CHANGES TO THE AMOUNT OF VAT ON DISCOUNTED PRICES

Currently when a business issues an invoice showing VAT calculated on a discounted amount but the discount isn’t taken up by the customer you don’t need to change the VAT amount.

For most customers that are VAT registered it is merely cash flow that is affected, as they can reclaim VAT paid on purchases anyway therefore it doesn’t matter to them how much VAT they are charged. However, for unregistered customers or those who are VAT exempt or partially exempt there’s a significant saving. Therefore those types of customers are likely to buy from a seller who offers artificially large prompt payment discount.

However changes are being made which will alter VAT calculations on discounted amounts. For supplies made after the 1^st of April 2015 you can choose to issue an invoice showing the VAT on either the full or discounted amount. If the customers qualifies for the discount and you have charged the full VAT you must issue a credit note. But if you have charged VAT on the discounted amount and they don’t qualify for the discount you will have to issue another invoice for the extra VAT only.

Think you are safe from an HMRC enquiry?… Think again

How does HMRC select investigations?

Click here to download the document to find out more.

The risk of an HMRC enquiry is a reality.

Individuals and businesses can be selected for investigation because they fall within a campaign category, a geographical task force area or because their income or net profit ratio appears too low.

Our tax investigations package offers businesses and individuals protection to ensure that in the event of an HMRC enquiry all your professional fees are provided for.

Our fee protection package offers:
• Up to £75,000 of accountancy fees
• Full representation to HMRC on your behalf including handling all correspondence and interaction, including attending any 1-1 meetings
• Comfort and peace of mind that we will fiercely defend any enquiry into you or your business

Business Works UK Ltd are delighted to have won two awards:

Manufacturing Accountancy Team of the Year – UK

Business Advisory of the Year – West Yorkshire

The awards are handed out solely on merit and are awarded to only the most deserving businesses who have been nominated by their clients, peers and industry experts, for their outstanding work over the past 12 months.

Jo Tomlinson, MD of Business Works said “I am delighted that our team has been recognised for their hard work, and am honoured that Business Works has received these awards.  We work very hard to provide clients with a service better than they expect, always striving to exceed expectations.  We do much more than just the numbers, we are here to hold our clients hand in all areas of their business growth and development.”

Speaking about the awards, coordinator, Siobhan Hanley said: “Finance is without a doubt one of the biggest and most widespread sectors we cover at Acquisition International, making competition for these awards particularly strong.

“Not just any business can be nominated for one of these awards and only the most forward- thinking, committed and results-driven firms, who have consistently produced standout work will walk away with one of our prestigious trophies.”

Thank you to everyone who took their time to vote for us – we really do appreciate it.

The HMRC can currently collect debts up to £3000 by adjusting tax codes this scheme is known as ’Coding Out’.

However due to changes in the law the amount of debts the HMRC can collect using this method has increased. This can apply to you if you have a debt with HMRC and are an employee paying tax through PAYE or receive a taxable UK based private pension.

These changes will only apply to underpaid self-assessment and class 2 national insurance debts as well as tax credit overpayments. Changes will become effective in your 2015-16 tax code and you will receive a letter before any debts are collected in this way.

The Sliding income scale is as follows:

If you don’t want the debts to be included in your tax code then you will need to pay the full amount you owe or discuss with HMRC a more suitable payment arrangement.

In their most recent quarterly bulletin the Pension Regulator revealed that they have issued the first fixed penalty notices. A fixed penalty notice under section 40 of the pensions act 2008 of £400 for failure to comply with an unpaid contributions notice or compliance note.

According to their research and analysis employers are failing to comply with their auto enrolment duties because of a lack of information in the following areas:

Self-Employment

Auto Enrolment duties can apply to self-employed people with a contract and are those who are not undertaking the work as part of their own business. Fixed term or non-permanent workers should be assessed under the same criteria as other workers.

Postponement

Whether an employer postpones or not, their staging date remains the same. This means that they still have duties from their staging date. These include: issuing worker communications, postponement notices, and facilitating opt-in requests.

Opting In or Out

All eligible job holders must be Auto enrolled before they can chose to opt out. Employers must take immediate action to establish the workers enrolment date upon receipt of a valid opt-in notice.

Reassessing Eligibility

Employers must assess workers who may have previously been ineligible at each pay reference period to see if eligibility criteria have been triggered. They must also undertake further ongoing assessments in respect of workers ages, new starters, and the end of postponement or transitional periods.

The pension regulators research suggests that some small and micro employers don’t know when they need to comply with Auto Enrolment. In addition many queries revealed that some employers were unaware that the law applied to them.

