A SIMPLE GUIDE TO THE BUDGET 2018
This is a basic guide, prepared by ACCA’s Technical Advisory team, for members and their
colleagues or clients. It is an introduction only and should not be used as a definitive guide, since
individual circumstances may vary. Specific advice should be obtained, where necessary.
The message from the Chancellor was that ‘this is a budget that shows the British people that the
hard work is paying off.’

Dividend allowance

The tax-free dividend allowance is unchanged at £2,000.

Stamp Duty Land Tax: relief for first time buyers

The chancellor announced relief up to the value of £500,000 back-dating from 22 November 2017,

so that those eligible who have not previously claimed first-time buyers’ relief will be able to amend

their return to claim a refund. This measure does not apply in Scotland or Wales

Corporation tax

The corporation tax rate will remain at 19%.

Annual investment allowance

Companies will be able to claim £1m as AIA for expenditure incurred from 1 January 2019 to 31

December 2020.

Structure and Building allowance

A relief of 2% will be available for expenditure on non-residential buildings, for which construction

contracts are entered into after 29 October 2018. Qualifying costs relate to construction,

improvement, conversion, including demolition costs and land alterations costs.

CGT letting relief and final period exemption

From April 2020 the government will reform lettings relief so that it only applies in circumstances

where the owner of the property is in shared occupancy with the tenant. The final period exemption

will also be reduced from 18 months to 9 months.

Making tax digital

There were no announcements on MTD. HMRC is aiming to introduce MTD for VAT in April 2019.

Making tax digital

There were no announcements on MTD. HMRC is aiming to introduce MTD for VAT in April 2019. VAT registration threshold remains £85,000 for 2018/19 and 2019/20.

Phoenix and insolvent companies

From 6 April 2020, the government will change the rules when a business enters insolvency HMRC

will be a preferential creditor. It has also announced that directors and other persons involved in

tax avoidance, evasion or phoenixism will be jointly and severally liable for company tax liabilities.

Business rates

The threshold for Small Business Rate Relief (SBRR) has been raised to include properties with a

rateable value of up to £51,000. The Treasury has announced that the bills of those below this

threshold will be reduced by a third, starting from April 2019 for a period of two years.

Apprenticeships

SMEs will now only pay 5% towards the cost of an apprentice’s training costs, down from the

previous 10% co-investment rate. This change is expected to come into effect from April 2019

Taxation of trusts

The taxation of trusts will be subject to a consultation and review

R&D

From 1 April 2020, the amount of payable R&D tax credit that a qualifying loss-making company

can receive in any tax year will be restricted to three times the company’s total PAYE and NICs

liability for that year.

IHT

The Nil-rate band remains at £325,000. The residence nil-rate band for deaths in the following tax

years will be:

• £100,000 in 2017 to 2018 £125,000 in 2018 to 2019

• £150,000 in 2019 to 2020 £175,000 in 2020 to 2021

Interest relief for landlords

Landlords will be able to obtain relief as follows:

Finance cost allowed in full          Finance cost allowed at basic rate

Year to 5 April 2018                                      75%                                        25%

Year to 5 April 2019                                      50%                                       50%

Year to 5 April 2020                                    25%                                          75%

Year to 5 April  2021                                   0%                                          100%

IR35

The chancellor announced the extension of IR35 to the public sector. It has been recognised with

issues with CEST and recent cases that changes require further thought with a resulting

implementation date of April 2020. The reform will apply to large and medium sized businesses.

Employment allowance reform

From April 2020, this will be limited to employers with an employer NICs bill below £100,000 in the previous tax year.

Entrepreneurs’ Relief

Legislation will be introduced in Finance Bill 2018-19 for disposal made on or after 6 April 2019, to increases this minimum period throughout which certain conditions must be met to be eligible for Entrepreneurs Relief from one year to two years

ACCA LEGAL NOTICE This is a basic guide prepared by the ACCA UK’s Technical Advisory Service for members and their clients. It should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary.

This year 2017 see’s major changes to the Flat Rate VAT Scheme (FRS), which is a simplified accounting scheme for small businesses. Businesses using the FRS will be expected to ensure that, for each accounting period, they use the appropriate flat rate percentage. At Premier Accountants in Kirkintilloch & North Glasgow, we have provided below a low down on the changes made.

Background on The Flat Rate VAT Scheme

Flat Rate Scheme is a simplified method for eligible businesses to work out their VAT liability by applying a fixed percentage, based on the trade or profession to the VAT inclusive turnover. This scheme was designed to reduce the cost of complying with VAT obligations by simplifying the way small business calculate their VAT. This is achieved by applying a fixed percentage depending on the trade or profession. Under this scheme any VAT reclaims are restricted (except on capital equipment greater than £2000).

