Taxing Times – January 2017

Tax OppsPhew…we made it to the New Year.  Christmas is a distant memory (but unfortunately has left a lasting legacy on hips and thighs!), the mornings are getting lighter (honest!) and it is time to refocus our energy on things other than shopping and eating! So onwards with the first Taxing Times of 2017, and the usual updates plus some (hopefully) encouraging tips as we step boldly in the New Year.

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Making Tax Digital – Don’t panic, we’re on it!

You will have heard all the recent stories in the press about ‘Making Tax Digital’ but the real detail from HMRC doesn’t come out until the end of January 2017.  We do know that it will be a new way in which tax will be calculated and paid affecting individual taxpayers and businesses (although it will not affect the principles of how tax will be calculated or the rates of tax).  For now incorporated businesses are off the hook!!  It is something that Dodd & Co are committed to, we are keeping abreast of the legislation and have been involved in the initial consultation for HMRC.  We have a specialist team in place to  digest the detail so don’t panic – we have it covered!

Making Tax Digital is meant to be in place by April 2018, with all business being online by 2020.  It is proposed that individual taxpayers and business will have a Digital Tax Account, that you can log onto anytime anywhere, similar to our online bank accounts.  It would mean that the UK tax systems would provide HMRC with ‘real time’ information as opposed to historic.  As with any online accounts, for now, we can only assume that HMRC are on top of the security issues

We will inform you as soon as we know the Government’s exact plans and our team will be here to advise and support you through the process of making your business digital.

cat1However there’s no harm in getting ahead of the game right from the start of the brand new year! Cloud Accounting can not only help you become digitally ready, it can help grow your business and speed your ‘back-office’ administrative tasks up, so our advice is to get moving with this now so you are ahead of the game.  If there’s one resolution it’s worth making stick for 2017 it’s getting your business in the best shape possible!

Our team have been dealing with cloud packages since they were introduced, so we are ready to advise and assist you.  As with everything at Dodds we have always been independent and the CAT (Cloud Accounting Team) is no exception. For our existing clients our CAT will be in touch if you’re not digitally ready so don’t worry. However, if you’re not currently a client of Dodds and want a head start this January contact Kristina on 01228 530913 to find out more.

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Top Tips for Sticking to Your Small Business New Year Resolutions

  1. Define Successtax-stickman

Make your resolutions measurable and meaningful. Add measurable specifics so that you can gauge success (or failure) and learn from it. “Sell X additional units of Y by 31st January” is a lot more useful when establishing what you did right or wrong than simply “increase turnover”.

  1. Break it Up

Slice big goals into bite-sized pieces. If your resolution is to start your own business in 2017, split it into smaller, more manageable (but still ambitious) steps such as write your business plan, establish a budget, source a project, approach funders…. A old Chinese proverb sums it up nicely:

“It is better to take many small steps in the right direction than to make a great leap forward only to stumble back”

  1. Write it Down

When stuff is whirling around in your head it can seem insurmountable.  But when you write it down you’ll invariably find that there isn’t as much to do you thought.  I’m convinced tasks duplicate themselves when you are worrying about them, but wrestle them into a list and you’ll realise there really aren’t as many.

  1. Make it a Habit

Bad habits are hard to break, and good habits can be just as difficult to make. Add them to your morning routine (for example “have a coffee and complete one expense claim”), set a calendar reminder, write it on your to do list… as Aristotle said, “we are what we repeatedly do. Excellence is not an act but a habit”.

  1. Treat Yourself

Incentivise yourself by setting goals AND rewards.  Once I finish this article I can have another coffee.  If I research this technical point I can check the BBC News headlines. And so on.

  1. Time outstickman-paper-airplane-9566142_ml

It may sound odd but sometimes you need to step away from projects to gain clarity and perspective – being too close and too involved with something can stop you from seeing the big picture.  Tackle something else for a while, talk to workmates for a fresh perspective, get a breath of fresh air and stretch your legs, and don’t forget to attend to your out of work activities/spend time with the family. After all, Richard Branson says;

“Spending time away from work is important to helping you maintain perspective on the challenges you face, and thus to the future of your company.”

And he knows what he is talking about!

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Payroll Update

National living wage to rise to £7.50

The Chancellor has confirmed that the national living wage will rise to £7.50 per hour from April 2017.  The new rate will apply to workers aged 25 and over, and will mark the first rise in the new statutory minimum rate since it was introduced in April 2016, at £7.20. 

