Changes to the way some small business can prepare accounts from 01 April 2013
Cash basis
Cash basis is a way of working out your income and expenses for your Self Assessment tax return https://www.gov.uk/self-assessment-tax-returns
You can use cash basis if you:
- are a small self-employed businesses (sole traders and partnerships)
- have an income of £79,000 or less a year (this is the threshold when you have to register for VAT)
You can start using cash basis from the 2013 to 2014 tax year.
Limited companies and limited liability partnerships can’t use cash basis.
How cash basis works
You can choose to record your business income and expenses over the tax year in 1 of the following ways:
- using cash basis - record money when it actually comes in and goes out of your business (all money counts - cash, card payments, cheque, any other method)
- using traditional accounting (accruals basis) - record income and expenses when you invoice your customers or receive a bill
This might make it easier to handle your cash flow.
If you would like to more information on this please contact Rosemary Hargan
Source: www.gov.uk
HMRC Key Deadlines for October 2013
October 2013
1st Corporation tax: Due date for payment of corporation tax for year ended 31st December 2012
5th Personal tax: Deadline for taxpayers who do not receive a tax return to notify HMRC of new sources of chargeability/income in 2012/13
7th Vat returns: Due date for August VAT returns (electronic payments)
19th PAYE/NIC/Student loan payment: If paying by cheque, payments due for the month to 5th October are due to be made by 19th October
PAYE/NIC payment: If paying by cheque quarterly, quarter 2 PAYE/NIC payment due by 19th October
CIS return date: Construction Industry Scheme: Monthly return due for period to 5th October due by 19th October
22nd Quarter 2 PAYE/NIC payment due, where paying electronically
PAYE/NIC/Student loan payment: If paying electronically, payments due for the month to 5th October are due to be paid by 22nd October
31st
Tax return date: Deadline for submission of the 2013 paper tax return
Corporation tax return date: Filling deadline for Corporation Tax Return Form CT600 for period ended 31 October 2012 to be submitted to HMRC
Company accounts filing deadline: Filing deadline at Companies House (Northern Ireland: Companies Registry) of accounts for private companies with a year ended 31 January 2013 and for public companies with a year ended 30 April 2013
PAYE Real time information:
HMRC have announced that, for businesses with fewer than 50 employees, the temporary relaxation of the new RTI reporting rules will be extended from October 2013 to April 2014 (the end of the tax year).
Self Assessment Penalties
Our firm is becoming increasingly alarmed about tax payers' laid back attitude towards HMRC penalties and feel we should emphasise how serious the penalty regime is.
If you don't do any of the above the following penalties will apply:
- 1 day late - £100 penalty which applies even if you have no tax to pay or have paid the tax that you owe.
- 3 months late - £10 for each following day - up to a 90 day maximum of £900. This is additional to the fixed penalty of £100 above.
- 6 months late - £300 or 5% of the tax due, whichever is the higher. This is in addition to the penalties above.
- 12 months late - £300 or 5 % of the tax due, whichever is the higher. This is in addition to the penalties above.
Therefore if a tax return is 12 months late, total penalties incurred are at least £1,600.
It is vital therefore to act immediately if you have received penalty notices. The problem won't go away if you ignore it. If you are in this situation contact your accountant immediately.
If you have any queries regarding any of the questions above please contact our office on 028 79633221.
We now offer a free initial consultation where we will offer as much advice as we can and provide a competitive fixed fee quotation for your consideration. We can be contacted at the number above or email : rosemary@rosemaryhargan.com
028 7944 0903