Category Archives: Tax Help

Tax Help

Self Assessment Tax Returns FAQ

Self Assessment Tax Return Deadlines

Self Assessment Tax Returns, questions we get asked a lot and some interesting facts.

Who needs to complete a Self Assessment Tax Return?

Self Assessment Tax affects individuals, partnerships and trustees who receive tax returns, together with companies that are not resident in the UK and are not trading in the UK through a permanent establishment. It also affects individuals who do not receive a tax return, but need to claim a tax relief or allowance and companies making claims outside their company tax returns.

Accountants charge too much for Self Assessment Tax Returns, I am just a sole trader.

If your accountant is charging you too much for your Self Assessment Tax Return, you need to speak to us today!  Our service is second to none, and we always aim to save you much more than the cost of our services ever would!  We know how difficult starting a new business is, and it is in our benefit as well as yours to do everything we can to help you flourish.

When did Self Assessment Tax start?

The first year for Self Assessment Tax was the 1996 – 1997 tax year (April to April), with all partnerships being included in Self Assessment in the 1997 – 1998 tax year.   Previous to self assessment, HMRC would assess each taxpayer!

When do I need to complete my Self Assessment Tax Return?

Paper returns must be filed by 31st October following the end of the tax year. The deadline for filing self assessment returns on-line is 31st January. Returns issued after 31st July following the end of the tax year must be filed three months from date of issue or 31st January if later and the return is filed on-line.

So for example, your trading between 6th April 2019 and 5th April 2020 would need to be submitted;  on or before the 31st October 2020 if you use a paper tax return form (SA100), or if you submit your self assessment tax return online, on or before 31st January 2021.

Can’t I just have my self assessment tax return filed straight away?

Yes, you can file your tax return for the previous year from 6th April.  There are no advantages filing later in the year, and actually it allows your accountant more time to make sure you have included everything you are entitled to claim as expenses!   Filing your tax return straight away does not mean you have to pay your tax bill any sooner than someone who files on the 31st January!

If you are in receipt of certain HMRC tax credits, filing earlier should mean you are not being over paid, or under paid.

I have just started working for myself, when should I let HMRC know?

If you do not receive a notice to file, but have received untaxed income or made a capital gain in the tax year have to inform HMRC by 5th October following the end of the tax year. However, for National Insurance purposes a when you start new self-employment, you must notify HMRC as soon as you start, within the first three months of self-employment.

I missed my filing deadline, it was due last week, last month, last year, or even for previous years, what do I do?

Firstly, do not panic, but you should act straight away!  HMRC can be very accommodating of genuine mistakes, but you need professional advice now!  Click here to contact us.

When will I know how much self assessment tax I need to pay HMRC?

As soon as we complete your return, ready for submission, we request your approval before sending to HMRC, at this point you will have a breakdown of any payment due.

When do I need to make Payment on Account to HMRC?

If you have Self Assessment Tax bill is more than £1,000 and less than 80% of your income is from a PAYE scheme, you will be required to pay your tax bill by 31st January as normal, but also half as much again against your future prospective earnings.  If you think you may fall into the Payment on Account scheme, you should contact us to clarify.

As an example; if your tax due for April 2018 to April 2019 is £2,000 , before 31st January 2020 you would need to settle this tax bill, and also your Payment on Account of £1,000 for the year April 2019 to April 2020.    In other words, you would pay a tax bill of £3,000, made up of the previous years bill, and half of the following year – on account.

If you have any questions at all concerning Self Assessment Tax, or any other taxation issue, please do contact us today, you will be glad you did!

Choosing an Accountant

An unbiased guide to choosing your accountant

Can I just choose any accountant? 

Yes, all accountants should be able to file your tax and corporation returns.  However, finding the right accountant can save you and your business lots of wasted time, stress and of course money.

How can I tell if an accountant is any good?

