Category: Egan Roberts

Remember Remember…the 31st January

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The 31st January is the self assessment tax return deadline for both sole traders and partnerships. If you are the owner of a new sole trade or partnership you may not have submitted one of these tax returns yet, but don’t worry, we have all the information you need.

Why Sole Traders and Partnerships?

Sole traders and partnerships do not submit corporation tax returns every year like Limited companies would. The tax on your profits will not be directly charged to the business, the tax also will not appear on your financial statements, however it will be charged directly to you on your self assessment tax return.

So how will I be taxed on my profits?

Every year you will need to fill out a self assessment tax return in your name, this will have to include your business income and expenses and any other income you may have received personally. Basic rate for tax on profits is 20%, however if your profits reach above a certain threshold you may have to pay class 2 and class 4 national insurance. If you own a partnership then your profits will be split between the partners in accordance with your partnership agreement.

Other Useful Information

There are lots of things you may need to know when filling out a self assessment tax return but some things are a lot more common than others. Below I have listed some of the more common occurrences:
• Any tax you have paid through the payroll in another employment will be taken off your tax liability.
• Everybody will have a personal allowance which is £11,850 for 2018/19 tax returns, this will be taken off your overall profits and income before your tax liability is calculated.
• Any dividends received from other Limited companies will also need to be included on your tax return, however you will receive a separate dividend allowance on this, for the 2018/2019 tax year the dividend allowance is £2,000

Making Tax Digital for Vat

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Making Tax Digital. You may have heard of this?

If you have not and you are a vat registered business then you need to find out about this as soon as possible. Contact us on andrew@egan.co.uk

 

As from April 2019 all vat registered businesses will need to be able to submit their vat returns direct to HMRC using an approved piece of software. You will no longer be able to submit your return via the HMRC online login as you may currently do.

We at Egan Roberts are speaking to all our clients at the moment to make them aware of the above and checking what plans they have in place to be able to comply with the new rules from next April. Those clients that have a PC based piece of software (sage accounts etc) will need to make sure that their software is up to date and will be compatible with submissions to HMRC from next April. We can do this check for you.

There are however many businesses that either keep their software on spreadsheets or still keep their records manually. These businesses need to act now to be ready for the change in April 2019.

What options are there?

There are several options:

  • Upgrade your current PC based software so that it is compatible with the new HMRC submission criteria
  • Obtain a piece of software that links your spreadsheet to the HMRC online portal
  • Move to a cloud computing piece of software (Xero, Quickbooks or Sage Business Cloud Accounting)
What we recommend

We are recommending that our clients move to the cloud, there are numerous advantages to this, not least being that we as your accountant can login to your live data anywhere and deal with any queries you have.

How easy is it to set up?

The set up of Xero as an example is very easy.

  • We can send you a trial invite which lasts for 30 days if you are happy with the software you can use the standard chart of accounts set up which can easily be amended to suit your business.
  • You enter your opening balances – preferably from your last year end accounts.
  • You can then set up bank feeds which allows your bank to send through the transactions direct into the software. This makes reconciling your bank very easy.
  • You can add your logo so that if you generate sales invoices your logo appears on them and these can easily be emailed to your customers.
  • You add your purchase invoices in to the system so that the payments can be matched against these.
    We can of course help with all of the above
How do I do my Vat Return

Once all the transactions have been entered for the quarter you can generate your vat return from within the software and check all the transactions to make sure it is correct. You can then publish the vat return and submit it from within the software using your HMRC login details. Again if you would like us to do this we are able to login to do this for you.

What do I do now?

Do something now do not delay any further!

Get in touch and we will give you the best options for your business and guide you so that you will be able to submit your vat returns correctly from April next year.

Make your list and check it twice!

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The Christmas markets opened this week, but what about January? You might not be thinking about it yet but your accountants are!

While your children sit down to start their lists to Santa, you should join them and complete your tax return checklist.

