When do I need to fill in a Tax Return?

You may be wondering why you have been sent a notice to complete a tax return, or whether or not you should be completing one for the year.

The list below explains when you need to prepare a self assessment, but should you need any further information, please do not hesitate to contact us; 

  • You were self employed at any point of the tax year (runs from 6 April to 5 April)
  • You received more than £2,500 of un-taxed income for renting property or from un-taxed savings
  • You received dividend income of over £5,000 in the year
  • Your investment income was £10,000 or more before tax
  • You made a profit from selling a second property or shares and owe Capital Gains Tax
  • You are a company director
  • Your income was more than £50,000 and you or your partner claimed Child benefit
  • You received overseas income and need to pay UK tax on it
  • You lived abroad and need to pay tax on your UK income
  • Your income was over £100,000 for the tax year
  • You were trustee of a trust or registered pension scheme
  • If HMRC have issued you with a tax return, you must still complete and submit it

If you would like any advice on whether or not you should be completing a Self Assessment, or would like help completing and filing a tax return, please call 0845 303 1144 or email info@coopercurtis.co.uk 

Post by Caroline

Post by Caroline

 Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

The Not so 'Trivial' Benefits Exemption

Tax-free Trivial Benefits

A little known and underused tax free perk is the trivial benefits exemption.

A benefit provided to an employee is classed as a trivial benefit and therefore tax free for not only them, but a tax deduction for the employer too, provided that;

  1. It is less than £50, if given as a voucher it is non cash transferable,
  2. It is NOT a reward for services,
  3. And, it isn't included in the terms of an employee’s contract.

Examples

Trivial benefits could include, a gift voucher, a bunch of flowers, a meal out for employees under £50 per head.

To avoid the reward for service rule, the benefits could be given for a birthday, or a turkey or bottle of wine at Christmas, the birth of a child or a bereavement.

There is no limit to employees!

HMRC’s legislation does not state how many times per year you can give a trivial benefit to your employees. But be wise! Obviously a £50 gift every working day of the year would ring HMRC's alarm bells so we would advise that any trivial benefits made in the year are made as a gesture rather than a frequent payment.

Does this apply to company directors too?

Yes it does! To limit company directors taking advantage of this tax freebie, HMRC will allow trivial benefits provided to directors up to a value of £300 per year. So that’s a payment up to £50 once every two months. If your spouse is also a director that is another saving of £300 and a potential tax saving of £335 if both higher rate tax payers!

For more information on trivial benefits and other tax saving opportunities, contact Cooper Curtis on 0845 303 1144 or email info@coopercurtis.co.uk

POST BY CAROLINE

POST BY CAROLINE

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

Chancellor makes shock U-Turn! Cooper Curtis comment on Spring Budget

Last week saw Philip Hammond deliver his first Spring Budget as Chancellor. There were a few shock announcements on the day, one being the dividends allowance now reduced to just £2,000 from next year prompting some in-year tax planning for our limited company clients. 

After a heavy backlash from his opposition about tax rises, the chancellor has now abolished his plans to raise the Class 4 National Insurance from April 2018 one week after delivering his budget bringing a sigh of relief to many self-employed people. 

The changes proposed where the contractors IR35 status will be decided by the public body they are contracted with is still going ahead beginning from April 2017. 

If you have any questions regarding any topics covered in the Budget or would like any advice, please give us a call on 0845 303 1144 or email info@coopercurtis.co.uk.

 Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

Please beware of scam HMRC emails!

It's that time of year when scammers prey on cash strapped tax payers after Christmas. If you receive ANY email from HMRC saying that your are entitled to a refund there is a high probability that it will be a scam. HMRC will not contact you via an email address they are just not sophisticated enough to have these details for every tax payer.

Some of our clients have received very convincing emails asking them to fill in their bank details. PLEASE do not click on any links within the email or fill out ANY forms. It could not only download harmful viruses onto our computer, but unfortunately if you get that far, scammers could wipe your entire bank account.

HMRC will only contact you about a possible refund via post. If you are still unsure always ring the HMRC helpline to confirm that you are in fact entitled to a refund.

