Self-Assessment Tax Returns

Let the Fun Begin.

So it’s that time of the year again…. And no. I don’t mean Christmas!

The time of the year when some of us panic at the realisation we are not as organised for the imminent Self-Assessment Tax Return deadline as we would like to be. We’re full of mince pies. We’re Christmas shopping. We’re putting our trees up. But self-assessment? It’s achingly dull and it’s not due for AGES…right?

Like Christmas itself self-assessment rolls around much quicker than you’d expect, and it takes time to complete it correctly. 

Do I NEED to complete a Self-Assessment Tax Return?

If you receive income from any other source other than through your employer through PAYE then you will most likely need to complete a Self-Assessment Tax Return. 

Common reasons for needing to complete a self assessment include:

  • Landlord rental income
  • Savings
  • Investments
  • Being self-employed
  • Being a company Director
  • Being a minister of religion

If you are unsure as to whether you need to complete a tax return, then you need to contact an accountant or HMRC (Prepare yourself for some funky hold music) and inform them of your circumstances and get tailored advice.  Ignorance is NOT excuse and you will receive penalties for not paying tax on or declaring any relevant income. 

How do I register for Self-Assessment?

Like with most things these days most people choose to sort all their self-assessment dealing online. You need to pop along to the HMRC website and follow the instructions, make note of the many many reference numbers you’re provided with along they way paying attention to your Unique Taxpayers Reference (UTR). You will also need to enrol for the Self-Assessment Online service. 

You will then be sent an activation code which you will need the first time you log on to your online account. You can replace your activation code should you misplace it but it may take 10 days to reach you in the UK and up to 21 days if you live abroad. Our advice is just don’t misplace it.

There is a different registration processes for those who are self-employed, those who are not self-employed, those in partnerships etc so make sure you do your research and fill in the correct forms for your circumstances. Alternatively, you can talk to us regarding your circumstances and let us navigate the process for you.

What expenses can I claim?

When you are self-employed, a large proportion of your running costs can be deducted from your tax bill such as:

  • Internet and phone bills
  • Electricity
  • Council Tax
  • Heating
  • Electricity
  • Mortgage interest

Running a limited company allows you to deduct some of your business costs from your tax bill also. Such as:

  • Phone and internet bills
  • Travel costs
  • Advertising and marketing costs
  • Business premises costs such as business rates and heating
  • Insurance
  • Staff costs
  • Stock or raw materials if you are intending to sell them
  • Clothing and other uniform costs
  • Office supplies such as stationery and computers

To get the most from your expenses and therefore reduce your tax bill as much as possible, it is a good idea to talk us about your personal circumstances and what constitutes an expense for you or your business. 

We hope you have now completed your tax return, or at the very least have everything prepared ready to fill in your online form. The deadline is the 31st January and there is an immediate fine of £100 for not submitting it on time. Not something you really want to pay after the expense of Christmas!

If you have not had the time to complete it, or don’t fancy jumping through the hoops above when all you really want to do it eat pigs in blankets and watch Die Hard, then please do not hesitate to contact us. 

Have a great Christmas!

Love, the Team at Advanced Accountancy.

Business of the year

We are OVER THE MOON to announce that Advanced Accountancy has been shortlisted as a finalist for Business of the Year category of the Dudley News Forging a Future Awards 2019.

This would not have been possible without the support of our team and our wonderful clients.

We are SO proud to have been recognised by such a fantastic award scheme that celebrates so many wonderful organisations and individuals within our community.

The awards will take place on the 28th of November. Just being nominated is enough for us, but hey – who knows?

#awards #finalists #proud #excited #hopeful

Axe the Tax

11 ways to pay less tax. You’re welcome.

You love paying tax, right? Hmmm. Maybe not. Here’s the good news though – there are perfectly legitimate and legal ways of paying less tax. Happy? Have a little read!

1. Use your Personal Savings Allowance

You can save up to £1,000 in interest from savings without paying ANY tax.

The Personal Savings Allowance (PSA) is applied automatically and is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers.

Current accounts, fixed-rate bonds and regular savers, credit unions, peer-to-peer platforms, corporate bonds and Government bonds are all covered by the PSA.

Given the low level of interest rates now, you’d need at least £20,000 in a best buy savings account to even get close to exceeding the PSA for basic-rate taxpayers, so this isn’t a solution that would work for everyone.

Once you’ve crossed the £1,000 / £500 threshold, you should put your other savings in an ISA.

2. Open an ISA

The Personal Savings Allowance doesn’t mean you should ditch your existing ISA or not bother opening one at all. That’s because ISAs shield your savings from taxes over the long term.