Previously, limited company contractors had a choice of collecting 20% VAT from the customers and paying only 14.5% to HMRC which resulted in a gain of 5.5%.

What Changes Were Made to The Flat Rate VAT Scheme in April 2017? 

From April 2017, businesses qualifying as limited cost traders will have to pay 16.5% which means the gain will only be 3.5%.

Trader spending less than the following will qualify as limited cost trader:

• £250 / quarter or
• 2% of the VAT inclusive turnover.

whichever higher

Following expenses do not qualify:

• service which is not goods
• expenses on travel and accommodation
• means for employees or yourself
• fuel for vehicle
• rent, internet, phone bills and accountancy fees
• purchase of capital items such equipments.

Who Will Be Affected by The  Changes in The Flat Rate VAT Scheme in April 2017? 

In crux, the labour intensive business which spends less on goods such as IT contractors will be affected.

What to do:

Business in the first year of trading will still enjoy 1% discount which means their gain will be 4.5%  which is still significant.

Business not in the first year of trade must review their spending pattern and identify if they qualify as limited cost trader.

If they qualify as one then we suggest carrying a time benefit analysis to see if it still worth being on flat rate scheme or should the business consider de-registration or change of the scheme.

How Premier Accountants Can Help:

• We help client build smart business which results in higher efficiency in business operation.
• We keep clients up to date with latest developments and compliance requirements and hence saving from penalties etc.
• We offer fixed price services, which means no surprise bills. Our quote stays same through out the year and you can enjoy the services by paying a fixed monthly bill
• At the time of signing up we carry a out a health check
• You will enjoy unlimited ad hoc advice with the freedom to get in touch anytime and have your queries answered within four hours.
• We provide a 5 star service, working with a limited number of clients, thus providing a very tailored service to meet your needs.
• We keep in touch with you throughout the year to ensure you’re keeping records in the correct order etc .
• We conduct a pre-year end tax planning meeting with the client to ensure that right decisions can be taken before they year end.
• We use the finest and latest cloud technology in the industry to increase efficiency &reduce cost. This eventually transfer the benefit over to you as you will have complete use of our cloud software with a paperless office, allowing us to access client information even if we are not in the office.

We are here to help you with the way forward. Please contact us on 01417750070 or [email protected].

For a proper accounting of business, large international companies can afford to have their own internal team of accountants. This team evaluates profit potential, ensures prompt payment of taxes and manages company’s growth. Small businesses also need good accounting and while they may not be able to afford a team, they will do very well with a good accountant.

Here are ten reasons from us at Premier Accounting in kirkintilloch & North Glasgow on why you need an accountant for your small business to be a success:

1. A good accountant can help your business start properly in its initial stages. He manages your tax payment and he is also going to give good advice on how to solidify the structure of your business so it goes with the goals you have set.
2. An accountant is knowledgeable on what business structure a business needs and will help you choose the right for your business. Depending on your situation and goals, he could advise you go for a limited company, partnership, sole proprietor or a franchise.
3. Incorrect estimation of the expenditure or incoming cost of your business could prove to kill the business. An accountant will help with a proper estimate of your business cash flow.
4. Most accountants have experience working in different industries. With such knowledge and experience, they are more positioned to give advice if you are looking to push your business into different industries.
5. By law, there are some financial tasks that can only be handled by an accountant. Having an accountant to handle these tasks makes your business a law abiding one and you will be free of any fine or legal action attached to breaking this law.
6. Accountants are well respected and connected in business communities and can give your link your business to important contacts. A good accountant knows how to prepare a business finance for investors.
7. Accountants are in the know when it comes to new tax regulations, having one for your small business ensures you do not have to pay more than you need to for taxes.
8. During the early stages of a business, issues are bound to occur and as a first timer, you might not know how to handle these problems. An accountant is skilled in providing a solution to these issues. He will also help you learn more about your business.
9. Every small business owner plans to expand one day, as your business grows and the number of staffs increases, salary payment becomes a cumbersome task for you. An accountant can help with that and he ensures that every staff is paid on time and with the right amount.
10. Most accounting processes are done digitally these days but choosing the right accountancy software to use for your business can be difficult. An accountant knows the right software to use for your business and will tutor you on how to use the software to access and manage your account.

