News from Coalesco – March 2019

In this month’s E-news we report on the ongoing Brexit uncertainties and latest HMRC advice. We also consider National Minimum Wage, National Living Wage and pension contribution increases and the latest guidance for employers. HMRC advice – prepare for no deal HMRC is urging business owners to make sure they are ready for a potential no deal Brexit. Business owners are being urged to prepare now and take steps to ensure their businesses can continue to trade with the EU if the UK leaves the EU without a deal. HMRC advise: Businesses should register for an Economic Operator and Registration
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Committee warns small businesses ‘could pay heavy price’ for MTD and latest ‘encouragement letters’

The Economic Affairs Committee has warned HMRC that small businesses ‘could pay a heavy price’ for Making Tax Digital for VAT (MTDfV). The Committee stated that HMRC has ‘failed to adequately support small businesses’ ahead of the introduction of MTDfV. MTDfV is generally set to come into effect for the from 1 April 2019 for businesses which have a taxable turnover above the current VAT registration threshold of £85,000. Under MTDfV, businesses must keep some records digitally and submit their VAT returns via an Application Programming Interface (API). The Committee has urged HMRC and the government to ‘start listening’ to small
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Tax-free gifts to employees

Some employers may wish to give small tax-free gifts to employees. As long as the employer meets the relevant conditions, no tax charge will arise on the employee. A tax exemption is available which should help employers ensure that the benefits provided are exempt and do not result in a reportable employee benefit in kind. In order for the benefit to be exempt it must satisfy the following conditions: The cost of providing the benefit does not exceed £50 per employee (or on average when gifts made to multiple employees). The benefit is not cash or a cash voucher. The
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Leaving the EU with no deal

The government has published a collection of documents in preparation for the scenario of the UK leaving the EU without a Withdrawal Agreement a so called ‘no deal’ Brexit. The guidance states: ‘The government does not want or expect a no deal scenario. However, it is the duty of a responsible government to prepare for a range of potential outcomes, including the unlikely event of no deal. In the event of leaving the EU without a deal, legislation will be necessary to ensure the UK’s Customs, VAT and Excise regimes function as intended after the UK leaves the EU and
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Phishing tax refund email targets university students

HMRC has warned that university students are being bombarded with fake tax refund emails. The scammers have targeted university students in an attempt to steal their banking and personal details using.ac.uk email addresses that look genuine, in order to avoid detection. Mel Stride, Financial Secretary to the Treasury said: ‘Although HMRC is cracking down hard on internet scams, criminals will stop at nothing to steal personal information. ‘I’d encourage all students to become phishing-aware – it could save you a lot of money.’ In common with other tax scams, fraudsters send a message, including HMRC, GOV.UK or credit card branding,
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Making Tax Digital for VAT public pilot opens and deferral for some businesses

HMRC has opened the Making Tax Digital for VAT (MTDfV) public pilot. However certain VAT-registered businesses (around 3.5% according to HMRC) with more complex requirements will be deferred from being subject to MTD for six months. Essentially, the public pilot is now open to sole traders and companies using standard VAT accounting. This applies whether returns are done monthly or quarterly provided they are up to date. Those signing up for the pilot will be required to keep their VAT records digitally from the first day of the period covered by their next VAT Return and submit their return using
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HMRC countdown: file your tax return

With less than 100 days until the self assessment tax return deadline of 31 January 2019, HMRC is urging taxpayers to complete their tax returns early in order to avoid the last minute rush. The deadline for submitting 2017/18 self assessment tax returns online is 31 January 2019. An automatic penalty of £100 applies if the return is late. Interest is payable on late payment of tax and NIC and student loan deductions. Contact us for help with your self assessment tax return – our internal deadline for the submission of your information to us was 31 October however we
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Budget 2018 Personal Tax

The personal allowance The personal allowance is currently £11,850. The personal allowance for 2019/20 will be £12,500. The marriage allowance The marriage allowance permits certain couples, where neither pays tax at more than the basic rate, to transfer 10% of their personal allowance to their spouse or civil partner. Tax bands and rates The basic rate of tax is currently 20%. The band of income taxable at this rate is £34,500 so that the threshold at which the 40% band applies is £46,350 for those who are entitled to the full personal allowance. Additional rate taxpayers pay tax at 45%
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Budget 2018 Business Tax

Making Tax Digital for Business: VAT HMRC is phasing in its landmark Making Tax Digital (MTD) regime, which will ultimately require taxpayers to move to a fully digital tax system. Regulations have now been issued which set out the requirements for MTD for VAT. Under the new rules, businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software. The new rules have effect from 1 April 2019 where a taxpayer has a ‘prescribed accounting period’ which begins on that date, or otherwise from the
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Budget 2018 Employment Taxes

Off-payroll working in the private sector The changes to IR35 that came into effect in April 2017 for the public sector will be extended to the private sector from April 2020. Responsibility for operating the off-payroll rules will be transferred from the individual to the organisation, agency or third party engaging the worker. Only medium and large organisations will be subject to this change. Employment Allowance The Employment Allowance provides businesses and charities with up to £3,000 off their employer NICs bill. Employer provided cars The scale of charges for working out the taxable benefit for an employee who has
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