Category: News

A number of changes to capital allowances were announced at the Budget, including an increase in the Annual Investment Allowance (AIA), for two years to £1 million, in relation to qualifying expenditure incurred from 1 January 2019. The AIA is currently £200,000 per annum. Complex calculations may apply to accounting periods which straddle 1 January 2019.

Other changes to the rules include:

• a reduction in the rate of writing down allowance on the special rate pool of plant and machinery, including long-life assets, thermal insulation, integral features and expenditure on cars with CO2 emissions of more that 110g/km, from 8% to 6% from April 2019. Complex calculations may apply to accounting periods which straddle this date.
• clarification as to precisely which costs of altering land for the purposes of installing qualifying plant or machinery qualify for capital allowances , for claims on or after 29 October 2018
• the end of the 100% first year allowance and first year tax credits for products on the Energy Technology List and Water Technology List from April 2020.
• an extension of the current 100% first year allowance for expenditure incurred on electric charge-point equipment until 2023.

In addition, a new capital allowances regime will be introduced for structures and buildings. It will be known as the Structures and Buildings Allowance and will apply to new non-residential structures and buildings. Relief will be provided on eligible construction costs incurred on or after 29 October 2018, at an annual rate of 2% on a straight-line basis.

 

With less than six months to go until the first staging date for implementation, we outline what you need to know about Making Tax Digital (“MTD”) and guide you through what measures to take to prepare for the change.

What’s the reason behind MTD?

The latest figures published by HMRC estimate that the tax gap stands at £33 billion which is 5.7% of tax liabilities. 41% (13.7 billion) of the tax gap is attributed to small businesses.

According to the Office for National Statistics, although 99% of VAT returns are submitted online, only about 13% of those are submitted via software. The other 87% of VAT returns are manually entered into HMRC’s Government Gateway.

HMRC’s ambition is for the UK to become one of the most digitally advanced tax administrations in the world. It is hoped that MTD will help for the following reasons:

• Digital records should eliminate errors with calculations
• Help is built-in to the software products
• Information is sent directly to HMRC from the digital records avoiding errors as data is transferred from one system-to-another

What will change under MTD for VAT?

Under the rules, from April 2019 VAT registered businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to keep digital records and will no longer be able to use the Government Gateway website.

VAT returns will need to be maintained digitally and submitted via MTD complaint software. Hand written records will be a thing of the past for businesses affected by MTD for VAT.

HMRC have created a list of suppliers who provide MTD compliant software, which you can find here:

https://www.gov.uk/government/collections/commercial-software-developers

Overseas businesses that have UK taxable turnover above the UK VAT registration threshold will also be subject to the requirements of MTD for VAT.

Need help with MTD?

Contact one of our partners who would be pleased to meet with you and undertake an MTD compliance review of your business.

https://www.wtca.co.uk/meet-the-team

The government has decided not to proceed with plans to abolish Class 2 National Insurance Contributions ( NICs) from April 2019.

Class 2 NICs are currently paid at a rate of £2.95 per week by self-employed individuals with profits of £6,205 or more per year. The government had planned to scrap the Class 2 contribution and had been investigating ways in which self-employed individuals with low profits, could maintain their State Pension entitlement if this inexpensive contribution had been abolished.

In a written statement to MPs, Robert Jenrick, Exchequer Secretary to the Treasury, stated that:

“This change was originally intended to simplify the tax system for the self-employed. We delayed the implementation of this policy in November to consider concerns relating to the impact on self-employed individuals with low profits. We have since engaged with interested parties to explore the issue and further options for addressing any unintended consequences.”

“A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the State Pension rise substantially. Having listened to those likely to be affected by this change we have concluded that it would not be right to proceed during this parliament, given the negative impacts it could have on some of the lowest earning in our society.”

Internet link: Parliament written statement

 

As we say goodbye to a lovely bright summer, now is a good time to shine the light on your finances and file your tax return early to avoid the winter blues.

The one good thing about the tax return deadline is that it always remains the same, which means that a little bit of organisation and the help of your accountant, you should be able to avoid facing penalties by maintaining easily accessible and up-to-date records of your income and expenses throughout the year.

Yet people still leave it until the last minute – 2.6 million taxpayers had still not filed their return two days before the 31st January 2018 deadline.

File now, pay later

Calculating your tax liabilities and filing your return now will allow you time to start budgeting and managing your cash flow, and to plan for paying any tax you may owe. Speeding through your tax return at the last minute increases the risk of mistakes being made, and HM Revenue & Customs has declared it will – and does- issue fines for errors. If you pay your tax bill late, HMRC will charge you interest and possibly even late payment penalties. Filing your tax return early does not mean you are obliged to pay any tax liability before the 31st January.

Get a tax refund sooner

Refunds of tax can often arise for employees or directors when HMRC has made errors with its tax codes. Also, it is not unusual for building subcontractors operating under the Construction Industry Scheme to receive tax refunds.

Therefore, the earlier you file your tax return, the sooner any refund you may be eligible for will be processed. So why wait until January when refunds usually take longer to be issued as this is HMRC’s busiest time?