While you are searching through the internet, you will no doubt see many special offers of accountancy services at amazingly low costs – there is of course more to judge an accountancy service by than the initial cost, and choosing the wrong accountant can cost you a whole lot more than any amazing limited offer low price!  You should be looking for an accountant with a proven track record of customer service,  who ideally has experience in your business field.

Should I speak to my new accountant before using their services?

Absolutely you should!  You are about to form a business relationship which involves trust, and could last many many years.  If you can not get a response from your accountant now, what makes you think it will be any different when you really need their help?

What can my accountant help me with?

Your accountant should be able to free you from many of the financial and administrative tasks, most of which probably take you away from your core business. Your account will be able to help you with VAT , PAYE (payroll), personal and business taxation, year end accounts, CIS payments, and many more aspects of taxation.  Not every business owner is good with figures, and making mistakes with taxation could prove very costly.

Monthly fee or Pay as you go?

Wouldn’t you rather see what you accountant does for the money you pay them? You can save yourself money by keeping your own records of income and expenditure, rather than paying your accountant to do your book-keeping.  If you are using regular services from your accountant, such as weekly or monthly payroll, book-keeping etc, that might be a valid case for opting to pay a regular monthly fee to cover the services you use, otherwise pay as you go could save you money.

Should I be paying my accountant for advice?

Sitting down with your accountant and asking questions can save you and your business time and money, unless this forms part of your monthly plan, you can probably expect to pay for this advice, however it would be unlikely you would be charged for the occasional bit of telephone or email advice.

I am about to start a new business, should I find an accountant?

Accountants will generally give the first meeting free of charge, so this is an ideal opportunity for you to talk over your business and ideas with your potential future accountant.   They will probably be able to offer lots of advice from similar businesses they have worked with, local area information, business networking events, and of course tax implications.   Once you business starts to grow, it will be in your best interest to have an existing relationship with an accountant, rather than rushing to find one at the last moment.

I already have an accountant, but am not happy, what can I do?

Quite simply, you can change accountants!  As long your account is paid to date, your existing accountant should not have any issues releasing any previous accounts information to your new accountant.    If you are unable to retrieve your accounts from your accountant (due to cessation of practice etc.), you new accountant should be able to retrieve your tax information from HMRC directly.

If you would like more information about the services we offer, or accountancy in general, please do click here to contact us.

Making Tax Digital Pembrokeshire

Making Tax Digital Pembrokeshire
Latest News : for VAT and Income Tax

Making Tax Digital Pembrokeshire – currently voluntary for Sole traders and Landlords (compulsory for VAT registered companies in April 2019): As part of the Making Tax Digital pilot, self-employed businesses and landlords can voluntarily use software to keep their business records digitally and send Income Tax updates to HMRC, instead of filing a Self Assessment tax return. This means you’ll see an estimate of how much tax you might owe as you go, rather than waiting until the end of the tax year.

The companies deferred from Making Tax Digital for VAT are : trusts, ‘not for profit’ organisations that are not set up as a company, VAT divisions, VAT groups, those public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts), local authorities, public corporations, traders based overseas, those required to make payments on account and annual accounting scheme users.

In April 2019 Making Tax Digital will become mandatory for nearly all VAT registered companies, there are a few exceptions, but H.M.R.C. should have already written to you if you are a deferred company.  Even deferred VAT registered companies will be part of the Making Tax Digital for VAT by October 2019.

So what exactly is Making Tax Digital for VAT and how will it affect me?  Making Tax Digital for VAT is the phrase HMRC use to describe how they would like your VAT records entered and stored digitally using suitable and approved software.  You can either use a full VAT software package which complies to MTD, or so called “bridging software” to allow existing software (generally spreadsheets) to interface to the new HMRC VAT submission system.

For more information regarding HMRC Making Tax Digital and how it affects your business

Click here to contact Us

HMRC making tax digital VAT (MTD)

HMRC Making Tax Digital VAT
Making Tax Digital for Income Tax

In April 2019 Making Tax Digital will become mandatory for nearly all VAT registered companies, there are a few exceptions, but H.M.R.C. should have already written to you if you are a deferred company.  Even deferred VAT registered companies will be part of the Making Tax Digital for VAT by October 2019.