Running your business and planning Christmas leaves little time for all of that admin work…but the tax return deadline at the end of January will be here before you know it.

Complete your list now and you’ll have one less task to think about!

Not sure where to start? Here’s a simple list to help you on your way.

 

  1. Employment income
  2. Employment benefits e.g. car benefit
  3. Pension income
  4. Interest income
  5. Dividend income
  6. Property income and expenses
  7. Trade income and expenses
  8. Child benefit received
  9. Charitable donations
  10. Pension contributions

 

Read more on self-assessment here.

Every checklist is unique and personal to you. So if you would like some help or advice on completing yours, contact us on 01254 583515 or fill out the form below and we’ll get back in touch with you as soon as possible.

Converting to an Academy

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One of our specialisms at Egan Roberts is acting for academies, but have you ever wondered how it all starts?

 

There are two types of academy; single academies and multi-academy trusts.

Firstly, to convert to a single academy the school’s latest Ofsted rating must be at least good, student’s attainment and progress must be high and finances must be healthy.
Alternatively, to convert to a multi-academy trust you can join an existing trust or set up a new one. All academies in the trust share staff and expertise and make savings on expenses.

 

However, before the school can apply to convert, the governing body must pass a resolution to convert. If applying to join an existing trust, the trust must confirm they are happy to accept your school.

 

The following steps must be completed to convert a local-authority-maintained school to an academy.

1. Prepare for your school’s application before you apply. It is recommended that you submit a registration of interest form and read the ‘Academies financial handbook’.
2. Complete the application form and notify your local authority
3. Set up or join an academy trust
4. Transfer responsibilities to the academy trust
5. Prepare to open as an academy including appointing officers and auditors, insurance and complaints procedures
6. In the first few months of being open as an academy, publish the final funding agreement on the academy’s website, submit the relevant financial returns, complete the land and buildings valuation within 6 weeks of converting and seek advice from peer-to-peer networks

Peer-to-peer networks include:

• Freedom and Autonomy for Schools – National Association
• The Schools Network
• Institute of School Business Leadership

 

More detailed information is available on the government website here.

Who you gonna call? Egan Roberts!

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Don’t get spooked over starting up your business this Halloween. One of our specialisms here at Egan Roberts is working with start-up businesses to help you succeed without the nightmares!

 

Whether you’re at the very beginning of your journey or part way through and think you could use some extra help, we’re here for you.

 

Here are some essential tasks that you might not have thought about yet:

  • Inform HMRC that you are trading
  • Register for self assessment
  • Begin your record keeping, however small you think that receipt is
  • Appoint your accountant
  • Decide the legal structure of your business
  • Set up a business bank account
  • Ensure your software us compatible with Making Tax Digital

 

At Egan Roberts we have experience in multiple accounting softwares and we are all Xero Certified Advisors.

 

If you’re unsure about what records you should be keeping, read our blog here.

 

For more information on Making Tax Digital we have the following blogs available to explain it without the jargon:

 

If you would like to discuss your new business further, please call us on 01254 583515 or visit our website to book a free meeting.

Making Tax Digital Compliant Software

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HMRC have updated their list of software which is compliant with Making Tax Digital for VAT.   They are currently working with over 150 suppliers to provide compliant software before April 2019.

 

Suppliers include:

 

  • Xero
  • Iris
  • Sage (UK) Ltd
  • Intuit – Quickbooks
  • Clear Books plc

 

The full list is available here.

 

 

At Egan Roberts we are Xero Advisor Certified and so are fully equipped to provide you with help and guidance in using Xero whether it is for the first time or to help you get the most out of the software.

 

Not sure about Making Tax Digital?

 

Read our other blogs here to better understand Making Tax Digital and how it will affect you and your business.

 

Download This Cutting Edge App to Help You Manage Your Finances and Income On the Go

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Egan Roberts Accountants App

With this free cutting edge App you can now manage your finances and income on the go, all from the device you always carry with you and use every day – your mobile phone.