Here is an example of the beginning of a convincing scam email we have recently received;

If you would like any help on anything we have mentioned in our blog, please do not hesitate to contact us on 0845 303 1144 or email info@coopercurtis.co.uk. 

POST BY CAROLINE

Higher earning family?... Your state pension may not be protected!

The child benefit claw back for higher earners (those earning over £50,000) was first introduced back in January 2013, and meant those who claimed the benefit had to pay it back through a charge on their tax return. 

However, mothers with children born after 6 April 2013 may not realise that by not claiming this benefit as their partner is a higher earner, this could leave them with a big gap in their national insurance record affecting their state pension entitlements.

If this applies to you, take action now!

If you or your partner fall into this category, you should either claim child benefit and include the tax charge on the higher earner's tax return, or fill out the form CH2 to claim the child benefit at 0%. Those qualifying years will then be protected up until the child is 12.

Those who claimed child benefit before 2013 will still be protected until their child is 12. If you don't claim for children born January 2013 and onwards, you could be missing out on those all important contributions especially for those not returning to work once the child has reached 12.

To qualify for a state pension, you now need 35 years of NI contributions. 

Blog by Caroline

Blog by Caroline

 

 

If you would like further information on anything outlined above, please contact Cooper Curtis on 0845 303 1144 or email info@coopercurtis.co.uk.

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published

 

Are you looking to save money through a Childcare voucher Scheme?

A question we get often asked by our recruitment director clients' is; 

'Should I be operating a childcare voucher scheme through my own limited company?'

The facts.

An employer operating the Childcare voucher scheme will allow each parent paying basic rate tax, up to £55 per week or £243 per month tax free childcare for children up to the age of 15. Higher rate tax paying parents are allowed up to £28 p/wk and £124 p/mth respectively. Any vouchers exceeding this amount are subject to tax and NI and must be included on a form P11D. 

So, many limited company directors who employ their spouses, have use of twice the amount of vouchers. 

It works by having either a deduction in your salary (via a salary sacrifice) saving tax &NI, or having an addition to your salary, and having it as a company expense. 

Care needs to be taken when coming to a decision on which option to take. 

How it's done.

  • Your childcare provider must be registered with the OFSTED scheme. You can find out this information from the OFSTED website.

  • Set your scheme up IN YOUR COMPANY'S NAME through HMRC or pay for a scheme administrator such as Kiddivouchers or Edenred to do this for you.  

  • If you choose to use a scheme administrator they will charge commission on supplying the vouchers for this but is allowed as an additional business expense. (Yet more tax savings!) 

  • Payments MUST be made through the company bank.

The future of the Childcare Voucher Scheme.

The childcare voucher scheme is running out and no further parents can apply to join the scheme after April 2018.

You may already be aware of the Government's new 'Tax-free childcare' scheme which is being introduced from 2017. It will then be necessary for parents to decide which scheme would be more beneficial to them. There are more strict conditions with this new scheme. For example, both parents must be working and earning over a certain amount to enter the scheme.

How it works under the new 'Tax-free childcare' for every 80p paid into the scheme, the government will top this up by 20p up to a total of £10,000. For parents with lower childcare costs such as a couple of days a week, the current childcare voucher scheme may be more beneficial to them.

To conclude, in my opinion it is beneficial to enter the scheme and operate the vouchers through your limited company as long as your administration costs stay low and the costs don't outweigh the benefit. We will see what happens when the new 'Tax-free childcare' scheme is introduced next year and whether my view will change.

post by caroline

post by caroline

If you would like further information on how to set up a childcare scheme through your own limited company, please contact Cooper Curtis on 0845 303 1144 or email info@coopercurtis.co.uk.

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published

National Minimum Wage change to age bands from 1st October

From the 1st October 2016, the national minimum wage rates for the different age bands and for apprentices are increasing.

