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Jan 24

Tax Diary December 2018/January 2019

 1 December 2018 - Due date for Corporation Tax due for the year ended 29 February 2018.

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

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

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

30 December 2018 - Deadline for filing 2017-18 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2019-20.

1 January 2019 - Due date for Corporation Tax due for the year ended 31 March 2018.

19 January 2019 - PAYE and NIC deductions due for month ended 5 January 2019. (If you pay your tax electronically the due date is 22 January 2019)

19 January 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 January 2019.

19 January 2019 - CIS tax deducted for the month ended 5 January 2019 is payable by today.

31 January 2019 – Last day to file 2017-18 self-assessment tax returns online.

Jan 24

Are you eligible to claim the Marriage Allowance?

 Marriage Allowance lets you transfer £1,190 of your Personal Allowance to your husband, wife or civil partner - if they earn more than you.

This reduces their tax by up to £238 in the tax year. To benefit from this arrangement, you (as the lower earner) must have an income below your Personal Allowance - this is £11,850 for the current tax year.
You can backdate your claim to include any tax year since 5 April 2015.

If your partner has died since 5 April 2015 you can still claim - phone the Income Tax helpline. If your partner was the lower earner, the person responsible for managing their tax affairs needs to phone.

Who can apply?

You can benefit from Marriage Allowance if all the following apply:

  • You’re married or in a civil partnership.
  • You do not pay Income Tax, or your income is below your Personal Allowance (£11,850 for 2018-19).
  • Your partner pays Income Tax at the basic rate, which usually means their income is between £11,851 and £46,350.

If you’re in Scotland, your partner must pay the starter, basic or intermediate rate, which usually means their income is between £11,850 and £43,430.

It will not affect your application for Marriage Allowance if you or your partner:

  • are currently receiving a pension;
  • live abroad - as long as you get a Personal Allowance.

If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.

Jan 24

Disqualified from acting as a director

When a director has been found guilty of mismanagement verging on fraud, one of the remedies that the courts can impose is disqualification as a director. But what does this actually mean?

A disqualified director has to abide to the following restrictions:

  • While the order or undertaking is in force, it stops a person acting as if they were a director. Accordingly, you cannot avoid the order, or undertaking by simply changing the job description.
  • The order or undertaking also means that you must not get other people to manage a company under your instructions. If you do, those people may also be prosecuted for assisting you in contravening the order or undertaking.

The order or undertaking does not stop you having a job with a company, but unless you have court permission it does stop you:

  • acting as a director of a company;
  • taking part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership;
  • being a receiver of a company's property.

You also cannot act as an insolvency practitioner.

In addition to companies, you must not do any of the prohibited acts in relation to the following organisations: Limited liability partnerships (LLPs), Building societies, Incorporated friendly societies, NHS foundation trusts, Open-ended investment companies, Registered societies and Charitable incorporated organisations.

A disqualification order will not stop you carrying on a business as a sole trader. You could also trade in a partnership, but not a Limited Liability Partnership (LLP)

Jan 24

Increase in the Annual Investment Allowance

The Annual Investment Allowance (AIA) is being increased from 1 January 2019 to £1m from the present base level set some years ago of £200,000. The increase is due to be available for two years, until 31 December 2020. At this later date, the AIA will presumably return to the £200,000 limit.

The AIA is a 100% write down of qualifying asset purchases against business profits. For profitable companies, partnerships (excluding partnerships where one of the partners is a company or another partnership) and sole traders this is a generous tax break.

The AIA is available for most plant and equipment purchases, for example:

  • items that you keep using in your business, including commercial vehicles and cars if they are working assets, for example taxi cabs or driving school, dual control vehicles;
  • costs of demolishing plant and machinery;
  • parts of a building considered integral, known as ‘integral features’;
  • some fixtures e.g. fitted kitchens or bathroom suites;
  • alterations to a building to install other plant and machinery - this doesn’t include repairs.

The AIA is not available for purchase of:

  • cars that are not working assets;
  • items you owned for another reason before you started using them in your business; and
  • items given to you or your business.

Please call if you would like more information about this generous tax allowance.

Jan 24

Childcare scheme update

The childcare voucher and directly contracted childcare schemes closed 4 October 2018. In time, these schemes will be replaced by the roll-out of the new Tax-Free Childcare: this offers parents £2,000 per year per child towards approved childcare costs. (This is extended to £4,000 for disabled children.)

In a recent article HMRC confirmed the following instructions for employers:

  • Employees who joined a scheme and had the necessary changes made to their salary on or before 4 October, will see no change. Both you and your employees will continue to benefit from any Income Tax exemption or National Insurance contributions (NICs) disregard.
  • Applying to the scheme before the deadline is not sufficient and a new applicant needs to have had the necessary changes made to their salary by the deadline (4 October 2018) in order to benefit from the Income Tax exemption and NICs disregard.
  • If you continue to offer a scheme for new entrants after 4 October, you’ll need to deduct Income Tax and NICs on any vouchers given and pay employer NICs after this date.
  • Your employees need to tell you in writing (for example, by email) within 90 days if they start getting Tax-Free Childcare, so you can stop giving them vouchers and directly contracted childcare with Income Tax and NICs reliefs. If this means stopping or changing their salary sacrifice arrangement, you’ll need to update their contract and your payroll software. Employees won’t be able to return to your scheme once they’ve left.

Parents reading this post can check out what is available to their family under the new arrangements for child care support at https://www.childcarechoices.gov.uk/

Jan 24

Making Tax Digital timeline

As many readers of our newsletter will be aware, HMRC is moving forwards with their digitisation of taxpayer VAT and Income Tax reporting requirements under their much publicised Making Tax Digital (MTD) initiative. We have reproduced below recent announcements made by HMRC on this issue.

Mandatory filing of VAT returns using MTD compliant software will commence for all returns with reporting periods commencing after 1 April 2019. This will apply to VAT registered traders with turnover in excess of the present VAT registration limit of £85,000.

Traders in the following list can apply for a six month deferral, to October 2019 from this requirement. Those eligible for the deferral are:

  • trusts,
  • ‘not for profit’ organisations that are not set up as a company,
  • VAT divisions,
  • VAT groups,
  • those public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts),
  • local authorities,
  • public corporations,
  • traders based overseas,
  • those required to make payments on account and
  • annual accounting scheme users.

Finally, a reminder that the MTD process will not be rolled-out to other taxes (Income Tax and Corporation Tax for example) until April 2020 at the earliest.

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