Value Added Tax returns for the quarter ended 31 July 2019 should be submitted by Saturday 7 September 2019, and any payment which is due should be made electronically by the same date.
Small private companies with a year end of 30 November 2018 and into their second or later year of existence should submit their accounts to Companies House by Saturday 31 August 2019 in order to avoid a Late Filing Penalty.
We advocate that businesses should consider doing some direct mailing to attract new customers. The cost of postage is expensive however. What we do is to do a round of mailing when business is slack, so the cost of direct mailing is the cost of unemployment insurance. It looks quite cheap seen in those terms. We will always be busy.
If several sets of client records are handed in at once, then it makes sense to do all the optical character recognition scanning of bank statements at once, for everybody, before we do anything else. We call this scanbashing and it gives us an early warning if any bank statements are missing. Monday is a good day for scanbashing because the online tax and banking systems are effectively still shut and there is not so much to do.
The dust has now settled on our “making tax digital” efforts and we are currently up to date with everything. It has swallowed up a lot of time and energy and left us with a backlog of other work. We have now scanbashed all the bank statements we have and life is returning to normal. If anybody telephones asking for their accounts to be produced quickly, then we are ready for them.
We have triaged our work-in-progress according to our estimate of when the job is likely to be asked for. Obviously the next round of VAT returns are at the top of the “to do” list, so we are now getting on with them. As we submit each return, we will make a point of downloading it again on another computer to prove that we have submitted it correctly. We have a new Intranet which lays out the procedure to follow and which helps us find our way round the over-complicated MTD system.
All new technology has teething troubles, and the new Making Tax Digital system is unlikely to be an exception. We have transferred all our clients and have successfully submitted on time and verified all the Value Added Tax returns that were due by 7th August 2019, which is the first big date for MTD.
Verification is an issue. From experience with corporation tax, we know that just because we have a receipt from both the software and the Revenue, that still does not mean that our client won’t be bothered by spurious fines and other demands. What we have done is to set up someone else’s software on another computer and then download the VAT returns to check them, and we will make a habit of doing this for the next few months at least. It is actually possible to have more than one software installation communicating with the Revenue as long as they are all authorised to do so, but we will only use one installation for submitting returns to avoid chaos.
The Revenue should have provided a free read-only viewer, or an online view, or some other means of checking submissions independently of third-party software. They do this for corporation tax and income tax, but not for VAT. What a dreadful system this MTD is !
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 July to 5 August 2019. In that case you must submit electronically an Employer Payment Summary as a NIL return by Monday 19 August. 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 July to 5 August 2019 should be submitted online by Monday 19 August. 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.
We are going to spend August making sure all new company clients are signed up for accounts submission and corporation tax submission, so we have all the codes and reference numbers we need and can see the client online.
September will be for VAT. We will make a note of any clients near the threshold. This is in addition to the checklist we do at the time of preparing the accounts, so we want to play safe.
If your company had a deadline of Wednesday 31 July 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 31 August 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.
If anybody owes you money, then today, which is Tuesday 30 July 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.