News Archives - Page 5 of 6

ChadStone Celebrates it’s 5th Birthday!

10 May 2019/in News/by Georgia

The First Days

On the first day that ChadStone opened for business, Rob and I came into our office, plugged in our one phone and built our one flat-pack desk. There were supposed to be two, but one was broken so we ended up sharing. It was a funny, exhilarating, daunting time and we look back with fondness and with slight incredulity on the days when we took two weeks off to go on a group holiday together, and just left the office locked up!

We knew from the start that we had the technical skills to make an accountancy firm work but we also knew that we wanted to make ChadStone more than about facts and figures. We wanted it to be about great relationships and connections as well as great advice.

Celebrations

That’s why we held an event to celebrate our 5th year and to say thank you to some of the people that have been there right from the start or have provided amazing continuing support. The invite included friends, family and colleagues and a lovely afternoon was had by all (we hope).

It really gave us a chance to look back on our last 5 years and be proud of our hard work and success so far.

And that’s not to say we’re perfect and always get it right. We’re still working hard on making sure that we are as efficient as possible so that we can get work out in good time. As we grow and get busier this is even more important and which is why we have implemented a 90-day plan. We want to make sure that every client knows what tax they owe three months before their payment is due. We want to make sure that everyone has plenty of time to get prepared.

What is Next?

We’re also very happy to say that we’re taking on two new apprentices this year, Mollie and Alex who start in August. We think that they are both going to be a brilliant asset to the team, and we can’t wait for them to get stuck in. The addition of two more brilliant minds will mean that we can make sure that we are providing the best service we can.

The move to a new office is still on and actually much needed with our two new additions! We are running out of room in our current office so we’re massively looking forward to being able to move into an independent space that’s all ChadStone’s own. If for nothing else than for the parking! Our lips are sealed as to the location at the moment but watch this space.

Finally, we want to say a big thank you to all of you reading this, to all of your friends and family and to all of our clients. Without you, ChadStone wouldn’t be thriving as it is. We hope that we see you at our 10 year anniversary!

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

How Dividends are Taxed

2 May 2019/in News/by Georgia

The dividend tax allowance was introduced in April 2016. It replaced the old dividend tax credit with an annual £5,000 dividend allowance with tax payable on dividends received over this amount. The tax-free dividend allowance was reduced to £2,000 with effect from 6 April 2018.

The tax rate for dividends received in excess of the dividend tax allowance are taxed at:

– 7.5% for basic rate taxpayers,
– 32.5% for higher rate taxpayers, and
– 38.1% for additional rate taxpayers.

It should be noted that dividends falling within your Personal Allowance, do not count towards your dividend allowance and you may pay tax at more than one rate.

If you receive up to £10,000 in dividends, you can ask HMRC to change your tax code and the tax due will be taken from your wages or pension or you can enter the dividends on your Self-Assessment tax return. You do not need to notify HMRC if the dividends you receive are within your dividend allowance for the tax year.

If you have received over £10,000 in dividends, you will need to complete a Self-Assessment tax return. If you do not usually send a tax return, you need to register by 5 October following the tax year you had the income.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

Trading Income Priority Rules

1 May 2019/in News/by Georgia

There is specific tax legislation that seeks to determine which charge takes priority where two different charges could potentially apply to the same income. These rules are known as the ‘priority rules’.

HMRC manuals state that for Income Tax purposes, savings and investment income, and income otherwise within one of the charges on miscellaneous income, which also falls to be treated as a trade receipt is dealt with under the trading income rules. For Corporation Tax purposes, distributions from unauthorised unit trusts and income from the sale of foreign dividend coupons, which are also trade receipts, are dealt with under the trading income rules.

There are a number of exceptions to these rules. For example, a receipt or other credit item which would otherwise be treated both as a trade receipt and as a receipt of a UK property business is dealt with under the property income provisions.

The Income Tax priority rules must be considered together with other rules of law about the scope of particular provisions or the order of priority to be given to them. For example, there are particular rules which expressly require certain activities to be treated as a trade.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

VAT changes for CIS Sub-contractors

30 April 2019/in News/by Georgia

Important changes to the VAT rules for building contractors and sub-contractors are coming into effect from 1 October 2019. In a nut-shell, if you are subject to the Construction Industry Scheme (CIS) and if you are registered for VAT, from the 1 October 2019 you may need to change the way you account for VAT on supplies between sub-contractors and their contractor customers.

At present, sub-contractors registered for VAT are required to charge VAT on their supplies of building services to contractors. From 1 October, this approach is changing and sub-contractors will not add VAT to their supplies to most building customers, instead, contractors will be obliged to pay the deemed output VAT on behalf of their registered sub-contractor suppliers.

