Published: Monday, 29 January 2018 14:51
Written by George Peach
As you are aware the self-assessment deadline of 31 of January 2018 is fast approaching, here are five ways to pay before the deadline to ensure you avoid any unnecessary penalties.
Listed below are the methods you can use to pay your tax liability.
By debit or credit card or by BACS
If you wish to pay via debit or credit card online or over the phone you will need your 10-digit unique taxpayer reference (UTR) followed by the letter ‘K’. This will be on your tax return and computation.
It is important to note HMRC will no longer accept payments from personal credit cards, so if you are paying with a credit card ensure it is a business account.
The debit or credit card link is as follows (you will incur a fee if you pay by credit card):
Alternatively, you can pay by BACS as follows (assuming your account is UK based)
Sort Code Account Number Account Name
083210 12001039 HMRC Cumbernauld
083210 12001020 HMRC Shipley
Your bill should advise you which account to use, but if you are unsure, use HMRC Cumbernauld.
At your bank or building society
You can only pay at your branch by cash or cheque if you both:
· still get paper statements from HM Revenue and Customs (HMRC)
· have the paying-in slip HMRC sent you
Make your cheque payable to ‘HM Revenue and Customs only’ followed by your reference number - this is your Unique Taxpayer Reference (UTR). Followed by the letter ‘K’. You’ll find it on your paying-in slip.
If you wish to pay via Direct Debit you will need to set up a Direct Debit through your HM Revenue and Customs (HMRC) online account to make single payments for 31 January. If you will need to make a payment on account, then you will also need to set up another debit before 31st July.
You’ll also need to use your 11-character payment reference. This is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’.
Please Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days the next time if you’re using the same bank details.
By cheque through the post
You can send a cheque by post to HM Revenue and Customs (HMRC).
Please allow 3 working days for your payment to reach HMRC.
In the envelope you should include:
A cheque payable to ‘HM Revenue and Customs only’, followed by your Unique Taxpayer Reference (UTR). You’ll find this on your paying-in slip.
Include the paying-in slip HMRC sent you (if you still get paper statements). Don’t fold the paying-in slip or cheque or fasten them together. If you don’t have a paying-in slip you can print a slip to use to pay by post. However, you won’t be able to use this at a bank.
Through your tax code
You could have paid your Self-Assessment bill through your PAYE tax code providing you met the following criteria:
· you owe less than £3,000 on your tax bill
· you already pay tax through PAYE, for example you’re an employee or you get a company pension
· you submitted your paper tax return by 31 October or your online tax return online by 30 December
How it’s set up;
HM Revenue and Customs (HMRC) will have automatically collected what you owe through your tax code if you met all 3 conditions. unless you’ve specifically asked them not to (on your tax return).
If you’re not eligible, you wouldn’t have been able to pay this way. You aren’t legible if:
· you don’t have enough PAYE income for HMRC to collect it
· you’d pay more than 50% of your PAYE income in tax
· you’d end up paying more than twice as much tax as you normally do
Published: Friday, 01 December 2017 10:53
Written by Gemma Kerslake
With the festive season fast approaching, Christmas parties and gifts for employees and customers will no doubt be on the minds of many businesses. However, if tax relief is to be achieved there are many rules and regulations to be followed.
Gifts to Employees
All gifts will be tax deductible as an expense for the business. If the gift is a cash gift, the employee will have tax deducted as though the gift is regular earnings, and employers NIC is payable on the gross amount of the cash gift, and the employee will have national insurance and tax deducted on that gift. For example, if you give a cash bonus of say £100 to a basic rate employee, this will cost you as an employer £113.80 (less the corporation tax), and the employee will only receive £68 (after employees NI and tax).
However, you may wish to consider a non-cash gift known as a Trivial Benefit. The benefit is exempt from being taxed as employment income if all the following conditions are satisfied:
- the cost of providing the benefit does not exceed £50
- the benefit is not cash or a cash voucher
- the employee is not entitled to the benefit as part of any contractual obligation (including under salary sacrifice arrangements)
- the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)
This could be, for example, in the form of a hamper or a shop voucher. A good example of this is a voucher which can only be exchanged for goods but may be used in many stores, for examples of such vouchers please see the following link: https://www.one4allgiftcard.co.uk/
By comparison, providing a trivial benefit of say a John Lewis Voucher of £50 would cost you as an employer £50 (less the corporation tax) and the employee would receive £50 as a voucher, and not be subject to employees national insurance or tax. Likewise the employer would not be subject to employers national insurance.
It may also be interesting to note that trivial benefits may be used at any time of the year and there are no limits on the amount of times these may be provided to employees in the year, for example for staff birthdays.
Directors count as employees, but they may only receive a maximum of £300 per year in these trivial benefits. Therefore this is as equally beneficial for Directors.
Gifts to Customers
Gifts to customers are only allowable as a tax deduction if:
- the total cost of gifts to any one individual per annum does not exceed £50
- if the gift bears a conspicuous advert for the business
- the gift is not food, drink, tobacco or exchangeable vouchers.
However, samples of a trader’s product are allowable even if they are food, drink or tobacco.
Christmas parties are tax deductible as long as they meet the following criteria:
- £150 or less per head
- Annual, such as a Christmas party or summer barbecue
- Open to all of your employees
This allowance applies to ‘annual parties’, therefore if you have already entertained your staff during the year, the amount must still be kept under £150 in total to ensure the amount remains tax deductible. If the total annual expense for the employee exceeds £150, the total cost of the event is no longer tax deductible, not just the cost that exceeds the £150. All of the costs become taxable as a benefit in kind, requiring a P11D submission to HMRC for your employee.
It is also important to note that the cost is per employee, therefore if partners of employees are invited to the Christmas party, the cost of the partners will have to be absorbed within the £150 limit per employee.
For further information, please feel free to contact the team at Spirare.