The companies deferred from Making Tax Digital for VAT are : trusts, ‘not for profit’ organisations that are not set up as a company, VAT divisions, VAT groups, those public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts), local authorities, public corporations, traders based overseas, those required to make payments on account and annual accounting scheme users.

So what exactly is Making Tax Digital for VAT and how will it affect me?  Making Tax Digital for VAT is the phrase HMRC use to describe how they would like your VAT records entered and stored digitally using suitable and approved software.  You can either use a full VAT software package which complies to MTD, or so called “bridging software” to allow existing software (generally spreadsheets) to interface to the new HMRC VAT submission system.

Sole traders and Landlords:  As part of the Making Tax Digital pilot, self-employed businesses and landlords can voluntarily use software to keep their business records digitally and send Income Tax updates to HMRC, instead of filing a Self Assessment tax return.  This means you’ll see an estimate of how much tax you might owe as you go, rather than waiting until the end of the tax year.

For more information regarding MTD and how it affects your business

Click here to contact Us

National Insurance number and how to apply for one.

National Insurance applying by phone for your number.

National Insurance number application line
Telephone: 0800 141 2075
Textphone: 0800 141 2438
Monday to Friday, 8am to 6pm

Welsh language: 0800 141 2349
Monday to Friday, 8:30am to 5pm
Find out about call charges

To apply for benefits without a N.I. number, contact Jobcentre Plus instead.

There’s a different process if you’ve lost your N.I. number.

If you’re moving to the UK

You may have a NI number printed on the back of your biometric residence permit (BRP). You don’t need to apply for a National Insurance number if you already have one, or one is printed on your BRP.

If you don’t have a National Insurance number, you must apply. You can only apply for it once you’re in the UK. You must have the right to work or study in the UK to get a N.I. number.

Working without a N.I. number

You can start work before your National Insurance number arrives if you can prove you can work in the UK. You should tell your employer that you’ve applied for one, and give it to them when you have it.

National Insurance number interview

Jobcentre Plus may write to you and ask you to come to an interview where you’ll be asked about your circumstances and why you need a National Insurance number.

The letter will also tell you which documents to bring to prove your identity, such as:

  • passport or identity card
  • residence permit
  • birth or adoption certificate
  • marriage or civil partnership certificate
  • driving licence

You’ll be told at the interview how long it’ll take to receive your National Insurance number.

If you change your address before you receive it, tell the Department for Work and Pensions by contacting the National Insurance number application line.

National Insurance number application line
Telephone: 0800 141 2075
Textphone: 0800 141 2438
Monday to Friday, 8am to 6pm

Welsh language: 0800 141 2349
Monday to Friday, 8:30am to 5pm
Find out about call charges

If you turned 16 and didn’t get a number

You will normally be sent a NI number automatically just before your 16th birthday if you live in the UK.

If you didn’t get one, call the N.I. number helpline if you’re under 20.

Call the National Insurance number application line if you’re 20 or over.

N.I. number application line
Telephone: 0800 141 2075 Textphone: 0800 141 2438 Monday to Friday, 8am to 6pm

Welsh language: 0800 141 2349
Monday to Friday, 8:30am to 5pm
Find out about call charges

(This information was supplied by the H.M.R.C. website and is assumed to be correct on the date of publication, however you should always check with H.M.R.C. directly)

Employer Tax Codes

Employer Tax code

Employer tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay or pension.

HM Revenue and Customs (HMRC) will tell them which code to use to collect the right tax.

Check if your tax code is correct

You can check your Income Tax online to see:

  • what your tax code is
  • how your tax code is worked out
  • how much tax you’re likely to pay

What your employer tax code means

Your tax code will normally start with a number and end with a letter.

1185L is the tax code currently used for most people who have one job or pension.

How the numbers are worked out

The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year.

