Exam Success

Exam Success

The Martlet Partnership is delighted to announce and we send our full congratulations to our Rena Lourenço who registered 81% in her final exam for the AAT qualification and is now a fully qualified accounting technician.

Xero Beautiful Business Fund applications are open

We are writing to advise you that the leading accountancy software producers Xero have recently announced the launch of the Xero Beautiful Business Fund. It is their new initiative, backing small businesses for the future.

What does this mean?

Xero is offering more than NZ$750,000 (£352,500) in funding to Xero small business customers across Australia, Canada (excluding Quebec), New Zealand, Singapore, South Africa, the UK and the US. The Xero Beautiful Business Fund is open until 6^th October.

Applications for the fund are now open and we encourage you to apply.

About the fund

There are four funding categories, with no cap on how many you can enter.

• Innovating for sustainability

How are you taking the next step on your sustainability journey?

• Strengthening community connection

How are you striving to give back to your community?

• Trailblazing with technology

How are you seeking to innovate and set pace with technological advancements?

• Upskilling for the future

How are you thinking ahead and preparing for the future?

For each category you would like to enter, create a 90 second pitch video and complete the short online application form here.

Referrals

If you choose to enter, you will be asked if you have been referred by your accountant or bookkeeper. Please select yes and add the name of our firm and your primary contact.

Please spread the word.

Increased Disclosure Requirements for SMEs – Oh joy!

In an unexpected move, HMRC have announced that we effect from April 2025, there will be new rules on dividend disclosures for anyone involved with an owner managed business.

On their self-assessment tax return, you will need to split out the amount of dividend income received from your own companies and the percentage share you hold in those companies, and disclose dividend income from other sources separately.

Three years ago, during COVID, huge numbers of owners of small businesses were not eligible for grants because HMRC said they did not have sufficient information, namely regarding private company dividends. It would seem they are going to ask for it now and if they had done so earlier, a lot of people might have been in receipt of some Government help during those difficult times.

It is not exactly clear why HMRC need this level of information but there are a number of reasons why this may increase pressure on small business owners.

Also, from 2025/26, employers will have to report the number of hours worked by individual employees. We will have to see what this all means when the time comes but one thing will be clear. It is more administration and cost for small business owners.

Exam success!

The Martlet Partnership is delighted to announce that our Paisley Thomson received her exam results today, passing Financial Reporting with 64% and Audit and Assurance with a magnificent 75% in her ICAEW professional level exams.

We congratulate Paisley warmly on taking such a significant step on her pathway to professional qualification.

Interesting! Very interesting!

Everybody is aware that interest rates have risen almost month on month and are now the highest rates for many years.

This has an impact on taxation too.

HMRC have announced that from 11^th July, any tax paid late will attract an interest charge of 7.5%. this is relatively cheap for an unsecured loan but many taxpayers will not wish to pay this additional interest on their HMRC liabilities.

On the other hand, HMRC will pay 4% from 11^th July 2023 on tax repayments. This is going to be a better rate than most people can get from any financial institution and therefore, if you are aware of your tax liability and have sufficient funds, it may be a good idea to pay your corporation tax liability well ahead of the due date in order to exploit this excellent return.

Curiously, for employees (and especially directors), who have overdrawn loan accounts with their companies, the official rate of beneficial loan interest remains at 2.25%.

Finally, the House of Parliament debated on Monday whether to authorise an increase in the statutory mileage rate which has been at 45p per mile since 2012, notwithstanding the fact that the price of petrol has varied between £1 and £2 per litre during that time.

Unfortunately, the Members of Parliament decided to leave the rate still at 45p. We believe this is an opportunity lost. MPs say they will keep the approved Mileage Allowance Payment under review yet they have not changed it for 11 years!

H M Revenue & Customs launches time to pay tax arrangements

If you have arrears of tax, whether it be self-assessment, PAYE or VAT, it is now possible to request a time to pay from HMRC directly online. Unfortunately, there is no similar arrangement in place as yet in respect of corporation tax.

This is to be welcome, particularly given the often very lengthy response times when trying to contact HMRC by telephone.

The details of the various arrangements possible are given below. Please note that in all cases, it is necessary to request a payment plan online within certain deadlines, which vary from one tax to the other.

In order to access this service, taxpayers need to log in using the Government gateway. If you require any assistance with how to initiate this process, then please do not hesitate to contact us.

