Moore Accountancy Update

WINTER ECONOMY PLAN, MENTAL HEALTH AND LAUGHTER WORKSHOP

Last month the Winter Economy Plan was issued by the Government. We sent out a newsletter at the time, but if you missed it then please click here for a summary of the initiatives (including spreading tax payments and the new self employment scheme) - https://mooreaccountancy.co.uk/winter-economy-plan-scheme-update-september-2020/

Tomorrow (10/10/20) is World Mental Health Day.
I recently attended an event discussing the issues of Imposter Syndrome, mental health in the workplace, support we need due to Covid-19 and the affect on this for us and our families.

There is lots of support out there, but if you feel you need to talk about any of these issues then please feel free to get in touch with us.

We aren't specialists but sometimes a quick call to get something off your chest or to talk about your worries can be helpful.

Sara Kay, is offering a free Laughter Yoga session at 10am and 4pm on zoom - click here for the eventbrite link if you want to try something different :) - https://www.eventbrite.co.uk/o/serious-laughter-13493263269

If you have missed any of our previous newsletters, then our website has a backlog of them here.

SPREADING TAX PAYMENTS - BEWARE THE HIDDEN COST

Many small business owners and landlords can opt to spread their annual 31/01 Self Assessment tax across monthly payments.

As of 01/10/20, those who pay taxes in a lump sum have been able to apply online to spread payments due on 31/01/21 over monthly instalments, if you tax liability is less than £30,000.

The extension to Time To Pay will give taxpayers more breathing space, but it is important to realise that those payments will be charged interest at 2.6% on the outstanding tax amount from 01/02/21.

See link here to apply to create a payment plan for your tax bill - https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments

SELF ASSESSMENT PLANNING FOR EXISTING CLIENTS

It has been an incredibly challenging year for all of us, and we are conscious of the potential for further lockdowns and possible staff self-isolation or sickness due to Covid19.

We have thought hard about this and have decided to bring some changes to the way we run things this year to benefit our clients and ensure the wellbeing of our staff.
We are very keen to avoid submitting last minute returns and hence causing unnecessary stress for everyone.

Clients who submit their information:

between 01/11/20 and 06/12/20 will pay an additional 10% fee
between 07/12/20 and 03/01/21 will pay an additional 20% fee
after 03/01/21 and want it submitting before the 31st January deadline will pay an additional 30% fee.

Note, where clients have foreign income with reliance on tax deadlines being different from the UK; the above fees will not apply as long as all other information is received in advance.

Most clients send us records in plenty of time so this will not affect the majority of Moore Accountancy clients.

Susie will have sent emails this week regarding this, but if you have any further questions then please contact us.

CERTAIN PROPERTY BUSINESS OWNERS MAY BE LIABLE TO CLASS 2 NICs

Class 2 National Insurance Contributions (NICs) are currently paid at the rate of £3.05 per week by self-employed earners.
A person who is liable to Income Tax on the profits arising from the receipt of property rental income will only be a self-employed earner for NICs purposes if the level of activities carried out amounts to running a business.

HMRC have recently issued clarification which states that in order for a property owner to be a self-employed earner, their property management activities must extend beyond those generally associated with being a landlord which include, but are not limited to, the following:-
•   undertaking or arranging for external and internal repairs
•   preparing the property between lets
•   advertising for tenants and arranging tenancy agreements
•   generally maintaining common areas in multi-occupancy properties; or
•   collecting rents.

The HMRC guidance suggests that the ownership of multiple properties, actively looking to acquire further properties to let, and the letting of property being the property owner’s main occupation could be pointers towards there being a business for NICs purposes.

A landlord may also be a self-employed earner if any of their activities amount to a trade for Income Tax purposes. This could include, for example, receiving income from other services provided to tenants.

BUSINESSES ENCOURAGED TO ACCESS BUSINESS TAX ACCOUNT (BTA)

The HMRC business tax account is an online account which brings together all your business taxes in one place.

From one sign in, you can view a summary of your business’s tax position for taxes that you’ve registered for. You can use your online tax services to complete tasks like making returns and payments.

Agents do not have access to your BTA, so it is important to ensure that you know your government gateway logon and password.

Services that business may wish to use include:

Filing returns for taxes that they manage themselves
Keeping track of liabilities and payments
Making payments and applying for refunds
Applying online for time to pay for income tax self assessment and to spread deferred VAT liabilities when that service becomes available in early 2021
Authorising an agent
Updating account details (address, telephone, email).

Use the link here to sign in to your BTA - https://www.gov.uk/guidance/sign-in-to-your-hmrc-business-tax-account

HMRC RECEIVES AIRBNB LETTING DATA

HMRC has been using its Connect data analysis system for years to scrape data concerning property income and gains from various sources.
However, it is uncommon for an online platform to state they are sharing data with HMRC.

If the earnings from Airbnb are less than £7,500 (£3,750 if jointly owned) then this will lie within rent a room relief, if you live in the property at the same time.

However letting a second home that generates income over £1,000 a year will create a tax reporting obligation.

If you have received airbnb income over the last few tax years and have not declared it, then please get in touch with us as soon as possible.

DIVIDEND RUMOURS

Should we maximum dividends in 2020/21?

There are discussions on the Tax Circuit about whether Sunak will increase the dividend tax rates at the next (March?) budget.

Current rates are 7.5% for basic rate, 32.5% for higher rate and 38.1% for additional tax payers.

We do not know whether this will happen, but it is something that is worth thinking about over the next 6 months, before the end of the tax year.

Remember all indviduals can receive £2k of dividends at 0% and that dividends are added on to your other earned income before being taxed, so are at your top slice bracket.

KEY DATES

19/10/20 - PAYE & NIC deductions for month ended 05/10/20 (September payroll)

31/10/20 - Corporation tax due for year to 31/01/20

19/11/20 - PAYE & NIC deductions for month ended 05/11/20 (October payroll)

30/11/20 - Corporation tax due for year to 29/02/20

For any businesses struggling with payments, please contact HMRC to see if they will agree a Time To Pay arrangement - https://www.gov.uk/difficulties-paying-hmrc

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Moore Accountancy · 1 Northway · Altrincham · Cheshire, WA14 1NN · United Kingdom