The 2019/20 ISA allowance for adults is £20,000, which can be saved in a Cash ISA, Stocks and Shares ISA, Innovative Finance ISA or Lifetime ISA. 

Children under the age of 18 also get a tax-free savings allowance with a Junior ISA. In 2019/20, up to £4,368 can be put away in a Junior ISA (Cash and/or Stocks and Shares). You get to pay less tax now, and your kids thank you later. What’s not to love?

3. Pay into a pension scheme

Auto-enrolment means that most workers have a pension (for those who are self-employed it’s important you keep up with your pension planning).

But that doesn’t mean you should be satisfied with making the lowest contributions.

When you pay into a pension scheme, you benefit from tax relief on your contributions based on the highest rate of Income Tax you pay. Plus, you can sit back and decide which luxury cruises you can take when you finally retire.

4. Don’t blow pension savings

Pension freedom laws introduced in 2015 allow anyone aged 55 or over to take all the cash from their pension savings for the first time. You can then do whatever you want with it. Wey hey!

But beware! Withdrawing your whole pot could land you with a massive tax bill.

Pension rules say you can take 25% of your pension pot as cash in one lump sum, or multiple withdrawals, tax-free.

5. Stop paying National Insurance Contributions

Older people that carry on working beyond the State Pension age (66 years old presently) don’t have to make National Insurance Class 1 and Class 2 contributions.

Make sure you stop these being taken from your wages by showing proof of age to your employer or writing to HMRC to get a letter confirming you have reached State Pension age.

6. Know your Capital Gains Tax rights

Capital Gains Tax (CGT) is payable on the profits made from selling assets like property (not your main home) and investments.

You don’t have to pay if your gains are under your tax-free allowance. In 2019/20, the capital gains you can get tax-free is £12,000.

After the tax-free allowance, CGT is charged according to your tax band.

The rate of CGT for basic rate (20%) taxpayers is 10% (or 18% on residential property) and the rate for higher rate taxpayers (40% or 45%) is 20% (or 28% for residential property).

There are lots of savvy ways to save on CGT, including using an ISA, investing in certain small businesses, making extra pension contributions, offsetting losses against gains and spreading gains over tax years. 

7. Sharing economy tax relief

The Government has finally caught up with the proliferation of eBay, Gumtree and similar sites, with the launch of two tax relief schemes for the ‘sharing economy’.

The first £1,000 you make from selling your old stuff online, or items you’ve made, is now tax-free – beyond that, you’ll have to pay income tax.

Additionally, the first £1,000 you make from your property, for things like renting out your driveway, is tax-free. That’s on top of the Rent-a-Room scheme, if you’re eligible. Best get cracking with that long overdue clear out eh?

8. Get married

Ding dong the bells are gonna chime! Not something usually associated with saving money, but a wedding does come with some surprising financial bonuses. Married couples and civil partners born after 6 April 1935 may be able to take advantage of a tax break called the Marriage Allowance.

It allows a partner who generally earns less than £12,500 a year to transfer up to £1,250 of their Personal Allowance to their higher-earning spouse (providing their spouse is a basic rate taxpayer).

The Government estimates the scheme could reduce the amount of tax by up to £250 every tax year.

9. Give to charity

The Government pays tax relief on charity donations.

Both you and the charity can benefit, but it depends on how you donate.

Donating through Gift Aid means charities and community amateur sports clubs (CASCs) can claim 25p for every £1 you give back from the Government.

Higher rate taxpayers can claim the difference between their rate and the basic rate on the donation on their self-assessment tax return.

Those that donate through a Payroll Giving scheme will donate from their gross wage or pension, so you’ll then pay less tax on your remaining income.

And don’t forget that those that donate at least 10% of their estate in their will get a reduced Inheritance Tax rate.

10. Stick to deadlines

This is a pretty obvious one, but worth outlining. If you must file a self-assessment tax return, make sure you don’t miss the deadlines as you’ll be hit with an instant £100 fine, and more charges will be levied the longer you leave it.

Read What to do if you haven’t filed your tax return yet on how to limit the damage.

The deadline for paper returns is midnight on 31 October 2019, but if you choose to file online you have until midnight on 31 January 2020.

Take a look at How to get your online self-assessment tax return right for help getting it done on time.

11. Offset expenses

Self-employed people and private landlords can deduct some business expenses before paying tax on their income.

Allowable expenses for the self-employed include travel costs, the running costs of the business premises (including a home office) and buying stationery.

