Taxing Times – October 2018

Hello and welcome to Autumn.  There is definitely a nip in the air, quite welcome after the heat of summer,  especially to those in certain industries such as our farming clients. Speaking of which, we have also produced the latest edition of our Farming Newsletter – click here to read that.

Of course, Autumn brings with it the most exciting time in a tax adviser’s year (apart from the January self assessment deadline!) and that is the Budget. Yes, really!  This year it has been announced for October 29th.  What will it bring– little tweaks or big changes?  We wait with bated breath.  Instead of our usual Taxing Times next month, we will instead bring you a Budget special to be released just after the 29th.

Until then, in this month’s Taxing Times you can read about:

  • The power of positive messages
  • PAYE update
  • Latest HMRC scam
  • Self assessment registration: deadline reminder
  • Check and sign your tax return through our Client Portal
  • Making Tax Digital (MTD)
  • Dates for your diary
  • Tax News

The power of positive messages

Sometimes businesses go through tough times.  Responding to changing economic circumstances, the loss of a critical contract or key staff member, or having to respond to ever changing regulations/innovations/legislation can all prove challenging.  But critical to riding out and overcoming these challenges is to have a positive mind-set. Not only that, but promoting that positive mind-set in your staff;  critical or negative messages circulated by staff or managers can completely undermine your business.

It’s simple really – which is the most helpful thought?

However bad this situation is, we can fix it if we all pull along together

OR

No one can save this business. It’s going to be a disaster. It’s everyone’s fault but mine

Obvious isn’t it?  So it is vital that if your business is facing tough times, you take the time to reframe your own and everyone else’s mental attitude to the more helpful, positive one to get everyone moving forward in a positive way.  Otherwise lethargy and doom and gloom takes over, and those negative messages become a  self – fulfilling prophecy.  After all, if you tell yourself it is going to be awful and you can’t cope what happens?  You can’t cope!

The task of a leader is to change those messages (helping people see that they’re simply messages, not reality), reframe them (substituting new, positive, and more accurate messages), and refocus the managers’ and the staffs’ attention on the new messages until it becomes second nature to say “yes, it’s tough but we really care about our clients and our offering and we can do it”, (emphasising positivity and solidarity) instead of “It’s tough and nothing I do makes a difference so what is the point?” (which reinforces negativity and isolation).

So then…what makes a good leader; someone who can drive these positive messages?

It is important that the business’s leaders don’t get “bunny in the headlights” syndrome.  It’s common, when faced with lots of complexity, changes and having to deal with new information and situations, for people to freeze.  They cannot compute and it all seems overwhelming. Good leaders need to strive against this – to break down complexity and offer a simple plan for winning that has just a few priorities.  They need to think about where they ultimately want to take the business/the team/a particular product or offering and cut through all the white noise. They are able to communicate what the business is really going to go after, and what success will look like, and make it quite simple (though not simplistic) so that the team can remember it and use it as a focus when the white noise gets too much.

Most leaders try to accomplish too many things or get trapped in reactive mode by the problems that crop up or meetings that fill their calendars – so step back, take a time out and refocus on what you are trying to achieve and to what end.

It is also very important for leaders to think about the whole of the business and how it interacts together, not just little pieces of it, and to communicate the wider strategy and picture.  This helps avoid a silo mentality, whereby the team is made up of little cliques who look after their own “part” of the business but don’t engage with the rest (which in turn can lead to negative and isolationist thinking in difficult times – which, as we said above, really needs to be changed into positive messages!)

And of course it is vitally important that leaders operate on the “do as I do” mantra and leading by example!  So, without further ado, good luck and crack on!

Motivational thought for October:

PAYE update

Coming around again!

It seems a long time ago now since automatic enrolment was introduced (October 2012 to be exact) and by now, all employers large and small, will have had to complete their automatic enrolment duties which includes enrolling eligible staff into a workplace pension scheme.

