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Self-employed should be aware of self-assessment registration deadline

HMRC must know about any new source of income by 5th October in the tax year following it’s establishment. The concern, with only a short time left to register for self-assessment, is that self-employed and gig-economy workers may be unaware of this requirement.

Should you be registered for self-assessment?

For these individuals, work doesn’t always come in a steady stream and assignments may be ‘one-off’, or otherwise very casual. This leads to uncertainty about whether income is or is not taxable. The truth is that even the most casual activity, or one-off job, may be taxable.

The Low Income Tax Reforms Group (LITRG) is concerned that self-employed and gig-economy workers may not fully understand their responsibilities. Even where no Income Tax or National Insurance is due, HMRC should still be notified of any new income. In these instances, preparing and filing a self-assessment tax return may still be necessary.

You can find out if you need to register for self-assessment and send a self-assessment tax return here on the GOV.UK website.

Failure to notify HMRC and failure to prepare and submit a return accordingly may result in financial penalties. 

Where the 5th October deadline is missed, the individual should still register for self-assessment as soon as possible. If the tax owed is paid on time (31st January 2018), then penalties may not be imposed.

Simple assessments

In the same week, as various reminders emerge about self-assessment, HMRC also began to rollout simple assessment notices. These notify taxpayers of Income Tax or Capital Gains Tax due without the need for a tax return submission.

HMRC will only issue these in straight-forward cases, where it has access to all the 3rd party information it needs.

Although this seems to be a step towards improving the efficiency of the tax system and making it easier for the taxpayer to navigate, it is not entirely failsafe. If a taxpayer receives a simple assessment notice, it is vital that they carefully check the details that HMRC has used for its calculations and ultimately whether they agree with any amount owing as a result.

HMRC are allowing a 60-day period, within which taxpayers must query a notice if they believe it to be incorrect. We urge taxpayers to engage swiftly upon receipt of a simple assessment notice. If you fail to query the notice within 60 days, you cannot appeal and you must pay any tax due.

Here at George Hay, whether self-assessment or simple assessment we can help you to fulfil your obligations. Contact us today on 01767 315010, to find out more.

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HMRC release September 2017 advisory fuel rates

HMRC has now published the latest advisory fuel rates (AFR), effective from 1 September 2017, for users of company cars.

If you drive a company car, you can’t claim business mileage but you can recoup the cost of fuel for business journeys using HMRC’s recommended advisory fuel rates.

Compared with the rates applied in the previous quarter, there have been only 4 changes; the rates for diesel and LPG vehicles, over 2000cc, have fallen by 1 pence per mile as well as petrol and LPG vehicles between 1401cc and 2000cc which are also subject to the same reduction.

Advisory fuel rates are applicable only under the following circumstances:
– To reimburse employees for any business travel in their company car; or otherwise,
– to reclaim money from employees to cover the cost of fuel for personal travel in their company car

The new advisory fuel rates

HMRC accepts that there is no taxable profit on reimbursed travel expenses, where the rate per mile paid does not exceed the AFR. Likewise, in these circumstances, no Class 1A national insurance is payable.

Advisory fuel rates are calculated based on engine size and the type of fuel that the vehicle requires. Below are the rates effective from 1 September:

advisory fuel rates

 

 

 

advisory fuel rates

The above applies to all journeys, made on or after 1 September, until further notice. However, for one month from the date of change, employers can opt to use the previous quarter’s rates.

HMRC review the AFR four times a year and take into account recent fluctuations in the cost of fuel when doing so. It will publish rates for the next quarter shortly before 1 December 2017.

So how will it affect you?

If you… cover the cost of fuel yourself your employer can choose whether or not they wish to reimburse you. Should they opt to reimburse you, the rate that you receive must be correct. If the rate you receive is higher than the AFR, your employer must provide evidence to support the higher rate. You may face tax and national insurance liabilities if use of the higher rate cannot be justified.

If you… use a company card to pay for fuel then you will likely find yourself repaying your employer for any private trips that you take in the company car. In some cases, if you have the relevant evidence, you may repay at a lower rate, relative to the cost of your fuel.

If you… don’t pay anything towards your fuel and your employers covers the total cost you may have to pay fuel benefit tax.