Meanwhile, private landlords can claim for things like agent fees, maintenance, repairs, services like a gardener, legal fees and direct costs such as phone calls, stationery and advertising for new tenants.

They can also offset 25% of the tax on their mortgage interest and for wear and tear on their property, but the Government is reducing this tax break and will end it completely in 2020.

Landlords and those that run a business can also take advantage of the Annual Investment Allowance (AIA) to claim tax back for capital expenditure on specific items.

The limit has temporarily rise to £1 million until 31 December 2020, up from £200,000.  

If any of the above appeals to you but you don’t fancy the legwork, don’t forget we’re here to help. Call Advanced Accountancy today on 01384 271858 and start saving money.

enquiries@advancedaccountancy.co.uk

Events coming up

The wonderful Bonded Warehouse have had food festivals a plenty over summer – have you been lucky enough to attend one? If so did you see our Advanced banners displayed proudly on the premises? We think they look amazing. If you haven’t managed to get over there yet fear not; they still have loads of stuff going on right up until Christmas.

Stourbridge Navigation Trust

Stourbridge Navigation Trust – Open Weekend on Saturday 19th and Sunday 20th of October for instance! All the details can be found on their Facebook – https://www.facebook.com/events/648124202296814/?event_time_id=648124205630147

Canal boats, classic bars, real ale….it’s got it all. Best of all, it’s free admission! Please head along and see what this fantastic organisation has to offer…and of course don’t forget your Advanced Accountancy banner selfie!!! #lookinggood

Advanced Accountancy in the news!

A new month means it’s high time for a fresh blog.

As the weather sways from tropical heat to biblical rainfall and back again (usually on the same day), here at Advanced Accountancy we’ve also been keeping ourselves busy.

Most excitingly, we’ve recently featured in the Stourbridge News who wrote a wonderful piece about our new corporate sponsorship arrangement with the famous Bonded Warehouse community group. It was a real joy to see our hard work celebrated in the local press and we look forward to a mutually beneficial relationship with one of the most esteemed volunteer-led projects in the region. We’ve given the Bonded Warehouse team a cool £1,000 which will allow them to keep the iconic 18th Century building ship shape and Bristol fashion for years to come. We’re as thrilled as ever to support an organisation which has spent so many decades improving their local area. Read more about how the money will be put to good use here. 

In the news!

Advanced Accountancy in the Stourbridge News
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Advanced Accountancy in the Stourbridge News paper

However, it’s not only the Bonded Warehouse who have benefited from our good fortune; we’re also delighted to provide the shirt sponsorship for Wolverhampton-based football team Claregate Park Rangers FC. We wish them all the best for the forthcoming season and look forward to cheering on the boys from the sideline. If they continue working as hard for each other as we do for our customers, we’re sure they’ll enjoy a successful season. We’re also pleased to have assisted The Duncan Edwards Foundation (DEF), who help children from all walks of life achieve their sporting ambitions, achieve their long-awaited charity status after a great deal of hard work by Advanced Accountancy company director and valued DEF trustee DEF and the their lovely founder Rose Cook-Monk.

In accountancy news, the first VAT quarter (1 April-30 June) following the Making Tax Digital changeover is due for submission next week. The VAT return and payment due date for this return is 7 August 2019, so we’ve been working hard integrating all our VAT registered clients into the new system of late. If you are a VAT registered business with a taxable turnover above the VAT threshold (£85,000) you are required to keep digital VAT records and send returns using ‘Making Tax Digital’ compatible software from 1 April 2019 or risk running foul of the law – does this sound like it affects you? Are you baffled by the whole process? Have a query? Why not get in touch with our friendly team today so they can run through your options and put your mind at ease.

In other news, we’ve enjoyed a few celebrations in the office as bookkeeper Jake and payroll manager Maddison both had their birthdays in the last few weeks. It was also Advanced Accountancy’s company director Marina Parry’s birthday recently which we all enjoyed celebrating.

We’re also delighted to announce Advanced Accountancy’s youngest fan, courtesy of our lovely staff member Stacey-Leigh who gave birth to her beautiful little girl Alannah back in May. We can’t wait to see her in the office again soon, she’s breath-taking!

So that brings you pretty much up-to-date with what we’ve been busying ourselves with over this Great British Summer. Naturally, we’ve also been occupied keeping our clients as happy as they’ve ever been and ensuring we always go the extra mile to help out you and your business interests. As ever, here at Advanced Accountancy we’re open to any questions you may have – big or small, daft or serious – and also are always looking for new businesses to bring into our little family. Why not call by for a quick chat and a coffee? There might even be a little bit of birthday cake left over… Until next time!