Tax Diary July/August 2018

1 July 2018 – Due date for corporation tax due for the year ended 30 September 2017.

6 July 2018 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2018 – Pay Class 1A NICs (by the 22 July 2018 if paid electronically).

19 July 2018 – PAYE and NIC deductions due for month ended 5 July 2018. (If you pay your tax electronically the due date is 22 July 2018)

19 July 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2018.

19 July 2018 – CIS tax deducted for the month ended 5 July 2018 is payable by today.

31 July 2018 – Deadline for payment of second instalment self-assessment for 2017-18.

1 August 2018 – Due date for corporation tax due for the year ended 31 October 2017.

19 August 2018 – PAYE and NIC deductions due for month ended 5 August 2018. (If you pay your tax electronically the due date is 22 August 2018)

19 August 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2018.

19 August 2018 – CIS tax deducted for the month ended 5 August 2018 is payable by today.

Importing goods from non-EU countries?

Businesses that are importing goods need to be aware of the many special rules that apply. Whilst most smaller businesses importing goods will use a courier or freight forwarder, it is still important to be aware of the duties and VAT implications.

Businesses importing goods must be able to distinguish between goods imported from outside the EU or within the EU. Intra-EU movements of goods that are imported are referred to as ‘acquisitions’, and goods that are exported to the EU are known as ‘dispatches’.

It is generally more straightforward to handle acquisitions from within the EU and there is no import duty to deal with. It remains to be seen what changes will be made as the Brexit negotiation rumble on.

Businesses that start to import goods from outside the EU will be required to apply for an Economic Operators’ Registration and Identification System (EORI), that helps businesses communicate with customs officials when they are importing and exporting goods. They will also need to ensure they correctly classify any imported goods, declare the goods to customs and pay any VAT and duty that is due.

As we have mentioned this is a complex area and we would be happy help any new importers to ensure that they are managing the various aspects associated with the import of goods correctly.

Could you qualify for NIC Carer’s credits?

Carer’s credit is a National Insurance credit that can help carers to fill gaps in their National Insurance record. Carers who don’t qualify for Carer’s allowance, may qualify for Carer’s credit. This can help increase the amount of state pension a carer receives when they reach the state retirement age. The Carer’s credit is available to qualifying applicants caring for one or more people for at least 20 hours per week. A carer’s income, savings or investments does not affect their eligibility for Carer’s credit. The carer must also be aged 16 or over and under the State Pension age in order to qualify.

The person the carer is looking after must usually receive one of the following benefits:

  • Disability living allowance care component at the middle or highest rate
  • Attendance allowance
  • Constant attendance allowance
  • Personal independence payment – daily living component, at the standard or enhanced rate
  • Armed forces independence payment

If the person being cared for isn’t receiving one of the qualifying benefit, the Department for Work and Pensions (DPW) will consider whether the level of care provided is appropriate to qualify for Carer’s credit. The DPW will usually will consider the level of care as appropriate if there is a signed certificate confirming this from a health or social care professional. Carer’s will continue to receive Carer’s credits for 12 weeks after caring ends or for breaks in caring of up to 12 weeks.

Equipment you buy for your job

Employees who use their own money to buy things they need for their job can sometimes claim tax relief for the associated costs. It is usually only possible to claim tax relief for the cost of items used solely for your work.

There is no tax relief available if your employer pays you back in full for an item you have bought for work. In addition, you cannot claim tax relief if your employer has provided you with a suitable item, but you want a different or upgraded model. For example, you are provided with a mobile phone for your work, but you want to use a newer and more advanced model and pay for this yourself. An employee cannot claim relief on the initial cost of buying small tools or clothing for work.

Employees who need to buy substantial equipment to use as part of their employment may be able to claim tax relief. In most cases, you can claim tax relief on the full cost of this type of equipment as it usually qualifies for a type of capital allowance called annual investment allowance. Any tax relief would be reduced if the employer provides a contribution towards buying the item. The way to claim tax relief varies and depends if the amount spent is more or less than £2,500.

There are different rules for employees who use their own uniforms, work clothing and tools for work. It is possible to claim for the cost of repairing or replacing small tools you need to do your job as an employee (for example, scissors or an electric drill), or cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots). A claim for valid purchases can be made against receipts or as a ‘flat rate deduction’.

Interpreting your tax code

The letters in an employee’s tax code signify their entitlement (or not) to the annual tax free personal allowance. The tax codes are updated annually and help employer’s work out how much tax to deduct from an employee’s pay packet. 

The basic personal allowance for the tax year starting 6 April 2018 is £11,850 and the tax code for an employee entitled to the standard tax-free Personal allowance 1185L. This is the most common tax code and is used for most people with one job and no untaxed income, unpaid tax or taxable benefits (for example a company car).

There are many other numbers and letters that can appear in your tax code. For example, there are letters that show where an employee is claiming the marriage allowance (M) or where their income or pension is taxed using the Scottish rates (S). The basic rate limit for 2018-19 is £34,500 except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an intermediate rate. If the numbers are changed this usually means your personal allowance has been reduced.

There are also emergency tax codes (W1 or M1) which can be used if a new employee doesn’t have a P45. These codes mean that an employee’s tax calculation is based only on what they are paid in the current pay period.

If your tax code has a ‘K’ at the beginning this means that deductions due for company benefits, state pension or tax owed from previous years are greater than your personal allowance. However, the tax deduction for each pay period can’t be more than half your pre-tax pay or pension.

It is important to check your tax code to ensure the correct information is being used. If you have any queries we can help or you can check with your employer or HMRC.