Everything you need to know about MTD and how having a bookkeeper helps.

Making Tax Digital (or MTD) is part of HMRC’s ongoing initiative that has been underway since April 2019 to digitalise the UK tax system. Currently, MTD is focused on VAT submission but is set to grow to include other types of tax, such as Income Tax and Corporation Tax. The most immediate of these extensions is coming up soon, when in April 2022, the current MTD VAT will become extended to include businesses.

So, what is MTD? When and how will MTD affect your business? And how should you go about paying it? We have all the answers. Getting in touch with your nearest Rosemary Bookkeeping business lets you directly contact your local bookkeeping experts, who will help support you with any bookkeeping query.

We’ve also put together a post to answer all of your most burning questions on MTD. Starting with:

What is MTD?

MTD has two core components:

  1. Replacement of paper-based records and a requirement for businesses and organisations (including those with property-based incomes) to keep digital accounting records.
  2. Using compatible software to submit tax returns and updates to HMRC – The government will be removing their current online tax services when a business registers for MTD and will require businesses and organisations to use software compliant with their API (Application Program Interfaces) to submit relevant updates and returns to HMRC instead.

MTD Timeline

  • 1st April 2019: MTD has been in place since this date for the majority of VAT-registered businesses that are above the tax threshold of an £85’000 turnover or above. These included partnerships, sole traders, limited companies, non-UK businesses registered for UK VAT, and charities and trusts.
  • 1st October 2019: There was a six-month deferred start date for more complex businesses.
  • 1st April 2022: MTD will be mandatory for all VAT-registered businesses and organisations.
  • April 2024: MTD will become mandatory for Income Tax Self-Assessment (ITSA) for those who are self-employed and/or with a property-based income if they have self-employment and/or gross rental income of over £10’000.
  • April 2025: MTD ISTA becomes mandatory for general partnerships. Meaning it will now apply to corporate or ‘non-natural’ and non-limited liability partnerships with a turnover above the £10’000 threshold.

The immediate changes and how they affect your business

If, before April 2022, you were not already under the current MTD legislation, you will be required to sign up to MTD, keep digital records of VAT and submit this information to HMRC through an MTD compatible software.

It’s important to note that if your business has received an MTD exemption, this will still be in effect beyond 1st April 2022. To check if you are eligible, or apply for exemption from MTD, you can find guidance on how to do so via the HMRC website. If you’re concerned about the impact of MTD on your business, you can read more about its effects here.

MTD’s benefits:

  • It can reduce or even eliminate paper-based or manual tax processes. This allows you greater accuracy in tax returns, reduces the time you spend on administration, and gives you more time to maximise your business opportunities, productivity and profitability.
  • In the case that you opt to use cloud-based software, you’ll be able to see in real-time what is happening in your books and have better control over your finances, allowing you to up-to-date and well-informed business decisions.
  • Using compliant digital software means that submitting information to HMRC is far simpler and less stressful.
  • Some accounting software link directly with your bank account, further reducing the ‘paperwork’ and time spent filing taxes.
  • Digital software provides you with real-time management information so you can see how your business is performing.

So, if you have not already done so, you need to start weighing your options for MTD compliant software.

How Rosemary Bookkeeping can help

We understand that making the jump to digital can be scary and daunting. But, it’s not as costly or difficult as it seems – especially with the help of an expert bookkeeping service like Rosemary Bookkeeping. The benefit of changing to MTD in April 2022 is that everybody else has already had around three years of experience working with it.

With a professional bookkeeper from Rosemary Bookkeeping to help you, making your tax digital is a very simple process. We have been operating MTD for VAT submissions since its inception in 2019 and know its processes inside and out. Going digital may be a scary prospect, but by using a bookkeeper, your tax may be going digital, but your bookkeeping experience isn’t. We will assist however you need to get accustomed to the software, or simply do the work for you and make the process of sending returns to HMRC straightforward. We will also send generated returns directly from the software so that you have a well-kept and organised backlog of your records.

The main drawback of digital services like Xero and QuickBooks is that they depend on your own financial knowledge and ability to work through MTD yourself. Our bookkeeping experts are trained to work digitally using MTD compliant software like Xero and QuickBooks and Sage, but are a real-life human presence that can reassure and guide you through the process, so you’re not going it alone. As Rosemary Bookkeeping is well-versed in MTD and online services, we can also offer advice on which software would be best for you, and often offer competitive prices for software subscriptions.

