Unless that sum is already covered by PAYE tax payments, or payments made earlier on account, you will required to clear it by making a ‘balancing payment’, which may also include capital gains tax and/or student loan repayments if applicable.

In most cases, the balancing payment must be made by January 31st after the end of the tax year in question so it is likely you will make payment at the same time as filing your self-assessment return. If you are not able to make payment by the due date, interest will be accrued continually until the balance is settled in full.

If you are concerned about your tax liability and would like to understand how it might be minimised, call us for a chat on 01327 811164 or email info@accountsassist.com

If you’ve never filed online before, you will need to register with HMRC’s self-assessment online service, at www.hmrc.gov.uk/sa.

Click ‘Register for Self Assessment Online’ in the top right hand corner, fill in your details and you’ll be sent an activation code which will be issued in the post. This can take a week or more, so if you haven’t already, now is the time to act! Anyone who fails to meet the 31 January deadline will be fined £100, regardless of whether or not any tax is owed.

When you gain access to the system, you will be able to complete your details online, entering in your income details as you would on the old paper forms. A key benefit of filing online, however, is that when you complete your details, you will receive instant confirmation that your return has been received and your tax liability will be calculated automatically. You will be invited to make a payment, if there is an amount owing.

If you are concerned about filing your return and would like some assistance, call us for a chat on 01327 811164 or email info@accountsassist.com

Your return will show your income (what you’ve earned) and capital gains (gross income) and allow a final figure to be produced stating the amount of income tax you are liable to pay.

Where can you get one?

Before you can file your self-assessment tax return, you will need to register with the HMRC by visiting http://www.hmrc.gov.uk/sa/register.htm. HMRC will then use the information you provide to set up a record for you.

You will then receive a ten-digit tax reference, called a Unique Taxpayer Reference, which will be used on all correspondence and login details to allow you to file your future returns online.

HMRC will send you a letter each year, usually in April, telling you to complete your tax return. If you haven’t received this letter by the end of April, you should get in touch with HMRC.

You can submit your tax return online or on paper.

We’ve put a handy guide below of all the key deadlines for 2012:

1. For online submission of 10/11 tax year information – Midnight 31st January

2. For ‘balancing payment’ – 31st January

3. For first payment on account self-assessment payment – 31st January

4. For second payment on account of self-assessment for this tax year – 31st July

5. For second payment of self-assessment for previous tax year – 31st July

6. For paper submission of 11/12 tax year information – 31st October

If you would like more information on how to keep on top of your self assessment tax return and payments, call us today on 01327 811164.

Getting on the wrong side of the tax system can create huge problems that are easy to avoid if you do everything right to start with. Check out our guide of what you need to do if you’re a private teacher.

• Keep a record of all your incomings – Private teachers/coaches tend to be paid cash in hand and this why HMRC is now targeting private teachers to make sure they are paying the right amount of tax.
• Keep your receipts for business purchases – As well as keeping a record of your incomings you need to keep a record of your business expenses. This includes all business purchases you make, anything from supplies to travel costs need to be recorded.
• Keep all documentation from HMRC – This is your own record of your communications with HMRC.

What to do if you receive a letter from HMRC stating they are carrying out inquiries into your tax affairs

Firstly, don’t panic, stay calm and give detailed information back to HMRC.

1. Contacting HMRC – When you first make contact with HMRC fully answer all their questions in as much detail as possible, referring to your own records. Contact information is available on their website (www.hmrc.gov.uk).
2. Co-operate – Remember that HMRC has a legal right to demand information from you and other people you have worked with e.g. your bank manager, your customers, and your suppliers. The more you co-operate with HMRC the easier and quicker any issues will be resolved.
3. Talk to a professional – Talking to a professional can sometimes prevent you from being the subject of an inquiry to start with. If you do become a target of an investigation, consider engaging a professional to help guide you.

Who is it available to?

For a body to be able to claim back gift aid, it must be a registered UK charity.

How to give with gift aid

Taxpayers who want to donate to charity and include gift aid, simply have to complete a gift aid declaration. The declaration form is simple to complete and can be used for every donation you make to the same charity (if you make regular donations).

To complete a gift aid declaration form you must provide the following information:

• Your full name (including middle names)
• Your home address
• Charity name, and maybe address and charity’s registration number
• Your donation amount
• The form should also clearly state that it is a gift aid donation.

Often, this form will be included as part of the standard online donation process, making it very simple to do.

Declaring gift aid to HMRC

Like everything to do with declaring to HMRC you need to keep a record of your donations. These may come in the form of receipts, copies of the payment slips or bank statements.

If you complete your own tax return, you can declare your gift aid payments on it by completing the gift aid donations section. If you don’t complete a tax return you can declare your payments on a P810 form, which you can pick up from your local tax office.

Sometimes employers choose to give an employee a company car to commute to work instead of giving them a pay rise, travel costs or other employee benefits. Company cars are typically given to sales managers, who need to travel long distances or management members. A company van is typically given to plumbers, tradesman etc that need a van to enable them to do their job.

Company car private usage is taxable on the employee. The employer is responsible for paying for paying the Class 1A NICs. This needs to be reported to HMRC on the employee benefit form P11D for each tax year.

