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Jan 24

Reporting tips for building contractors

HMRC recently published a list of helpful reminders regarding the submission of monthly returns to HMRC. This article lists some of the points highlighted.

Each month contractors must send HMRC a complete return of all payments made to subcontractors within the scheme in the preceding tax month. This is regardless of whether the subcontractors were paid:

  • net of the standard deduction of 20%
  • net of the higher deduction of 30% or
  • gross (you still need to include gross payment status subcontractors on your monthly submission if you pay them in the month even though no deductions have been made from their payments).

This monthly return must reach HMRC within 14 days of the end of the tax month it is for.

You can make your monthly returns using either:

  • the free HMRC CIS online service or
  • commercial CIS software

Contractors who know they won’t be paying any subcontractors for several months should let HMRC know. You can do this by selecting the ‘Inactivity Request’ box under the declarations section of the return. HMRC will make your CIS record ‘inactive’ for 6 months which means you will not need to send any monthly returns (including nil returns) during this period of inactivity. If, however the situation changes during that time and you start to pay subcontractors again, you must tell HMRC.

If you stop using subcontractors within the Construction Industry Scheme permanently or stop using subcontractors but continue to have employees liable to PAYE deductions, you need to tell HMRC and they will update your records to show you are no longer a contractor. Once all the required contractor monthly returns have been received up to the requested date of cessation then no further monthly returns (including nil returns) should be submitted. If, however you start making payments to subcontractors under the Construction Industry Scheme again you will need to advise HMRC.

Jan 24

Saving the High Street

In his Autumn Budget delivered 29 October 2018, Philip Hammond made a number of promises including measures to improve the lack-lustre retail sector in our High Streets.

There is no doubt that the major online retailers have caused a major shift in the way we shop. As faster broadband has become more commonplace, and the use of computers a regular feature at home, the drift away from viewing and buying goods on the shelf to viewing pictures and click and buy on the internet, will likely continue.

At present, online retailers have a competitive advantage over their High Street competitors. They don’t have to pay:

  • business rates or rent for shop front property or
  • salaries to sales staff.

And in the case of the mega online retailers, who can afford to exploit the use of tax havens to shelter their trading profits, they do not pay comparable tax on their trading profits.

The recent Budget offered a one-third reduction in business rates for English retailers with smaller shop premises: those with a rateable value below £51,000. Although this reduction is for a limited period, two years from April 2019. Other regions to the UK may adopt a similar relief subject to decisions made by regional assemblies.

He has committed what seems to be a modest sum, £675m, to rejuvenating city centre areas. This will support the cost of:

  • improving traffic flows to shopping areas,
  • the renovation of empty retail premises to provide residential accommodation, and
  • the repurposing of older or historical property.

City centre shops depend on foot-fall, if shoppers don’t pass by, then it’s unlikely they will become customers. In this respect, the above investment should encourage people to live and shop in city centre areas.

Mr Hammond also committed to start the process of increasing the UK tax take from online retailers, social media outlets and search engines, who sell goods and services to UK users. A new digital services tax will commence April 2020 and will levy a charge of 2% on the revenues generated by these concerns to customers in the UK

Jan 24

£50 note gets new lease of life

The Treasury has confirmed that the £50 note will continue to be part of the UK’s currency, and further, that the Bank of England will reissue it as a new modern polymer note. According to Treasury sources this will help clamp down on crime.

The announcement follows a public consultation and the government has confirmed that the current mix of coins and notes will remain. The move will apparently give us more flexibility over how we spend and manage our money while making it harder for criminals to counterfeit the new note.

Originally introduced in 1981, there are currently 330 million £50 notes in circulation – with a combined value of £16.5 billion. According to the Bank of England, demand for the note is continuing to rise.

The Bank of England has also confirmed that the new £50 polymer note will be printed in the UK to accompany the existing £5, £10 and upcoming £20 notes. This will ensure that the UK’s currency continues to be secure.

Oct 4

Newsletter · Thursday, 4 October 2018

Our newsletter this month includes: the use of spreadsheets for VAT purposes, a change in the law to make invoice discounting easier for suppliers to larger companies, a discussion of what is and is not a reasonable excuse and passport issues if we fail to agree a deal with the EU next year.

Our next newsletter will be published on Thursday, 1st November 2018.

Oct 4

Tax Diary October/November 2019

1 October 2018 - Due date for Corporation Tax due for the year ended 31 December 2017.

19 October 2018 - PAYE and NIC deductions due for month ended 5 October 2018. (If you pay your tax electronically the due date is 22 October 2018.)

19 October 2018 - Filing deadline for the CIS300 monthly return for the month ended 5 October 2018.

19 October 2018 - CIS tax deducted for the month ended 5 October 2018 is payable by today.

31 October 2018 – Latest date you can file a paper version of your 2018 self-assessment tax return.

1 November 2018 - Due date for Corporation Tax due for the year ended 31 January 2018.

19 November 2018 - PAYE and NIC deductions due for month ended 5 November 2018. (If you pay your tax electronically the due date is 22 November 2018.)

19 November 2018 - Filing deadline for the CIS300 monthly return for the month ended 5 November 2018.

19 November 2018 - CIS tax deducted for the month ended 5 November 2018 is payable by today.

Oct 4

What is a reasonable excuse?

 HMRC is still required to obtain certain returns from you even if there is no income or tax to declare. Failure to submit will likely trigger late filing penalties and unfortunately, pleading ignorance of your obligations to file “nil” returns is not a reasonable excuse.

Which begs the question, what is a reasonable excuse?

HMRC had published what may, and what will not, be considered excusable. They say:

A reasonable excuse is something that stopped you meeting a tax obligation that you took reasonable care to meet, for example:

  • your partner or another close relative died shortly before the tax return or payment deadline,
  • you had an unexpected stay in hospital that prevented you from dealing with your tax affairs,
  • you had a serious or life-threatening illness,
  • your computer or software failed just before or while you were preparing your online return,
  • service issues with HM Revenue and Customs (HMRC) online services,
  • a fire, flood or theft prevented you from completing your tax return,
  • postal delays that you couldn’t have predicted,
  • delays related to a disability you have.

You must send your return or payment as soon as possible after your reasonable excuse is resolved.

What won’t count as a reasonable excuse are situations where:

  • you relied on someone else to send your return and they didn’t,
  • your cheque bounced, or payment failed because you didn’t have enough money,
  • you found the HMRC online system too difficult to use,
  • you didn’t get a reminder from HMRC,
  • you made a mistake on your tax return.

Often, failure to file is not a deliberate act. Unfortunately, appealing against what you consider to be an unreasonable stance by HMRC is not that simple, and ignoring the issue is not the way to go.

If you find yourself in dispute with HMRC on a late filing challenge, we can help. Please call us so we can discuss your options.

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