How Premier Accountants Can Help

• We help client build smart business which results in higher efficiency in business operation.
• We keep clients up to date with latest developments and compliance requirements and hence saving from penalties etc.
• We offer fixed price services, which means no surprise bills. Our quote stays same through out the year and you can enjoy the services by paying a fixed monthly bill
• At the time of signing up we carry a out a health check
• You will enjoy unlimited ad hoc advice with the freedom to get in touch anytime and have your queries answered within four hours.
• We provide a 5 star service, working with a limited number of clients, thus providing a very tailored service to meet your needs.
• We keep in touch with you throughout the year to ensure you’re keeping records in the correct order etc .
• We conduct a pre-year end tax planning meeting with the client to ensure that right decisions can be taken before they year end.
• We use the finest and latest cloud technology in the industry to increase efficiency &reduce cost. This eventually transfer the benefit over to you as you will have complete use of our cloud software with a paperless office, allowing us to access client information even if we are not in the office.

For a free consultation on the issue, please contact us on 0141 775 0070.

Help with Avoiding HMRC Tax Penalties from Premier Accountants in Glasgow

Proper accounting is important for the success of every business. So if you plan on being self-employed or you are currently building your business, this is something you should be aware of. At Premier Accountants in Kirkintilloch, Bishopbriggs & Glasgow, we bring you a guide on how to avoid HMRC tax penalties and self assessment penalties.

Accounting mistakes and poor handling of financial records can lead to the contractual problem, a cut in company’s income and they could also attract penalties from HMRC. As a business owner, you should know that by law you are meant to keep accurate and timely account records, make payment promptly and ensure timely submission of all required paperwork and processed returns.

What are the Late Filing Penalties for Self-Assessment?

Every registered self-employed person is to complete a yearly self-assessment form and submit before the circulated deadline. Paper tax returns are to be completed and submitted on or before midnight on 31^st of October while online returns are to be completed by midnight on January 31^st. A single day delay in submission will attract a penalty and those who delay submission by more than a day will have heavier penalties.

• There is a £100 fine for submitting a return three months from the deadline.
• Delaying tax returns for 6 months attracts a fine of £100 plus 5% of the tax due or £300, whichever is greater.
• Delaying submission of forms for a year attracts the £100 penalty and an additional 5% of the tax owed or £300, whichever amount is greater.
• In some serious cases, HMRC can demand 100% of the due tax, it has the power to do so. In such cases, you end up paying twice the amount owed in taxes.

Tax Penalties for Private Limited Companies

If your company is liable for corporation tax, then it is important you inform HMRC of these liabilities within a year after your corporation tax liability period expires. You will also be penalised if you do not deliver your return on the date specified in the circular to submit a tax return.

Depending on how HMRC see your actions, penalties can range from 0 – 100 %. Penalties are mild if HMRC see your excuse as genuine and reasonable and they can be harsh if HMRC views your actions as deliberate. Deliberately concealing your mistakes also results in harsh penalties.

What are Penalties for Late Filing With Companies House?

• Filing yearly accounts late by less than a month attracts a fine of £150 and £750 for private and public companies respectively.
• Submitting late by a month and three months takes the fine up to £375 and £1500.
• Penalties of £750 and £3000 are given for submission that is late by 3 to 6 months.
• Filing of accounts six months after the due time attracts a fine of £1500 and £7500.
• Consecutive late submission of the file up to the next year attracts double the initial fine in the second year.

How to Avoid HMRC Late Filing Penalties

You can appeal a HMRC decision to fine you or your company, but an appeal will be successful only if you can present a cogent excuse for filing and paying late. You can also prove that you were frugal and that errors made were simply mistakes that were out of your hands, HMRC may take a decision against imposing fine in such a case.

Penalties can affect your company strongly and cause you financial troubles so it is better to avoid them completely and the only way to do this is to keep up-to-date records, ensure early submission of all necessary paperwork and make all required payments on or before the deadline.

Preparing yearly accounting records and the tax return is time-consuming and can be tedious, particularly when you are paying attention to every detail and making sufficient research to avoid overpayment or underpayment of tax.

A professional accountant ensures that your records are up-to-date at all times, ensures the risk of being penalised is also eliminated and that all necessary payment are paid in due time always.

Book A Free Accounting Consultation at Premier Accountants in Glasgow

At Premier Accountants in Glasgow, we help our clients keep up to date with latest developments and compliance requirements and hence saving from penalties etc. Give us a call on 0141 775 0070 for more information.

How We Can Help:

• We help clients build a smart business which results in higher efficiency in business operation.
• We keep clients up to date with latest developments and compliance requirements and hence saving from penalties etc.
• We offer fixed price services, which means no surprise bills. Our quote stays same throughout the year and you can enjoy the services by paying a fixed monthly bill
• At the time of signing up, we carry out a health check
• You will enjoy unlimited ad hoc advice with the freedom to get in touch anytime and have your queries answered within four hours.
• We provide a 5-star service, working with a limited number of clients, thus providing a very tailored service to meet your needs.
• We keep in touch with you throughout the year to ensure you’re keeping records in the correct order etc.
• We conduct a pre-year end tax planning meeting with the client to ensure those right decisions can be taken before they year end.
• We use the finest and latest cloud technology in the industry to increase efficiency &reduce cost. This eventually transfer the benefit over to you as you will have complete use of our cloud software with a paperless office, allowing us to access client information even if we are not in the office.