To work out what a company car is worth to an employee, and what it will cost your business, you can use the HMRC’s calculator.

Finally, it should be noted that if a company car is used by a director or employee for personal use after April 2011, the company will need to complete a P46car form.

Here’s an overview of the most common ones:

P60 – A P60 is a record of the amount earned and tax that an employee has paid that year. Each employee needs a P60 at end of every tax year; these are typically given out with the employees’ next payslip after the end of year – generally April’s payslip.

A P60 may be needed to apply for tax credits, claim back overpaid tax or complete a self-assessment tax return.

P45 – A P45 is given when an employee leaves a company. A P45 shows the amount earned and the amount of tax the employee has paid for that tax year, up to the time employment ended.

It contains the employee’s tax code and PAYE reference number, which will be needed by their next employer.

A P45 will be needed when an employee leaves a job, starts a new job or wishes to claim jobseekers allowance.

P46 – A P46 is used when an employee doesn’t have a P45, so that HMRC can still be updated about the change in employment.

An employee might have to complete a P46 if it’s their first job, they’re already employed so this job would be their second, or they have been claiming jobseekers allowance or other forms of government support.

P11D – A P11D is used by an employer to inform HMRC about expenses and perks they have given to employees to enable them to do their job during the year. On this document, the employer will include information regarding company cars, private medical insurance, gym memberships, etc.

If a company has given an employee a relocation fee or other forms of money/loans they would also be included on a P11D.

If you’re still confused by the forms you are required to complete as an employer, get in touch on 01327 856076.

Employers deduct the income tax and national insurance percentage from employees’ wages each time they are paid.  The employer then has to make payments on behalf of the employees to HMRC every month or quarterly.

Setting up a PAYE system

When a business becomes an employer, they have to register with HMRC for PAYE, which may be done online by visiting www.hmrc.gov.uk

Once the business has been registered, a letter will be sent containing a unique employer PAYE reference. The letter will also include website links to gaining the correct forms and information to enable you to set up PAYE successfully.

Once you have this information you can register for HMRC’s ‘PAYE Online employers’ service’.

The inquiry found that HMRC’s service to UK taxpayers had dropped to unacceptable levels during the last tax year (April 2010 – March 2011). MPs said the inquiry’s findings were “disturbing”. The Treasury Select Committee stated that the public had lost confidence in the tax system.

When examining HMRC’s performance, the committee stated that “poor service standards have been an issue for many years.” Criticism was levelled in particular at way HMRC handles telephone calls during peak times, finding that many taxpayers were having to waiting for long periods of time to speak to an advisor.

The response to postal enquires was delayed as well, resulting in the public losing confidence in HMRC.

The Select Committee pointed out that HMRC’s service to taxpayers could get worse before it gets better due to a number of reasons, including:

• “Overly ambitious” computer projects, such as the new plan to make employers submit “real-time” information regarding employees PAYE payments.
• Complex tax laws.
• High reliance on the internet for filing tax returns or giving out information to businesses and/or taxpayers. This is a disadvantage for those without good internet connection or internet knowledge.
• Previous job cuts and the possibility of more job and spending cuts over the next few years.
• It was also recommended that HMRC should use cheaper 0345 numbers for customer queries, unlike the currently used and more expensive 0845 phone numbers.

Although the inquiry found that HMRC service to taxpayers wasn’t up to standard, the report did say that HMRC does a good job in collecting taxes from UK taxpayers.

In this guide, we cover the bookkeeping basics that every small business owner should know, from simple steps like keeping receipts together, to the more complex business of categorising your financial records.

The three files you must keep

As a minimum, you should keep a cash book, a sales invoice file and a purchase invoice file. Your cash book details payments in and out of your bank account, your sales invoice file details all the sales that you’ve made and whether they’ve been paid for or not, whilst your purchase invoice file details any purchases you’ve made, as well as when and how you paid for them.

If you use accounting software, you can use it to store all of these records, but if you don’t, a simple series of spreadsheets should suffice.

Check your bank statements

Spend time checking each and every bank statement you get to ensure that no mistakes have been made and that no fraud has taken place. It will also give you a complete breakdown of exactly what your income and expenditure is, and allow you to spot trends and ensure your cash book entries are accurate.

Get proof of purchase for everything

It’s best to get a receipt for everything that you buy for your business, no matter how large or small. It will make it much easier to look back through and update your records, and it will also mean that you have all the required proofs of purchase should the taxman decide to do an audit.

Separate your business and personal accounts

You should have separate bank accounts for personal and business use and should only use funds in your business account to fund purchases for your business.

Clear a regular slot in your calendar

When you’re busy with everything from meeting client deadlines to pitching new business, it can be easy to throw your receipts in a box, leave invoices on your ‘to do’ list and ultimately, lose track of your books altogether. Set aside a regular time each week – clearly marked out in your calendar as a recurring appointment – to keep on top of your accounts, and stick to it!

Remember it’s more than just ‘best practice’

Putting off going through your books and generally being disorganised is a big no-no. Not only will HMRC fine you if you are late in filing any financial documents, but you cannot run a business effectively if you don’t have a firm grasp of your finances.

If you’re struggling with your record keeping, give us a call on 01327 856076 and we’ll be happy to talk you through your options.