sharp edge issue 10

THE
SHARP EDGE
ISSUE 10
THIS ISSUE
2. P11D FORMS - DON’T GET
THEM WRONG!
3. MINIMISING THE RISK OF
EMPLOYER COMPLIANCE
VISITS
4. HOW LONG SHOULD YOU
KEEP YOUR BOOKS AND
RECORDS?
5. BUSINESS COMMUNITY
6. GETTING THE STATIONERY RIGHT
7. N
EW STAFF
8. DATES FOR YOUR DIARY
Sharp Edge - June 2015
P11D FORMS DON’T GET THEM WRONG!
2/8
You may be aware that the deadline for the submission
of forms P11D and P11Db is approaching. P11Ds inform
HMRC of any taxable expenses or benefits that you
have received or provided to employees during the year,
for example company cars, private medical expenses,
interest free loans, etc.
HMRC have published a list of common errors in the completion of forms P11D. The information is part of the latest Employer
Bulletin and we have reproduced the guidance below.
The guidance advises:
•
Submitting duplicate P11D information on paper where P11D information has already been filed online to ensure ‘HMRC
have received it’. These duplicates can cause processing problems. •
Using a paper form that relates to the wrong tax year – check the top right hand corner of the first page.
•
Not ticking the ‘director’ box if the employee is a director.
•
Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form.
•
Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section.
•
Completing the declaration on the final FPS/EPS submission accurately (for those employers whose software package
requires them to be completed) or question 6 in section A of RT 4 form to indicate whether P11Ds are due.
•
Not advising HMRC either by paper form P11D(b) or electronic submission that there is no Benefits in Kind & Expenses
return to make.
•
Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion –
you must report the full gross value of the benefit.
•
Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in.
•
Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2014
to 05/04/2015 to indicate the car was available throughout that year. If the car was available in the previous tax year,
the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be
completed.
If you would like help with the completion of the forms P11D please contact us.
Internet link: Employer Bulletin 53
Sharp Edge - June 2015
MINIMISING THE RISK OF
EMPLOYER COMPLIANCE VISITS
3/8
Because HM Revenue & Customs (HMRC) seeks to concentrate its resources in areas where
it considers tax is being lost, it has in recent years increased the nature and scope of
compliance visits.
The purpose of compliance visits is to confirm that PAYE has been properly operated on all earnings and payments
in accordance with the rules and regulations operational, as set out in the booklet, Employer’s Further Guide to
PAYE and NICs (CWG2).
What they will check
Casual labour
HMRC’s visit will be to your business premises and is likely
Any employer paying £1 a week or more to any employee
without a form P45 must request a form P46 to be
completed. If the employee signs that it is his or her first job
since last 6 April, then PAYE and national insurance need not
be deducted unless the payment is in excess of the national
insurance primary threshold, currently £155 per week. HMRC
is applying this procedure strictly and, where forms P46 have
not been completed, charging employers for tax and NI
contributions on the grossed-up amount of these payments,
often regardless of whether or not any tax has actually been
lost to HMRC.
to check:
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PAYE deduction working sheets for completeness and
accuracy
Correct use of employee codes
Reconciliation of the records with the Final FPS (Full
Payment Submission) and/or EPS (Employer Payment
Summary) for the tax year
Correct treatment of new employees and leavers
Cash payments where PAYE has not been operated
Expense payments, employee benefits, and their correct
disclosure on forms P11D or P9D
Compliance with terms of any dispensation
Compliance with sub-contractors’ rules
Compliance with NIC regulations
Problem areas
The following are the main areas where problems may arise:
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Gross payments to casual employees
Payments to alleged ‘self employed’ persons
Lump sum expenses
Private petrol
Spouse’s travel and subsistence
Travel to work from home and vice versa
Trips for purposes other than purely business, e.g. trade
fairs, golf, social outings
Home telephone
Entertaining
Expenses for use of home as an office
Club subscriptions
Goods and services provided free or below market value
Luncheon expenses
Clothing
Accommodation
Work undertaken at an employee’s home
Medical expenses
Whether or not tax or NI is payable, you must keep proper
records of payments and persons paid.
Settlement
The majority of compliance visits result in some discrepancies
being uncovered, and HMRC will usually calculate the ‘lost’
tax and NI over a period of six years plus the current year.
This period may be extended if they suspect that deductions
have been withheld deliberately. HMRC may also seek
penalties, although these will normally depend on the
gravity of the discrepancy and the existence or absence of
‘reasonable care’. Often the audit investigator will be looking
only for tax and possibly national insurance on the ‘income’
not taxed, instead of effecting a gross position. Amounts
treated as benefits would not be grossed up or included in
the assessment of NI under deduction.