Making PAYE repayments more cost effectivefinances-38073981_ml

Employers who pay their PAYE liability by cheque through the post will also be contacted by letter or phone to ask them to consider paying electronically by:

  • Online or telephone banking – Faster Payment, Bacs, CHAPS
  • Direct Debit
  • Debit or credit card online.

HMRC are encouraging all customers to pay by electronic payment methods because they say it is safer and more secure – unlike cheques, electronic payments cannot be lost or intercepted and fraudulently cashed.  Customers can be more confident that the payment will reach HMRC on time – no postal delays.

Details of where to find the alternative payment types available are on GOV.UK and will be detailed in the letters or phone call.

Review of Statutory Sick Pay

As part of a health and work plan, Statutory Sick Pay will be reviewed so it better encourages supportive conversations and phased returns to work.  New plans have been announced by the Government to help more people with long term conditions reap the benefits of work and improve their health.  The plans include a review of Statutory Sick Pay and GP fit notes to support workers back into their jobs faster.  Consideration is also being given to extending fit notes from doctors to other healthcare professionals to help ensure people receive more tailored support.

Automatic Enrolment Update

Concerns have been raised that the Pensions Regulator is taking too hard a line with small businesses that fail to comply with automatic enrolment guidelines.  Four out of five warnings or fines issued to companies by the regulator over supposed failures were found to be incorrect when they were disputed.  More than 3,700 businesses were issued with penalties between July and September, compared with 861 in the previous three months. Meanwhile, Aviva has recommended that automatic enrolment pension contributions should rise to 12.5% of earnings by 2028.  The insurer said this will give workers the best chance of building up an adequate retirement pot.

And yet more Automatic Enrolment
You have complied with piggy-bank-38867862_mlyour AE duties as an employer, your pension scheme contributions are ticking along nicely, but (Jaws theme tune!) ….just when you thought it was safe to forget about automatic enrolment….Please note, any employer who had a staging date in 2014 will have their re-enrolment date in 2017. Every three years certain members of staff must be put back into an automatic enrolment pension scheme and must be written to, to advise them of their options.

An employer’s duties will vary depending on whether they have staff to re-enrol or not. Either way, it will be necessary to complete a re-declaration of compliance to tell The Pension Regulator how their duties have been met.

If you need any assistance with your 3 year AE compliance duties please contact Julie Campbell.

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What’s new in the world of tax?

Cringe-worthy holiday party mistakes

A recent survey of financial executives has exposed some of the most embarrassing things done by managers at company holiday parties. CFOs reported seeing behaviour that included screaming like a werewolf, fighting with their boss, and attempting to walk across a swimming pool. Managers had also discussed confidential work information and failed to interact with anyone. Oops, hopefully this warning doesn’t come too late for those who are still to have their office parties!

Music to the taxman’s ears  

Pop star Adele has paid out £14.5m in tax in the last five years. Last year, the singer earned more than £84,000-a-day after her music empire turned over £30m.

Ooh la lucre!

A Frenchman who inherited a house in Normandy discovered gold worth €3.5m stashed around the house. The taxman will take 45% in IHT and hit him with an annual wealth tax bill of about €35,000!

Last Christmas? Autumn Budget may as well mean abolishing Christmas

Will a full Autumn Budget will leave tax professionals scrutinising legislation over the Christmas holidays instead of joining in the festive fun? I guess that will save on all those mince pies and festive nibbles!

And finally…..the best late tax return excusesstickman-finance-14163000_s

Excuses from individuals who failed to submit their tax return this year included a claim that the paperwork was engulfed in a yacht fire. Other claims, rejected by HMRC, included a wasp causing an car crash (the tax return was inside and was destroyed along with the car) and a child scribbling on the forms. Blaming a husband or wife also featured in excuses such as: “I could not complete my tax return, because my husband left me and took our accountant with him. I am currently trying to find a new accountant”  and “my wife helps me with my tax return, but she had a headache for ten days”. Others used the oldest excuses in the book: “My dog ate my tax return… and all of the reminders”.

You have been warned, there are very few excuses accepted by HMRC so…best just to knuckle down and tackle that tax return before 31st January!

All joking aside, if you need help with your 2015/16 tax return by the deadline, please contact us here at Dodds.

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