Death and Taxes

Are you struggling with you responsibilities as a Personal Representative (PR) due to someone’s death, or are you getting prepared?

It is now, in most cases, possible to arrange for HMRC, the Department for Work and Pensions (DWP) and most other government departments to be notified of a death at one and the same time through the Tell Us Once (TUO) service with is available in most parts of England, Wales and Scotland.  Normally the registrar will offer the service to anyone registering a death, but it can also be accessed at tinyurl.com/TX-GOV-TUO.  In Northern Ireland the Bereavement Service (tinyurl.com/TX-NIGOV-BS) offers bereaved relatives a single point of contact for the Social Security Agency but not for any other department.

If TUO is not used or not available, the PRs must themselves notify HMRC of the death via the bereavement helpline 0300 200 3300.

After being notified via TUO, HMRC should make contact with the PRs to settle the deceased’s tax affairs.  If this does not happen, the PRs may themselves have to initiate contact.  Even if HMRC does respond, the PRs should check that the information on which any assessment or repayment is based is correct.

For PRs administering the estate themselves, there is a useful checklist at tinyurl.com/TX-HMRC-CHKLST which is adequate for straightforward cases.  The Low Income Tax Reform Group (LITRG) has also published a Tax at bereavement factsheet which is available at tinyurl.com/TX-LITRG-FAQ.

If you would like more advice, or wish us to check any assessments produced by HMRC, please do not hesitate to contact us.  We can also complete the Personal Tax Returns to the Date of Death for you, and any necessary reporting requirements for the Estate.  Please contact us at Chrissie@bennewith.co.uk.

on 6 April the minimum amount employers must pay into workplace pensions is going up

On 6 April, by law, the minimum amount employers have to pay into a workplace pensions goes up to 2% of qualifiying earnings, whilst staff will now contribute 3% – making a combined total minimum contribution of 5%.

Automatic enrolment has so far out more than nine million workers into workplace pension schemes.

All of these people are now on the road to saving for a better retirement, but it’s only the start.

Now that they’re saving for their future, the next step in automatic enrolment is for the amount of staff pay into their pensions to increase, helping them to gradually adjust to saving money for their pension pot.  Employers pay more in too, growing it even further.  In fact, if they want to, employers can contribute more than the minimum amount they’re required to, meaning staff don’t need to pay in quite so much – as long as the total contribution is still at least 5%.

Please do contact us as A J Bennewith & Co if you have any queries, or would like us to take over your payroll for you.

It is recommended that all employers write to their staff to let them know about the increase in contribution, and you can find letter templates at the following address: http://www.thepensionsregulator.gov.uk/doc-library/automatic-enrolment-letter-templates.aspx?ed2f26df2d9c416fbddddd2330a778c6=kxijvkxsj-kxlxrribl

Minimum contributions will increase again on 6 April 2019, to 3% for the employer and 5% for staff, making a combined total minimum amount of 8% of qualifying earnings. Rates will then stay at this level, unless the government makes changes to automatic enrolment in the future.

This information was taken from The Pensions Regulator and you can find out more on their website:    http://www.thepensionsregulator.gov.uk/en/employers

You can also possibly reduce the amount of income tax you pay by making Voluntary Contributions to a pension.  Please contact us at info@bennewith.co.uk if you would like more information.

 

National Minimum and Living Wage rates change on 1st April 2018

On 1st April 2018 the National Minimum and National Living Wage rates change.

This includes the largest increases in a decade for the rates that apply to 18-20 and 21-24 year olds.

You can view the new rates on the GOV.UK webpage National Minimum Wage and National Living Wage rates and see if you need to make any changes.

Contact us at A J Bennewith & Co to update your payroll.

If you don’t use us for your payroll, contact us for competitive quotes for Payroll and other services we can supply.

Are you expecting a tax repayment? Check HMRC repayment arrangements

In April 2015, HMRC systems were brought in line with banking industry standards so that, where possible, repayments are made back to the latest credit or debit card used to make a payment on the self assessment accounts.

Although it does mention this in the notes of the tax return, and during the process, many taxpayers are at risk of being caught out and suffering hardship as a result.

There are discussions taking place, but they suggest that there is no way of stopping HMRC’s system automatically attempting to repay a card.  In such circumstances it is very important that taxpayers are aware of this and that they understand that their tax repayment may not be made where they are expecting it to be.

At A J Bennewith & Co we will ask you to check for your repayment and let us know if there have been any issues.  It is important that you have informed us of any bank details when a repayment needs to be issued.  We will ask you to check the information on page TR6 of the return, before signing it and returning it to us.

If you use an online self assessment account please watch out for this.  If necessary you can contact us to complete your self-assessment on your behalf.  Please email, or telephone us for a quote if necessary.

