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.
Small private companies with a year end of 30 June 2018 and into their second or later year of existence should submit their accounts to Companies House by Sunday 31 March January 2019 in order to avoid a Late Filing Penalty.
Postage rates rise on Monday March 25th 2019, so you might like to buy in a stock of stamps of the “non value indicator” type which will hold their relative value. We have done it already by ordering online from https://shop.royalmail.com/ which is currently offering free delivery on orders over £50.
It costs nothing extra to order a great variety of colourful stamps. We advocate that every business does a little bit of direct mailing, for example in its slack season. Our standard stamp for direct mailing is the grey-green second class “English country definitive” with the three lions. This is an attractive-looking stamp and it does not scream “second class” at the recipient. The same can be said of the nice blue second class Scottish country definitive.
For the other mail we send out, we use a variety of nice stamps and commemoratives and we can order in early March in order to stock up. We often get our own envelopes handed back to us with signed documents in them, so we cut off the used stamps and give them to charity. Everybody wins.
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 February to 5 March 2019. In that case you must submit electronically an Employer Payment Summary as a NIL return by Tuesday 19 March. 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.
We have started to claim to be Making Tax Digital Specialists. Back in 1999 David Porthouse devised a spreadsheet system for analysing bank statements by the page which was always right to the nearest penny, and since then he has advanced digital accounting to the point of having a working optical character recognition system for processing bank statements. It is possibly literally true that we were making tax digital when the taxman was wearing a nappy.
The area to watch is interaction with the online tax system. The corporation tax system is pretty good, and David has worked on nothing but companies for several years. However, the other taxes leave something to be desired, and we need checklists and written procedures to fill in the gaps, which we now have. It is always essential after submitting a tax return to make sure that the online view is what we expect it to be. This cannot be taken for granted, and if necessary we will telephone or write a letter (with a Certificate of Posting if needed) to sort things out.
Construction Industry Scheme returns for the month from 6 February to 5 March 2019 should be submitted online by Tuesday 19 March. 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.