RTI Penalties Start October 2014!

Since 6 April 2013 employers have been reporting PAYE information to HM Revenue & Customs (HMRC) in real time. You may see this referred to as Real Time Information - or RTI.

This means you must set up payroll records for the new tax year using payroll software, some of which is free. It makes PAYE submissions to HMRC be updated in real time, every time you pay your employees.

Earlier this year, HMRC announced that the penalties for late returns of payroll information (RTI) would start from October 2014 instead of April 2014. If you operate your own payroll, make sure that your RTI submissions are made on time to avoid an automatic penalty.

Remember that the RTI submission should normally be made on or before the date when the wages or salaries are paid to the employees.

Check for more information about PAYE payments and deadlines and penalties at http://www.hmrc.gov.uk/payerti/paying/deadline.htm

Tax Relief For Donating Your Old Suit To Charity!

HMRC has amended its guidance for charities that claim Gift Aid on the sale of donated goods. Gift Aid normally only applies to gifts of money by an individual. However, in certain situations, Gift Aid can be claimed by charities or community amateur sports clubs on the income from the sale of supporters' goods on their behalf. The charity can offer to act as an agent for private individuals and sell goods on their behalf, so that at the point of sale the funds actually belong to the individual. If the owner agrees to donate the sales proceeds to the charity, Gift Aid can be claimed by the charity on the net sales proceeds, subject to all other Gift Aid conditions being satisfied.  The charity  is then able to reclaim tax at the basic rate. A number of charities, such as Oxfam, operate such schemes. The charity provides the donor with details of the value of goods sold in order for the donor to claim tax relief on their self-assessment tax return. Remember that the Gift Aid payments, grossed up for basic rate tax, are an effective way of reducing income where an individual’s personal allowance is restricted by income in excess of £100,000 a year.  Higher rate taxpayers also benefit from additional tax relief. For example, if a suit is sold for £40, the charity is able to reclaim £10 basic rate tax from HMRC (£50 gross) and a higher rate taxpayer obtains a further £10 tax relief - win win!. To keep yourself up-to-date on the latest finance and accounting news in the UK, subscribe to our blog or follow us at Facebook, Twitter or Google+

Employee Engagement & Turnover!

We all know that the best employees are engaged and highly motivated. However, most businesses don’t consider the relationship between employee engagement and turnover. Research shows that companies with highly engaged employees experience higher employee retention rates, improved profitability and better overall effectiveness.    Contrary to popular belief, those leaving at the greatest rate are not necessarily those who are the least engaged. It is those with average engagement, the passively engaged staff that leave. These employees are the solid workers that contribute reasonably well to the business. They leave because they are "looking for something better" and when they leave, they take their knowledge and abilities with them. Unfortunately, those with low levels of engagement are very often the ones who stay in the firm. Why? Because they've landed the perfect job! They are satisfied and are collecting a pay cheque each month. By measuring and making some targeted changes, employees with average levels of engagement can often join the ranks of the highly engaged. With this come the benefits of higher profit and higher productivity.

Consultation On Possible Changes To Rules On Employee’s Travel

Many employees and employers find the current tax rules for dealing with travelling and subsistence claims difficult to understand. This is an area that the Office of Tax Simplification is seeking to make more comprehensible.  Consequently, the treasury are consulting on possible changes to the rules, and the way that such expenses are reported. The government intends for any new rules to reflect, rather than drive, commercial decisions and that it will be responsive to 21st century working patterns. As is currently the case, any new system would not provide tax relief for private travel or ordinary commuting.

Note that unless the employer holds a dispensation from reporting such expenses, they need to be included on the employee’s or director’s end of the year Form P11d.

If the tax rules or reporting requirements change, we will get in touch to explain the implications for your business.

Business Travel For Self Employed Traders

Following a recent case in front of the Upper Tier Tax Tribunal involving a doctor with a private practice (Dr Samadian), HMRC are applying the rules for business travel much more strictly.

The “wholly and exclusive” principle states that where there is both a business and a personal reason or benefit in meeting an expense, there is no tax relief for any of the expense. The doctor in question argued that as he was based at home (where he saw some of his patients and ran the business), the expenses of traveling to and from various hospitals and nursing homes should be an allowable business expense. Based on earlier cases, the Tribunal decided that the “habitual” journeys to two hospitals should not be allowed but less regular “itinerant” journeys to other locations would be allowed as a deduction.

Although this case involved a doctor, it has wide ranging implications for other self-employed individuals who operate their business from home and travel regularly to one or two locations. It will become increasingly important to keep a detailed mileage log of business journeys should HMRC challenge the deduction in the business accounts.

Do you still have questions regarding Taxation and Expenses? Feel Free to Phone us on 020 89310165  Now or Arrange a FREE No-Obligation Meeting with us.

Remember Your Clients - Or They Will Forget About You!

If you don’t ask you don’t get! Just because you're good at what you do, it doesn't mean you'll get referrals for new business. Many business owners know that the best source of referrals is from satisfied clients. They go about doing great work and making their customers happy, then wait for the referrals to come in.

To a degree this works, depending on your business and its reputation in the market. However, this alone does not generate enough new referral work. The problem is that receiving referrals is more important to you than giving referrals is to your past clients. Clients may love working with you, but may be too busy to pass your name along.

Asking for referrals is a good place to start. You might mention it in a phone call or email as a natural part of the work you do together. You can have a form on your website or in paper form that clients fill out when they start work with you. It doesn't matter what you do, just as long as you have integrated it into your business system.

If you don't remember past clients, they certainly won’t remember you. When you stop working with a client, they don't have a reason to think about you anymore. If you want them to remember who you are, keep in touch with them. This is easy to do with ongoing clients. If you work with them every month, they will naturally remember you.

Stay in touch with former clients with regular email marketing, an invitation to an annual client event or perhaps a message through social media. You could consider following them on Twitter as they may follow you back.

The key is to keep in touch with previous clients through scheduled email / marketing. Quarterly or twice yearly contact is often enough, and don’t forget to ask for a referral. Make sure you get the message right rather then being too pushy.  Something along the lines of, “Business is going well. We are always looking for more. If you would like to refer a friend or contact to us we will look after them as well as we looked after you…”

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At APJ Accountancy we aim to provide you with the most relevant information to run your business whether you are a Contractor or Small business.