We can help file your tax return 

Tax has become an ever-changing and increasingly complex field and unless you have expert knowledge, you may be left bewildered and miss out on all the reliefs you are eligible for. Without the help of an advisor, you could end up paying too much tax without realising, or accidently pay too little and risk an investigation.

So why wait, call our Tax Partner Simon Odam  01932 868 444 today, beat the deadline and be safe in the knowledge that you can be relaxed about your tax.

 

The revenue authority’s inheritance tax take has increased by 13% compared to the £4.7bn collected in 2016-17.

HMRC collected a record £5.3bn in inheritance tax in the year to February 2018, according to a private client law firm.

The inheritance tax threshold freeze at £325,000 has meant that more families are being subject to tax bills on their inheritance following several years of residential property price inflation.

No one wants their children or other dependants to have to pick up hefty inheritance tax bills, so it is important to plan ahead as early as possible how to pass wealth onto children and grandchildren. We can help you with this.

Family and Children Tax Planning

The Wellden Turnbull budget seminar with Dominic Raab, MP for Esher and Walton and Robin John, tax partner at Wellden Turnbull was held at the Cobham Curve on Friday 24th November.  Dominic gave a presentation on the state of the UK economy and key budget measures.  Robin John spoke about the budget including sources of revenue and where the money goes! Did you know debt interest is the fourth biggest expenditure!  Robin also spoke about potential new taxes for non UK owners of UK commercial property.

Delegates received responses to a wide variety of questions ranging from VAT, stamp duty and issues relating to Brexit.

If you would like to watch Robin’s presentation please click here

Excellent skills and great sportsmanship were shown by all the players on Sunday, at the Cobham Rugby Minis Festival.

Oli Spevack, a partner at Wellden Turnbull, was honoured to present the teams playing in the under 10’s with their trophies.

A wonderful opportunity to support a local event.

We support local events through a range of sponsorship’s including Cobham Heritage Day. Wellden Turnbull sponsored St John’s Ambulance and gave out balloons to children. It was a wonderful family fun day enjoyed by all ages and the perfect opportunity to support our local community.

We were delighted to welcome Grace to Wellden Turnbull for a week’s work experience.  Grace hopes to study Accountancy at university, before embarking on a career as an accountant.

My week on work experience

On the 10^TH July 2017, I started my work experience at Wellden Turnbull Chartered Accountants. Coming into the experience, I had no idea what to expect, but was quite excited about it all.

On Monday, I spent most of my day getting to know everyone and learning where everything was. This includes my own desk, the printer and of course the kitchen. I immediately felt welcomed by everyone and was looking forward to getting to know everyone a bit more in the upcoming week. Also on that day, I had my first piece of work. This involved me using excel, which I was not too experienced on. This meant I was able to extend my knowledge, not only with more of an understanding of the business, but also skills on the computer which I will be able to use later in life.

On Tuesday, I spent my first day in one particular department. Here, I was with Ellie, working in Accounts and Audit. My first hour was spent shadowing Ellie. By doing this, I was learning exactly what it’s like being an accountant. This enabled me to gather a real understanding into what goes on, on a day to day basis within the firm. Next, Ellie gave me some work to complete in order to get some accounts started. This work was all on software called Caseware. This, to begin with, was completely alien to me, but after a quick tutorial from Ellie I was on my way to finishing the job she had planned for me. This, again, allowed me to gather knowledge into not only the business, but also the software that I may need in my future career.

The following day I was in the same department, Accounts and Audit, but instead was with Emma. Here, I was looking through spreadsheets and trying to analyse the numbers and bits of data I was given. This required an eye for detail and lots of concentration, areas I usually tend to fall on. However, this seemed more of a challenge and for that reason I actually ended up pushing myself and trying my hardest. All of which are skills I would need when it comes to working in any job, particularly those of an accountant.

Thursday came and I was moved to another department, the Tax department. On this day, I spent my day doing some work for Richard. Coming into work on Thursday, I was beginning to realise just how tiring full time work can be. But due to everyone’s friendly attitude and lively mentality I really was enjoying it. On Thursday I was given the job of looking through bank statements from a particular client of Wellden Turnbull’s and was making sure all the numbers put in, were correct. After going through pages and pages of different amounts of payments, my next step was to put all of this into a spreadsheet. However, due to a typical technical difficulty this was not possible. However, this actually made me realise what exactly can happen in an office and how this can impact the time frame in which you can complete a given task. Due to this Helen then gave me some further work regarding all the graduates who are applying for trainee positions within the firm. This gave me an insight into exactly what kind of grades I would be competing with and what types of degrees are available to me, considering I am coming very close to sending off my personal statement.

My last day arrived and it was actually quite sad to see it start coming to an end. My final day was spent with Bobbi who worked in Credit control. With her, I was working on finding and printing all the invoices which need to be sent off to any clients who currently owe the company money. This allowed me to gather an understanding to yet another piece of software, advance. I then focused on getting everything into a letter, stamped and then sent off. This was done both manually and by hand.

Overall, I have really enjoyed my work experience. My entire week has managed to set me off with skills, that are not only required in what I want my future career path to be, but also in everyday life. I have spent my week with some really lovely people who have been kind enough to spend time with me and help broaden my knowledge of the business. The experience as a whole has taught me a lot and I hope to be able to showcase some of my new skills when I head off to university.