Remember the deadline is 31 January 2018, for the return and any liabilities due.

Interest Rate Rises for First Time in Ten Years: What Does it Mean for You?

For the first time in ten years, the Bank of England has increased the UK’s interest rate from 0.25% to 0.5%.  But what does the change mean for you?

Who welcomes the change?

Savers are the biggest winners from this announcement as they are likely to see a higher return on their savings.  Some banks are holding off putting their own rates up, but others are following suit.

House Owners with Mortgages

This is where the sting is in the tail.  An increase in interest rates will see mortgage repayment rates increase.  It is thought that nearly four million households will face higher mortgage interest repayments.

Interest from savings may help towards the cost but in a lot of cases it will not be enough to cover it unless you have a lot put away.

Winners

For retirees buying an annuity, that rate rise is good news.  Annuity rates follow interest rates or yields of long-term government bonds, known as gilts.  As the base rates rise, these yields do too, giving retirees better value for money.

Businesses

The Federation of Small Businesses (FSB) criticised the decision, saying that this could not come at a worse time for small businesses.  The rate rise will mean yet more cost pressures for small firms as they battle spiralling prices and flagging consumer demand.

National Chairman Mike Cherry suggested that the rate rise could lead to businesses viewing borrowing as more risky which could ‘threaten investment, growth and job creation.’

At the end of the day it has only taken the rate back to the level seen in August 2016 and at 0.5% it is still very low.

The pound has also suffered a dip in value, falling by more than a cent against both the dollar and the euro.

Mark Carney defended the decision by saying it was time to ‘take the foot of the accelerator’.  He said, ‘To be clear, even after today’s rate increase, monetary policy will provide significant support to jobs and activity.  And the MPC continues to expect that any future increases in interest rates would be at a gradual pace and to a limited extent’.

Making Tax Digital

The Government recently announced that the start date for digitalisation of the UK tax system has been pushed back to April 2019.

There has been intense lobbying from businesses and professional bodies (some on which Tony and Chrissie stand) and the concerns raised by the Treasury Select Committee regarding the pace of change.  Whilst it is clear that MTD (Making Tax Digital) is here to stay, we welcome the news that our clients will be given more time to  make the transition to the new digital tax system.

Under the Government’s new timeline only unincorporated businesses and landlords with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and for VAT purposes only from April 2019.  Businesses will now not be required to keep digital records for income tax until April 2020 at the earliest.

We will be contacting our clients that this will effect as we can assist you to prepare for the transition to MTD for VAT reporting from April 2019.

If you are not one of our clients you can still contact us for assistance and advice.  We offer a complimentary 1 hour consultation to help you decide the correct way forward for you.  Contact us at info@bennewith.co.uk

 

Auto Enrolment for small businesses

A new step-by-step guide to help small businesses get ready for their automatic enrolment duties has been launched by the Pensions Regulator. The online guide has been written specifically for employers with between 1 and 50 staff, and explains how to complete key tasks such as; knowing when to be ready, providing a point of contact for the regulator, checking who needs to be enrolled and creating a plan of action.

New research published by the Pensions Regulator shows that while levels of awareness of auto enrolment remain high amongst all employers, more than 20% of those due to stage between June and November this year had not yet drawn up plans to meet their dates.  The regulator has warned those small and micro employers that they must start preparing for the enrolment duties.

New tax year – new rates and allowances

As businesses enter the new tax year on 6 April we are urging businesses to prepare for the new tax arrangements.  UK companies will pay a reduced rate of corporation tax on their profits (cut to 20%).  Employers hiring under 21s will also no longer face National Insurance Contribution tax bills.

For individuals, the standard personal allowance is increased to £10,600, but this could be larger if you receive the blind persons allowance or were born before 6 April 1938.  For those born before 6 April 1935 you may be able to claim the Married Couple’s Allowance, for others you may be able to claim the new Marriage Allowance.  If you receive over £50,000 per annum in income you may have to pay all, or part of any Child Benefit received.  Please contact someone in the office to find the most efficient way to do this.

https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2015-16/tax-and-tax-credit-rates-and-thresholds-for-2015-16

Charity Audit threshold changes take effect

The government has published a detailed document surmising the Charity accounting framework.

Charity audit thresholds have changed in an effort to reduce the regulatory burden for charities, with changes taking effect from 31/03/2015.

The basic audit threshold changes from £500,000 to £1m, meaning fewer charities will be required to have their accounts formally audited.

Those charities can instead have their accounts independently examined to ensure a high level of assurance remains.  A service that we can offer, please contact Tony if you are interested in knowing more.

Other changes that come into effect include:

  • Increasing the aggregate gross income threshold at which point charities should have group accounts from £500,000 to £1m
  • Increasing the preparation threshold for group accounts from £500,000 to £1m