So – having ticked that box and of course, you will have continued to assess and inform your workforce every time you have processed your payroll, that’s it all sorted isn’t it?

Well not quite. Now we need to start thinking about re-enrolment.

Every three years – on the anniversary of your original staging/duties date, certain members of staff must be put back into an automatic enrolment pension scheme. This is called re-enrolment.

The work involved will vary depending on whether you have staff to re-enrol or not. Either way, you will need to complete a re-declaration of compliance to tell The Pensions Regulator how your duties have been met.

What do you need to do?

Your re-enrolment date is a chosen date within a six-month re-enrolment window which starts three months before and ends three months after the third anniversary of your automatic enrolment staging date. The re-declaration deadline will be five months after the third anniversary date.

For example- if your original staging date was 1 January 2016, then you can complete your re-enrolment duties between 1 October 2018 and 31 March 2019. You must complete your re-declaration of compliance with The Pension Regulator by 31 May 2019.


Once you have decided when you are going to complete your re-enrolment, you will need to ensure your payroll software is ready to complete the re-enrolment procedure.

You will need to identify which employees you need to re-enrol into your employer pension scheme and start contributing to their pension. You must write to your employees, to tell them how the re-enrolment applies to them. Even if you don’t have anyone to re-enrol into your pension, you must complete a re-declaration of compliance to tell The Pension Regulator you have met your duties.

Employees, who originally opted out of the pension scheme, may now decide that the time is right for them to save into a pension. However, they may want to opt out of the pension scheme again. This is their choice and they must opt out with the pension scheme provider by following the specific rules the pension scheme has set. You will need to liaise with your pension scheme provider regarding re-enrolling employees and monitoring employees who opt out.

Of course, if we process your payroll at Dodd & Co, then don’t worry – we have everything in hand and we will be in touch with you in good time to ensure you meet your deadlines.
If you process your own payroll, we can still help. For “know how to re-enrol” contact Julie Campbell on 01228 530913 or email julie.campbell@doddaccountants.co.uk

Have you received an automated message saying HMRC have taken out a warrant for your arrest? This is a scam

There is a new telephone scam, purporting to be from the police, telling the listener that HMRC have taken out a warrant for their arrest. The message then gives a warrant number and requests the listener to contact HMRC.

Warning: Do not respond! When the call is answered a recorded voice message plays purporting to be from the ‘UK Police’ telling you that they have received a complaint from HMRC’s tax department and that there is a warrant out for your arrest. They then give out a phone number to contact for more details, in the hope that they will scare you into calling up and giving out personal details that can then be used in a fraud against you.

You should report all incidents to Action Fraud or call them on 0300 123 2040. They are open Monday to Friday 9:00 – 18:00.

You should also report the full details to HMRC (date, time, phone number used and content of the call) via email (phishing@hmrc.gsi.gov.uk).

Register for 2017-18 self assessment by 5 October, warns HMRC

Anyone whose tax circumstances have changed in the past year and now earns more than £2,500 from rented property, owns shares or is hit by the higher income child benefit charge needs to register for self assessment to avoid automatic penalties

The deadline for registering for self assessment is 5 October for the 2017-18 tax year.

Anyone submitting a self assessment return for the first time – including higher income child benefit charge (HICBC) taxpayers – need to register by 5 October so that they can complete their return by 31 January and avoid an automatic £100 penalty for failure to file.

Individuals need to do a tax return if they:

  • earn more than £2,500 from renting out property;
  • have a partner who receives child benefit and either has an annual income of more than £50,000, the so-called higher income child benefit charge;
  • earned more than £2,500 in other untaxed income, for example from tips or commission;
  • are self-employed sole traders;
  • are limited company directors;
  • are shareholders;
  • employees claiming expenses in excess of £2,500/tax year; or
  • have an annual income over £100,000.

The deadline for (online) self assessment returns 2017-2018 is 31 January 2019.