Additionally, we also offer an online exchange of documents, so you’ll be able to upload photos or scans of documents so that we can process them on the bookkeeping software. We also use Apps like AutoEntry or Hubdoc, which not only attach documents directly to the record on the software but also automate some bookkeeping processes – saving you valuable time and money.

To start receiving expert help and advice from your local bookkeeping experts, find your nearest Rosemary Bookkeeping business today.

With 2022 now underway, here is your reminder of some important dates for the rest of this financial year.

January 2022:

January has various different important dates to remember.

There are two different monthly deadlines for sending off your payments for CIS, NICs and PAYE to HMRC. The postal deadline is 19th January, and the deadline for electronic payments is 22nd January. These payment dates for CIS, NICs, and PAYE then repeat monthly for the remainder of this financial year.

31st January is an important date to remember for various reasons. It is the deadline for filing your Self-Assessment tax return form for the tax year that ended April 2021. However, due to the difficulties may have faced as a result of COVID-19, HMRC has waived late fee filing penalties for Self-Assessment Tax Returns.

If you have been unable to file your return by the 31st January deadline you will not receive a fine, permitting that you file online by 28th February. Anyone who cannot pay their Self-Assessment tax by the 31st January deadline will not receive a late payment penalty if they pay tax in full, or set up a Time to Pay arrangement by 1st April. However, interest will be payable from 1st February as usual, so it is still better to pay on time where possible.

January 31st is also the deadline by which you need to have filed your 2020/21 Capital Gains Tax, and if your company has a January 2021 year end, you will also need to have filed your Corporation Tax by this date. Furthermore, the 31st is the date by which you need to have finalised balancing payment of tax for 2019-2020, and the first payment of Account for Income Tax for 2021-2022.

 

February 2022:

The first date to remember in this month is 1st February, as it is the due date for paying Corporation Tax for a the period that ended 30th April 2021.

If your business uses vehicles, is the deadline for submitting Car P46 for the financial quarter ending 5th January 2022 is 2nd February. Following this, the VAT Tax Return and payments deadline for accounting quarter period ending 31st December 2021 is 7th February. As with January, the monthly postal and electronic deadlines for the payment of CIS, NICs, and PAYE to HMRC are the 19th and 22nd respectively.

Finally, the due date to file for Corporation Tax for companies with a 28th February 2021 year end is 28th February. Remember this is also now the final date you can now file your Jan Self-Assessment tax return online without receiving a fine.

March 2022:

1st March is both the new AFR (Advisory Fuel Rates) day for company car users, and the due date for the payment of Corporation Tax for the period that ended 31st May 2021.

The 7th March is the deadline for VAT Returns and payments of the accounting quarter that ended 31st January 2022. For large companies with the year-end of 31st March 2022 and 31st December 2022, the due date for Corporation Tax quarterly instalments is 14th March.

Following this are the monthly postal and electronic deadlines for the payment of CIS, NICs, and PAYE on the 19th and 22nd March. The filing date for companies with 31st March 2021 as a year-end rounds off the month on 31st March.

April 2022:

April is the end of the current 2021/2022 financial year. It begins with the due date for payment of Corporation Tax (for the period that ended 30th June 2021) on the 1st April.

Then, the current tax year ends on 5th April, and the 2022/2023 tax year begins the following day on 6th April. Also on the 6th, IR35 comes into force in the private sector.

19th April is a busy day this year. Firstly, automatic interest is charged where PAYE Tax, Class 1 NI, CIS and/or Student Loans are not paid by this date, so make sure you have these paid up to date well in advance. Furthermore, PAYE quarterly payments are also due for small employers for periods 6th January 2021 – 5th April 2021.

19th April is also the deadline for employers’ final PAYE return to be submitted online for 2020/2021.

Finally, on 30th April, corporation Tax Returns need to be filed by companies with 30th April 2021 as a year end.

That’s all for the current tax year in 2022. If all of this seems like a lot of work to remember, you can leave your bookkeeping to the professionals by letting us take of your books for you.

Entrusting your bookkeeping to Rosemary means:

· We keep track of your deadlines for you

· We know when your Tax return needs to be filed by

· We can keep track of your CIS payments

To find out more about our services and find out how Rosemary Bookkeeping can help you, give us a call on 0345 862 0072, or find your nearest Rosemary Bookkeeper here.

