your employees’ pay and deductions
  • reporting payroll information to HMRC
  • working out how much you need to pay HMRC
  • calculating statutory pay, e.g. maternity or sick pay

 

More information on this can be found on: https://www.gov.uk/payroll-software

Paying HMRC

  • Every month you have to pay HM Revenue and Customs (HMRC): the tax and National Insurance (and any other deductions such as student loans) you owe as reported on your Full Payment Submission (FPS) in the previous tax month minus their deductions on any.
  • Employer Payment Summary (EPS) you sent before the 19th in the current tax month.
  • Pay what you owe by the 22nd of the month (or the 19th if paying by post) – you may have to pay a penalty if you don’t pay on time

 

PAYE Payment details

Account name Sort code Account number
HMRC Cumbernauld 083210 12001039

Reference number: 13-character Accounts Office reference number as the payment reference followed by the tax year and tax month in YYMM format, for example, 2011.

For more information, see: https://www.gov.uk/pay-paye-tax/bank-details

Pension Auto Enrolment

All employers must provide a workplace pension scheme. This is called ‘automatic enrolment’.

Employers must automatically enrol employees into a pension scheme and make contributions if all of the following apply to the employee:

  • classed as a ‘worker’
  • aged between 22 and State Pension age
  • earn at least £10,000 per year
  • usually (‘ordinarily’) work in the UK

 

More information on this can be found on: https://www.gov.uk/workplace-pensions/joining-a-workplace-pension

Construction Industry Scheme(CIS)

Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC).

More information on this scheme can be found on: https://www.gov.uk/what-is-the-construction-industry-scheme

Register as a contractor of a subcontractor

Register as a contractor if either:

  • you pay subcontractors for construction work
  • your business doesn’t do construction work but you spend an average of more than £1 million a year on construction in any 3-year period

Register as a subcontractor if you do construction work for a contractor.

 

What you must do as a Construction Industry Scheme (CIS) contractor

  • You must register for CIS before you take on your first subcontractor.
  • You must check if you should employ the person instead of subcontracting the work. You may get a penalty if they should be an employee instead.
  • Check with HM Revenue and Customs (HMRC) that your subcontractors are registered with CIS.
  • When you pay subcontractors, you’ll usually need to make deductions from their payments and pay the money to HMRC. Deductions count as advance payments towards the subcontractor’s tax and National Insurance bill.
  • You’ll need to file monthly returns and keep full CIS records – you may get a penalty if you don’t.
  • You must let HMRC know about any changes to your business.

 

You must verify subcontractors, the following details the information which is required to do this:

  • Name, or the name of your business or company
  • Full address
  • UTR –
  • Partner’s name if in a partnership
  • National Insurance number
  • The partner’s UTR or National Insurance number if they’re a partnership (or, if the partner’s a company, that company’s UTR or company registration number)
  • Tax treatment? (Gross, standard or higher)
  • Company registration number (CRN)

 

Record keeping

Under the Construction Industry Scheme (CIS), you must keep records of:

  • The gross amount of each payment invoiced by subcontractors, excluding VAT
  • Any deductions you’ve made from subcontractor payments
  • If you made deductions, you must also keep records of the costs of materials the subcontractor invoiced you for, excluding VAT.
  • Keep these details for at least 3 years after the end of the tax year they relate to. HM Revenue and Customs (HMRC) could ask to see your CIS records at any time.
  • You could be fined up to £3,000 if you can’t show your CIS records when asked by HMRC.

More information can be found on: https://www.gov.uk/what-you-must-do-as-a-cis-contractor/record-keeping

SELFASSEMSMENT

Deadlines

Send your tax return by the deadline (31 January if you file online or 31 October if you file on the paper form, following the end of the relevant tax year ending 5 April).

Payment

Pay your Self-Assessment bill by 31 January & 31 July

More information can be found on: https://www.gov.uk/self-assessment-tax-returns

Requirements

Please contact Together We Count to discuss your personal tax return requirements.

company accounts

Companies house requirements and deadlines

After the end of its financial year, your limited company must prepare full (‘statutory’) annual accounts and a Company Tax Return

You need your accounts and tax return to meet deadlines for filing with Companies House and HM Revenue and Customs (HMRC).