Click here to download : https://play.google.com/store/apps/details?id=uk.co.myfirmsapp.one.accountants and use access code ER2018

The App is packed with expertly designed features

Such as the ability to store virtual receipts and log your mileage in real-time, all whilst having access to quality approved information regarding rates, taxes and maximising profits.

The App is not here to replace your accountant, but this App gives you their financial management service in the palm of your hand, at any time, day or night.

Packed full of powerful features, ready to be used as soon as you download such as:

Income Manager – Log your income, ready to export and send directly to us

Receipt Manager – Take photos of your receipts on the go, quick and easy

Mileage / Logbook Tracker – Make sure your mileage claims are always accurate with background GPS tracking

Calculators – a suite of useful calculators to provide you financial and tax information in an instant

Tax & Finance – Get access to tax tables, important financial dates and business news, updated regularly

Say goodbye to paper receipts, our App allows you to photograph your originals, quickly categorise them and export them in a spreadsheet format, ready to send to your accountant whenever suits you. Never again will you have to worry about losing a receipt or taking up valuable office space with piles of paper.

No more lost income records!

You can now use the App to quickly and simply capture invoices and payments. With the click of a few buttons you can log, categorise, add notes, add an image and then save. Captured income can then be exported and emailed to your accountant ready to incorporate into your accounts.

Is capturing your business mileage a chore?

The App can take this pain away too. Mileage / Logbook Tracker will record your mileage at the press of a button. Simply ‘tap’ on the start button and the App starts tracking your journey, even when it is minimised. Once you have finished your journey hit stop, give it a name and you’re done. If you forget to track the journey at the time, don’t worry – you can manually add the journey later so all your journey details are in one place. You also have the ability to export mileage at any time with the click of a button. This will make capturing your business mileage a doddle.

We have also packed the App with super useful calculators to help you make informed decisions such as APR, loan payments, mortgage payments, savings and currency conversions.

We make sure that you also have access to essential tax and financial information. From key tax dates and tax tables to the latest financial news and budget information, you can access it all from within the App, with the reassurance that it is always up to date.

Whether you’re employed, self-employed or running a private company

This App will help you to manage your money effectively and save you time and administrative costs. Simply download to your mobile or tablet and take the first step to easier accounts.

Free HMRC App

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HMRC launches an app to assist with personal taxation

The newly issued HMRC app enables individuals to find information about their tax, National Insurance, tax credits and benefits on the move. Suitable for both Apple and Android devices, users will need their Government Gateway credentials to access the information.

For accountants like us who act as tax agents for individuals and for whom we will never have full access to the client’s personal tax account this provides easy way to enable clients to show us, ‘on the move’, otherwise unavailable information without having to access it via a computer/internet.

Full details can be found at: https://www.gov.uk/government/publications/the-official-hmrc-app/the-free-hmrc-app

You can use the HMRC app to estimate your tax, manage your tax credits, access your Help to Save account, or work out your take-home pay.

Used by more than 550,000 people per month, the app puts you at the heart of your tax matters and financial life.

What the HMRC app enables you to do

You can use it to:

    • view your tax code and an estimate of the tax you need to pay
    • see your income and benefits
    • check your National Insurance number
    • view your tax credits payments schedule
  • renew your tax credits
  • access your Help to Save account
  • use our tax calculator to work out your take home pay after Income Tax and National Insurance deductions
  • track forms and letters you’ve sent to us
  • get 6-digit access codes to make your HMRC accounts more secure

 

Getting started

Download the free HMRC app now from:

 

How to sign in

The first time you sign in, you’ll need to enter your Government Gateway ID and password. If you haven’t got these, go to the Government Gateway website and register as an individual.

Whenever you use the app again, depending on what your handset supports, you can sign in using:

  • a 6-digit PIN
  • fingerprint authentication
  • facial recognition

 

Setting up a personal tax account

You can use the app to set up a personal tax account by giving us your name, National Insurance number and date of birth.