We’ve made a list of festive expenses that you may be able to claim back as a business expense.

Christmas time can be a busy and expensive time for many businesses – big or small. But with the January Self-Assessment Tax Return coming up, here are some festive expenses that you might not have thought about reclaiming.

Decking the Halls

If ‘business as usual’ has resumed in your office, then you may have decided to also carry on the festive tradition of decorating your office for the holidays. What you might not be aware of, is that you can actually claim back decorations like a Christmas tree, tinsel, and wreathes as tax by logging them on your accounts as running costs for the office. Bear in mind that this doesn’t extend to employees working from home however, as HMRC judges this as personal enjoyment, not office related.

A Christmas Party

Providing that you went ahead with a Christmas do this year, be it virtual or in person, you may be liable to claim expenses back as tax. However, this depends on who was in attendance.

If the event is/was open to all of your employees, then the whole thing will be taxable, no matter the number of people in your operation. However, you cannot claim expenses if there were also clients and/or associates in attendance, as this is not acceptable for corporation tax or VAT purposes as HMRC classes this as business entertaining. Furthermore, any even that is not open to all employees will also not be liable.

As a result – if you do decide to invite clients and/or associates to a Christmas event, remember to allocate sufficient funds to cover their expenses because you won’t be able to claim any tax relief, or reclaim any VAT on costs. Bear in mind that you should still record this in your books, and add the costs back on when you come to calculate your profit for tax.

Presents

As it is Christmas, you may choose to buy gifts for staff or clients. In the case of clients, you are able to record these as a business cost on your books, provided that these gifts meet the appropriate guidelines so as not to constitute potential bribery. This means:

  • You must not spend more than £50 (p.a.) on gifts for any one client.
  • You must not gift a client an item that can be exchanged for goods or money – such as cash or vouchers.
  • You must include a conspicuous advert for your business. For more information regarding gifts to clients, please visit the HMRC website.

In the case of your staff, there are other key tax considerations regarding gifts:

  • If the gift has no cash benefit, then it may be accepted by HMRC as trivial benefit, which means that you will not need to pay extra tax or National Insurance, or report it on the employee’s P11D form.
  • If your gift does include cash payment to staff – they will be classified in the same way as regular earnings by HMRC so should be put through payroll as normal – and might require a National Insurance payment.

More guidance and information on gifts for staff can be found on the HMRC website.

If navigating this all feels a little daunting, why not entrust your bookkeeping to the professionals? You can find more information on the upcoming January tax return here, and to find your nearest Rosemary Bookkeeping business, click here.

Inflation rates are projected to reach highs of 4% before the end of this year. This could have a big impact if you own and run a small business. Here’s what you need to know:

British inflation has hit decade highs, caused by a combination of factors including COVID-19, Brexit, rising energy and fuel prices, higher costs of raw materials and goods in factories, and higher bills in restaurants and hotels. In October, the UK Office for National Statistics reported that inflation had hit 4.2%, a 1.1% increase from September – a significantly bigger increase than had been predicted by experts.

So what does this mean for small business owners?

Well, this could have a number of knock-on effects that small business owners should be aware of, including:

  • A rising in costs of labour to compensate for increasing inflation
  • Rising costs of products and services
  • Labour shortages and supply chain issues

This will only be exacerbated by The Bank of England’s inconsistency on the topic of interest rate rises. As this is the mechanism used to control inflation, this will make more money more expensive to borrow – which would further reduce demand. This, in tandem with a fixed supply, means that price increases slow down, and businesses are faced with decision of whether or not to lower prices in order to maintain sales, or raise them to maintain profit (and risk losing customers).

So what can you do?

Unfortunately, the current situation leaves businesses with a dilemma and a bit of a no-win scenario. This will only change when either demand reduces or supply chains resume normal service. Meaning that, at present, the solution is in finding a balance between increasing costs and maintaining profits.

If you find the prospect of managing your finances in this difficult time daunting, why not contact Rosemary Bookkeeping? We can take care of your books for you and help you manage your finances. Hiring a professional bookkeeping service like Rosemary can greatly benefit you as we are able to help with tracking the cost and profit in your business.