How can we help?
We can assist in reviewing your wage and salary
records with a view to identifying possible areas of
non-compliance with PAYE & NI regulations. If a visit
is made we can advise on, and assist in, negotiating a
settlement with HMRC.
Sharp Edge - June 2015
HOW LONG SHOULD YOU KEEP
YOUR BOOKS AND RECORDS?
4/8
There is no simple answer to this question because different types of record are covered by different
types of legislation, as shown by the following summary:
Value added tax
Government grants
By law, VAT records have to be kept for six years unless HM
Revenue & Customs (HMRC) allows a shorter period. Any
request you make to keep records for a shorter period must
be accompanied by a full explanation of why it is considered
impractical to keep the records.
Documents relating to Government grants must generally be
kept for four years from receipt of the grant. Where grant
aid is still being received, no documents should be destroyed
without consulting the relevant Government department.
Employers’ Liability policy certificates
PAYE
HMRC recommends that pay records be kept for at least
three years after the income tax year to which they relate.
Taxes generally
For periods before the start of self assessment HMRC can
issue an assessment at any time up to six years after the
end of the chargeable period to which the assessment
relates. There is no limit in cases of fraud or wilful default. All
business records must be retained for a period of (broadly)
six years.
Company records
Under corporation tax self assessment, accounting records
must be preserved for six years from the end of the
accounting period.
With regard to the statutory books, there are no specific
requirements, but the Companies Act states that an entry
relating to a former member of the company may be
removed from the Register of Members ten years from the
day he or she ceased to be a member.
The requirement for the Register of Directors and Secretary
to include details of past directorships held within the
preceding five years has been removed with effect from 1
October 2009.
The former requirement to keep Employers’ Liability policy
certificates for forty years has been replaced by guidance.
Businesses are reminded that their potential liability for illness
and injury at work does not end when the policy expires.
Records should be retained to ensure that any future claim
can be met.
Limitation Act 1980 - general periods
The 1980 Act allows an action to be brought on a contract
for up to six years from the event (e.g. breach) that gave rise
to the claim.
Where a contract is under seal (or deed), the time limit is
twelve years.
These periods govern how long invoices and other
documents should be retained as evidence in case of a claim
by, or against, another party.
Conclusion
Taking into account the various requirements outlined above,
we recommend that you keep all records for at least six years
after the end of the accounting period or tax year.
Do call us if you would like further help or advice on this
subject.
Sharp Edge - June 2015
BUSINESS
COMMUNITY
5/8
BRIDGE TELECOMS
They specialise in all aspects of business
telecommunications, offering a wide
range of telephony products and solutions
from telephone systems and support to
business mobiles.
Whether you are interested in improving
your customer service, moving premises or
looking for ways to reduce your overheads
they can advise and help you take control
of your business communications.
They pride themselves on delivering a
personal and bespoke service, adding
value to your business.
Please visit www.bridgetelecoms.co.uk
or call 0845 177 0720
K2L MARKETING
K2L is the award-winning agency responsible
for designing this very newsletter.
They provide Strategic Marketing, Web
Design, SEO & Content, Creative Design as
well as a host of other marketing services to
a broad client base from a variety of industry
sectors, from finance to health & fitness.
Their ethos of Strategy + Creativity has
won them numerous industry awards
and they continue to innovate and evolve
as an agency.
A list of services can be found at
www.K2L.co.uk
or call 0161 848 9008
SPORTANDMUSIC
SPORTANDMUSIC arrange tickets,
hospitality and travel to all kinds of
sporting, music and entertainment events.
With over 25 years’ experience in the
industry, their clients are rest assured
they’re in safe hands throughout the
event planning process. They can arrange
bespoke and ready-made itineraries at
competitive rates at home and overseas
for events such as the FA Cup Final,
Wimbledon’s Men’s Singles Final or the
British Grand Prix, as well as tickets for an
Opera in Paris, top festivals with luxury
camping, or a private yacht at the Monaco
Grand Prix.
For more information please visit
their website
www.sportandmusic.co.uk
or call 01925 755 222
FEATURE ON THIS PAGE...
In every issue of The Sharp Edge we publicise our clients businesses in our Business Community pages.
To feature in one of our upcoming issues, please email [email protected]
Sharp Edge - June 2015
GETTING THE
STATIONERY RIGHT
6/8
The development of your brand and the design of your logo and stationery is an important part of
your marketing strategy. Letters, invoices, mail shots, and statements are all forms of advertising.
