blog

National Minimum Wage

Mon, 21 May 2012 14:03:44 +0100

The government has accepted the Low Pay Commission’s recommendations for National Minimum Wage rates from 1 October 2012.

From 1 October 2012:

the adult minimum wage rate will increase from £6.08 to £6.19 an hour
the youth development rate will remain at £4.98 an hour
the 16-17 year old rate will remain at £3.68 an hour and
the apprentice rate will increase from £2.60 to £2.65 an hour.

The Chair of the Low Pay Commission David Norgrove said:

‘Our recommendations this year are, as ever, based on extensive economic evidence and take account of the prospects for the UK economy. Although the economy is forecast to grow through 2012 and 2013, the expected pace of growth is uncertain and is likely to be low. We believe our recommendations for October 2012 balance the needs of low-paid workers against the challenges facing businesses, particularly small businesses.’

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Employer Year End Forms

Mon, 14 May 2012 09:13:29 +0100

HMRC are reminding employers that in order to avoid penalties they must file the Employer Annual Return (P35 and P14s) online and on time. The vast majority of employers must file electronically and the deadline for submission of the forms is 19 May 2012, which this year falls on a Saturday.

Where employers do not file their annual return by 19 May they incur a penalty of £100 per 50 (or fewer) employees for every month (or part month) that their return is late.

HMRC have been criticised for failing to make employers aware that they were incurring penalties on a timely basis. In a change to procedure HMRC will now issue employers, who they believe have yet to make a return, with an ‘Employer Annual Return Reminder’ from the end of April.

From the end of May HMRC will issue ‘P35 Interim Penalty Letters’ to relevant employers.

If you are unsure whether you need to complete a return this year, feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

P11D Deadline

Tue, 08 May 2012 08:40:08 +0100

The forms P11D, and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2012, are due for submission to HMRC by 6 July 2012. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.

Employees pay tax on benefits provided as shown on the P11D, either via a PAYE coding notice adjustment or through the self assessment system. In addition, the employer has to pay Class 1A National Insurance Contributions at 13.8% on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form.

HMRC have issued some guidance as to common errors on the forms in the latest Employer Bulletin. These include the following:

Not ticking the director box if the employee is a director
Not including a description or abbreviation where amounts are included in box A, B, L, M or N of the form
Leaving the cash equivalent box empty
Failing to report the full gross value of the benefit where it is provided for mixed business and private use
Not reporting a fuel benefit where one is due.

Correct completion of forms P11D can be a complex issue.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Personal Allowance Changes

Mon, 30 Apr 2012 10:53:44 +0100

For those aged under 65 the personal allowance will be increased by £630 to £8,105. This increase is greater than the minimum required and is part of the plan of the government to ultimately raise the allowance to £10,000.

The personal allowance is reduced by £1 for every £2 of adjusted net income over £100,000. So for 2012/13, the allowance ceases at adjusted net income in excess of £116,210.

Tax band and rates 2012/13

The basic rate of tax is currently 20%. The band of income taxable at this rate is being reduced to £34,370 so that the threshold at which the 40% higher rate of tax applies will remain at £42,475.

The 50% additional rate of tax currently applies where taxable income exceeds £150,000.

If dividend income is part of total income this is taxed at 10% where it falls within the basic rate band, 32.5% where liable at the higher rate of tax and 42.5% where liable to the additional rate of tax.

Changes for 2013/14

The personal allowance is to increase to £9,205. The band of income taxable at this rate is being reduced to £32,245 so that the threshold at which the 40% band applies will reduce to £41,450.

For 2013/14 the 20% basic rate and 40% higher tax rates remain unchanged. However the 50% additional rate tax will be reduced to 45%. A rate of 37.5% will be payable on dividends liable to the additional rate of tax.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Stamp Duty Land Tax - Expensive Properties

Mon, 23 Apr 2012 09:06:27 +0100

A new rate of 7% will be introduced where the chargeable consideration for a residential property is more than £2 million. This will have effect where the effective date (normally the date of completion) is on or after 22 March 2012, unless the contract was entered into before that date.

An even higher rate of 15% will apply to such residential properties if the purchaser is a ‘non-natural person’, for example a company. This will have effect where the effective date of the transaction is on or after 21 March 2012.

In addition the government will consult on the introduction of:

a SDLT annual charge where properties over £2 million are owned by non-natural persons
a CGT charge on residential property owned by non-resident, non-natural persons.