If we need to verify your identity, we’ll ask for details such as your passport number and information about your salary.

Sign in to your Help to Save account

The Help to Save service went into a trial phase known as ‘private beta’ in January 2018. It is being rolled out gradually so that it can be tested and developed.

If you’ve already opened a Help to Save account as part of the trial, you can use the app to:

  • check your Help to Save account balance and bonus
  • keep track of how much money you’ve paid in each month
  • see how much money you can still pay in before the end of each calendar month
  • set regular reminders to add to your savings
  • view all your payments and withdrawals

If you want to do other tasks, such as pay money in, it is easy to sign in to your Help to Save account using the app.

Safety and security

HMRC takes cyber security very seriously – see how we are keeping you safe online.

Help and support

If you have a problem with your account that you can’t solve using HMRC’s online resources, contact us for help.

What is marriage allowance and can we claim it?

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We all know that tying the knot can affect your day-to-day money management, but exactly what effect does marriage or a civil partnership have on your financial status? Here we’re looking at marriage allowance.

There was a time that making the leap from single life to married bliss came with a great range of tax incentives. Married couples used to be viewed by the Government as one single taxable entity and so you would be taxed less after getting married.

The picture is different today: even when joined to another in matrimony, we are now mostly taxed individually, meaning the tax benefits are few and far between.

How will your tax status be affected?

You should inform HM Revenue & Customs of your new marital status to make sure you are taxed correctly. You can do this by following the GOV.UK link here.

Marriage Allowance

Marriage allowance allows you to transfer £1,190 of your personal allowance to your husband, wife or civil partner if they earn more than you do saving tax of up to £238 in the year.

It is estimated that one in four couples who are eligible for marriage allowance fail to claim it.

The lower earner must have income of £11,850 or less to be able to make the claim.

Claims can be backdated for any tax year since 5th April 2015 providing you were eligible in those tax years.

Your application can be completed online and once an application is complete it is processed immediately. The new form is expected to take you only ten minutes to complete.

Penalties: Not Football, Tax Returns!

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Self Assessment Tax Return Deadline 31st January 2019

With just over 6 months until the 2018 self assessment tax return deadline (31st January 2019), you may not have even begun to think about it. With the summer we’ve been having that’s hardly surprising! However, you should always be aware of the penalties you could face should your tax return be late.

Help Me With My Self Assessment

If you need a hand with your self assessment tax return contact us for a free meeting to discuss your situation and how we may be able to help now and in the future.

Late filing

If your tax return is up to 3 months late you may face a penalty of £100.

Between 3 and 6 months late will result in a daily penalty of £10 per day for up to 90 days.

Filing between 6 and 12 months late is a penalty being the greater of 5% of your tax due or £300.

A return filed more than 12 months late is again 5% or £300 unless you are found to have deliberately withheld information.

If you have deliberately withheld information, the penalty is based on whether the withheld information was concealed or not concealed. If concealed, a penalty of 100% of tax due or £300 if greater will be payable. However, if not concealed, the penalty is 70% of tax due or £300. Reductions can be applied for prompted and unprompted disclosures.

Late payment

Interest is charged on a daily basis on both tax due and tax penalties payable.

A payment made 30 days late will incur a penalty of 5% of your tax due.

Up to 6 months late results in a penalty of 5% of tax outstanding at that date.

If your payment is 12 months late, the penalty is 5% of tax outstanding at that date.

Appeal

You can appeal against a penalty if you have a reasonable excuse.

Examples of reasonable excuses include:

  • An unexpected stay in hospital that prevent you from completing your tax return
  • A serious or life threatening illness
  • A fire, flood or theft

 

Find more examples from HMRC here along with excuses which will not count as reasonable.

https://www.gov.uk/tax-appeals/reasonable-excuses

Read our blog on Excuses and Expense Claims: What not to submit