If anybody owes you money, then today, which is Friday 28 June 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 June 2019
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 May 2019 would be settled by Sunday 30 June 2019. Obviously, the average settlement time will be 45 days, but this is OK if the customer’s credit is good.
Large companies insist on doing it this way because they may receive several invoices from a supplier during a month, and will want to settle all of them with a single payment when they do their monthly computerised cheque run. It would therefore be a good idea for the supplier to have sent a statement at the start of June listing all outstanding invoices. Typically the cheque run would be about the 25th of the month, which is today.
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 advisors as well. Some large companies rely upon a cynical calculus of bargaining power when they take ages to settle invoices, and you need to know what to do about this.
The “nett” in “nett monthly account” has “net” as an alternative spelling.
We currently colour-code the taxes so it’s red for income tax, yellow for PAYE, blue for corporation tax and green for VAT. Sometimes a “tax” is actually just a forced loan, and we will start using purple or amethyst to indicate this when we report to the client. An example of a forced loan is where dividend tax is levied as a payment on account for a dividend that hasn’t actually been voted yet.
We will also use the colour brown for instances such as when the Personal Allowance is withdrawn on income over £100,000 to direct the client’s attention to their loss of human rights.
This system won’t flatter the Revenue, but we owe a professional duty to the Queen-in-Council to make sure that our clients understand the nature of how they are being taxed by the Queen-in-Parliament. Other colour-coded schedules which we prepare may be helpful to the Revenue. For example, we will often write a letter on behalf of a new company to explain what accounting periods have been adopted, and we will colour-code this in dark colours to make things clear.
Two things that the British people can be proud of are income tax and the National Health Service. Something we should be ashamed of is the introduction of Value Added Tax. Income tax is the tax that defeated Napoleon, but VAT looks quite like Napoleon’s revenge. If the income tax collection system starts to resemble the VAT collection system, then we are going to comment upon it.
Value Added Tax returns for the quarter ended 31 May 2019 should be submitted by Sunday 7 July 2019, and any payment which is due should be made electronically by the same date.
If you gave any benefits in kind to your employees for the year ended 5 April 2019, then these need to be reported on form P11D which needs to be submitted to the Revenue by 6 July 2019. Benefits in kind are things like the use of a company car or private medical insurance.
If you paid any of your employee’s employment-related expenses, then these need to be reported on the same form P11D. These are things like professional subscriptions to approved bodies.
Benefits in kind go in the brown boxes on the form P11D. Employment-related expenses go in the blue boxes. Benefits in kind will mean that the employee will need to pay tax on them, usually in the following year, and the employer will need to pay extra Class 1A National Insurance Contributions. No extra tax or NI is payable on employment-related expenses, but this is a confusing system and it is not always obvious what something is.
David Porthouse knows just enough about P11D to be able to highlight text in brown or blue where relevant. The whole P11D system is just a bureaucratic pain in the neck, but without it there would be all sorts of fiddles going on.
If an employer gives any shares to employees by reason of their employment, then this also needs to be reported.
Small private companies with a year end of 30 September 2018 and into their second or later year of existence should submit their accounts to Companies House by Sunday 30 June 2019 in order to avoid a Late Filing Penalty.
On an average day, we like to have a colourful product. It is of practical use to have blue as the standard colour for companies, red for sole traders, orange for partnerships, green for VAT and yellow for PAYE. Our outgoing mail uses a red company sticker for sole traders and partnerships, green for VAT and blue for everything else. Our accounts and VAT reports often use colours appropriate to the particular client.
Postage stamps can be ordered online from https://shop.royalmail.com/ and they are currently offering free delivery on orders over £50, which is just about right. We order batches of commemorative stamps according to our fancy, and then use them in the appropriate season. It is stamps with eagles and aeroplanes in summer, owls in the autumn, and the Night Mail in November. Our stampings are intended to have plenty of atmosphere.
We also pick out greenish stamps from what we buy, and use them for posting VAT reports, so everything to do with VAT has an overall greenish colour cast. When we e-mail out electronic payment details for VAT, that is a green notice as well.
The point here is that we preach having a Unique Selling Proposition, and failing that, a Distinctive Product. Our use of optical character recognition is the USP, and colourful accounts and VAT reports are the DP. Our competitors should find it impossible to copy the USP, and practically quite difficult to copy the DP. We are business advisors as well as accountants, and are in a better position to talk to clients with the way we go about our own business.
It can happen sometimes that when you are an employer, you have not actually made any wage or salary payments for a PAYE month such as the month from 6 May to 5 June 2019. In that case you must submit electronically an Employer Payment Summary as a NIL return by Wednesday 19 June. This bureaucratic requirement is too easy to overlook.
If you engage a local accountant and business advisor or a payroll bureau to do your wages, then this will be taken care of. In our case we keep a diary and do a batch of payrolls at about the same time each month. Our payroll files are bright yellow like the old P30BC booklet so we do not overlook them. We colour-code all the taxes so green is VAT, red is income tax, blue is corporation tax and yellow is PAYE.
If you no longer want to have a payroll scheme, then you need to close it down in a formal way. You cannot just assume that you can stop sending in monthly returns.
Construction Industry Scheme returns for the month from 6 May to 5 June 2019 should be submitted online by Wednesday 19 June. This includes NIL returns.
It is only too easy to get caught out by the need to submit a NIL return when no payments to subcontractors have been made. If you engage a local accountant to do your CIS returns, then this will be taken care of. In our case we keep a diary and do a batch of work at about the same time each month. We aim to be the Carlisle accountants that businesses will turn to for a range of advice and services. Our payroll files are bright yellow so they are hard to overlook, and CIS files also have a green line around them so they are easy to pick out.
If your company had a deadline of Friday 31 May 2019 for the submission of its accounts to Companies House, and this deadline has been missed, then you still have something to play for, and you should contact Carlisle accountants such as David Porthouse and Co at once. You will incur a penalty of £150, but this penalty rises to £375 after Sunday 30 June 2019 if you still haven’t submitted your accounts. These penalties are £300 and £750 if you miss the deadline two years’ running. We can readily prepare and submit your accounts within the month if you contact us straight away.
Just stating the obvious, if you miss a deadline and incur a penalty, you still have the obligation of preparing and submitting accounts. That doesn’t go away and your penalty is just extra money you will need to pay.