Outsourcing your books to Rosemary also means:

  • Your books are done regularly – so you can see what is going on in your business
  • You don’t have to spend your valuable time doing the books – so you can do things more beneficial to your financial income
  • Paying less than you would for an accountant
  • You don’t need to hire any additional staff. You only pay for the work done
  • You don’t have to do a job you loath

To outsource your books today, and receive financial advice from our experts, give us a call on 0345 862 0072, or find your nearest Rosemary Bookkeeping business here.

If you own a small business and are approaching the holidays worrying how you’re going to manage your books, why not make these tips part of your New Year’s resolution?

The prospect of maintaining your books can be a daunting one for many small business owners. Juggling a steadily growing pile of receipts and invoices can certainly start to feel like quite the balancing act. But not to worry, we are here to help alleviate any anxiety about managing your books. Simply follow these tips to stay on top of your finances:

  1. Keep personal and business finances separate

Have separate bank accounts when you are running your own business, by separating out the two, you will be able to avoid any messy mix-ups in your finances.

  1. Don’t get rid of receipts and invoices

In a small business, nothing should go to waste. Make sure that you and your staff receipts and/or invoices for any and all expenditure, and attach them to expenses claims. To be safe, keep all records for at least six years.

  1. Maintain filing system

These records should be simple and easily organised. Sales invoices should be raised and filed in order, and purchases should follow a system that is logical to you.

  1. Keep your time similarly organised

Working closely with a plan or schedule can help you to best stay on top of your finances. Allotting diarised time to reconcile your bank accounts or update records will mean that it becomes part of your routine, and this can help it to feel like less of a chore. It also means that it doesn’t become forgotten amongst all of the other things you have to do.

Be sure to raise sales invoices quickly and file your paperwork on time. You may be able to remember what happened last week, but not last month or the month before.

  1. Stay on track of petty cash

In the same vain, you should be keeping receipts for your petty cash, and reconciling amounts regularly.  Keeping a keen eye on your cash will help to reduce the risk of loss or theft.

  1. Bank payments quickly

Once you have these cash or cheque payments it is important to stay on top of them and get them in the bank fast – even if they might feel old school. By doing this, you will reduce the risk of losing them or spending them quickly. Plus, the quicker they are in the bank, the better your cash flow.

  1. Chasing debtors

Slow payers can cause real harm to your business, and damage your cash flow. Set a clear policy for chasing up debtors. You aren’t loaning money, so your clients need to pay.

  1. Plan ahead by putting money aside

Putting money aside, perhaps in another account, will mean there are extra funds available in the event that you need them. There will always be future expenditures, such as VAT, so be sure to be prepared by planning ahead.

  1. Learn the basics

It’s true that you should always have a professional handle your finances for you, but knowing the basics can help you a lot from day to day. If you would like to learn more about finances and bookkeeping, you can find a lot of useful information and tips on our news page – under the bookkeeping tab.

  1. Trust the professionals

The best way to manage your finances is to enlist the help of a professional. Managing your books can be difficult, especially when trying to manage it alongside everything else you need to do as a small business. Outsourcing your bookkeeping to Rosemary means that your books are maintained regularly, but you don’t have to spend your valuable time doing them yourself. You also won’t need to hire any additional staff – you only pay for the work done – and a bookkeeper is cheaper than an accountant!

If you think it’s time to outsource your bookkeeping, get in touch with Rosemary Bookkeeping, or find your nearest branch here.

The Holiday season approaches – a very busy time for most businesses. Whilst it may be easy to get carried away with festivities or Christmas rushes, don’t forget that you can carry out your self-assessment months in advance.

By now, whether you are self-employed, a partnership, or neither, you should have registered for your tax return self-assessment. The deadline for the assessment may be the end of January next year, but we are just about to head into a very busy period for most businesses, and that time will be gone in a flash. So, it’s well worth getting a head-start on the process now.

‘But I simply don’t have time!’ you say. This winter period is a busy one for businesses the world over, so the temptation to put off that January tax return is a strong and understandable one. Unfortunately, it is not an option. Tax returns are not voluntary, and have to be completed no matter what. Luckily there is still plenty of time before that rush period really starts, so you still have the option to get it done now, early doors. Plus, it makes much more sense to stay on top of these things as they go, and keep your records as current as you can. For self-employed business owners especially, if your books are up to date, you will have a better understanding of the financial standing of your business. This means you will be able to put money away for the self-assessment at the end of the year.