The new rates from next month will be as follows;

From October 2016 - April 2017

Adult rate (21+)NLW (25+)        £7.20

 Adult Rate (21-24)                    £6.95

YDR (18-20)                               £5.55

16-17 Yr Old Rate                       £4.00

Apprentice Rate                        £3.40

 

Please ensure your current payroll system is compliant in advance of the changes.

POST BY CAROLINE

POST BY CAROLINE

 

If you would like more information on the minimum wage requirements or have a payroll query, please contact us on 0845 303 1144 or email info@coopercurtis.co.uk. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published

Tax advantages for Employing your spouse

At first, the idea of giving a role in your organisation to your husband or wife might not seem particularly appealing. Working in such close proximity to your partner, could put a strain on your relationship.

When you begin to take a deeper look into the consequences of such an arrangement however, perhaps it isn’t the worst idea after all…

Clearly, you know the person well, and therefore all the concerns about trust (should) go out the window.

From a financial point-of-view, there are certain benefits that you can achieve through employing a spouse. Let’s take a look at some of them now;

Use up your Tax Allowance!

Almost everyone living in the UK is entitled to an Income Tax Allowance; “the amount of income you can receive each year, without having to pay tax on it”. For the majority of the working public, this figure currently stands at £11,000.

By employing a spouse, you can make sure that your partner is using up all of this non-taxable income. If they do a job for free, pay them! After-all, it’s money going into your household – that isn’t getting taxed. Just think; how much would it cost to employ a non-family member to do the same job?
 
Higher Rate Business – Split your profits

 On a similar note; directors of a business which pays a higher rate of tax can also benefit from taking on a spouse, by making them “more than just an employee.”

If your spouse were to become a shareholder in the company, for example, “you can pay yourselves a mixture of salary/bonuses, benefits, and make use of the £5,000 dividend tax free band, thereby reducing your overall tax bills quite considerably. Not only this, but once more this in more money going into your household.

However, employing a spouse is not as easy as this. Before doing so, you must make sure you are aware of all your duties with regards to the law.
 

Save on National Insurance costs

Rising to £3,000 in April, the employment allowance can be claimed through the payroll giving relief on Employers NI as along as a director only business pays their additional employee more than £8,060.  

Don’t get caught out!

It is important that your spouse is treated like a “normal” employee. Just because you are in a personal relationship with them, it doesn’t mean you can exploit them for your own gain.

The National Minimum Wage rules therefore still apply, and your spouse must actually be paid what they are owed (and are thus affordable to you). Just like with a normal employee, if your spouse is not involved in any other paid employment, a starter checklist form must be filled out.

To avoid any unwelcome visits/checks from HMRC; make sure that your spouse is employed to do a “proper” job within your organisation. 
 

Employing a spouse is a good idea

 All in all, employing a spouse can often be a worthwhile venture for your business. There are many tax benefits (some listed above), that can be realised from doing so.

However, it is essential that if you are thinking about taking on your husband/wife, you do things by-the-book. One quick tip; if you pay them in cash, you may struggle to justify your activities should HMRC come knocking.

Post by Brian

Post by Brian

 

If you would like to find out more information about employing a spouse – or employment in general – check out the payroll section of our website.

Alternatively, get in touch with us at Cooper Curtis today on 0845 303 1144 and we’d be happy to help…

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published

Could your business benefit from using pool cars?

 Are you thinking of purchasing a pool car rather than going down the expensive company car route? It is possible, but if these strict conditions are met a business can escape a taxable benefit for their employees (and employers NIC!).... 

1/ The Pool car is made available to and used by more than 1 employee.

2/ It is made available by reason of the employee’s employment.

3/ The car was not used by 1 employee at the exclusion of others.

4/ In the case of each of those employees, any private use of the car made by the employee was merely incidental to the employee's other use of the car in that year (60% as a rule of thumb) such as a short diversion to shops on way to, or from work premises.

5/ The car was not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making the car available to them. (Eg setting off early to a business meeting.)

If any of the above conditions aren’t met, this will be classed as a company car and taxable benefit on each employee.

Do you have a query on pool cars? Contact Brian or Caroline on 0845 303 1144 or email info@coopercurtis.co.uk. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

Employment Allowance is £3,000 from April, but can you still claim?

