If anybody owes you money, then today, which is Friday 29 March 2019, would be a good day to send them a statement to remind them of the fact. This is just a statement which you are entitled to send: it is not a threat.
Archives for March 2019
I have a client who was supposed to submit accounts by tomorrow’s deadline of March 29th, but hasn’t actually done anything yet. I have agreed with Companies House and the Revenue a two-week extension until Friday April 12th. However, the client still hasn’t done anything and I am not expecting much to happen.
I ask you, dear reader, should I tell this client to look for another accountant? Perhaps our MPs could advise.
From 1st April 2019, businesses which submit VAT returns will be expected to keep digital records. At the moment, all our VAT clients can be said to keep digital records since we were very early enthusiasts for MTD anyway. However, there will be an additional requirement to be able to turn these records into a standard format readable by the Revenue which needs to be considered.
In practice, MTD will hit us round about 1st June as VAT returns need to be actually submitted, and we have made an inventory of our clients to ascertain cutoff between the old system and the new.
Frankly, the Revenue’s general MTD efforts are just a joke. I cannot go onto the Revenue’s website and look up a client’s P60 or their CIS deduction history. I could do that in the “backward” Irish Republic where CIS is known as Relevant Contract Tax. What’s going on?
It is quite common to invoice a customer with terms of “30 days or nett monthly account”. Small customers will be expected to pay within 30 days, while large customers will be expected to pay at the end of the month following the month of the invoice, so an invoice sent in February 2019 would be settled by Sunday 31 March 2019.
Large companies do it this way because they may receive several invoices from a supplier, and will want to settle all of them with a single payment when they do their computerised cheque run. It would therefore be a good idea for the supplier to have sent a statement at the start of March listing all outstanding invoices. Typically the cheque run would be about the 25th of the month, which is a Monday this month. If you give credit and have debts to collect, then you might like to have a discussion with us. Most accountants are also general business advisers as well.
The “nett” in “nett monthly account” has “net” as an alternative spelling.
The cost of a basic 2nd class stamp increases to 61p and a basic 1st class stamp increases to 70p, with matching rises for large letters and items over 100 grams. The rise in the second class stamp price is in breach of Ofcom’s guidelines this side of April 1st, which only allows 60p, so the Post Office will give its expected superprofits to charity. The average rise is by 4.8% measured over one 2nd and one 1st class stamp taken together.
We keep about six months’ supply of basic NVI stamps plus a few stamps in the range between 1p and 20p, so we are a little inflation-proofed until September at least. Higher value stampings are made up of a mixture of lower values. NVI means “non value indicator” and NVI stamps are worth their current price when used in combinations, so their apparent value rises automatically today. As an example, the new cost of a large second class letter weighing 200 grams has risen from 1.26 to 1.32, for which we use exactly the same combination of stamps, namely one 1p stamp, one 2nd class and one 1st class.
Value Added Tax returns for the quarter ended 28 February 2019 should be submitted by 7 April 2019, and any payment which is due should be made electronically by the same date.
If you expect that you will claim a tax refund based upon your tax return for the year ended 5 April 2019, then you could plan to get your accounts prepared and your tax return submitted as soon as possible after April 6th. Start collecting your records together now.
Being registered under the Construction Industry Scheme may lead to a claim for a tax refund. Make sure that you have all Statements of Payment and Deduction. These Statements are valuable documents in themselves, and it would be a good idea to make photocopies of them.
You might also want to submit a tax return fairly quickly after April 6th in order to reduce the instalment of tax payable on July 31st.
Auto-enrolment pension contribution rates will increase after 6 April 2019. The new rates are 5% from employees and 3% from employers, making a total of 8%.
Make all the pension contributions that you wish to make by the April 5th deadline. This will be the lower of £40,000 and your earnings for the tax year, but subject to a lifetime allowance of £1,030,000. These rules are over-complicated if the Government actually wants people to save for a pension and not throw themselves upon the State in retirement.
Put up to £20,000 in an Individual Savings Account (ISA) by April 5th. Use it or lose it.
If you own a portfolio of shares, you might deliberately sell a few in order to crystallise a gain which is below the Annual Exemption of £11,700. There are rules to anticipate you buying them back the next day. Your accountant can advise you here.
Directors of small companies could have a payroll scheme set up so that they can pay themselves a salary and make use of their Personal Allowances for the income tax year 2018/19. There is just enough time to do this if you get on with it now!
Directors of small companies can vote themselves a tax-free dividend of up to £2,000 per shareholder. We can provide the paperwork, and they should do this as an exercise just to keep themselves familiar with dividends and how they work.
Our VAT clients need to provide us with information every quarter. Just taking bank statements as an example, sometimes they hand them in, and sometimes they e-mail them to us as a PDF attachment. Occasionally they photograph the statements on their mobile phone and text them to us.
Pretty soon we get a collection of dribs and drabs of information. What we have started to do is to staple and tape two files back-to-back for selected clients. The front file contains our working papers. The back file, which we call the dribcatcher, contains client records. We hole-punch the client’s bank statements as needed and fix them together with treasury tags to build up one big bank statement which will be the lead schedule in the dribcatcher. Other information provided by clients goes in behind the bank statements, and when we see the client we can empty out the dribcatcher and hand it back to them.
The need for something like a dribcatcher is a feature of the electronic accounting age when documents can be e-mailed or texted. We aim to position ourselves as “MTD Specialists” and we do need to do something to avoid being overwhelmed by an assortment of data in a variety of formats.