We’ve move our main office to:

1, Clarke Hall Farm, Aberford Road, Wakefield WF1 4AL.

We’re just opposite Pinderfields Hospital, by the bus stop.

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We have plenty of parking and some nice coffee so please come on over and see us.

Our new Wakefield number is: 01924 950 230, although you can still get us on the old Leeds number 0113 359 3033.

We’re still using the old offices at Hillside for occasional meetings, so if you’d prefer to see us there that’s no problem either.

Courtley West Chartered Certified Accountants | Wakefield | Leeds

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The basic rule for work-related expenses is that they are tax deductible where they are incurred wholly and exclusively for the purpose of your job.

This means that if you personally pay for something that is related to (for example) business travel and then the company reimburses you, the company can claim a tax deduction and there is no income tax charge on you.

However if the company pays you for a something of personal benefit to you, then you will be taxed on it. (Unless you have an exemption.)

Overnight accommodation

Let’s take overnight accommodation and related expenses as an example. The bill for stopping in a hotel and the meals when you stay away on business won’t result in a tax bill (the wholly and exclusively rule). However if the company pays for extras deemed for your personal benefit, for example use of the hotel gym or a pay-per-view movie then these are taxable.
If the extras are included in the room bill and not itemised separately then you won’t be taxed.

But what if they are shown separately?

Your company can take advantage of a little tax break where these personal expenses are exempt where on average they don’t exceed £5 per night (or £10 if you’re travelling outside the UK). It’s based on an average, so if you spend £10 on the first night, then you’re still okay provided you don’t spend anything on the second night etc.

A word of warning to employers though. If they opt to pay more than the exempt amount i.e. £7 per night, the whole lot becomes taxable and not just the excess over the £5.

Making best use of the rules

1. You don’t actually need to incur the expenses in order to be paid by the company, therefore the company could make the payments and you get an extra £5 tax free in your pocket.
2. Make it a company policy that where any personal expenses exceed the limit, then the excess is reimbursed to the company.

If you find the above interesting and would like some further assistance, please get in touch.

Courtley West

www.courtleywest.co.uk

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HMRC will NEVER email you advising of a refund.

See the attached report on HMRC’s website:

http://www.hmrc.gov.uk/security/examples.htm

Please do not click on the link in the email. The best course of action is to delete it.

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HMRC had threatened penalties for those employers that don’t comply with the new RTI rule, here’s an update to see what the latest is.

What is RTI? (Real Time Information)

Starting from April 2013, all employers must send details of salary, tax and national insurance to HMRC via the internet each time they make a payment to an employee.

This means that the end of year returns P35 & P14 are no longer required and so there won’t be any late filing penalties for these documents. Instead penalties will be imposed for missing the RTI deadlines.

Penalties

HMRC have announced the late notification penalties won’t apply for the first year of RTI and instead they’re working on a fair and practical way to implement these from 2014.

PAYE errors

The RTI submissions (Full Payment Submissions) won’t be subject to fines for late submission in the first year however penalties will still be charged under the existing rules for employers who make PAYE errors.

Late Payments

Interest and penalties will continue to be charged on late payments however it is worth noting that under RTI it will be clearer to HMRC when a payment is late and to calculate the interest and penalty due.

Watch this space for further information and if you have any questions please don’t hesitate to get in touch.

Ben

Courtley West

Chartered Certified Accountants.

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BUSINESS

• The small companies rate of tax is to be left at 20% but the main corporation tax rate will be cut by a further 1% to 21% by 2014.
• Small business rate relief is to be extended by another year to 2014.

INDIVIDUALS

• The personal allowance to go up to £9,440 next year.
• The 40% tax threshold is to rise by 1% in 2014 and 2015 from £41,450 to £41,865 and then £42,285.
• The capital gains tax annual exemption amount is to increase by 1% to £11,000 in 2014/2015.
• Inheritance tax limits, which currently stand at £325,000, will increase by 1% in £329,000 in 2015/16.
• The overall ISA savings limit will increase from £11,280 in 2012/13 to £11,520 in 2013/14.

PENSIONS

• The annual savings limit will reduce from £50,000 to £40,000 in April 2014.
• From 2014/15 there will be a further reduction in the lifetime pension relief allowance from £1.5 to £1.25m.

If you have any queries on the above please don’t hesitate to get in touch.

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Cloud accounting on a tablet

When I first started out in the world of accountancy most clients kept their records manually. They used large cash books and ledgers which were written up diligently by their book-keepers. Some had computerised systems, this enabled more analytical reporting to help grow their business, statements could be generated at the push of a button to send out to customers and when necessary a backup could be taken and passed to their accountant.

Now most of our clients have computerised systems, they are very good and they can save the client time and improve productivity.