1^st of October 2014 saw the National Minimum Wage increase

• The adult rate increased by 3% from £6.31 to £6.50
• The 18-20 year olds rate increased by 2% from £5.03 to £5.13
• The 16-17 year olds rate increased by 2% from £3.72 to £3.79
• The apprentice minimum wage increased by 2% from £2.68 to £2.73.

It is the low pay commissions target to ensure that the minimum wage keeps pace with inflation. This helps to reduce the negativities in the labour market such as in work poverty when those on low pay cannot afford inflated prices.

The changes will mean that more than a million people are set to see their pay rise by as much as £355 a year. The Business Secretary Vince Cable stated that “The National Minimum Wage provides a vital safety net for the lowest paid, ensuring they get a fair wage whilst not costing jobs. This year’s rise will mean that they will enjoy the biggest cash increase in their take home pay since the banking crisis.”

It is illegal to pay any less than minimum wage. Those who employers who fail to pay this rate will face tough action from the government including steep financial penalties and publicly naming flouters. If you are concerned that minimum wages are not being met you can call the free and confidential pay and work rights helpline on 0800 9172368.

Research by the Pensions regulator shows that micro employers are unprepared for auto enrolment with as many as 20% of them unaware of their staging date.

When asked if each size of business understood all five key features of the reforms, the results showed that the smaller the business the smaller the percentage of understanding. Businesses with between 50 and 60 workers displayed 85% of understanding, whilst only 49% of micro employers understood these five key features of Auto Enrolment.

The research into the attitudes to the changes in the pension scheme revealed varying opinions. On a positive note at least 74% of all businesses who will be involved in the changes to pensions state that they will be able to deal with the admin demands and view the changes as a good idea in principle. However 49% of micro employers believe that it will be financially difficult to make contributions to the scheme.

If you are unaware of your businesses staging date for auto enrolment call us now on 0113 2864486 with your PAYE reference and we will find out for you.

Currently the place of taxation is determined by the location of the supplier. From the 1^st of January 2015 the place of taxation will change to where the EU consumer lives.

An estimated 34,000 Digital Services businesses are eligible in the UK for VAT Mini One Stop Shop (MOSS). This will allow businesses to register online for VAT services meaning that they do not have to register VAT separately in each country where they do business. Between 27,000 and 42,000 UK businesses are expected to register for the VAT MOSS service and can begin registering on the 20^th of October.

Digital Service businesses include: broadcasting, telecommunications, e-service supplies, telephone services, music suppliers, films and games suppliers and apps services.

If you supply consumers through an online store or gateway it is their responsibility to declare and pay any VAT due. In this instance the rule changes do not directly affect you.

If you are an EU business you may register and use the union VAT MOSS online service in the member state of your business establishment. You will then be able to submit a single calendar quarterly VAT MOSS return and payment covering EU digital service supplies.

To find out more about changes to VAT follow the link: http://www.hmrc.gov.uk/posmoss/

If you would like advice about your VAT scheme or would like us to submit your VAT return on your behalf please contact us.

Thousands of people will receive a second tax statement from HM Revenue and Customs after the first estimate was miscalculated.

The HMRC states that errors had emerged in the process due to receiving incomplete information from employers.

“The majority of the errors have happened because an employer failed to make a final payment statement for the 2013-14 tax year meaning our records were incomplete despite reminders that these submissions had to be made,” a spokesman for HMRC said.

They have issued an apology and have stated that they will ‘push the boat out’ to help those who had already received a rebate and spent it.

HMRC and employers now use a Real Time Information system that is supposed to ensure accurate PAYE information is sent regularly rather than just at the end of the tax year.

The Institute of Financial Studies (IFS) have announced that September is an important month for the Automatic Enrolment pension scheme. Those businesses with 61 employees begin their auto enrolment duties. There is only 12 months until employers of less than 30 workers will have a duty to stage auto enrolment.

Businesses that his their staging date 5 months ago must complete their ‘Automatic Declaration of Compliance’ with The Pensions Regulator.

It is important to consider payroll and Auto Enrolment assessment software as they hold the information required to run automatic enrolment and can improve the process and communications involved in a successful scheme.

You must also have a qualifying workplace pension scheme which will need to be registered with the Pensions Regulator and checked to ensure that it meets the new Auto Enrolment standards.

Opt out rates by workers are a lot lower than we had expected at just 8.5%. Fortunately the majority of employees are aware that they should be saving for their retirement and value the pension set up for them by their employer.

To reduce the complications of the scheme you are advised to begin planning earlier and involve your staff in the decisions that matter to them.

There is a growing need for smaller employers to obtain information, help and guidance from external sources because they might not be large enough to employ someone in house to deal with their new duties.

If you require any assistance in setting up Auto Enrolment and would like to find out more contact us.