There are instances in which the deadline is different:

  • If you are eligible, you can submit your online return by 30th December 2021, provided you want HMRC to automatically collect tax from your wages and pension.

In this case, HMRC must receive a paper tax return by 31st January 2022 if you are a trustee of a registered pension scheme or a non-resident company. Please note that in this case, you cannot send a return online.

HMRC may also write or email to give you a different deadline. More details can be found on their website.

  • Partnership returns if you have a company as a partner.

If your partnership’s accounting date is between 1st February and 5th April and one of your partner’s is a limited company, the deadline for returns is different.

Online: 12 months from the accounting date.

Paper: 9 months from the accounting date.

Late payment penalties:

Perhaps the most obvious reason to stay on top of this process, is that there are fines for lack of payment. If your tax return is up to three months late, you will have to pay a late filing penalty of £100. If it is later, or you pay your tax bill late, you will have to pay more and will be charged further interest on late payments. This amount can be estimated on the HMRC website.

You can appeal these penalties if you have a reasonable excuse such as:

  • The death of a partner or close relative – provided this was shortly before the tax return or payment deadline.
  • Fire, flood or theft that has prevented you from making the deadline.
  • Serious or life-threatening illness.
  • Postal delays that you could not have predicted.
  • Computer software failure just before the preparation of your online return.

But for the sake of tardiness, these fines are not worth the risk. It would be better to make sure of your payments whilst you have time, rather than suddenly come to find you have to shell out even more for overdue tax returns in the new year.

And if absolutely none of this has convinced you that it’s best to pay early, and the idea of sorting out your own tax returns this Christmas makes you say ‘Bah Humbug’, then don’t worry. We’ll do it for you!

Outsourcing your books to Rosemary means:

  • Your books are done regularly (so you can see what is going on in your business)
  • You don’t have to spend your valuable time doing the books (so you can do things more beneficial to your financial income)
  • A bookkeeper is cheaper than an accountant (who doesn’t like to be cost-effective?)
  • Outsourcing means no additional staff (you only pay for the work done)
  • You don’t have to do a job you loath

 

Leaving your assessment to Rosemary leaves you with a clear mind and the space to spend your holidays free of worry, and getting on with doing business you love.

If you think it’s time to outsource your bookkeeping, get in touch with Rosemary Bookkeeping, it’s what we do best.

The government have introduced a Plastic Packaging Tax that is coming into force in April 2022. The tax will apply to plastic packaging produced in, or imported into the UK, that contains less than 30% recycled plastic.

Plastic Packaging Tax Information

Plastic packaging with less than 30% recycled content will be taxed at £200/tonne and even if you’re not direct manufacturers the cost of the additional tax may be passed through the supply chain.

If the packaging has multi-material components and is predominantly made up of plastic it will be classed as plastic packaging and this is decided by weight, for example:

100g packaging = 40g not recycled plastic + 30g wood + 30g paper is classed as plastic packaging for the purpose of this tax.

Plastic Packaging Tax Exemptions

Producers and importers of small quantities of plastic packaging (under 10 tonnes in 12 months) will be exempt.
Other exemptions:

  • Transport packaging is used when importing goods into the UK
  • Plastic packaging used in aircraft, ships, or railway stores for international journeys
  • Plastic packaging produced or imported for use in the immediate packaging of human medicine
  • Components that are permanently designed or set aside for non-packaging use.

It’s a good idea to plan ahead for the future and understand the composition of the packaging that’s being used within your company and possibly look into reducing the unrecycled plastic content in it.

We recommend the recording of the webinar from HMRC that goes more into detail:

  • To reduce the financial impact on their business and help the environment
  • What are the exemptions
  • When your client needs to register
  • Who is liable to pay the tax

Government website information HERE

For help with your bookkeeping find your nearest Rosemary Bookkeeper HERE

From 1 October 2021, a new reduced interim VAT rate of 12.5% will be introduced for hospitality, holiday accommodation/attractions and it will stay in place until 31 March 2022. It replaces the current temporary reduced rate of 5% for these sectors.

This reduction in VAT is intended to boost trade immediately for hotels, B&B’s, cafes, pubs, restaurants, cinemas, zoos and theme parks to name but a few.

