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Tax

Don't Fall For The Fake Tax Refund Messages
Don’t fall for the fake tax refund messages 758 513 Stepping Stones Accountancy

Don’t fall for the fake tax refund messages

The HMRC (HM Revenue and Customs) are taking a very proactive approach in highlighting a spam campaign currently on the rise which relates to false tax refund claims. Although it has been around for a number of years, it has again started to build moment with estimated figures rising by over 15% in the last 12 months.

So, what is the scam?

An email is sent which has been branded to look as though it has been issued by the HMRC, it can be very deceptive, recipients will need to carefully check the actual e-mail address used by the sender. The content of the message will be something like the following:

HM Revenue and Customs (HMRC) has sent you this notification as your eligibility has been checked. We owe you 843.78 GBP.

GOV.UK HM Revenue and Customs Gateway Claims (this will show in blue as a hyperlink)

Your reference is GHS-W3K5-OB8.

By clicking on the links in the e-mail and entering details the scammers can capture vital information when asking for bank details which they will then use for fraudulent purposes.

Why is there such a high interest now?

This time of year, is when the scam hits its peaks as more and more people are filing their self-assessment tax returns. Whilst the example above relates to an e-mail, scammers are also using both phone calls and text messages to offer fake tax refunds.

What are HMRC saying?

The warnings from HMRC are very simple, they will NOT issue any form of communication (e-mail, text or telephone) to let a taxpayer know that they are due a refund. They are also very clear that at no stage will individuals be encouraged to request a refund. If a person is entitled to money back, then this will be clearly shown on their HMRC account and payment can be made directly in to the bank account held on file. At no stage will HMRC issue a communication asking for bank details.

The HMRC are requesting that if any suspicious communications are received then they should be forwarded on e-mail to phishing@hmrc.gov.uk or if text messages received, they should be forwarded to 60599.

Should you have any questions or concerns then the Stepping Stones Accountancy team can offer both help and support. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Simplifying the capital gains tax on a property when a couple separate
Simplifying the capital gains tax on a property when a couple separate 758 513 Stepping Stones Accountancy

Simplifying the capital gains tax on a property when a couple separate

Many people are still not fully aware of the changes that took place on 6th April 2023 in regards to capital gains tax (CGT) on a property when a couple separate. Previously the old rules were very inflexible where the no gain / no loss treatment could only apply for a short period of time. Whilst it is almost a year since these changes were introduced many people are still unaware of what they mean.

This blog post will explore the details further.

It goes without saying that when a couple goes through a separation it can be a very stressful period. On top of that agreeing on what happens with the assets and associated property can only add to the problems. With the introduction of these CGT changes the following rules will apply:

  • Those involved in the separation can take up to 3 years from the date of the split to issue a no gain no loss transfer on all relevant assets thus minimising any capital gains tax.
  • Any timeframes previously in place for the transferring of assets following a formal split such as a divorce have been removed.
  • If any partner has remained in the shared home then they are entitled to claim private residence relief once the property is sold.

Another major positive with this change is that all parties involved in the separation can take their time and organise all their financial matters without worry or concern that they will face liabilities in relation to CGT. The process of transferring assets is a simple one and any previous issues around dates for separation are removed.

Although on the whole these changes see a number of benefits there are still some areas to be aware of:

  • Some fees around CGT could apply if there are cash agreements in place as part of any separation.
  • If any oversees assets are involved then the no gain no loss rule will not apply, meaning tax payments could occur.
  • If assets are transferred but then later sold there is a high probability that future tax charges will be incurred.
  • Anything in relation to income tax should be treated separately. For example if a family company exists between all parties and dividends are taken then liabilities could be applied.

To conclude when a civil or marital partnership breaks up and there is the requirement for a split of assets it is very important to consider the tax positions for each party. It can be a minefield for individuals to understand especially at a time which is incredibly stressful and emotionally draining. This is why it is recommended that specialist help is sought to assist with the entire process.

For anybody that does has any questions in regards to CGT or in need of any form of accountancy help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Renting home office space to your company | Home Office Accountant Advice | Advice on Home Office Set-Up | Accountancy Support Bristol
Renting home office space to your company 758 513 Stepping Stones Accountancy

Renting home office space to your company

The last few years have seen more of us working from home and although life is slowly returning to normal, many organisations have realised there are many benefits of home working and are encouraging staff to make this change, whether full or part time, more permanent.

Naturally this change in work location incurs additional costs and this is recognised by HMRC with their work from home allowance. Whilst this allowance enables people to reclaim a proportion of the costs of running a home office, it does not allow directors of companies to claim for a percentage of their rent or mortgage interest charges.

To mitigate this, directors are entitled to charge rent to their company for the use of their property, with this then being declared as commercial rent on the directors’ personal tax return and enabling them to also declare a proportion of costs.

It is essential that a rental agreement is put in place between the director and the company so that the director can become the landlord and in turn charge commercial rent. If the rent is charged at the same rate as the costs, then income offsets costs and thus no rental profit needs to be declared. As rental income is not subject to National Insurance many see this as a cost-effective way to release money from your business.

Prior to setting up a formal rental agreement there are some elements that must be considered:

  • Will your mortgage provider/landlord allow you to enter into the agreement and how will it affect your home insurance?
  • Ensure that the agreement only covers trading hours as it is normal for a home office to be utilised for personal use outside of these hours.
  • The proposal to put an agreement in place must be evidenced in the board minutes and cannot be backdated.
  • The agreement must be in joint names if the property is joint owned.
  • Rental costs may include service charges for a proportion of heating, light and power costs.
  • The rental cost must not exceed local commercial rental values, or it may be deemed by HMRC as disguised distributions.
  • The director must genuinely work from home and be able to evidence the costs that are being claimed for.
  • If you are leasing a substantial part of your property or separate buildings then a formal lease agreement would be more appropriate and this must be drawn up with the help of a solicitor as it would be covered by the Landlord and Tenant Act and would have implications for Capital Gains Tax and Business Rates.