This does not mean that contractors, in most cases, are paying their sub-contractors’ VAT as an additional cost. When contractors pay their sub-contractors’ VAT to HMRC, they can claim back an equivalent amount as VAT input tax; subject to the usual VAT rules. Accordingly, the two amounts off-set each other.

The change is described as the Domestic Reverse Charge (DRC) for the construction industry. It has been introduced as an increasing number of sub-contractors have been registering for VAT, collecting the VAT from their customers, and then disappearing without paying the VAT collected to HMRC.

However, the change to DRC may create cash flow issues especially if you use the VAT Cash Accounting Scheme or the Flat Rate Scheme. We recommend that all affected CIS readers contact us so we can help you make the necessary changes to your invoicing and accounting software and reconsider the use of VAT special schemes if your continued use would adversely affect your cash flow.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

Government to End Free Movement If a No-Deal Brexit

30 April 2019/in News/by Georgia

If the UK leaves the EU without a deal in place on 31 October 2019, EU, EEA and Swiss citizens (and their family members) who are living in the UK by this date will still be eligible to apply for settled or pre-settled status under the EU Settlement Scheme and they will have until 31 December 2020 to do so.

Under Theresa May’s Government, in the event of a no-deal Brexit, temporary transitional arrangements were to be put in place for those EU, EEA and Swiss citizens arriving in the UK after exit day but on or before 31 December 2020. Under those transitional arrangements, EU, EEA and Swiss citizens would be able to come to the UK for up to three months to visit, work or study without applying for a visa. However, those who wished to stay in the UK for more than three months, would need to apply to the Home Office for the new status of “European Temporary Leave to Remain” (ETLR) and they would need to apply within three months of entry. ETLR was to be valid for a maximum of three years and would allow work and study, but it would not lead to indefinite leave to remain in the UK. A new immigration system would then take effect from 1 January 2021. Irish citizens do not need to obtain settled status and would not need to apply for ETLR.

However, the new administration, under new Prime Minister Boris Johnson, has now stated that the UK is leaving the EU on 31 October 2019 come what may, and that free movement will end immediately if the UK leaves without a deal. In the event of a no-deal Brexit, it is therefore seeking to introduce a new immigration system to take effect immediately from exit day, abandoning the proposed ETLR arrangements set out above. With only just over two months to go until exit day, there is no indication yet about what the requirements of this new immigration system will be. The Home Office has said that the new plans are being developed and will be announced shortly. In the meantime, it has confirmed that EU, EEA and Swiss citizens will still be able to come to the UK on holiday and for short trips, but what will change is the arrangements for them to come to the UK for longer periods of time and for work and study.

As a precaution, if you currently employ any EU, EEA and Swiss citizens who have not yet applied for settled or pre-settled status, you should advise them to do so before 31 October 2019, particularly if they intend to travel outside the UK after that date, so as to reduce possible difficulties in verifying their UK immigration status on re-entry. At the same time, in the event of a no-deal Brexit, any EU, EEA or Swiss citizens proposing to relocate to the UK for work after 31 October 2019 should not assume they will be able to do so without prior immigration permission. This means UK businesses currently have no idea whether they can recruit EU, EEA and Swiss citizens for vacancies with a start date after exit day. Finally, it is also not now clear how right to work checks are to be made on EU, EEA and Swiss citizens immediately after exit day in the event of a no deal.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

Simplified Expenses Use of Home

17 April 2019/in News/by Georgia

If a taxpayer is self-employed and running a business from home, there are simplified expense rules available for claiming a fixed rate deduction for certain expenses where there is a mix of business and private use. The simplified expenses rules are not available to limited companies or business partnerships involving a limited company.

The use of the flat rate expenses for core business activities carried out from the home eliminates the need to calculate the proportion of personal and business use for certain bills in the home; usually, this applies to various utility bills. Instead, a monthly deduction is allowable. The use of the simplified expenses regime is optional, and businesses can claim the trade proportion of actual costs.

