October 2014

 

Eden Accounting Ltd.
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Newsletter · Thursday, 2 October 2014

HMRC delays RTI penalties
Wear & Tear Allowance (WTA)
Business rates relief
Autumn statement 2014
Tax Diary October/November 2014

HMRC delays RTI penalties Payroll

From 6 October 2014, HMRC was due to include smaller employers in the penalty regime for late filing of Real Time Information (RTI) payroll returns for 2014-15.

HMRC have announced that this penalty process will be delayed for a number of smaller employers.
They will now start from:

  • 6 October 2014 for employers with 50 or more employees
  • 6 March 2015 for employers with fewer than 50 employees

The size of the late filing penalties depends on the number of employees within the PAYE scheme.

Number of employees  Penalty per PAYE scheme
1 to 9 £100
10 to 49 £200
50 to 249 £300
250 or more £400

HMRC will use the latest information available to determine the number of employees, and the size of the filing penalty for each period where a return is late.

Wear & Tear Allowance (WTA) General

If a property is let furnished – with sufficient furniture, furnishings and equipment for normal residential use – landlords can only claim tax relief for the furniture and equipment by way of the WTA. Prior to April 2013, landlords had the option of claiming the cost of replacement furniture instead.

The WTA is calculated as 10% of the gross rents less any tenant’s costs (e.g. water rates and council tax) met by the landlord.

WTA does not cover repairs, which continue to be tax deductible. The question is then raised can replacement of an item be counted as a repair? In this respect, landlords that let furnished property need to distinguish between:

  1. Replacement of items that are integral to the building, and
  2. Replacement of items that are not integral to the building.

Needless to say there are grey areas!

Replacement of items that are integral to the building

Fixtures integral to the building are those that are not normally removed by either tenant or owner if the property is vacated or sold. Examples include:

  • Baths
  • Washbasins
  • Toilets
  • Immersion heaters
  • Fitted kitchens and fitted white goods.

This list is not intended to be complete but gives an idea of the assets that are integral to the building and fall outside the wear and tear allowance. As these items are integral to the building, the cost of replacing these items is normally an allowable expense as a repair to the building.

Replacement of items that are not integral to the building.

Expenditure of this type will be covered by the WTA. Examples given on HMRC’s website in this category include:

  • movable furniture or furnishings, such as beds or suites,
  • televisions,
  • fridges and freezers,
  • carpets and floor-coverings,
  • curtains,
  • linen,
  • crockery or cutlery,
  • beds and other furniture

Unfortunately, these examples are not definitive: is a carpet glued to the floor a permanent fixture, or not part of the integral features?

Business rates relief General

There are a number of reliefs available to owners or tenants of smaller business premises. This article lists a number that can be claimed.

Small business rate relief:

You’ll get 100% relief (doubled from the usual rate of 50%) until 31 March 2015 for properties with a rateable value of £6,000 or less. This means you won’t pay business rates on properties with a rateable value of £6,000 or less.

The rate of relief will gradually decrease from 100% to 0% for properties with a rateable value between £6,001 and £12,000.

Retail relief:

Some local councils will give you up to £1,000 off your business rates if you occupy a retail property with a rateable value of £50,000 or less. To be eligible the property must mainly be used as a shop, restaurant, cafe or drinking establishment.

You’re usually not eligible if your business provides financial services, medical services or professional services like legal advice or accounting.

Empty properties re-occupation relief

You may get 50% off your business rates if you start occupying a retail premises that’s been empty for one year or more.

Rural rate relief:

You may qualify for the rural rate relief if your business is in a rural area with a population below 3,000. The relief is between 50% and 100% off your business rates.

You can get rural rate relief if your business is:

  • the only village shop or post office with a rateable value of up to £8,500
  • the only public house or petrol station with a rateable value of up to £12,500

Local councils can also:

  • top up the mandatory 50% relief to 100%
  • give relief to other rural retail businesses of up to 100% (for properties with a rateable value under £16,500)

The availability of the various reliefs will depend where you business is based. If you think you may qualify for any of the rates relief discuss your options with your local council.

Autumn statement 2014 General

HM Treasury has announced that this year’s Autumn Statement will be made on 3 December 2014. Historically, this has been used to showcase the Government’s expected tax changes in the following year’s finance act.

If you have any suggestions the Government is seeking your views on what you would like to see in the Statement. According to the GOV.UK website:

“In the interest of open and transparent policy-making, the Government welcomes original and innovative ideas, which will be considered by HM Treasury as part of the policy-making process.

Business, charities and members of the public can submit these views via email to autumnstatementrepresentations@hmtreasury.gsi.gov.uk

For information on the correct procedure for submitting your representation, please view the guidance.

To allow for full consideration in advance of the Autumn Statement, any submission should be sent to HM Treasury by 17 October.”

The clock is ticking!

Tax Diary October/November 2014 General
1 October 2014 – Due date for Corporation Tax due for the year ended 31 December 2013.

19 October 2014 – PAYE and NIC deductions due for month ended 5 October 2014. (If you pay your tax electronically the due date is 22 October 2014.)

19 October 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2014.

19 October 2014 – CIS tax deducted for the month ended 5 October 2014 is payable by today.

31 October 2014 – Latest date you can file a paper version of your 2014 Self Assessment tax return.

1 November 2014 – Due date for Corporation Tax due for the year ended 31 January 2014.

19 November 2014 – PAYE and NIC deductions due for month ended 5 November 2014. (If you pay your tax electronically the due date is 22 November 2014.)

19 November 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2014.

19 November 2014 – CIS tax deducted for the month ended 5 November 2014 is payable by today.

Eden Accounting Ltd.

The Russetts, Thicket Road, Houghton, Huntingdon, PE28 2DB.
Tel: 08452 707 738   Fax: 01480 466161.

Suite L3, South Fens Business Centre, Fenton Way, Chatteris, PE16 6TT
Tel: 08452 707 740   Fax: 01354 657339.

For further information please contact Jan Rayner on 08452 707 738 or Michael Prattis on 08452 707 740.

Web: www.eden-accounting.co.uk

Eden Accounting is a limited company, registered in England & Wales with number 04918343. A Director of the firm is a member of the Association of Chartered Certified Accountants (ACCA). This body has its headquarters in the UK and its rules of professional conduct can be obtained from its web site.

DISCLAIMER – PLEASE NOTE: The ideas shared with you in this email are intended to inform rather than advise. Taxpayer’s circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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