The allowance gives relief from Employer NIC up to £2,000 rising to £3,000 from April, and can be claimed at the start of the tax year.

However....

This allowance will not be available to to employers if they,

  • Employ someone for household work ie Nanny, gardener, cleaner
  • Already claim the allowance through a connect company or charity
  • Are a public authority such as a council
  • Carry out functions either wholly or mainly of a public nature such as NHS Services, debt collection for a government department, GP . This doesn't include supplying IT services, providing security or cleaning for a government building. 

Further restriction for one director only companies...

The July Budget (and again in consultation in January 2016) announced that from 2016, employers who are director only companies will be excluded from claiming the employers allowance.

If you are a one director company and wish to take on a member of staff, they must be paid over £8,060 in order to claim the allowance.

 

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax Services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in WarwickBirmingham and Manchester

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Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

Cooper Curtis Accountants Comment & Guide to the March 2016 Budget

With the Budget taking place yesterday, there were a number of significant changes announced and confirmed coming in from April....

Some of these were expected, such as the Travel and Subsistence tax relief restriction for those employed via an employment intermediary. We expect the re-percussion of this will be a skills shortage for workers unwilling to travel. 

A surprising announcement was a drop in capital gains tax to 10% and 20%. This is the chancellor's move to encourage enterprise investments. But, this does not apply to residential properties or carried interest, which remain at the 18% & 28% tax rates. 

We knew the new dividend tax regime from April was going ahead so this comes as no surprise. We have been busy reviewing our clients' records over the past few weeks to seek out any tax saving opportunities. 

Read our Guide to the Budget Summary here

If you have any concerns about any of the announcements made in the recent Budget and would like a confidential chat to an advisor, please call 0845 303 1144 now or email info@coopercurtis.co.uk 

 

 

Year end personal pension planning...

If you're thinking of making a large personal pension contribution before the end of the year, you can take advantage of the pension carry forward rules in order to benefit from any unused allowances from the previous three tax years. 

This is generally the difference between the old £50,000 annual pension allowance and your pension input that year and can be added to your relief for 2015/16. 

Note that the annual pension allowance is £40,000 for 2015/16 and 2016/17.

To avoid losing pension relief brought forward from 2012/13 which lapses 5 April 2016, why not consider making an additional pension payment before 5 April 2016? If your pension input was £24,000 in 2012/13 then there is £26,000 unused relief available to add to your 2015/16 allowance. You would need to make gross pension contributions of at least £66,000 (£40,000 plus £26,000) to avoid losing this relief.

If you have income over £150,000 your annual pension allowance will be reduced by £1 for every £2 over £150,000.

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in WarwickshireBirmingham and Manchester

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

 

Are you a Landlord....? This blog's just for you!

If you are a landlord, then you're probably aware of the forthcoming changes to allowable expenses. 

Now is the time to be considering your options. 

In our latest blog, we outline these changes and offer some food for thought. 

 

Say farewell to your generous Loan Interest deduction.... 

Large property portfolio with high levels of interest on borrowings? This will affect you. 

You can still have 100% deduction of loan interest on a mortgage for 2016/17, however from 2017 it will be phased out as follows....

2016/17      100% deduction

2017/18       80% deduction

2018/19       60% deduction

2019/20     40% deduction

2020/21     20% deduction

2021/22       0% deduction

You could consider....

1.   Full incorporation - by moving properties and loans into a company.

2.  Pay down your borrowings.

3.  Sell up!

Jar_burano_4_houses.jpg

 

Is there any good news...?

Wear & Tear Allowance...  

The 10% deduction which was allowed against total rent income is being abolished.

Landlords will now be able to claim a deduction as and when they spend money on the property. 

Tax Point....!

Why not consider delaying any property expense until April 2016 to get the full deduction! 

Rent-a-room relief

Thinking about de-cluttering that spare room? Why not let it out and take on a lodger....or even start a small B&B in your own home? You can have tax free rent of £7,500 per year from April 2016.....! 