Limited companies and Limited liability partnerships (LLPs)
Whether in hard copy, electronic or any other form, the company or LLP must state its name, in legible lettering, on the
following:
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All its business letters and order forms
All its notices and other official publications
All its bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed
by, or on behalf of, the company or LLP
All its bills of parcels, invoices, receipts and letters of credit. (Invoices must also state the VAT number where applicable)
All its websites
On all of its business letters, order forms or any of its websites, the company or LLP name must show in legible lettering:
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Its place of registration
Registered number
Its registered office address
And if it is being wound up, that fact
Premises:
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Every company or LLP must paint or affix its name on the outside of every office or place in which its business is carried on even if it is a director’s or member’s home. The name must be kept painted or affixed and it must be both conspicuous and
legible.
The address of the registered office has to be displayed prominently within the premises
Partnerships
Partnerships are required to state on letters, orders, invoices, and receipts, and to display on the premises, the names of all
partners together with the principal office of the partnership. Alternatively, they must indicate where a list of partners may be
inspected. Invoices must state the VAT registration number, where applicable.
Sole traders
A sole trader operating under a business name must state on letters, orders, invoices, and receipts his or her own name and
business address. Invoices must state the VAT registration number, where applicable.
Whenever an email is used where its paper equivalent would be caught by the business stationery requirements, then that email
is also subject to the requirements.
Sharp Edge - June 2015
NEW STAFF
7/8
PAULA DEARY
Paula joined Harold Sharp in January as a financial adviser in our financial services team.
Having spent 21 years in the industry, Paula now specialises in investment performance. She
works alongside Sue Farrington reviewing client’s portfolios, maximising their return and
ensuring they are heading towards their investment goals.
Paula has a Diploma in Financial Planning and qualified with passes in G60 Pensions, G20
Investments and G10 Taxation and Trusts. Paula Deary
Paula spends her days in the office reviewing investment portfolios, meeting with clients,
drafting reports and suitability letters and researching the market amongst other things.
She enjoys liaising with clients and the variety of her role, especially when a client seems
particularly happy following a meeting.
Paula spends most of her spare time with her 3 year old son, Frankie. She’s a big fan of
health, nutrition and fitness and particularly triathlons, but has also been known to do the
Macclesfield and Wilmslow half marathons. What you may not know about Paula is she is also
prone to the odd sky dive.
JACQUIE SANEH
Jacquie came on board in March 2015 as Personal Assistant to support Heather
Cunningham and partners. Jacquie has a wealth of experience working for the financial
sector in large corporate organisations as well as mid cap companies in the
City of London.
Jacquie is also a qualified Prince2 Practitioner in Project Management.
Jacquie Saneh
Jacquie’s role includes managing Heather’s calendar, scheduling meetings, liaising with
clients as well as providing first class organisational and secretarial support. She is
passionate about her role and is committed to deliver a first class service to Heather’s
clients both internally and externally. No two days are ever the same for Jacquie in the
office and she really enjoys the variety of her workload and the daily interaction with our
clients.
Outside of the office, Jacquie enjoys travelling, keeping fit, and spending time with family
and friends. Jacquie is also a qualified personal trainer and massage therapist and enjoys
helping family and friends to adapt a healthy lifestyle.
Sharp Edge - June 2015
REMINDER
DATES FOR
YOUR DIARY
JUNE
End of CT61 quarterly period. Annual adjustment for
30th
VAT partial exemption calculations
(March VAT year end).
8/8
JULY
6th Deadline for submission of Form 42
(transactions in shares and securities).
Deadline for submission of EMI40
(EMI Annual Return).
File Taxed Award Scheme Returns, file P11Ds,
P11D(b)s and P9Ds.
Issue copies of P11Ds or P9Ds to employees.
AUGUST
Submission date of P46 (Car) for quarter to 5 July. 2nd
Annual adjustment for VAT partial exemption 31st
calculations (May VAT year end).
Deadline for entering into a PAYE Settlement
Agreement for 2015/16.
14th Due date for income tax for the CT61 period to
30 June 2016.
19th - 22nd Quarter 1 2016/17 PAYE remittance due.
Final date for payment of 2015/16 Class 1A NICs.
31st Second payment due date for 2015/16 Class 2 NICs.
Second self assessment payment on account
for 2015/16.
Annual adjustment for VAT partial exemption
calculations (April VAT year end).
Liability to 5% penalty on any tax unpaid for 2014/15.
Deadline for tax credit Annual Declaration
(if estimated, final figures required by 31/01/17).
Sharp Edge - June 2015
Holland House, 1-5 Oakfield
Sale, Cheshire M33 6TT
t 0161 905 1616
f 0161 973 6750
w www.haroldsharp.co.uk
e [email protected]