Both these measures will apply from April 2013.

The intention of the 15% charge is to stop or reduce the number of schemes which claim to allow a property to be transferred without SDLT. The charges to be introduced in 2013 are aimed at charging properties already in companies which are used as residential accommodation.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Key Points for SME's - Budget 2012

Mon, 26 Mar 2012 08:52:03 +0100

A full report on this year’s Budget can be downloaded via our download page here.

However, there are a number of key points in the 2012 Budget which are most applicable to SME’s. The top 5 points have been summarized below:

1. The personal allowance will be increased to £8,105 from April 2012 and £9,205 from April 2013. This is good news for all lower rate tax payers as it means that they will be better off by around £126 in 2012 and an additional £220 in 2013. A reduction in the higher rate band however, means higher rate payers will not see any change.

2. As announced previously, the annual investment allowance (AIA) for capital purchases on most items of plant and machinery will be reduced from £100,000 to £25,000 from April 2012.

3. Changes to child benefit now means that any couple, where one person earns more than £50,000, will see a decrease in this benefit. This benefit will be lost completely where one person earns in excess of £60,000.

4. The decrease in the main rate of corporation tax has been accelerated so that the rate from April 2012 will be 24%, decreasing to 23% from April 2013, with a further decrease to 22% by April 2014. The small companies’ rate however remains unchanged at 20%.

5. The additional rate of tax will decrease from April 2013 from 50% to 45% for those individuals earning over £150,000. There was, prior to the Budget announcement, speculation that this rate would be abolished all together. However, the Chancellor opted for a reduction instead.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Budget Booklet 2012

Thu, 22 Mar 2012 10:55:47 +0000

For a full report on the issues raised in the budget announced on 21st March 2012, please visit our downloads page

Kilby Fox Downloads

If you have any questions on any of the issues raised in the budget, please do get in touch.

What is Companies House?

Mon, 19 Mar 2012 10:00:00 +0000

The role of Companies House is often unknown to both start-ups and many established businesses. Clients are often confused as to why they are required to file accounts with both HMRC and Companies House.

The main role of Companies House is:

To incorporate and dissolve limited companies
To store company information and make it available to the public.

This role means that a lot of company information can be found out through a simple search via Companies House online service, Webcheck. As a minimum, the following information is available through this service:

Historical sets of company accounts (be aware however that if the company is classed as small, they are able to file abbreviated accounts which only show limited useful information).
Annual return. This document is filed annually by companies and shows details of the directors and shareholders of the company.
Registered office of the company.
Date of incorporation.

These documents as well as many others can be downloaded from the site for £1 each.

What does this mean for a company?

Firstly, the downside. As a Limited company, there is a lot of information on the public record which can be accessed for a small fee.

The benefit of this however is that Companies House can be a very cost effective and simple way to carry out checks on your competitors, partners, suppliers or customers. The financial information shown for small companies is often not that useful, but it may give a basic idea of their financial strength. Using this service will also help in checking that a potential business associate is not being dissolved or in liquidation.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Online Filing Penalties - Payroll Forms

Mon, 12 Mar 2012 11:42:43 +0000

HMRC have confirmed in the latest Employer Bulletin that they intend to impose penalties on all employers who fail to send their payroll starter and leaver forms online from April 2012.

During the 2011/12 tax year HMRC issued penalty notices to employers with 50 or more employees when they submitted more than two paper forms in a quarter. The penalties issued ranged from £100 to £3,000 depending on the number of paper forms received in the quarter.

Since April 2011 small employers (with 50 or less employees) have been required to file their in year starter (P46) and leaver (P45) forms online. However, small employers who submitted paper forms between 6 April 2011 and 5 January 2012 were only issued with warning letters. This action was taken to try and help small employers to get this right.

From 6 April 2012 penalties will be issued when the employer fails to file their starter and leaver forms online in the period 6 January 2012 to 5 April 2012 and onwards.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

HMRC Latest Targets

Mon, 05 Mar 2012 09:46:27 +0000

HMRC have announced that they will turn their attention to those involved in home improvement trades and direct selling (online market sellers) in their next round of Tax Catch Up Plans.