  1. HMRC works out your tax-free Personal Allowance.
  2. Income that you haven’t paid tax on (such as untaxed interest or part-time earnings) and the value of any benefits from your job (such as a company car) are added up.
  3. The income that you haven’t paid tax on is taken away from your Personal Allowance. What’s left is the tax-free income you’re allowed in a tax year.
  4. The last digit in the tax-free income amount is removed.

What the letters mean

Letters in your tax code refer to your situation and how it affects your Personal Allowance.

Letters What they mean
L You’re entitled to the standard tax-free Personal Allowance
M Marriage Allowance: you’ve received a transfer of 10% of your partner’s Personal Allowance
N Marriage Allowance: you’ve transferred 10% of your Personal Allowance to your partner
T Your tax code includes other calculations to work out your Personal Allowance, for example it’s been reduced because your estimated annual income is more than £100,000
0T Your Personal Allowance has been used up, or you’ve started a new job and your employer doesn’t have the details they need to give you a tax code
BR All your income from this job or pension is taxed at the basic rate (usually used if you’ve got more than one job or pension)
D0 All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)
D1 All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)
NT You’re not paying any tax on this income
S Your income or pension is taxed using the rates in Scotland
S0T Your Personal Allowance has been used up, or you’ve started a new job and your employer doesn’t have the details they need to give you a tax code
SBR All your income from this job or pension is taxed at the basic rate in Scotland (usually used if you’ve got more than one job or pension)
SD0 All your income from this job or pension is taxed at the intermediate rate in Scotland (usually used if you’ve got more than one job or pension)
SD1 All your income from this job or pension is taxed at the higher rate in Scotland (usually used if you’ve got more than one job or pension)
SD2 All your income from this job or pension is taxed at the top rate in Scotland (usually used if you’ve got more than one job or pension)

If your tax code has ‘W1’ or ‘M1’ at the end

These are emergency tax codes.

If your tax code has a ‘K’ at the beginning

Tax codes with ‘K’ at the beginning mean you have income that isn’t being taxed another way and it’s worth more than your tax-free allowance.

For most people, this happens when you’re:

  • paying tax you owe from a previous year through your wages or pension
  • getting benefits you need to pay tax on – these can be state benefits or company benefits

Your employer or pension provider takes the tax due on the income that hasn’t been taxed from your wages or pension – even if another organisation is paying the un-taxed income to you.

Employers and pension providers can’t take more than half your pre-tax wages or pension when using a K tax code.

(This information was supplied by the H.M.R.C. website and is assumed to be correct on the date of publication, however you should always check with H.M.R.C. directly)

Emergency tax codes

Emergency tax codes

If you’re on an emergency tax code your payslip will show:

1185 W1, or 1185 M1, or 1185 X

These mean you’ll pay tax on all your income above the basic Personal Allowance.

You may be put on an emergency tax code if you’ve started:

  • a new job
  • working for an employer after being self-employed
  • getting company benefits or the State Pension

Emergency tax codes are temporary. Your employer can help you update your tax code.

(This information was supplied by the H.M.R.C. website and is assumed to be correct on the date of publication, however you should always check with H.M.R.C. directly)

How to get your UTR number

HMRC generally will issue a UTR (Unique Taxpayer Reference) number to you when you :

  • You register as a self-employed sole trader.
  • You form / incorporate a new limited company.
  • You registered as a partnership.
  • You registered for the subcontractor CIS scheme.
  • You have a trust or other income, subject to tax.

Your UTR is a ten digit number and is unique to you, it helps HMRC identify you across all its services.

You will need your UTR to file your tax return, if you have not already received your UTR we recommend you apply as soon as possible.  HMRC will most likely post your UTR for security, and it may take many days before you receive it.  You could be responsible for late filing fees while you wait for your UTR, so make sure you have this number as soon as possible.

If you have joined the CIS scheme, it is vital you apply for your UTR immediately to avoid paying the higher rate tax of 30%.

If you are concerned about your UTR, please contact us for help today.