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October 2017 Newsletter

Unbelievably here we are in autumn and the clocks go back at the weekend. We are now starting to crank up the work until the end of the year so that January is manageable. There are always new issues raising their head above the parapet and I share some of them with you in this month's newsletter.

Fake exemption certificates

There is at least one firm out there offering employers a certificate of exemption from having to introduce an auto enrolment pension scheme for their employees. Please be aware that no such certificate exists. The charge levied is only £58 but the penalties for non-compliance with the auto enrolment legislation are severe. If you do receive an offer you should decline it and contact the Pensions Regulator immediately.

VW Kombi and Vauxhall Vivaro (car or van)

We do receive numerous queries about certain vehicles and do they qualify as a van, which means the personal tax charge and Class 1A national insurance cost may be lower, or a car. In addition if the vehicle qualifies as a van a VAT registered business can reclaim VAT. In a recent case before the HMRC tribunal on benefits in kind the judge decided that the VW was more like a minibus and the Vivaro like a van - not cars. The decision is not legally binding on other disputes but will provide some ammunition if challenged.

Tax liabilities on dividends

The changes to the rules for taxing dividends came in on 6 April 2016 and the first self-assessment liabilities based on these changes will be in January 2018. Many individuals who haven't had a tax liability in previous years will have one this coming January. The system will require payment for 2016/17 and the first instalment for 2017/18 so it may be a significant amount due. If we prepare your tax return for you please let us have the details we require so that we can let you know the amount to pay as soon as possible.

Making Tax Digital (MTD)

The timetable for MTD has now been announced:

  • From April 2019, businesses with an annual turnover above the VAT threshold (currently £85,000) will be required to keep digital records and submit quarterly online returns, for VAT purposes only.
  • Businesses will not be mandated to using the MTD system for income and corporation tax purposes until 2020 at the earliest.
  • Businesses with turnover below the VAT registration threshold (including those voluntarily registered for VAT) may use the MTD system voluntarily.

Quarterly online filing for VAT is nothing new, but the requirement to hold VAT records in a digital environment may pose a challenge for those who currently use spreadsheets or paper-based systems to arrive at their VAT return figures.

Budget day

The Chancellor will make his budget speech on Wednesday 22nd November. This is a move from the traditional date of having the Budget in the Spring. The reason for the change is to give Parliament more time to consider the announcement and having the legislation in place before the start of the new financial year. This would seem to be very sensible and it will remove some uncertainties about tax rates and allowances at the start of the tax year that existed under the old system.

I will aim to do another Budget special newsletter once we know what the impact of the budget speech and when it has been ratified.

I hope you have found this useful. Thanks once again for your business

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