HMRC have previously offered Tax Catch Up Plans to Plumbers, Dentists and Tutors amongst others. According to the press release their latest campaigns will target:

Missing returns: This will contribute to wider HMRC activity tackling failure to complete tax returns. It will initially focus on those who fail to complete tax returns and who are liable to pay tax at the highest rates.
Home improvement trades: This will build on campaigns aimed at plumbers and electricians, and will include several 100,000 tradespeople in construction and building work such as roofing, window fitting, bricklaying, carpentry and joinery.
Direct selling: This will target customers who ought to be paying tax on income they earn from buying and selling goods direct to others, or from the commission on these sales.

As with previous campaigns, the focus of the new campaigns will be on providing those in the selected groups, who may not be paying the tax they owe, a chance to put their affairs in order on the best possible terms.

HMRC have announced that they will be using new technology to identify traders in both sectors with unpaid taxes.

Marian Wilson of HMRC said:

‘We are offering all the people targeted the opportunity to come forward. Penalties will be higher if we come and find people after the opportunity.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

How Are Dividends Taxed?

Mon, 20 Feb 2012 08:30:00 +0000

Dividends are widely used by companies as a tax efficient way of remunerating its shareholders. The tax system surrounding dividends however is a little more complicated than some other sources of income. This confusion often arises due to the tax credit received on dividends.

This impacts basic rate and higher rate tax payers differently. Examples of how dividends are taxed for each are shown below:

Basic rate taxpayer

The tax credit received on dividends was put in place to account for the tax already paid by the company on its profits. The way it works is to gross up the dividend you receive by 10% and then deduct this tax credit from your personal tax bill. This effectively results in no tax being due on the dividends received for basic rate taxpayers.

Example:

Description	Workings	Figures
Dividend paid to you		£1,000
Gross dividend (value used on your personal tax return)	£1,000 / 0.9	£1,111
Tax credit received	10% of the gross dividend	£111
Tax on dividend at the basic rate of 10%	£1,111 x 10%	£111
Tax due	Tax on dividend less tax credit	Nil

Higher rate taxpayers

The area where the tax credit has the biggest impact, is for higher rate taxpayers (2011/12 – earnings over £42,475). Dividends are technically taxed at 32.5% for higher rate taxpayers, however once we account for the tax credit, we are left with an effective rate of tax of 25%.

Example:

Description	Workings	Figures
Dividend paid to you		£1,000
Gross dividend (value used on your personal tax return)	£1,000 / 0.9	£1,111
Tax credit received	10% of the gross dividend	£111
Tax on dividend at the higher rate of 32.5%	£1,111 x 32.5%	£361
Tax due	Tax on dividend less tax credit	£250

Conclusion:

If you are a basic rate taxpayer, then the in no further tax to pay on the dividends you receive. However, if you are a higher rate taxpayer, it is important to ensure you set aside 25% for the tax due.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

PAYE Tax Codes

Mon, 13 Feb 2012 08:51:34 +0000

HMRC are issuing PAYE tax codes for 2012/13. These new coding notices, which are due to be issued between January and March 2012, will be used against employees pay from April 2012 onwards. It is important that these coding notices are checked carefully as an incorrect code will result in too little or too much tax being deducted from pay or pension payments.

Good news for many

The majority of taxpayers will see an increase in their tax code as the personal allowance for those under 65 increases from £7,475 to £8,105.

Those individuals with simple tax affairs (just one employer with no reliefs or benefits or tax underpayments brought forward) will generally not receive a coding notice. Their current coding of 747L will be automatically uplifted to 810L following general instructions to employers.

Although the personal allowance is increasing, the point at which taxpayers start to pay the higher rate of 40% tax on their taxable income is decreasing (from £35,000 to £34,370). This means that basic or higher rate taxpayer will generally benefit from the same tax saving of £126.

The withdrawal of the personal allowance for those with income over £100,000 income limit applies for 2012/13. The reduction in the personal allowance is by £1 for every £2 of adjusted net income above the income limit. Adjusted net income for these purposes is broadly all income after adjustment for pension payments, charitable giving and relief for losses. Individuals with adjusted net income of at least £116,210 will not be entitled to a personal allowance for 2012/13.

If you are unsure that your coding notice is correct and would like some further guidance, please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Online VAT Returns and Electronic Payments

Tue, 07 Feb 2012 08:27:28 +0000

Since April 2010 most VAT registered businesses have been required to submit their VAT Returns online and pay any VAT due electronically. From 1 April 2012 all VAT registered businesses will be required to meet these requirements, apart from a very small number who will be exempt.