Action Deadline
File first accounts with Companies House 21 months after the date you registered with Companies House
File annual accounts with Companies House 9 months after your company’s financial year ends
Pay Corporation Tax or tell HMRC that your limited company doesn’t owe any 9 months and 1 day after your ‘accounting period’ for Corporation Tax ends
File a Company Tax Return 12 months after your accounting period for Corporation Tax ends

 

For more details see: https://www.gov.uk/prepare-file-annual-accounts-for-limited-company

Our requirements to prepare statutory accounts

The information we require to prepare your accounts to include, where applicable:

  • A backup copy of your accounts software disc for the year if your records are computerised. Let us know the exact software and version and make sure you have a spare copy.
  • Your cash book.
  • Petty cash records.
  • Sales and purchase daybooks.
  • Any ledgers that you keep.
  • All business bank statements.
  • Purchase invoices.
  • Sales invoices/details of takings
  • Cheque books and paying in stubs.
  • Copies of VAT returns covering the year, together with any workings.
  • Your payroll records for the year together with details of PAYE calculations for payments to the HMRC.
  • Copies of any new loan or HP agreements taken out during the year.
  • Details of any business income or expenditure that didn’t go through your business bank account.
  • Property purchase details
  • Finance lease agreements
  • Details of investors, capital introduced etc.
  • Anything else you feel may be relevant – if in doubt, include it.

Confirmation statement ( Previously an annual return)

This is to be completed annually, around the anniversary of incorporating the company.

The purpose of the confirmation statement is to confirm all the non-accounting information about the company, such as directors’ details, shareholders, the share capital etc. have not changed, and that the information held by companies house is up to date.

For more information, refer to: https://www.gov.uk/file-an-annual-return-with-companies-house

Company changes you must report

You must report certain changes to Companies House.

Changing your company’s registered officeaddress

You must tell Companies House if you want to change your company’s registered office address. If the change is approved, they will tell HM Revenue and Customs (HMRC).

Your company’s new registered office address must be in the same part of the UK that the company was registered (incorporated).

Changes that HMRC must be informed

  • Business ‘contact details–e.g.yourname, business name or your personal or trading address
  • Appoint an accountant or tax advisor

 

Changes that must be reported to Companies House within 14days

  • the address where you keep your records, and which records you keep there
  • directors or their personal details, like their address
  • company secretaries(appointing a new one or ending an existing appointment)

 

You must tell Companies House within a month;

About issue of more shares in your company.

Changes that shareholders must approve

  • change the company name
  • remove a director
  • change the company’s articles of association

 

This is called ‘passing a resolution’. Most resolutions will need a majority to agree (called an ‘ordinary resolution’). Some might require a 75% majority (called a ‘special resolution’).

See additional information on: https://www.gov.uk/running-a-limited-company/company-changes-you-must-report

New Pensions Regulation

  • The minimum contributions you and your staff pay into your automatic enrolment workplace pension scheme increased on 6 April 2019. This is also sometimes known as phasing & that is employer responsibility to make sure these increases are implemented.
  • This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing scheme.
  • However, you don’t need to take any further action if you don’t have any staff in a pension scheme for automatic enrolment, or if you are already paying above the increased minimum amounts.

 

  • What Are The Increases?

 

Date Employer minimum Contribution Staff Contribution Total minimum contribution
New rates : 6  April 2019 Onwards 3% 5% 8%
Previous rates: 6 April 2018 to 5 April 2019 2% 3% 5%

 

  • If an employer decided to cover the total minimum contribution required then staff won’t need to pay anything.
  • Below components must be considered while contributing for the above scheme

 

-Salary

-Wages

-Commission

-Bonuses

-Overtime

-Statutory sick pay

-Statutory maternity pay

-Ordinary or additional statutory paternity pay

-Statutory adoption pay

 

See additional information on :https://www.thepensionsregulator.gov.uk/en/employers/increase-of-automatic-enrolment-contributions

Employment allowance

The Employment Allowance for the tax year 2019-20 remains at £3,000 i.e you could get up to £3,000 a year off your National Insurance(Class1) bill if you’re an employer.

Eligibility

-You are a business or charity (including community amateur sports clubs) paying employers’ Class 1 National Insurance

-You employ a care or support worker.

 

You can’t claim if:

  • You’re the director and the only employee paid above the Secondary Threshold (£157 per week)
  • You employ someone for personal, household or domestic work (like a nanny or gardener) – unless they’re a care or support worker
  • You’re a public body or business doing more than half your work in the public sector(such as local councils and NHS services) – unless you’re a charity
  • You’re a service company working under ‘IR35 rules(Off- payroll working rules) ’ and your only income is the earnings of the intermediary (such as your personal service company, limited company or partnership)

 

See additional information on: https://www.gov.uk/claim-employment-allowance

 

We hope that you have found this report useful, if you have any questions please do not hesitate to contact us on:

 

Email:   aaron@togetherwecount.co.uk

Tel:      01273 569 088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Copyright notice

This document is copyright of Together We Count – © 2019. All rights reserved.

Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following:

  • you may print or download to local hard disk extracts for your personal and non-commercial use only
  • you may copy the content to individual third parties for their personal use, but only if you acknowledge the Company as the source of the material. Together We Count Limited cannot be held responsible for any errors in this document.

You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or another form of electronic retrieval system.

 

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