ARE YOU AWARE OF THE CHILD BENEFIT CHANGES FROM 2013?

Are you aware of the Child Benefit arrangements that began in 2013?  If not, then you are not alone, 100,000 families have been hit by the High Income Child Benefit Charge for “over-claiming” on their Child Benefit.

Child Benefit is payable to parents who are responsible for 1 or more children under 16 (or under 20 if in approved education or training).  £20.70 per week is payable for the eldest or only child and £13.70 per week per child payable for additional children.  So, for a family with 2 children, this is £1,788.80 per year.

From 2013, the Government introduced changes where one of the individuals in a household has an income over £50,000. In these circumstances, a High Income Child Benefit Charge may apply.  The joint income is not relevant i.e. if a couple earn £49,000 each per year they are not affected by the charge.

If you or your partner earn between £50,000 and £60,000 per year, then the charge you pay is 1% of the Child Benefit you receive for every £100 of income over £50,000 a year i.e. if you earn £55,000 per year then the Child Benefit charge would be 50%.  When you earn £60,000 per year the charge is 100% of the Child Benefit.

So, if you or your partner have an income of between £50,000 and £60,000, it is still beneficial to claim the Child Benefit and recommended that you register for self-assessment.  Once either income rises to £60,000 per year then it may be best to decide not to receive Child Benefit payments (as you will need to repay this).  As a note you can choose not to receive the Child Benefit at any time!

HMRC still recommend you complete the Child Benefit claim form, in the first instance when your child/children are born, even if you decide not to take the payments as,

• It helps you receive National Insurance credits which in turn go towards the State Pension
• It will mean that your child is registered to get a National Insurance number when they are 16 years of age.

Finally, it is you or your partners responsibility to ensure the above is followed otherwise you may have to pay back any Child Benefit that you should not have received plus charges may apply if this occurs.

If you need assistance with this or completing a Self-Assessment then please call us on 0113 286 4486.

Trivial benefits were introduced in April 2016 and are tax-free to the employee with the employer not needing to notify HMRC on a P11D. A trivial benefit is,

• The cost of providing a benefit so long as it is no more than £50 (if above £50 then the full amount is taxable, not just the excess above £50)
• The benefit is not cash or a cash voucher
• It isn’t in the terms of the contract to receive the benefit
• It is not a reward for their work or performance.

It is the cost per employee that is trivial whether the employer gives it to one or 300 employees and not the total cost of the benefit to the employer.  The £50 is also inclusive of VAT if the benefit given includes it, regardless of whether the employee recovers the VAT.

If the employer cannot work out the exact cost per employee when given to a large number of employees, then the average cost per employee must not exceed £50 for it to be classed as trivial.  The only stipulation is that the other conditions must apply.

The employer must use a common sense approach with HMRC giving examples.

If a group of 5 employees were out for a meal together and the total bill is £240 then HMRC will accept that this is an average of £48 per employee.

However, if say 25 employees are given bottles of wine for Christmas and the total bill comes to £1,000, with some costing £15 per bottle for employees and others £140 per bottle for the directors. In this situation it is practical to determine the cost of the individual benefit per employee and director.  The £15 bottle is trivial whereas the £140 bottle will need to be full declared.

If you would like any further assistance and guidance on this, please do not hesitate to contact us on 0113 286 4486.

As from 1 September 2018 HMRC have announced an Advisory Electric Rate (AER) for 100% electric cars for the first time of 4 pence per mile.  Electricity is not a fuel for car fuel benefit purposes.

The Advisory Fuel Rate (AFR) and the new AER can be applied for fuel per mile,

• to reimburse employees for business travel in their company cars.
• when you require employees to repay the cost of fuel used for private travel.

If your employee does not repay the private fuel used during the tax year then you will need to,

• report on their P11D
• pay Class 1A National Insurance on the value of the fuel benefit

The AFR rates from 1 September will be,

Engine size                                         Petrol – amount per mile                             LPG – amount per mile

1400cc or less                                      12 pence                                                          7 pence

1401cc to 2000cc                                 15 pence                                                          9 pence

Over 2000cc                                         22 pence                                                         13 pence

Engine size                                         Diesel – amount per mile

1600cc or less                                     10 pence

1601cc to 2000cc                                12 pence

Over 2000cc                                        13 pence

AFR and the new AER are deemed to be tax and National Insurance free.

If you travel as a result of running your business (other than home to work) and

• are unsure on what you can claim
• are considering your options regarding the company purchasing a vehicle
• want to understand the rules around company car benefits in kind
• or anything else associated with business travel

Please contact us so that we can ensure the advice you are given is specific to your circumstances on 0113 2864486

Source: HMRC & AccountingWeb

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