Massey Accounting Company

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National Minimum Wage rise from April 2020

National Minimum Wages rates

National Living Wage (NLW) rates (for those over 25 years old) and National Minimum Wage (NMW) rates (for those under 25 years old) will rise from 1 April 2020.

The NLW increase of 51p represents a 6% rise, equivalent to an annual increase of around £930 for a full-time worker.

In summary and effective 1 April 2020 the follow minimum wage rates will apply

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice *
April 2019 £8.21 £7.70 £6.15 £4.35 £3.90
April 2020 (new rates) £8.72 £8.20 £6.45 £4.55 £4.15

* The apprentice rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.

Plan ahead

Ensure your payroll procedures are up to date and consider notifying staff ahead of time in writing (even via a note on their payslip). This transparency is likely to be well received and could help build positive employee relations. It also offers an opportunity to explain that any overtime worked during a pay reference period prior to the introduction of the new rates, that is payable after these have been introduced, will still be paid at the previous rate.  For further details and more rates visit gov.uk

Pension contribution rates

If you employ staff and run a pension scheme the minimum contributions rates remain the same with no more planned increases:

  • Employer minimum pension contribution 3%, staff contribution 5%.

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Small Business Tax Investigations raise £16 for every £1 spent

HMRC raises £16 for every £1 it spends on staff carrying out investigations into the #tax affairs of individuals and small businesses.

Figures show HMRC collected £4.9bn in extra tax from investigations into individuals and small businesses in 2018-19, but only had to spend £309m on staff to achieve that.

This extra tax included £1.2bn from investigations into underpaid income tax.

Sign up to our #TaxInvestigation scheme to be protected from #HMRC enquiries

Source info: http://bit.ly/smallbusinessinvestigations

Related blog: Can you insure against a tax investigation?


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Selling a rental property? Tax now due within 30 days!

Here’s a few general tax updates for the new tax year starting 6 April 2020.

Selling a rental property in the near future?

If so please keep in mind that if exchange of contracts take place from 6 April 2020 onwards then a standalone online Capital Gains Tax Return must be completed and any tax paid within 30 days of completion. If you’re planning on selling a property – please let us know.

Source info: https://www.gov.uk/government/publications/capital-gains-tax-and-corporation-tax-on-uk-property-gains

Capital Gains on Cryptoassets

HMRC continues to update its policy papers on the tax treatment of crypto assets. The latest versions of their guidance for individuals and for businesses can both be found at https://www.gov.uk/government/publications/tax-on-cryptoassets

Delayed budget

This year’s Budget Day set for 11 March is much later than usual. Unfortunately this may delay some of our usual forward tax planning advice for the coming tax year.

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We have two videos to help on ourYouTube-logo-full_colorchannel; and for regular tax-tips follow our blog on  or click +Follow at the bottom of this page.


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Beware of the mobile phone tax trap

 

It’s a well-known tax free benefit – an employer may provide one mobile phone per employee for both business and personal use without triggering a taxable Benefit-in-Kind (Section 319 ITEPA 2003).

Sounds simple enough but there are conditions:

• The mobile phone / sim-card must remain the property of the employer
• One phone per employee
• The contract must be between the employer and the mobile phone provider

It’s this final condition that often catches out micro companies that blissfully pay for the director’s mobile phone bill whilst the contract remains in the director’s personal name.

Whilst a seemingly minor technicality the tax treatment of reimbursement of mobile phone costs in this way triggers a costly Benefit-in-Kind Income Tax and National Insurance charge.

It has been reported that HMRC are taking a strict line on this matter, and when discovered, ordering assessments of often 4 years underpaid taxes averaging £500 before penalties and interest.

What’s the solution?

If your mobile contract isn’t in the company name – don’t overly worry – you’re not alone by a long stretch. To keep things practical (and in the real world) we suggest the following:

  • First of all, call your mobile provider to ask about their procedure for transferring the contract to the company (personally I found this surprisingly straight forward)
  • If there are extra charges to make the change during your contract, then wait until you’re out of your contract and try again – this is usually the easiest time to transfer your contract and you’re usually offered the same price as personal rate tariffs

Essentially, in our experience, it’s easier and cheaper than most people realise to review your mobile contracts yourself before HMRC do!

Source info: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21779

Enjoy saving tax?

We have two videos to help on ourYouTube-logo-full_colorchannel; and for regular tax-tips follow our blog on  or click +Follow at the bottom of this page.


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National Minimum Wage & Pensions rise from April 2019

From 1 April 2019 the minimum hourly pay rates along with the minimum contributions for auto-enrolment pensions will increase affecting both employees and employers.

First let’s look at the National Minimum Wages rates:

National Living Wage (NLW) rates (for those over 25 years old) and National Minimum Wage (NMW) rates (for those under 25 years old) will rise from 1 April 2019.

The NLW increase of 38p represents a 4.8% rise, equivalent to an annual increase of about £700 for a full-time worker.

In summary and effective 1 April 2019 the follow minimum wage rates will apply

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice *
April 2018 £7.83 £7.38 £5.90 £4.20 £3.70
April 2019 (new rates) £8.21 £7.70 £6.15 £4.35 £3.90

* The apprentice rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.

The Government has previously said it plans to raise the national living wage to at least £9 per hour by 2020.

Ensure your payroll procedures are up to date. For further details and more rates visit gov.uk

 

Pension contribution rates increase from April 2019

If you employ staff and run a pension scheme the minimum contributions rates are increasing from April 2019. This has long been the intention of The Pension Regulator (TPR) and is the last increase of “phasing”. The increases are as follows:

  • Employer minimum pension contribution 3% (from 2%), staff contribution 5% (from 3%).

If we provide your payroll services then we will of course implement the increased rates on your behalf but because this represents an increased cost for both employer and employee we highly recommend that you let your staff know in advance of this change. To do so you may like to use this TPR letter template.

Source info and more detail: http://www.thepensionsregulator.gov.uk/en/employers/phasing-increase-of-automatic-enrolment-contribution

 

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MTD means big changes to your bookkeeping

Are you ready for Making Tax Digital (MTD)?

If you’re a VAT registered business with a turnover above the registration threshold then Making Tax Digital (MTD) is compulsory from April 2019 and will mean big changes to how you do your bookkeeping. Watch this short video.

What is MTD?

From April 2019 businesses will have to provide VAT information to HMRC through MTD compliant software. If you’re already using cloud based software you may need to do little more than make sure it’s ready and working for MTD. If you’re maintaining pen-and-paper records then the MTD initiative is about to force upon you a huge change in your working practices.

HMRC recently issued their VAT Notice 700/22: Making Tax Digital for VAT detailing exactly what is required of the software you choose.

If you are maintaining manual bookkeeping records then please contact us immediately to discuss how we can help you implement MTD compliant bookkeeping.


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Updates to our Privacy Policy

In view of the General Data Protection Regulation (GDPR) coming into effect tomorrow we have updated our Privacy Policy and Cookies Policy.

Our new policies offer more detail on what data we collect, how we use it and your rights. Keeping your personal information safe is very important to us.

You can read the full updated policies here: Privacy Policy, Cookies Policy and Disclaimer

We are in the process of updating our standard terms and conditions and letters of engagement. We will be in touch with each of our clients individually to bring these up to date.


Enjoy saving tax?

We have two videos to help on ourYouTube-logo-full_colorchannel; and for regular tax-tips follow our blog on Google+ or click +Follow at the bottom of this page.