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Posts Tagged ‘hmrc’

car

It is common practice for employees to be reimbursed a reasonable rate per mile for using their own car whilst on company business.

HMRC issue a system of Approved Mileage Allowance Payments (AMAP) which applies to employees using their own vehicle for business journeys.

These rates are as follows;

  • Cars and Vans (first 10,000 miles pa) – 45p per mile
  • Cars and Vans (additional mileage above 10,000) – 25p per mile
  • Motorbikes – 24p per mile
  • Bicycles – 20p per mile

Whilst HMRC issue the above rates, it is still up to the employer to decide their own reimbursement rates.

If the employer pays more than the AMAP rates, then a benefit in kind has occurred and the benefit needs to be declared on an annual P11D form.

If the employer pays less than the AMAP rates, then the employee is entitled to claim tax relief for the shortfall (Mileage allowance relief).  This relief is also applicable to employees who are paid a company car cash allowance.

This tax relief is the difference between the AMAP rate and the company rate, multiplied by the number of miles claimed. For a higher rate tax payer who completes a large number of business miles, this recovery can often generate a significant tax reduction.

EG – An employee who completes 15,000 business miles and who is paid 14p per mile from his employer will collect;

15,000 miles at 14p per mile =   £2,100

However, HMRC allow this tax relief to be calculated at AMAP rates ;

10,000 miles at 45p per mile = £4,500, plus
5,000 miles at 25p per mile = £1,250 = £5,750

Therefore, an additional tax relief on £3,650 (£5,750 minus £2,100) can be claimed on your annual tax return.

For a higher rate tax payer, this results in a saving of £1,460

Bookkeeper HarlowTransform AccountingBookkeeper Essex

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tax briefcase

When a UK business makes sales to overseas customers, it can be a little confusing at first when deciding how to treat VAT.  Here are a few tips for preparing invoices for export sales of services from a UK supplier’s perspective. Be sure to check out our other guide for how to invoice for goods which are slightly different.

The following applies to a UK trader who is VAT registered.

  • If the customer is in a country within the European Union, then the invoice should not contain VAT as the sale is considered to be zero rated. Note: Unlike the supply of goods, for the supply of services to be zero rated, the customer must merely be a business and does not have to be a VAT registered business.
  • If the customer is in the European Union and is not a business ( ie – is a consumer), then the sales invoice should be prepared including VAT
  • If the customer is outside the European Union, the invoice should be treated as zero rated regardless of whether the customer is either a business or a consumer. The customers VAT number is not required.

There are a few other items which are also important when preparing documentation for exports;

  • The basic rule for establishing where a services transaction is deemed to have taken place is usually the location of the customer.
  • Zero rated VAT is later dealt with on the UK suppliers VAT return using the reverse charge mechanism.
  • All of the above applies only to UK companies who are VAT registered.
  • Sole Traders who are not VAT registered must not charge VAT under any circumstances.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Writtle AccountantTransform AccountingEssex Accountants

 

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tax briefcase

The normal rules for sales to consumers in the UK from a supplier outside the European Union (eg – Jersey or the USA) are that the UK VAT must be paid by the consumer when the goods are collected.

For example, an item with a value of £100 imported from the USA would incur a £20 VAT charge when collected by the end consumer.

However, there is an exception to this rule

An item with a value up to £18 has historically been allowed to be imported into the UK VAT free. This arrangement was historically put in place to allow perishable foodstuffs through with no delay, but in more recent times this has been used by importers of CD’s and DVD’s (often based in Jersey) to give a competitive edge over UK retailers who have to charge 20% more in the form of VAT.

From the 1st Nov 2011, the UK government reduced this amount to £15 and is continuing to review this situation so watch out for further changes.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Accountant RomfordTransform AccountingEssex Accountants

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pound sign

If you are lucky enough to have friends or family or friends who live outside of the UK who send you gifts for Christmas or Birthdays, then it is quite possible that you may have experienced a delay in receiving your gift, or even have had to pay a VAT charge before they are released by customs.

The reason for this is that there is a threshold as to the maximum value for such a gift before UK VAT is charged.

Every year on the 1st January, the UK reviews the level where this threshold is set.

For 2013, the UK limit has been revised to £36.

This means that any gift with a declared value of £36 or less will incur no UK VAT charge and should be delivered smoothly whilst gifts with a declared value greater than £36 may require UK VAT to be paid and the delivery may be held up until this payment is made.

For those lucky enough to have friends or family living in European Union countries such as Spain or Ireland, there is no such restriction so encourage these generous folks to send you expensive presents !

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Accountant BrentwoodTransform AccountingEssex Accountants

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tax return

tax return

January is the time of year when our attentions are may be focused on our new year resolutions such as getting fitter, losing weight or maybe paying off the credit card bill after Christmas.

Unfortunately for many, January is also the time of year when the annual self-assessment tax return can be put off no longer.  Some even resort to panic as the deadline and penalties for failing to file approach.

But there is an alternative to this stress.

Employ an accountant to make your tax filing on your behalf.

There are many advantages to this approach.

Firstly, a good accountant will be able to give you good advice to ensure that you do not pay too much tax. In many cases, the fees of the accountants are actually offset by paying a lower amount of tax. Be sure to choose an accountant who has up to date tax knowledge and qualifications, and one who will be able to give appropriate advice rather than just making a basic filing.

Secondly, a good accountant should prevent any last minute panics by making sure that you have timely reminders about when your returns are due, and should work with you to make sure that everything is filed in plenty of time. Remember, there are no downsides to making a return promptly and no advantages to filing at the last minute. Some accountants will even offer discounts to their fees for making a filing in the middle of the tax year rather than their busy period at the end of the year.

Thirdly – find an accountant who you are comfortable with. Some web based services can appear to offer the cheapest fees, but they will usually offer virtually no advice, certainly no face to face contact and you may find your return is handled by an unqualified office junior.  It is common practice for the cheapest web based services to e mail you a series of spread sheets for the client to complete, and then these are just processed and electronic tax filings are made.

Some clients may prefer a local, one or two man (or woman) qualified accountant who can provide a more personal service such as Transform Accounting, whilst others may prefer to visit a high street practice with multiple accountants and a wider range of services, but possibly higher fees due to higher overheads.

Whichever you decide is best for you, it is essential to find an accountant that you feel comfortable with and who can provide you with the appropriate financial and tax advice for your situation or business.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Accountant LoughtonTransform AccountingAccountant Essex

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taxreturn

The final day for filing a self-assessment tax return for the 2011-12 tax year is 31st January.

Care to know what the penalties are for missing the filing?

–          An initial £100 fixed penalty, which applies even if there is no tax to pay

–          If your return still isn’t filed after an additional 3 months, an additional penalty of £10 a day until the tax return is filed

–          If the return still isn’t filed after 6 months, a further penalty of £300 or 5% of the tax due (whichever is the greater)

–          If the return still isn’t filed after 12 months, a further additional penalty of £300 or 5 % of the tax due (whichever is the greater)

Remember, the penalties are for failing to file a return – they still apply even if you owe no tax or the taxman owes you money.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Writtle AccountantTransform AccountingEssex Accountants

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tax return

Are you one of the 10.6 million UK citizens who should be submitting a personal self-assessment tax return?

If so, then you have very little time left to get your return in for the 2011-12 tax year.

The deadline for submitting these tax returns electronically is 31st January.

Miss the deadline and it’s an automatic £100 fine, even if no tax is due.

 

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

 

Accountant LoughtonTransform AccountingEssex Accountants

 

 

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