But time waits for no one and things have moved forward again. We can bank on-line, pay our bills on-line and do the supermarket shop on-line, so why not prepare your accounts on-line?

It’s important to be able to access the relevant financial information for your business in real-time or as close to it as you can get. We have smart phones, laptops, tablets, work computers and more than one person wanting to access this information at any given time. This is where the cloud comes in…

1. The information is accessible independent of your location. You can view, edit and even send invoices from your desk, your phone or your home.
2. The data is held remotely, therefore no longer at risk from theft or fire in your office.
3. The data is backed up automatically on multiple servers by the service provider. You don’t need to do anything.
4. Efficiency is improved. Multiple users can access the data from multiple locations on multiple devices.
5. The software is always up to date, saving further time and costs.
6. Your accountant can access the data without you having to e-mail a backup and wait for it to be returned.

We’re pretty excited by the new developments in technology; the new systems can talk to your CRM or project management software giving you the ability to grow your business with minimal fuss.

We’re now partnered with Xero, one of the leading service providers of cloud accounting services, so if you have any queries or want to see a demo, please get in touch.

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Well, it’s the end of our 4 week internship programme this summer.
In an arrangement with Leeds University Business School and their nurturing talent programme, we’ve enjoyed the company of Vidya Prabhu as our intern for the last four weeks.

Vidya has been a great help to us during her time here and we hope that she’s found it interesting getting more involved in the more practical aspects of being an accountant.

Of course, we’re hoping that we might see her again and we wish her the very best in the final year of her Accounting and Finance degree at the univeristy.

Thanks Vidya and good luck!

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HMRC have several operations set up to target restaurants, hair and beauty businesses, pubs and nightclubs as well as motor trade companies in the South West, Yorkshire, the North East, and South Wales.  Their remit is to examine the records of business and individuals and carry out other necessary investigations to catch and deal with tax avoiders and evaders.

The project follows similar successful operations last year targeting market stall holders, taxi firms, restaurants and property rental businesses.  Those task forces managed to collect more than £50m from tax dodgers, and the operations are now being rolled out more widely.

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This week, the Chancellor of the Exchequer, George Osborne, announced a £140 billion emergency scheme in order to try to avoid a second credit crunch.  Backed by the Treasury, the Bank of England is to offer money to high street banks to kick-start mortgage and small business lending.  As the Chancellor says, this funding is for “the business that wants to expand”.

 The funding for lending scheme will allow banks to ‘swap’ assets with the Bank of England in return for money that can be loaned out to small businesses and other customers.  In addition to this funding for lending scheme, the Bank of England will inject a minimum of £5 billion a month into financial institutions to improve their liquidity.

With further details eagerly anticipated, some are worried about how the scheme will actually work.  However, in the current climate where credit can be hard to come by, this seems like a step in the right direction.

Courtley West

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HMRC are introducing “Real Time Information”.

Currently, HMRC don’t really know how much is owed on your company payroll until the P35 is submitted at the end of the year. This makes it hard to chase for outstanding amounts owed without guessing. Basically, what this means for an employer is that for every pay date a submission needs to be made to HMRC detailing the amount due.

When will this happen? The pilot is being rolled out in April 2012 and this will affect all employers from October 2013.

How will it work? Originally, HMRC wanted this bolted onto a BACS transmission, but the majority of small firms pay their staff by normal bank transfer and not through the BACS system, in fact there might even be one or two employers out there who still pay their employees by cheque or cash!

Instead, this will be an additional part of the payroll software used by employers or their payroll agents.

What problems might you encounter with this new system?

1. Please make sure your payroll figures are correct and complete before preparing your payroll, because once it’s been submitted to HMRC it will be very difficult to correct.
2. Please make sure your payroll records i.e. names, addresses, dates of birth, national insurance numbers etc. are also correct as one incorrect piece of data in the submission will prevent the whole submission from being accepted.
3. Regardless of which data is correct, yours or HMRC’s, if they don’t agree, it won’t be accepted. It remains to be seen how this one will be resolved – painfully, if the PAYE coding notices are anything to go by.
4. HMRC have identified 110 pieces of information they want for each employee, the list includes, passport number and “current gender”. Hopefully they’ll narrow this list down but clearly this will create more work for HR departments.

What else? Well P45′s are to be scrapped and instead we will have a “leavers statement”. We don’t know what the difference is yet. Hopefully the system will be refined before implementation though!

The tip of the iceberg? HMRC have also expressed a desire to have “Centralised Deductions”. What does this mean? Employers tell HMRC what each employees gross pay is to be, the employers then give the gross payment to HMRC who then pass the net pay onto the employees. No, we don’t think they understand what they’d be letting themselves in for either. If “Real Time Information” is a success then they might consider developing this idea, but it is just an idea at the moment.

Ben Storey FCCA

Courtley West

Chartered Certified Accountants.

Leeds.

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