Tax relief

There are a couple of instances whereby you may be eligible to claim tax relief on fuel costs, as follows:

– Your employers pays you less than the advisory rate
– Your employer does not reimburse you at all

Either way, you’ll need to fill in HMRC Form P87, or a self assessment tax return if your claim exceeds £2,500 and keep records to support your business mileage and fuel costs.

Further information about advisory fuel rates can be found here on the GOV.UK website.

 

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UK businesses still struggling with Automatic Enrolment

As UK law now states, it is your job as an employer to enrol all eligible employees onto a workplace pension scheme and contribute towards it. This is called ‘Automatic Enrolment’.

During 2017 it is estimated that approximately 700,000 employers will stage.

Are employers complying with Automatic Enrolment?

Figures recently released by The Pensions Regulator show that just over 598,100 out of 1.4m employers have submitted a Declaration of Compliance, up to the end of May 2017. However, there is still a shortfall of approximately 800,000 employers who are not yet compliant with the schemes legal requirements.

All businesses existing prior to April 2012 will have passed their staging date by now, while other companies will still be in the process of staging. The Pensions Regulator has issued a warning to businesses looking to begin trading from October this year (see our earlier blog post). The warning highlights the immediate pensions duties that these businesses must observe.

If you are planning to begin trading and recruiting from October, you will have an immediate legal obligation to your employees in respect of pensions. Therefore, you cannot afford to forget about, or ignore, your Automatic Enrolment responsibilities.

Non-compliance leads to naming and shaming

If you fail to fulfil your legal duties, you can expect to face significant financial penalties or other enforcement action taken against you.

So far, The Pensions Regulator has issued more than 16,000 penalty notices to those failing to comply and has now begun to name and shame these businesses online. It has published details of employers who have paid penalties but remain non-compliant and employers who have failed to pay and are now facing a court order.

Whatever you do, do not ignore your auto-enrolment responsibilities. At George Hay, we can support you throughout the process and ensure you are fully compliant. Get in touch with our team today on 01767 315010.

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Instant pension duties for start-up businesses

Businesses who begin trading and recruiting from 1st October this year will have instant pension duties to fulfil. This warning comes as the current schedule for employers to meet their automatic enrolment obligations comes to an end, meaning all businesses who existed prior to April 2012 will now have passed their staging date.

Specifically, the duties will apply from the first day that the first member of staff commenced work, referred to as the ‘duties start date’.

The Pensions Regulator (TPR) has launched an online bank of information and relevant tools to help new businesses, as well as their advisers, understand and fulfil their obligations. New employers will also receive written guidance, from The Pensions Regulator, explaining what they must do and highlighting the deadlines associated with the process.

One exemption that may apply to these new businesses is in respect of PAYE; when it comes to having a PAYE scheme in play, if staff earn £490 a month or less then HMRC may not require the employer to set one up.

If you’d like more information, there is now a new ‘employer’ landing page on The Pensions Regulator website, which can be found here.

At GH Payscheme, George Hay’s specialist Payroll Bureau in Biggleswade, Letchworth and Huntingdon, our team can assist you with administering your chosen workplace pension scheme and help you to ensure that you comply with the requirements of Auto Enrolment.

If you’re a business looking to start employing your first members of staff later this year, or if you’d just like to find out more about the services we offer, talk to one of our advisers today.

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Top Tips for the end of the tax year

Are you making the most of the allowances and tax advantages available to you? Are you aware of how certain changes to the tax system may impact you and your business? Have you planned and prepared for the new tax year? Here’s some top tips that just might help…

Top 7 Tips

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Contact Us

Our Offices

Bedfordshire (Biggleswade)
Brigham House, 93 High Street, Biggleswade, Bedfordshire, SG18 0LD
Tel: 01767 315010

Hertfordshire (Letchworth)
Unit 1b, Focus 4, Fourth Avenue, Letchworth Garden City, Hertfordshire, SG6 2TU
Tel: 01462 708810

Cambridgeshire (Huntingdon)
St George’s House, George Street, Huntingdon, Cambridgeshire, PE29 3GH
Tel: 01480 426500
© 2017 George Hay