SELF EMPLOYED – HELP WITH CHILDCARE COSTS

The scheme, introduced in April 2017, is available to all qualifying parents whether employed or self-employed.  The previous scheme of Childcare vouchers was only available if employers offered it and there was no such scheme for the self-employed.

The scheme is for parents whose youngest child is under 12 (under 17 if disabled) and you can receive up to £2,000 per year or £4,000 for disabled children, towards regulated childcare costs e.g. nurseries, childminders, after-school clubs or holiday clubs.

For Tax-Free Childcare both you and any partner (in the same household) are expected to earn, on average, the equivalent of 16 hours per week at the national living or minimum wage.  If your self-employed income varies from week to week, provided the 3 monthly average is equivalent to the minimum required then you will still be eligible.  However, if either parent earns more than £100,000 then you cannot claim for Tax-Free Childcare.

Parents on maternity, paternity, adoption leave, unable to work due to disability or caring responsibilities still may be able eligible.

Can I Get Help with my Childcare Costs? gives details of the new Tax-Free Childcare scheme and other available help with childcare costs.

If your employer still runs the Employer-Supported Childcare scheme (“Childcare Vouchers”) you may still be able to join up to 5 October 2018.  The HMRC website details the criteria for this.

Your circumstances will determine which scheme at present is best for you.  The HMRC childcare calculator will help with this decision.

A Payment on Account is a tax payment that is made twice a year by the self-employed or those with a tax liability of more than £1,000 and helps spread the cost of their tax bill.  HMRC calculate the amount due based on your tax liability for the current year and the total due is then split into 2 payments.

The first instalment is due 31 January (which coincides with the Self-Assessment deadline) and the second 31 July.  The payment on account includes Class 4 NI Contributions (if applicable) but not student loans or Capital Gains Tax.

If you have completed your Self-Assessment on-line then you should pay your Payment on Account on-line as well.  If not, then HMRC will send you a Bank Giro to pay.

As with many that are self-employed, income can fluctuate year on year.  Therefore, if you feel that your income for the coming year will be less than the previous year, you can apply for the Payment on Account to be reduced.  This can all be done on-line or by sending form SA303 to your tax office.  However, do be aware if it later results in you underpaying then HMRC will charge interest on any outstanding amounts.

If you need further information help with your Self-Assessment or Payments on Account then give us a call on 0113 2864486.

Source: HMRC

Though we are just over half way through the year and the deadline of 31st January for Self Assessments seems a long way off, there are advantages to submitting it early.

We know running your own business is busy any time of year.  By getting your Self Assessment out of the way it enables you to:

• Potentially pay less tax – you are more likely to remember what you have spent regarding business expenses and to find relevant receipts/invoices.  This in turn could reduce the amount of tax you need to pay.
• Budget
  • Filing your tax return early will mean you know how much you owe and thereby give you time to budget for the payment that is due on 31st January.
  • If you are due a repayment from HMRC, it is more likely to be processed more quickly.
• Payments on Account – if you are required to make payments on account, them submitting your tax return may enable you to reduce your July payment on account, if your income has reduced.
• One thing off your mind – though not many like completing their tax return, once completed it is then one thing off your mind.  After Christmas always seems like a good idea but is it……

If you need help with your Self Assessment then give us a call on 0113 286 4486

The managing and processing of timesheets can be a time-consuming task but there are Apps that help both the employee and employer, thereby reducing the time spent.

We use TSheets.  It enables you to track, manage and report time of a given task, client, job etc.  It can be used on a PC or mobile phone and integrates with various payroll and accounting software packages.

Employees can clock in and out and track their time on different jobs, clients or tasks.  Changing from one task or client to another is quick and simple.  GPS location tracking is also available for those employees out and about on the road, so they can log each job on the move plus travel time as well.

Holidays can be tracked and available time off is visible, too.

Reports can then provide all the information needed for payroll in an easily accessible format.

If you wish to know more about T-Sheets then give us a call on 0113 286 4486.

If you receive Working Tax Credits, a renewal pack should have been sent to you and you need to renew your tax credits by 31 July.

In order to complete your renewal you will need,

• Your National Insurance Number
• If applicable, details of any changes to your circumstances
• You and your partner’s total income for the last tax year.

You may need to complete a Self-Assessment to be able to calculate this income.  You need to complete a self-assessment tax return if,

• You’re self-employed and your income is more than £1,000
• You got more than £2,500 from renting out property. If between £1,000 and £2,500 contact HMRC.
• You received more than £2,500 in other untaxed income e.g. tips, commission etc.
• Your income from savings or investments was £10,000 or more before tax
• Your income from dividends from shares was £10,000 or more before tax; you need to tell HMRC if it was over your dividend allowance
• You made profits from selling such things as shares, a second home or other chargeable assets and need to pay Capital Gains Tax
• You were a company director – unless from a non-profit organisation (e.g. a charity) and you did not get any pay or benefits like a company car
• Your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit
• You had income from abroad that you needed to pay tax on
• You lived abroad and had a UK income
• Your taxable income was over £100,000
• You were a trustee of a trust or registered pension scheme
• You had a P800 from HMRC saying you did not pay enough tax last year – and you did not pay that you owe through your tax code or with a voluntary payment
• Your State Pension was more that your Personal Allowance and was your only source of income – unless you started getting your pension on or after 6 April 2016

Source: HMRC

Manually keying receipts and invoices can be time consuming, but there are a number of Apps on the market which mean you no longer need to do so.