 

Do you have a large property portfolio and unsure what to make of these changes?

We can advise you on the best course of action to take. 

 

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in WarwickshireBirmingham and Manchester

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

 

Changes to reporting business expenses from April 2016

HMRC have confirmed that all dispensations agreed until 5 April 2016 will not apply after this date and there will be no requirement to report business expenses on a form P11D.

In the current year, employers can request a dispensation from HMRC to cover all genuine business expenses such as travel, business entertainment, and company car fuel avoiding the requirement to declare these on a P11D.

These changes will ease the burden of employers from the strict July deadline and hefty penalties issued for non-compliance.

We would recommend that you continue to have a system in place for checking that all claims made as a deduction are valid business expenses. 

All other non-allowable expenses and benefits in kind will be subject to tax and National Insurance as normal and continue to be reported on a form P11D. Any expenses or benefits provided under salary sacrifice arrangement will need to be paid after deducting tax and National Insurance. 

For more information on the above or advice on getting better controls in place for your business please call Cooper Curtis Accountants on 0845 303 1144.

 

Cooper Curtis is different in that they specialise in growing successful recruitment businesses through their Accounting Advisory service.

Contact Brian or Caroline on 0845 303 1144 for a chat to see how we can help you raise your game. 

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Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

 

Cooper Curtis gives the low-down on the National Living Wage

From 1 April 2016 employees that are 25 years old and over are legally entitled to receive a'National Living wage' of £7.20 per hour, seeing a 50p increase. 

This new minimum pay rate is set to support the government’s vision of a 'higher wage, lower welfare, lower tax society.'

Those employers that don't comply will risk being named and shamed and tough penalties of up to 200% of arrears and a maximum of £20,000 per worker. 

We would recommend you take action before this date and review whether or not you should be making any changes to your payroll. Make sure you also inform your employees of any changes in pay. 

Other changes from April 2016

The personal allowance is set to increase to £11,000 from April removing more lower paid workers out of the tax bracket. 

For employees under 25, the 'National Minimum Wage' will still apply, the rates will be rising to; 

  • £6.70 for 21s and over
  • £5.30 for 18 to 20-year-olds
  • £3.87 for under 18s
  • £3.30 for apprentices (the rate applies to all apprentices in year 1 of an apprenticeship, and 16-18 year old apprentices in any year of an apprenticeship)

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

Save up to £212 with the marriage allowance!

If your spouse has some unused personal allowance, if you haven't done so already, you may be able to elect to transfer these and add them to your own personal allowance through an adjustment to your tax code. 

So long as;

- Both spouses are born after 6 April 1935

- One spouse has an annual income between £10,601 and £42,385

- The other spouse has income below £10,600 for the year to 5 April 2016. Or £11,000 from 6 April 2016.

If all the above apply, you should be eligible for this tax break. 

Speak to us for further information on applying for the marriage allowance. 

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester. 

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

 

How will dividends be taxed from April 2016?

From April 2016, the way dividends are taxed is changing. 

The 10% notional tax credit is being scrapped and there is now a £5,000 dividend tax free allowance per tax year.

After that, the tax rates are 7.5% up to the basic rate band (£5K tax free allowance forms part of this), then 32% for higher rate and 38.1% for additional higher rate.

Note, the new 'savings allowance' from April is in addition to the dividend allowance but is not available to use against dividend income, only interest.

Putting this into context, if you take an employment income of £8,000 and take out company dividends of £40,000, this will mean you will pay around £1,390 more in tax than before.

Should you be taking any action? 

If you have enough reserves held in the company, consider whether it would be beneficial paying a large dividend before April 2016.

Consider changing your year end to March if you haven't already, this way you can keep track of the dividends you are taking and this will make it easier to tie in to the year end. 

You should speak with your advisor on possible ways to mitigate this tax before April. 

 

To discuss how the new dividend regime will affect your business or to find out more about our pro-active services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

 

 

Tax Return Checklist

As the tax return season is upon us, we have compiled a checklist for you to use when gathering information...

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.