If you are a small business, your chances of being investigated by HMRC are much higher than it was a few years ago. This is because HMRC is of the view that small businesses are not employing best record keeping or paying correct tax which is resulting in billions of pound tax gap.

You will be surprised that big corporations like Cafe Nero, Vodafone some time pays zero tax. List of big corporations paying nil or little tax  Still the focus is small businesses!

In 2015 we started offering representation to the businesses and individuals under investigation and since then we have dealt with a number of enquiries. In 2017, we dealt with 4 full investigations and provided an effective and informed representation to our clients.  If you or your business is under investigation, call us on 01417750070 or [email protected]  

Recent cases

In 3 of these investigations, we found that halfway through the caseworkers were changed which resulted in enquiry going longer than expected. Sure it does not help, moreover, the approach and requests of these caseworkers were also unusual such as asking for financial record prior to 8 years etc.

We expected that these caseworkers would be knowledgeable but we were surprised that their knowledge of basic tax rules was too little. Not sure if the reasons are inexperienced recruitment or lack of training!

Very recently in one of the enquiry, the caseworker found that the amount coming in the bank was more than the total turnover, therefore, an assessment of £14,000 was raised. The excess amount was a loan receipt and the caseworker did not even consider this possibility, moreover, we were not even offered a chance to clarify the situation.

The caseworkers are obliged to obtain all the facts before deciding that the taxpayers have paid less tax or deciding penalty. If things were done by books then HMRC should have contacted us or the client and requested an explanation.

Standing by our clients

On the receipt of the letter, we contacted the caseworker and found her completely lost. We made it clear that it is highly irregular and if they do not reverse the assessment then we will make a formal complaint of unfair treatment.

The result was that the caseworker agreed to take the assessment back.

It is extremely important that your business is being represented by experienced, informed and most importantly by a dedicated team. In this case, we felt that our client was being unfairly treated and we stood by our client and ensured that HMRC takes corrective measures.

If you or your business is under investigation, call us on 01417750070 or [email protected]  

Changes for self-employed people

Being self-employed brings many perks but like everything, there are sometimes challenges too. One of which materialises at the time of mortgage application. In case of an employed person, lenders are satisfied with just last 3 months bank statement and payslips.

Unfortunately, lenders are more sceptic about self-employed people. Usually, lenders require following for a self-employed person’s mortgage application:

• Tax overview – to ensure that the client does not owe anything to HMRC
• 2 years or more business accounts – to check the financial performance of the business
• Last 6 months bank statement – to check the management of personal finances
• Accountant’s letter – confirmation of income from the accountant (the accountant has to be a member of a recognised body like ACCA or ICAS)
• 2 years or more SA302 – tax calculation from HMRC and confirmation of annual income  – THIS IS THE MOST IMPORTANT PIEVE OF THE PUZZLE

Recent Changes (No more SA302)

Now HMRC does not issue physical SA302 calculations and the alternatives are:

Downloading tax calculations using the personal online account

To register for this you will need information like bank account details, P60, recent payslips or passport details.  But we have found that in few cases the clients were unable to set up the account.

Confirmation from your Qualified Accountant

Now HMRC has reached an agreement with the lenders and mostly all the lender should rely on the tax calculations from the accountants. Here is the list of all the lenders who will accept tax calculations from the accountants.

But ensure that your accountant is associated with a recognised body such as ACCA, ICAEW, ICAS etc.

We are members of ACCA and hold public practice certificate and can confirm our clients’ income by providing accountants reference or tax calculations.

If you have any question regarding your mortgage application, please contact us on 01417750070 or [email protected]

Do you accept card payments in your business? Important information for you

Last year HMRC published guidance for all the business that accepts card payments. The guidance is called Card Transactions Disclosure Programme.

HMRC can use its legal power to obtain information, directly from the card companies, about the income of the business.

This means that the businesses which receives card payments and have not declared correct amount of income to HMRC or have not registered with HMRC for the appropriate taxes must ensure that they make disclosure of the correct income to HMRC.

The programme allows businesses to voluntary disclose the correct amount of income and pay correct tax and take advantage of reduced penalties.

If your business accepts card payments and has not disclosed correct income to HMRC, contact Premier Accounting on 01417750070 or [email protected] and we can help you.