We use Receipt Bank and Auto Entry.  These are data capturing tools and they aim to capture, analyse and post invoices, receipts and statements into your cloud accounting packaging.

The benefits are:

• Save time – no need to manually input invoices, receipt or statements, thereby eliminating manual inputting errors.
• Paperless – securely stored data in the cloud therefore no need to store, file, print or copy these documents going forward.
• Integrations – seamless automation of said documents to your cloud accounting package
• Mobile App – the App on your mobile (IOS and Android devices) enables you to submit invoices and receipts wherever or whenever

Receipt Bank is more cost effective for higher transactional users and Auto Entry is great for lower volumes.  Various pricing plans are available for both.

If you require further information about data automisation and how this can benefit your business, then get in touch on 0113 286448

Employers who provide expenses or benefits to employees or directors may need to inform HMRC and pay tax and National Insurance on these expenses.

The most commonly known are company cars, health insurance, travel and entertainment expenses and childcare.  Depending on the type of expense or benefit will result in what you have to report and pay.  The HMRC website has an A-Z of expenses and benefits.

The deadline for submission of P11d’s and payments are detailed below, so be sure that you submit what is needed and by the deadline.  Penalties will be charged if these are missed.

6^th July

• Submit your P11D forms on-line to HMRC
• Issue P11Ds to relevant employees
• Inform HMRC of the total amount of Class A National Insurance that you owe on form P11D(b)

22^nd July – payment to reach HMRC by or 19^th July if paying by cheque

• Pay any Class 1A National Insurance owed on expenses or benefits

Penalties will apply if your P11D (b) is late, £100 per 50 employees for each month or part month.  Plus, penalties and interest if you are late paying HMRC.

Source: HMRC

The dividend tax-free allowance has been reduced from £5,000 to £2,000 from 6^th April 2018 after the Chancellor, Philip Hammond announced this last year in the 2017 Budget.

The significant decrease in the tax-free allowance will affect employees and directors of small businesses who are paid wholly or partly through dividends as opposed to a salary.

For dividends above £2,000, the tax you pay is based on your tax band (marginal tax rate).  The different dividend tax rates are:

Income tax band

Basic rate                            7.5%

Higher rate                         32.5%

Additional rate                  38.1%

For those receiving more than £10,000 in dividends you will need to complete a Self Assessment.

If you require further information on this or require assistance then call us on 0113 2864486.

The minimum amount that employer’s have to pay into a workplace pension scheme is increasing from 6^th April 2018 to a minimum of 2% of qualifying earnings.  Employees will contribute 3% ensuring a combined total minimum contribution of 5%.

More than 9 million employees, so far, have been auto enrolled into a workplace pension scheme, helping people save for their retirement.

The minimum contributions to be paid are required by law and as an employer you must ensure the minimum contribution is made by both yourself and the employee.  However, as the employer you can pay both minimum contributions if you so decide thereby the employee pays no contribution.

As an employer you need to ensure that your payroll and pension provider have put steps in place to pay the increased amounts from 6^th April.  It is recommended that employers write to staff informing them of the said increase in contributions.

These increases apply whether staff are paying into a pension scheme set up through auto enrolment or you are using an existing scheme.  No action is required if you have no employees in a pension scheme for auto enrolment or you already pay above the minimum required.

Further minimum increases will apply from 6^th April 2019 to 3% for employer and 5% for the employee, making a total combined minimum amount of 8% of qualifying earnings.  These rates will then remain unless the government in future make changes to auto enrolment.

Further information on minimum contribution increases can be found by clicking the link.

Source: The Pensions Regulator

As from 1^st April the National Minimum and National Living Wage will be:

• The adult rate has increased by 4.4% from £7.50 to £7.83.
• The 21-24 year olds rate has increased by 4.68% from £7.05 to £7.38
• The 18-20 year olds rate has increased by 5.35% from £5.60 to £5.90
• The under 18 year old rate has increased by 3.7% from £4.05 to £4.20
• The apprentice minimum wage has increased by 5.7% from £3.50 to £3.70

With the minimum wage increases more employers than ever will be directly affected including even those that presently pay above the minimum wage.

It is illegal to pay any less than the minimum wage. Those employers who fail to pay this rate face tough action from the government.  Not only will employers have to pay back arrears of wages to the worker at current minimum wage rates but they also have financial penalties of up to 200% of arrears, capped at £20,000 per worker.

Last month (March 2018) the government named and shamed nearly 179 employers for underpaying 9,200 minimum wage workers by £1.1 million.  Not only were back payments recovered the employers were fined £1.3 million for underpaying.

Within the governments Good Work plan it announced the right for all workers to have a payslip.  The new law could benefit up to 300,000 UK workers who currently do not receive a payslip.  For those who are paid by the hour their payslip will have to include how many hours they have been paid for.  The reason for this is to ensure the worker understands their pay and can challenge if wrong.

For help with employer enquiries about the National Minimum Wage call the HMRC helpline on 0800 9172368.

If you need help with your business wages or would like us to deal with your payroll matters, please contact us on 0113 2864486.