Setting up a payment plan

To set up a payment plan you’ll need:

• the relevant reference number for the tax you cannot pay, such as your unique tax reference number
• your bank account details
• details of any previous payments you’ve missed

You may be able to set up a payment plan online, depending on which type of tax you owe and how much you owe.

If you owe tax from Self Assessment

You can set up a Self Assessment payment plan online if you:

• have filed your latest tax return
• owe £30,000 or less
• are within 60 days of the payment deadline
• do not have any other payment plans or debts with HMRC

If you owe employers’ PAYE contributions

You can set up an employers’ PAYE payment plan online if you:

• owe £15,000 or less
• are within 35 days of the payment deadline
• plan to pay your debt off within the next 6 months
• do not have any other payment plans or debts with HMRC
• do not have outstanding penalties to pay
• have submitted any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due

If you owe tax from VAT

You can set up a VAT payment plan online if you:

• have filed your latest tax return
• owe £20,000 or less
• are within 28 days of the payment deadline
• do not have any other payment plans or debts with HMRC
• plan to pay your debt off within the next 6 months

You cannot set up a VAT payment plan online if you’re in the Cash Accounting Scheme, Annual Accounting Scheme, or you make payments on account.

IT’S P11D SEASON

Now that we have reached the end of the 2022/23 tax year, limited companies who provide benefits in kind to any directors or employees, or even to members of the director’s or employee’s family or household, have a legal requirement to report this to HM Revenue & Customs (‘HMRC’) on form P11D before 6 July 2023.

Examples of benefits in kind can include use of company cars or vans, private medical insurance, interest free loans greater than £10,000, gym memberships, reimbursement of personal costs and company assets placed at a director’s or employee’s disposal for personal use.

Don’t worry – there are no requirements to report expenses that have been reimbursed by the employer if they were incurred solely (wholly ,exclusively and necessarily) for business purposes, for example travel, subsistence and entertaining.

If you believe that your company has provided benefits in kind to directors or employees during the 2022/23 tax year, or if you would like more information about employee benefits, please do not hesitate to contact us, we are here to help.

As you might expect, failure to notify taxable benefits and late filing of form P11D will give rise to penalty charges.

Don’t forget the ‘trivial benefit’ rules which allow you to gift your employees, for a non-work reason, cash or vouchers that cost up to a value £50 per day without any of the above benefit in kind tax implications.

Exam Success

We are pleased to advise that our George Moyle was successful in his Level 3 AAT Preparing Financial Statements exam last Friday, achieving a mark of 83%.

Our congratulations to George!

Spring Budget 2023

This year we are not sending out a detailed commentary on the annual budget because most of it had been leaked in the Press beforehand anyway and there is not a huge impact to tax rates, other than the previously announced increase to Corporation Tax from 19% to 25%. We nonetheless have pleasure in attaching a tax card setting out the rates in force for the new tax year.

It would seem that the Government is asking businesses to facilitate growth and at the same time kicking them in the teeth by increasing their Corporation Tax rates by 30%.

Successful businesses which are able to pay their owners income of more than £50,000 will effectively be paying tax at over 60% on that income as opposed to their employees who will be paying 42% on the same level of income. We believe that this budget was disappointing and uninspiring and particularly for small and medium size businesses, previously when there were two different rates of Corporation Tax, the starting point for the higher rate was £300,000, which with inflation would equate to round about £400,000 these days – it is now £50,000.

On a positive note, and to replace the Super Deduction, companies will be able to claim 100% relief on qualifying capital expenditure without any cap. However, for many family-owned businesses the £1 million Annual Investment Allowance provided this relief already.

Reduced paperwork for international traders and longer time to submit customs forms will be welcomed by many. The new investment zones may provide for some interesting opportunities, albeit they may be fairly niche.

The tax changes made, whilst few in number, are quite significant – in particular pensions, R&D and capital allowances.

The lifetime allowance for pensions – previously £1.07M – was abolished but there is still an annual allowance limitation, albeit it at the higher level of £60,000 per year compared to £40,000 previously.

Self-Assessment Payment Deadline

This is a late reminder for any clients who have not yet paid their Self-Assessment liability which was due on 31^st January.

Interest will be running from 1^st February but if there are any amounts of tax still outstanding as at 28^th February, HMRC will apply an additional 5% surcharge.

However, if you contact HMRC and make arrangements to pay, the surcharge will not be applied. Interest will continue to run but you will save the cost of an additional 5%.

Therefore, if this applies to you, then we strongly recommend you contact HMRC as soon as possible to put payment arrangements in place.