Employer Return by 19 February 2017

It may happen that as an employer, you did not pay anybody for a PAYE month such as the month running from 6 January to 5 February 2017. In that case you need to file an Employer Payment Summary as a NIL return by 19 February 2017. This is unfortunately something which may be forgotten about.

This is an argument for getting a local accountant and business advisor or a payroll bureau to do your wages. We keep a diary and do a number of payrolls at about the same time every month. Our payroll files are bright yellow like the P30BC booklet so we do not overlook them. We make sure we don’t forget.

CIS Returns for the Month ended 5 February 2017

Construction Industry Scheme returns for the month from 6 January to 5 February 2017 need to be submitted by 19 February if you are a principal contractor. Even a NIL return needs to be submitted online in the usual way, and you should never overlook this.

You could engage a local accountant such as David Porthouse and Co to do your CIS returns. We do a batch of returns on the same date every month, and we keep a diary to remind us. Our CIS files are bright yellow so we can hardly overlook them when we put them out to be done! We intend to be the accountant Carlisle businesses can look to for a regular service.

Our SA361 System

We hold the superstitious belief that if you prepare for the worst, then it doesn’t happen. If you fail to prepare, then it does. It’s often like that in accountancy. Here we describe something that we don’t ever want to use.

We have a spreadsheet which goes by the name of SA361. The first page of this spreadsheet is just a hotlink to the page on the Internet where we can get an SA Payments advice produced. If a client has left Self Assessment to the last minute, then a cheque can be posted off to the Revenue up to January 28th and if this is for the right amount of tax for the return which we will submit in early February, then there won’t be any penalties.

Paranoia time !  We don’t want to look for the first time on January 28th and discover that the page on the Internet has now vanished. We therefore have our own SA Payments advice lookalike set up on the second page of our spreadsheet. We can type in the details and generate a PDF file to e-mail to the client, which we can also do with the official system.

The third page of the spreadsheet is a mockup of the Revenue’s BX5 5BD envelope so we can print our own. This is left with the client at the first consultation for possible use later.

This system can be used without a UTR. That is something we would rather avoid, so we will apply for the UTR as soon as possible, and then encourage the client to telephone the Revenue and see if a friendly Revenue official will give it over the phone to our “customer”, which is what the SA Payments advice calls our client.

If the SA Payments advice is used without a UTR, then the payment will go to a National Insurance suspense account. The fourth page of our spreadsheet reminds us that the procedure to follow now is NOT to apply online for authorisation, but instead to send the 64-8 off by post once we know the UTR. We will also post a request with a photocopy of the 64-8 asking for the payment to be reallocated.

After a few weeks, the client will be visible online, and we can look at the results of our work. If there is an issue, we can telephone the Revenue to get it sorted, knowing of course that we are properly authorised by form 64-8 to act on behalf of the client.

Phew !  This is a long procedure which we would prefer to avoid using. We will be campaigning on the Internet next year to persuade prospective clients to apply early for that UTR.

Missing the 31 January 2017 deadline for Company Accounts

If you should have submitted your company’s accounts by 31 January 2017, and you have missed this deadline, then you will need to pay a penalty of £150. This penalty will be increased to £375 if you miss another deadline on 28 February 2017, and a Carlisle accountant such as David Porthouse and Co can readily prepare a set of accounts within a month. It’s time to take action! These penalties rise to £300 and £750 on a second occasion.

So Here We Are on 1st February …

The Self Assessment deadline was yesterday, so if you haven’t filed a tax return then you are now £100 poorer. The next significant deadline is 2nd March when you will need to pay 5% on any outstanding tax. If you get a move on right now  (Wednesday February 1st 2017)  then your accountant should be able to meet this deadline.

Looking back over the last month or so, we have made some notes on what to do next year. We will be plugging the need to get a UTR as soon as possible in 2018. For a new client who comes to us, we will apply online straight away, so it should be available in 7-10 days. We will encourage clients to telephone the Revenue with application details a few days after the application, and see if they can get the UTR earlier over the phone. When we get the UTR, we will check it at once with our software. The first digit of the 10-digit UTR is a check digit which needs to be right, and any transcription errors will show up at once.