The reduced rate of VAT will apply to:

  • Hot/cold food and non-alcoholic beverages for consumption on the business premises, for example, cafes, restaurants and pubs. Cold takeaway food continues to be subject to VAT at 20% or 0% under the existing rules.
  • Hot takeaway food and hot takeaway non-alcoholic drinks.
  • Sleeping accommodation such as hotels and similar establishments, holiday accommodation, caravan and tent pitch fees and associated families
  • Admissions to theatres, shows, fairs, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities. If a business charges admission fees that are currently exempt then that will take precedence and the admission will not qualify for the reduced rate. The reduced rate does not apply to admission to sporting events.

From 1 October 2021, all eligible businesses should apply the interim VAT rate of 12.5% on takings of supplies made of the goods and services listed above and on issued invoices until 31 March 2022.

Care will need to be taken where goods and services were supplied prior to 1 October 2021 but invoiced after 1 October 2021, and vice versa.

For example, in some circumstances, if a business has received a payment or deposit before 15 July 2020 but supplies the goods or services after 15 July 2020, then the business can choose to charge and account for VAT at 5% by issuing a credit note within 45 days of the rate change.

Flat Rate Scheme Changes
HMRC have updated the flat rate percentages to take account of the new reduced rate for VAT.
As of 15 July 2020 until 30 September 2021 the following sector rates apply:

  • Catering 4.5% (reduced from 12.5%)
  • Hotels 0% (reduced from 10.5%)
  • Pubs 1% (reduced from 6.5%)

From 1 October 2021 until 31 March 2022 the following sector rates apply:

  • Catering 8.5% (interim VAT rate)
  • Hotels 5.5% (interim VAT rate)
  • Pubs 4% (interim VAT rate)

Businesses that operate outside of the hospitality, holiday accommodation and attraction sectors may also be impacted by the VAT rate change if they make purchases from these sectors.

You’ll be able to apply the new VAT code in QuickBooks, Xero and other software after 1st October 2021.

Further detailed guidance can be found on the gov.uk websites HERE and HERE.

Are you unsure of what you can reclaim VAT on? Here we’ve explained what you can and cannot reclaim any VAT on:

As a business, you can usually claim back any VAT you have paid on goods and services bought for business use, for which you have a valid VAT receipt. Remember, no receipt, no reclaim!

If the item you buy is also for personal use, you can only claim back a proportion of the VAT paid, only the actual business element of this item, mobile phone bills are a good example. You might use your mobile 60% for work and 40% for personal, in which case you can only claim back the VAT on the 60% of the purchase price and plan. You need to ensure that you have adequate records to support your VAT reclaim which shows how you calculated the business use percentage.

It’s usually a good idea to have separate phone bills for personal and business use, this way it’s easier when claiming back any VAT.

A Valid VAT Receipt

A valid VAT receipt includes the following:

  • Name, Address and VAT number of the supplier
  • Your name and address
  • The date
  • A description of the goods or services
  • The cost before VAT
  • The separate VAT amount
  • The total amount that contains the VAT.

Having said that, many VAT receipts are actually a shorter version, simply containing the total amount paid, the seller’s name and VAT number. To work out any VAT quickly this website is very helpful – http://www.vatcalculator.co.uk/ . This is the amount you can reclaim.

Can you claim the VAT back on items brought in the EU?

Do you buy goods from the EU?

You can’t claim for goods bought in EU countries, although you may be able to reclaim VAT paid via the electronic cross-border refund system. You can reclaim VAT on products and services bought during the refund period, plus VAT on goods imported to Britain during the same timescale.

You can’t claim for VAT that has been invoiced incorrectly, where VAT has been levied on sending goods to another member state or exported items outside the EU.

Things you cannot reclaim VAT for

You can’t reclaim VAT on insurance, salaries, PAYE, postage, bank interest or business entertainment. However, VAT on entertainment for overseas customers can on occasions be reclaimed when that entertainment is very basic.

You can’t claim for anything you’ve bought specifically for personal use, or the products and services your business uses from VAT-exempt supplies. Also items you buy under VAT second-hand margin schemes and business assets transferred to you as a going concern are also exempt from VAT reclaim.

Not registered for VAT?