Exemptions from doing your VAT online

Businesses may not have to comply with the requirement if:

they are subject to an insolvency procedure - but if the business is subject to an approved Voluntary Arrangement, administration or trust deed, an online submission may be made
HMRC is satisfied that the business is run by practising members of a religious society, whose beliefs prevent them from using computers.

If you believe either of these exemptions apply then it is important to confirm the position with HMRC and not assume that the exemption applies.

Paying your VAT electronically

Businesses which submit their VAT Returns online, must also pay any VAT due electronically. This generally gives businesses up to seven extra calendar days to submit their return and pay their VAT. There are some exceptions to this rule, for example businesses which file annual returns and make payments on account.

HMRC advise:

‘The extended due date will be shown on your online return and you must ensure that cleared funds reach HMRC's bank account by this date. If your payment clears later than this, you may be liable to a surcharge for late payment’.

‘There are various ways to pay including by Direct Debit, online and telephone banking. You can also pay by cheque at a bank or building society using a Bank Giro paying-in slip which can be obtained from HMRC. Since some of these methods can take a little time to set up, you should choose which method you want to use, and set it up, well in advance of the filing and payment deadline’.

If you have any questions on this please feel free to contact Kilby Fox on 01604 662 670 or through the website, by completing the box on the right hand side.

Frock Swap / Christmas Fair - Northampton

Fri, 07 Oct 2011 11:13:14 +0100

Unfortunately due to lack of numbers, the Northamptonshire Community Foundation have had to cancel the Frock Swap event on 13th October. They will however been holding a Christmas Fair on 27th November at the Royal & Derngate.

More info to follow shortly!!

Sponsor A Skip

Fri, 26 Aug 2011 11:15:02 +0100

Hackleton Village Hall

Kilby Fox take their Corporate Social Responsibilities very seriously so when asked by the neighbouring village of Hackleton if we could help them, we jumped at the chance!

In late 2007 The Dudley Winterbottom Memorial Hall in Hackleton decided to knock down the little old single garage used by the local theatre group and the dilapidated Scout Hut which was no longer usable. In their place, the hall committee decided to build a new storage facility for the theatre group, the Scout groups and the local Playgroup. Once the hall started to raise funds for the build, it was suggested that an Annexe was built on top of the storage rooms to create more hire space for activities for the hall as they are currently full during the week and had groups on a waiting list to use its rooms. In the end, the build included toilets and a kitchen and an office for the Hall, the total build amounting to £250,000. The developments to the building have also included installing a stair lift to allow access for the disabled.

The Hall is a registered charity so relies purely on fund raising and donations to continue to provide facilities to the community. The build has also been heavily reliant on donations and funds raising and various grants. Some of the bigger donations have come from the London Marathon who generously donated £80,000 and Barclaycard who have offered to decorate the Annexe as part of their community activities, they have also put a sum of money towards paint and materials etc.

When it was decided that the Hall needed some modernisation a huge fund raising effort commenced in the community. Cream Tea mornings have been held, Jazz nights, Fun Days, Barn Dances and much more. As there was a need for a huge amount of skips to take waste from the site, the Sponsor a Skip idea came to light. Local businesses were asked to donate a sum of money to help with the building work and skip hire and in return they would receive advertising in the Hall etc.

Kilby Fox feel very strongly about helping the local community so were eagar to help. There were a total of 23 skips in the end and all but four have been sponsored, the work is almost complete now and well on target for it's opening. If you would like to make a donation or Sponsor a Skip, please contact Edward Kilpin, the Chairman of the Trustees at the Village Hall on 01604 870 764.

Frock Swap!!

Mon, 08 Aug 2011 08:42:18 +0100

Northamptonshire Community Foundation Frock Swap!

Come along and swap your clothes, shoes, jewellery and accessories at the October Frock Swap in aid of the Northamptonshire Community Foundation. The event is again being held at Highgate House in Creaton on Thursday 13th October. The doors and bar will open at 6.30pm, with the official swapping set to start at 7.30pm.

To come along, the Foundation just ask you to pledge a small donation via the JustGiving website. http://www.justgiving.com/NCF . The minimum donation is £10 and all you need to do is print the receipt and bring it along with you on the day. Once your details have been registered you will receive up to date instructions and information nearer the time via email.

If you do not have access to the internet, please contact Gemma at Kilby Fox on 01604 662 670 or Jessica at NCF on 01604 230033.