The penalties for late tax returns include an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time; after three months, additional daily penalties of £10 per day, up to a maximum of £900; after six months, a further penalty of 5% of the tax due or £300, whichever is greater; and after 12 months, another 5% or £300 charge, whichever is greater.

The easy way to check and sign your tax return

We are always trying to find ways to make easier for you to send and receive information from us.  We also want to make sure any confidential personal information we send to you is secure.  That’s why we have introduced our client portal.

With your own chosen login details and password, you will be able to download any documents we send you.  Through the portal, you can also digitally sign documents such as your tax return and send this back to us to submit.

It is easy to use and most importantly you can be assured that your personal information is protected.

To find about more about our client portal click HERE.

If you want to start using our client portal then get in touch and we can quickly arrange this.

Making Tax Digital (MTD)

With Autumn now upon us and the winter months approaching, 2019 will soon be here and, with it, MTD for VAT.  As a reminder, all VAT registered businesses with taxable turnover above £85,000 will need to be compliant for their first VAT return period beginning on or after 1 April 2019.

HMRC have released their long-awaited VAT notice which has provided much needed clarity.  If you are a Dodd & Co client, our dedicated MTD Team will be in touch soon to help you become compliant in time.

Dates & Deadlines for your Diary

What’s new in the world of tax?

Mourinho sentenced for £3m tax fraud

Manchester United boss Jose Mourinho has accepted a one-year prison sentence from Spanish prosecutors in relation to a €3.3m (£3m) tax fraud. Though he won’t actually serve time, in line with Spanish rules for first time offenders, he has been fined €1.98m (£1.78m) over charges relating to income for image rights in 2011 and 2012 which were claimed to have been funnelled through a British Virgin Islands company, Koper Services, and Irish and Swiss companies, before ending up in a New Zealand-based Trust.

One rule for the rich, another for the rest?

Richard Las, the deputy director of HMRC in charge of organised crime, told an economic crime conference in Cambridge that the tax authorities accommodated celebrities’ concerns and settled debts privately to avoid the embarrassment of a public trial. He admitted that “criminal justice” was never a “default option” for HMRC. “We use it where it is necessary and it will have the greatest effect”, he said. But Prem Sikka, professor of accounting at Sheffield University, said: “This policy provides absolutely no deterrent to tax cheats.”

Tax break for exotic dancer

An exotic dancer has won a tax appeal over her skimpy stage outfits. Gemma Daniels, who worked at Stringfellows in London, was told to pay £10,500 by HMRC after it ruled that she could not claim for travel and clothing as tax-deductible. However, a judge decided that her ‘naughty nurse and schoolgirl’ outfits could be deemed expenses as they were not suitable outside of work (!)

Aretha died intestate

Aretha Franklin, who died in August aged 76, had an estate worth $80m, but did not leave a will detailing the distribution of her fortune. Michigan law dictates that in cases of intestacy, an individual’s fortune is to be shared equally among their children – in Ms Franklin’s case, between her four sons.

 “Unfair” HMRC lifts late payment interest rate but not repayment rate

HMRC has raised the rate it charges people and businesses for late tax payments by 0.25 percentage points to 3.25%. The move follows the Bank of England’s latest quarter-point rate rise to 0.75%. But the repayment interest rate – the rate HMRC gives on top of sums it owes to taxpayers – has remained at 0.5% since 2009. The ACCA has said it is “simply unfair” that people owing tax have seen a rise in the interest they pay, while those owed a refund will see no change.

Big Brother flies high

Tax inspectors in Athens are using drones to count the number of tourists on board pleasure boats in holiday hotspots to make sure that the number tallies with receipts presented by tour operators.

HMRC tells OAP he’s dead

A retired Royal Navy chief petty officer received a letter from HMRC telling him he had died! Ronald Pomeroy, of Portsmouth, said: “HMRC has told me that they are sending somebody round to see me – presumably to check my pulse.”

 

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