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10 most common online Self Assessment issues

 

The deadline of the 31st January 2016 is fast approaching for filing 2014/15 Self Assessments online, thousands will probably file late and 50% will leave filing until January.

Here are 10 of the most common problems, issues and errors that come up.

  1. Not leaving enough time to register for Self-Assessment – It can take 20 working days (this is usually 4 weeks) to complete the registration process, then for online returns, allow 10 working days (21 if you’re abroad) to register because HM Revenue and Customs (HMRC) posts you an activation code.
  2. Lost Login details – Your account will be locked for 2 hours if you enter the wrong user ID or password 3 times.
  3. Leaving it too late to get help – If you need help from an accountant don’t leave it too late as they will need to carryout AML and other checks before they can file your return, they will also need your UTR
  4. Failing to complete all the parts of the return – For example leaving out PAYE information
  5. Failing to press ‘submit’ – you would be surprised how many people complete the return and then stop without submitting or leave submission and then forget to do it
  6. Failing to check the calculation – Most people do a rough calculation of what they owe but fail to check the HMRC calculation only to find out they have made a mistake
  7. Using invalid characters such as # ‘ ” in boxes where these are not allowed
  8. Not paying the tax they owe by 31st January
  9. Failing to explain where estimates and provisional sums have been used

 

How can you limit a Directors/Personal Guarantee?

If you have a Business and you want to borrow money, you will probably be asked to give a Personal or Directors Guarantee.

Most Directors don’t want to give guarantees as it makes them liable rather than their business and the purpose of having a limited company was to limit their personal liability.

So it’s a common dilemma.

What can you do to reduce your risk?

  1. Would you be prepared to pay a higher rate of interest? there are lenders who for an increased rate will agree not to ask for PG’s or DG’s
  2. If you aren’t prepared to give a guarantee you should make this clear upfront with the potential lender, it will save time and money.
  3. Limit the terms of the Guarantee – don’t let the guarantee be unlimited or unconditional
  4. Agree terms for relief – for example when a % of the debt has been repaid
  5. Decrease the Guarantee if the business achieves specific goals, for example a target net worth
  6. Set rules for when the Guarantee can be called on for example when a set number of repayments are missed
  7. Avoid ‘Joint and Several’ Guarantees as not all business owners may have equal shares
  8. Avoid co-signing by Spouses
  9. Avoid using your main residence in the guarantee
  10. Consider whether Personal Guarantee Insurance could be obtained and used

10 things a new business must do to pay less tax

A record breaking 581,173 businesses were registered with Companies House in 2014 showing an accelerated increase on previous years with 526,447 and 484,224 recorded in 2013 and 2012 respectively.

In 2014 the UK had the fastest growth in Self Employed workers in Western Europe!

So what should start ups do to pay less tax?

  1. Choose the right business structure for your business – most businesses start out as sole traders but once they start making profits convert to limited companies, this is because sole traders pay more tax than company structures
  2. Choose the best VAT Schemeyou might be better off with Flat Rate or Cash Accounting
  3. Get an Accountant and use accounting software – the penalties and fines for getting your tax wrong can be huge!
  4. Employ your family – Children can legally work from the age of 13 which means they can perform activities which are relevant and justifiable in your business. Each member of your family has a tax free allowance of £10,600 (2015/16)
  5. Avoid earning more than £100,000 – For all ages, the personal allowance reduces where taxable income is above £100,000 – by £1 for every £2 of income above this limit, so that the personal allowance is lost once taxable income exceeds £121,200 (2015/16).
  6. Pay into your Pension – Currently you can pay £40,000 per year into your pension
  7. Pay Dividends – Generally directors will take a low directors fee and the rest of their income in Dividends
  8. Claim Expenses – You may well have an office at home and use your car for business
  9. Use Company Assets – Sometime the Benefit in Kind Tax works in your favour, so you could get the business to buy the assets for you to use for example a commercial vehicle or computer equipment
  10. Buy Assets – You should be able to buy assets with a loan or on credit but you will get the tax relief as soon as you take ownership

BBC’s The One Show visit Integrity Accountancy

Staff at the BBC’s The One Show contacted Integrity Accountancy Services, to discuss their experience in trying to get through on the telephone to HMRC, following a recent report by Which? Magazine, showing that waiting times to HMRC had almost doubled from their research in 2014.

Pete Moorey of Which? Magazine said “It does look like HMRC are improving. They told us that they were getting 3000 more staff to work on the call centres and that does seem to be working because we’re getting quicker calls today by phone. Given that we have 6 weeks until the end of tax return deadline, we need to keep on the pressure with HMRC but they are clearlyresponding.”

Pete Moorey of Which? Magazine, along with presenter Lucy Siegle and producer Robin Anderson from The One Show, visited our offices to see how long it took us to get through to HMRC. Surprisingly 1 call was answered in only 6 minutes whilst another took 25 minutes for the call to be answered.

Shohaib Shafiq ACMA CGMA added although you could contact HMRC by Twitter, when individuals wanted an answer from HMRC that was relevant to them, they should contact HMRC by phone as personal details must not to be disclosed on Twitter.

Shohaib said “It was really good to have the BBC and reporters from Which? Magazine, come to visit us so that we could demonstrate the issues that people are having with HMRC. We demonstrated that HMRC are in fact in improving on the call answering times, where we’ve found that they answered our calls within 15 minutes on average. This is quite an improvement on waiting times of almost an hour earlier this year. We found that it’s best to call before 9am in the morning and between 2 and 4pm. Our clients really appreciate the pro-active manner in which we work, so hopefully the steps that HMRC have taken to bring in additional staff will feed through to shorter waiting times.”

The feature was broadcast on BBC’s The One Show on Thursday 17th December 2015, and it is available to watch on the BBC iPlayer until 16 January 2016.




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