When your business isn’t registered for VAT, you don’t have to charge VAT to your customers, however, you also can’t claim any VAT back. That’s why so many smaller businesses try to stay under the VAT radar, under the registration limit (the current threshold is £83,000 – see https://www.gov.uk/vat-registration/when-to-register for further details) . Charging VAT to a customer who isn’t registered for VAT means they’ll have to cover this cost as well.

What about VAT post-Brexit?

Domestic VAT rules remain the same following the end of the Brexit transition period, however, VAT rules relating to imports and exports have changed.

Prior to Brexit and during the transition period, the UK was part of a regime called the EU VAT Regime, which meant that a UK business didn’t have to register for VAT in each EU country. Now though, as of 1st January 2021 Great Britain now has to treat EU countries like they do countries outside of the EU.

It can get very confusing so we’d suggest taking a look at this article by Sage explaining this in a bit more detail.

Do you need support with the VAT system?

If you need VAT support, we’re here to help, find your nearest Rosemary Bookkeeper today.

Don’t miss these important deadlines the 2021/22 tax season, ensure you’ve got all of your bookkeeping organised for the year.

MAY 2021

1st – Due date for payment of Corporation Tax for period ended 31st July 2020

3rd – Deadline for submitting P46 for employees whose car/fuel benefits changed during the quarter to 5th April 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st March 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with February, May, August or November Year Ends

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st May 2020 as year end


JUNE 2021

1st – Due date for payment of Corporation Tax for period ended 31st August 2020

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th April 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with March, June, September or December Year Ends

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

30th – Corporation Tax Returns filed by companies with 30th June 2020 as year end


JULY 2021

1st – Due date for payment of Corporation Tax for period ended 30th September 2020

5th – Deadline for reaching PAYE Settlement Agreement for 2020/21

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st May 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Second Payment on Account 2020/21 due

31st – Corporation Tax Returns filed by companies with 31st July 2020 as year-end


AUGUST 2021

1st – Due date for payment of Corporation Tax for period ended 31st October 2020

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th June 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st August 2020 as year end


SEPTEMBER 2021

1st – Due date for payment of Corporation Tax for period ended 30th November 2020

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st July 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with year end 31st March 2022

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

30th – Corporation Tax Returns filed by companies with 30th September 2020 as year end


OCTOBER 2021

1st – Due date for payment of Corporation Tax for period ended 31st December 2020

5th – Deadline for Self Assessment registration to notify HMRC of Income/Capital Gains Tax for 2020/2021

7th – Deadline for VAT returns and payments of Accounting Quarter period ending 31st August 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st October 2020 as year-end

31st – Deadline for postal submission of Self Assessment Tax Returns for tax year ended 5th April 2021 to be received by HMRC


NOVEMBER 2021

1st – Due date for payment of Corporation Tax for period ended 31st January 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th September 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

30th – Corporation Tax Returns filed by companies with 30th November 2020 as year-end


DECEMBER 2021

1st – Due date for payment of Corporation Tax for period ended 28th February 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st October 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with year-end 31st March 2022

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Due date to file Corporation Tax for companies with 31st December 2020 year-end


JANUARY 2022

1st – Due date for payment of Corporation Tax for period ended 31st March 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th November 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Deadline for filing Self Assessment Tax Returns for tax year ended 5th April 2021 and 2020/2021 Capital Gains Tax

31st – Balancing payment of tax due for 2019-2020 and first Payment on Account for Income Tax for 2021/2022

31st – Due date to file Corporation Tax for companies with 31st January 2021 year-end


FEBRUARY 2022

1st – Due date for payment of Corporation Tax for period ended 30th April 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st December 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

28th – Due date to file Corporation Tax for companies with 28th February 2021 year-end


MARCH 2022

1st – Due date for payment of Corporation Tax for period ended 31st May 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st January 2022

14th – Due date for Corporation Tax quarterly instalment for large companies with year-end 31st March 2022 and 31st December 2022

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st March 2021 as year-end


APRIL 2022

1st – Due date for payment of Corporation Tax for period ended 30th June 2021

5th – 2021/2022 Tax Year Ends

6th – 2022/2023 Tax Year Begins

6th – IR35 in the private sector comes into force

30th – Corporation Tax Returns filed by companies with 30th April 2021 as year-end

 

We can help with your bookkeeping needs, find your nearest Rosemary Bookkeeper here for more information on our services.