If you have any questions or need some accountancy help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 30 minute call with Yarka – https://calendly.com/yarka-ssa/30min

Why do we need quarterly updates with Making Tax Digital (MTD) | Tax Advice MTD | Advice on Making Tax Digital
Why do we need quarterly updates with Making Tax Digital (MTD)? 758 513 Stepping Stones Accountancy

Why do we need quarterly updates with Making Tax Digital (MTD)?

As the Making Tax Digital (MTD) scheme continues to gather momentum there are many business owners still unsure of their commitments. However, the requirements can be broken down into 4 key measures which determine why taxpayers (even those who may have a small turnover as little as £10k) are required to provide a breakdown of income and expenses. This needs to be done via an online accounting platform which is approved by MTD and submitted every quarter.

Keeping up to date

By submitting a quarterly return, a business is keeping up to date with their returns and complying with their commitments to MTD. The regulations state that a quarterly filing deadline needs to be submitted online.

More accurate provision for tax payments

Any profit which is reported within the quarterly updates will allow the HMRC to provide an estimate of the tax payments a business might have to make during the tax year. The clear benefit of this is that a business will know how much tax they need to pay and when they will need to pay it, thus allowing for accurate budgeting.

Vital business analysis

Whilst a small business might think their quarterly tax return is only important to them, it is also a very useful tool for the HMRC. Being able to evaluate the data received from tax returns enables them to provide some informed and critical business analysis in relation the state of the economy.

Penalties for late submissions

To ensure businesses recognise the importance of quarterly submissions, HMRC will be implementing penalties to anybody who fails to comply. Penalties will be based around a points system, where any late submission means points added to an account. When a designated number of points are accrued a fine will be issued. Points will stay on record for 24-months after which they will be wiped from the record. To find our more please follow this link – https://www.gov.uk/government/publications/penalties-for-late-submission/penalties-for-late-submission

If you have any questions in relation to Making Tax Digital our team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

A Simplified Tax Reporting for Small Businesses | Making Tax Digital (MTD) | Simplifying Tax
A simplified tax reporting for small businesses 758 513 Stepping Stones Accountancy

A simplified tax reporting for small businesses

As part of the Government’s Making Tax Digital (MTD) plans to simplify the tax system and to speed up the time it takes for self-employed professionals and small business owners to complete their tax returns, the Government are proposing changes to the existing tax reporting rules.

The changes, planned by 2023, would mean that any business not incorporated would be taxed on profits arising in the tax year as opposed to profits on accounts ending in the tax year.

In short, the changes will see all businesses having to align their basis period with the 5/6th April tax year. Whilst the majority of businesses already do this, there are about 7% of sole traders who choose not to as it fits better with their business model.

For example, a business who runs their accounts to the 30th of June each year, their income tax for 2023/24 would currently be based on profits for the year ending 30th June 2023. Under the new rules the income tax for 2023/24 would be based on 3/12 of the income for the year ending 30th June 2023 in addition to 9/12 of the income for the year ending 30th June 2024.

The Government estimates that around 3% of sole traders and 15% of partners will face an increase in costs as a result of these proposed changes but believes that they will reduce errors and overpayments and bring tax returns in line with other assessments such as property income.

Whilst the changes are broadly welcomed and the consensus is that it will simplify life for business owners, the consultation period is due to conclude on 31st August. Some claim that this is too quick and businesses need more time to prepare and propose a delay of 12 months in order for business to provide proper feedback and ensure that the scheme works for everyone.

If you have any questions or would like to discuss this further please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

5 Tips To A Smooth Tax Return 150 150 Stepping Stones Accountancy

5 Tips To A Smooth Tax Return

If you apply our simple tips you can be assured that your tax return will be a lot easier to complete.

Complete your tax return in June 150 150 Stepping Stones Accountancy

Complete your tax return in June

In our latest animated video we explain why you should completed your tax return in June.

Gain Control of your Self Assessment | Help with Self Assessment | Self Assessment Hints & Tips
Gain control of your self assessment 758 513 Stepping Stones Accountancy

Gain control of your self assessment

It is surprising how a to-do list can achieve so much. The art of writing down a list of actions and then following them through to completion is nothing new but it still remains an incredibly powerful tool for efficient people. So how can this method help you get control of your self assessment?

Quite simply, if you follow some specific instructions to a set timeframe every year then you will have complete control of your self assessment. For example, if we look at the period of 2021 to 2022, it really is a very simple process based on 5 key steps:

  1. Monthly – keep track of all your monthly business transactions, logging a record of invoices, receipts and expenses.
  2. Register for self assessment by 5th October 2021 (if you have never done this before)
  3. When filing online submit your return by midnight on 31st January 2022
  4. Ensure relevant tax payments are made by midnight on 31st January 2022

In order to complete the self assessment you will need the following:

  • Your 10-digit unique taxpayer reference (UTR)
  • Your national insurance number
  • All details of your untaxed income for the period 2021/22 (this will include income from self-employment, dividends and interest on any shares
  • All records of expenses in relation to self-employment
  • Charity or pension contributions that should be eligible for tax relief
  • A P60 or any other records to demonstrate how much income you have received which has been paid on

Keeping in control of your self assessment can be a very simple exercise just follow your to-do list. Otherwise simply delegate and get your accountant to look after it for you.

Should you have any questions or need any help in relation to your self assessment please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

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