David Porthouse & Co

Carlisle Accountants

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81 Larch Drive, Carlisle CA3 9FJ

Employer Payment Summary by Tuesday 19 November 2019

 
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 October to 5 November 2019. In that case you must submit electronically an Employer Payment Summary as a NIL return by Tuesday 19 November. This bureaucratic requirement is too easy to overlook.

If you engage a local accountant and business adviser 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.

The Low Entropy Assumption

 
We are going to make the working assumption that handwritten records are more repetitive than printed records such as bank statements. Such records are said to be low entropy and the records that we get handed in during December and January in order to prepare an income tax return are often like this.

Typically we get a little rental account with twelve receipts of £500 recorded in an exercise book. Low entropy means that there is scope for invention in dealing with this. We will type in the number 500 once, and then type in * eleven times in order to copy down the 500 entry. Alternatively, we can click on the * button on an onscreen toolpad eleven times to do the same thing. To copy down a date we use Ctrl-C, and to copy down a date with an increment of one month we use Ctrl-Shift-C. Alternatively we can click on buttons on an onscreen toolpad to do the same thing. We will have the f1 key reprogrammed from last year to say “Rental income” or similar and we can just hit it twelve times to generate the narrative.

Generally handwritten records are shorter and more predictable. We cannot use optical character recognition on them, but we can use other methods to enter them into our system which have the same mentality or ideology. We want to use the best of new technology to do it quickly. There isn’t that much of a gain with our example of a rental account, but in other cases substantial gains can be made.

CIS Returns to Tuesday 5 November 2019

 
Construction Industry Scheme returns for the month from 6 October to 5 November 2019 should be submitted online by Tuesday 19 November. 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 accountants for small business that you 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.

Stamps for Christmas 2019

 
The new Christmas Stamps will be issued today and can be purchased online from the Royal Mail. I will be buying the 1st and 2nd class stamps for most of my Christmas cards, but the higher value stamps are rather small and I will be using other nice commemorative stamps for my airmail cards. All my cards will have a “Merry Christmas” sticker on the back purchased from Amazon.

A Company which has Missed the 31 October 2019 Deadline

 
If your company had a deadline of Thursday 31 October 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 Saturday 30 November 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.

Statements out on Wednesday 30 October 2019

 
If anybody owes you money, then today, which is Wednesday 30 October 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.

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The Cheque Run round about Friday 25 October 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 September 2019 would be settled by Thursday 31 October 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 October 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.

Time to See an Accountant

 
If you had any income for the tax year ended 5 April 2019 that the Revenue don’t know about, then you will need to file a tax return. You will also need to file a tax return if you had any capital gains for the same period, or if the Revenue have sent you a tax return. If you were thinking of doing it yourself, and you have left it this long, then consider sacking yourself as your tax clerk. You should have told the Revenue on October 5th if they don’t know, and you have until October 31st to file a paper tax return.

It’s time to see an accountant, who has until January 31st 2020 to file an electronic tax return, and does this for a living. Missing the October 5th deadline is nothing much to worry about if you act quickly.

Some people file their own electronic tax return, which can be done, but drafting a tax return is a funny way to spend Christmas.