The current monthly rates are based on the business use of the home as follows:

– 25 or more hours worked per month can claim £10.00
– 51 or more hours worked per month can claim £18.00
– 101 or more hours worked per month can claim £26.00

There is no issue if the number of hours worked varies from month to month as different amounts can be claimed for each month. The minimum number of hours worked in any month must be 25 or more. The flat rate doesn’t include telephone or internet expenses and the business proportion of these bills can be claimed by working out the actual costs. In addition, use of the flat rate deduction for household running costs does not prohibit a separate proportional deduction for fixed costs such as council tax, insurance and mortgage interest.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

Deregistering for VAT

12 April 2019/in Blog, News/by Georgia

A compulsory VAT deregistration is usually required if you:

– Stop making taxable supplies
– Sell your business
– Change legal status
– Disband a VAT group
– Join a VAT group
– Join the agricultural flat rate scheme

A voluntary VAT deregistration can be made if you do not expect your taxable turnover to exceed the VAT deregistration limit. The current deregistration limit is £83,000.

You will be required to submit a final VAT Return for the period up to and including the VAT deregistration date.

You must account for any stock and other assets you have on this date if:

– You could reclaim VAT when you bought them,
– The total VAT due on these assets is over £1,000.

You can also make late claims for input tax on invoices received relating to the period that you held a VAT registration. This can be done after the final VAT return has been submitted (subject to the usual VAT time limits).

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

Simplified Expenses Motor Vehicles

10 April 2019/in News/by Georgia

There are simplified arrangements in place for the self-employed (and some partnerships) to claim a fixed rate deduction for certain expenses where there is a mix of business and private use. The simplified expenses regime is not available to limited companies or business partnerships involving a limited company.

The fixed rate deduction can be used instead of working out the actual costs of buying and running your vehicle, e.g. insurance, repairs, servicing, fuel. The use of the simplified flat rates is entirely optional. However, once a decision is made to use the simplification for a specific vehicle, this must continue to be used for a vehicle as long as that vehicle is used for business purposes.

Under simplified expenses, the following flat rates per mile available.

– Cars and goods vehicles first 10,000 miles 45p
– Cars and goods vehicles after 10,000 miles 25p
– Motorcycles 24p

The number of people in the vehicle does not affect the rates above. The rates are only available for journeys, or any identifiable part or proportion of a journey, that are wholly and exclusively for business purposes. For example, travel from home to work is not a qualifying journey.

The self-employed can continue to claim for other costs not covered by the flat rate for mileage such as parking, tolls, and congestion fees as well as other separate travel expenses such as train journeys.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

Do You Trade With EU Companies?

9 April 2019/in News/by Georgia

The new Chancellor, Sajid Javid, has stepped up plans to help ensure businesses are ready to trade post-Brexit if the UK leaves the EU without a deal. If you trade goods with the EU then you will be responsible for making customs declarations, as is the case for businesses currently exporting goods outside the EU.

To do this, you must have a UK Economic Operator Registration and Identification (EORI). HMRC has been warning businesses for some time of the importance of obtaining an EORI number, but less than half of the businesses that need a number have applied for one.

Following the Chancellor’s intervention, HMRC has now started writing to businesses that have not yet applied for an EORI number. In these letters, HMRC is automatically allocating EORI numbers to some 88,000 businesses across the UK. If you have not yet applied for an EORI number, you should look out for a letter from HMRC allocating you an EORI number. All the letters from HMRC are expected to be sent by the end of the first week in September.

If the UK leaves the EU without a deal, you will need an EORI number to move goods into and out of the UK. This identification number will be required even if you use a customs agent to assist in making customs declarations.

If you deal with customs processes of EU Member States, you will also need to get an EU EORI number too. An EU EORI is valid across the entire EU, and you can get this from the EU member state you are trading with. If you have a subsidiary company that also trades goods with the EU, they will need to apply online for a UK EORI as these cannot be given automatically by HMRC.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]

Merchandise in Baggage in Case of No-Deal Brexit

5 April 2019/in News/by Georgia

There are special customs requirements for commercial goods or samples which are imported or exported by passengers in their accompanied baggage (hand carried) or in a small motor vehicle (carrying less than 9 passengers and weight 3.5 tonnes or less). This is known as Merchandise In Baggage or MIB.

MIB goods include the following:

– Goods for commercial sale
– Spare parts
– Trade samples

Whether or not they are:

– Permanently imported/exported
– Temporarily imported/exported
– In transit
– Liable to customs charges

HMRC has announced how these rules will be applied in the EU if we have a no-deal Brexit. This will include the introduction of transitional simplified procedures for the import or export of goods valued at below £900 and weighing less than 1,000kg. This simplification will not apply to licensed, controlled, or excise goods. For all other goods a full declaration will be required before the goods enter or leave the UK.

No obligation and no charge. We may even have a biscuit or two.

Say hello

Suite 3.12 Grosvenor House
Central Park
Telford
Shropshire
TF2 9TW
Phone: 01952 292729
Email: [email protected]