With the UTR, the client can pay before the deadline either electronically or by cheque in the post, and we have spreadsheet systems to assist with either method. The accountant’s tax software can file the return without needing to wait for authorisation. Life is easy.

Without the UTR, there is always the SA361 procedure as a backup, but this involves a payment being held in a suspense account, which means that there is more to go wrong. This is best avoided. Get that UTR !

Net Monthly Account and the 25 January 2017 Cheque Run

Large companies which need to pay their suppliers will often do a computerised cheque run round about the 24th to the 26th of the month. If they have received several invoices from a supplier, then they will want to settle them with one big cheque, so they will expect to see a statement from the supplier totalling all invoices sent. At the practical level, the supplier should summarise all invoices sent in December 2016 on a statement which the large company receives on 1 January, which is then settled about today. If you work it out, you will see that an average of 45 days’ credit is being given. The invoice will say “30 days or net monthly account”, but an average time of 40 – 45 days being taken to settle it is normal. Talk with local accountants such as David Porthouse and Co if you would like more advice. We aim to be general-purpose business advisors as well as preparers of accounts and tax returns.

Two Significant Income Tax Deadlines in 2017

Income tax returns for the year ended 5 April 2016 need to be submitted by 31 January 2017, or a penalty of £100 will be charged. Any tax that is due needs to be paid by 2 March 2017, or a 5% surcharge will be imposed.

To file an income tax return, you need a Unique Taxpayer Reference, which is a 10-digit number in a format like 12345 67890. If you apply for one, then it can take 7-10 days for the Revenue to reply. If you have left things this long (24 January), then you can expect to be £100 poorer, and really you should be thinking about the 2 March deadline.

If you act NOW, we would be able to meet the 2 March deadline easily. We use the latest technology to prepare accounts at high speed, and the 7-10 days delay annoys us as well. We want to be the local accountants Carlisle businesses turn to, and it is disappointing when the Revenue don’t seem to want to be part of the team after all their talk about taxpayers being customers.

VAT Return Due by 7 February 2017

Businesses with a Value Added Tax quarter which ends on 31 December 2016 will need to submit their return by 7 February 2017. The return must be submitted electronically, and any payment which is due must also be made electronically by the same date.

Look for a Carlisle bookkeeper to do your VAT returns. Most accountants in town will happily do VAT as part of the service. In our case we do the VAT returns for a fee, but we allow 25% off the annual accounts fee because there is no duplication of work in our efficient system, and our fees are able to reflect this.

Will European Politicians Shoot Themselves in the Foot?

European politicians have taken to arguing that once the United Kingdom leaves the European Union, it should not get a better deal that it had through EU membership. This is a sentiment we can all understand. If Scotland left the UK, we might be saying something similar.

The difficulty is that they sell more to us than we do to them. This includes goods and services provided cross-frontier, but also the labour of (future) EU nationals working in this country. If they take apparently justifiable measures and we retaliate in kind, but no more than that, then it is them who will be worse off.

Objectively EU membership has been a failure for the UK, and it is now reasonable for us to try our luck elsewhere. Trade deals with all the English-speaking countries are an obvious start, and there are many more English speakers today, thanks to the Internet, than there were in 1972.

Alternatives to European Wines

With us leaving the European Union, it is time to start thinking about alternatives to European wines, at least as accompaniments to food. This is likely to mean wines from the Southern Hemisphere.

New Zealand and Chile can supply pinot noir as alternatives to red Burgundy. You need to buy it and try it first, but the results can be just as good, or just as disappointing, as any Burgundy.

South Africa can supply dry red wines as alternatives to claret and Cotes du Rhone. Again drink around and try it.

Look at Australia for white wines like chardonnay and viognier. Look at New Zealand for sauvignon blanc.

Spanish wines like Rioja with graciano content have no competition elsewhere, but fortunately they are seldom overpriced. Just avoid expensive Rioja which is merely 100% tempranillo. Port and sherry have no competition, but again they are not overpriced.

These are preliminary comments. I will be trying things out and reporting back in the future.