The UK exited the EU VAT regime, Customs Union and Single Market from 1 January 2021. This means the loss of a range of compliance simplifications and the imposition of customs declarations, goods regulations, services and import VAT.

In this article HERE you can find an outline of the major changes affecting VAT treatment after the UK leaving the EU.

Here you can find the most recent guidance from the government; Import goods into the UK: step by step

If you import goods into Great Britain from outside the UK or from outside the EU to Northern Ireland you may have to pay import VAT on goods. For supplies of services from outside the UK you must account for VAT under the reverse charge procedure.

Guidance on Paying VAT on imports from outside the UK to Great Britain and from outside the EU to Northern Ireland

Export goods from the UK: step by step
Guidance on how and when you can apply zero-rated VAT to exported goods – Goods exported from the UK from 1 January 2021

TOMS – Tour Operators Margin Scheme 

If you supply digital services to private consumers you can read the guidance here – VAT rules for supplies of digital services to consumers 

CIS VAT changes

If you’re in the construction sector changes on VAT are coming on 1st March 2021.

VAT reverse charge technical guide HERE.

VAT is due when a VAT invoice is issued, or payment is received, whichever is earlier.

For invoices issued for specified supplies that become liable to the reverse charge, the VAT treatment for invoices with a tax point:

  • before 1 March 2021 – the normal VAT rules will apply and you should charge VAT at the appropriate rate on your supplies
  • on or after 1 March 2021 – the domestic reverse charge will apply

At Rosemary Bookkeeping Newbury & Basingstoke, we are pleased to say we are Quickbooks Making Tax Digital Certified.

If you need to get ready for Making Tax Digital and don’t know where to start, what it means, or if it applies to you?

Get in touch today and we can arrange a free bookkeeping health check and see how we can help with Making Tax Digital.

MTD advisor

about making tax digital

Making Tax Digital will change the way your business pays its taxes to HMRC. It is a scheme by the UK government to make it easier for businesses and individuals to manage their taxes. The first stage comes into play on 1st April 2019 and is called Making Tax Digital for VAT.

From that date, VAT-registered businesses (those companies with their turnover over the VAT threshold, which is currently £85,000) will be required to digitally submit their tax records to HMRC. They will no longer be able to do this via HMRC’s Government Gateway website.

What does that mean for businesses?

If you are VAT registered, then you will need to move to digital record keeping (i.e. use software to record all your VAT invoices and receipts). If you are not VAT registered, then digital record keeping is optional for the time being.

If you are VAT registered and do not yet use software to record your VAT information (invoices to customers and from suppliers) you need to start planning for Making Tax Digital. The implementation date is 1st April 2019.

My company uses spreadsheets for business records – what will that mean for me?

You can still continue to use spreadsheets to digitally record and store your business records. However, you will need to make sure those spreadsheets can digitally submit any necessary data to HMRC.

My business is not VAT registered and I don’t know if I will earn £85,000 this year. What should I do?

You will only be required to follow the rules of Making Tax Digital if your turnover exceeds £85,000 – the VAT threshold. You will need to keep track of your turnover over the last 12 months on a cumulative basis, and if at any point your total turnover exceeds £85,000 you will need to register for VAT.

What if I temporarily go over the VAT threshold?

If your business isn’t VAT registered and you do go over the threshold, you will need to comply with the requirements of Making Tax Digital. If your taxable turnover then drops below the threshold, you still need to continue complying with the legislation.

My business is under the VAT threshold, but I want to be part of Making Tax Digital. Is that possible?

Yes. Your business can choose to waive exemption if you wish to voluntarily follow the requirements of Making Tax Digital.

It’s important to note that “Making Tax Digital” is only coming in to play for VAT registered businesses in April 2019. For all other businesses, it comes into force in April 2020.

With this in mind, it’s a great idea to get started on digital bookkeeping so you are ready for the change. Starting early will help you to understand the workload involved and you will have plenty of time to decide if outsourcing to a well prepared Bookkeeper would be the best option for you.

Outsourcing is actually a very realistic option for business owners so don’t be scared. If you’re still not sure, Rosemary Bookkeeping are more than happy to come and help you find out about making tax digital or just do a 1-2-1 health check with you and give you the opportunity to decide for yourself if you think you could benefit with no obligation, contact your local Rosemary Bookkeeper today.