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Newsletter March 2015

Welcome to this month's newsletter

This month's newsletter articles are the last to be posted before George Osborne's final budget of the current Parliament. It will be interesting to see how much of the content will be carrot rather than stick. The articles included in this newsletter are: a reminder that tax planning should be considered before 6 April 2015, a list of HMRC's top ten reasons why serial tax avoidance is not a good idea, a reminder to review your Will and the tax consequences of employing domestic staff.

Our next newsletter will be published Thursday, 9 April 2015.

Last chance to plan for 2014-15

As we mentioned in our January 2015 newsletter there are a number of tax planning opportunities that will cease to exist once the clock passes midnight, 5 April 2015. For businesses whose year end is the 31 March 2015 these opportunities included:

  1. The timing of capital purchases: equipment, vehicles and so on.
  2. The timing of significant overhead expenditure.
  3. Dividend and profits extraction planning if your business is a limited company.
  4. And again, if you have a limited company is your director's loan account overdrawn?

In fact, all taxpayers, whether in business, employment or receiving a pension, may have opportunities to legitimately reduce their tax liabilities for 2014-15. The point of this article is to remind you that once the tax year end passes these opportunities will be lost, very often permanently.

Readers who are in business, or who have significant or complex sources of income, should have contacted and consulted with their tax advisors by now. If not, there is still just over three weeks to take action. Please call to see if there are any advantages that may be available to you.

You may be kicking yourself later this year if you pass over this planning window without taking action.

When was the last time you reviewed your Will?

Do you have any idea if your estate will have an inheritance bill when you die? How much will it be? Who will have to pay it?

Planning opportunities arise if:

  1. If you have assets that you would like to give away.
  2. If you have any interests in a business or company, or own agricultural property.
  3. If you have assets that you would like to gift, but are concerned that other parties may seek to control those assets against your wishes.

These and many other scenarios, particular to your circumstances, may be available. The key is to explore these planning strategies before the burden of responsibility for settling tax is passed to your executors, and ultimately, your family and beneficiaries.

Domestic employment arrangements

Did you know that if you take on domestic help you may be considered an employer?

Anyone who works in a private home is treated as an employee if they only work for one family, except for au pairs. This includes nannies, housekeepers, gardeners and anyone else working for one family. You're their employer if you hire them.

As an employer you would need to ensure that an employee:

  1. has an employment contract
  2. is given payslips
  3. does not work more than the maximum hours allowed per week
  4. be paid at least the National Minimum Wage

They're also entitled to employment-related benefits, if they meet the eligibility requirements. These include:

  1. statutory maternity pay
  2. statutory sick pay
  3. paid holiday
  4. redundancy pay

Additionally, domestic employers must:

  1. check if the person can work in the UK
  2. have employer's liability insurance
  3. register as an employer and send employer tax returns each year - even if they pay the employee in cash

Running a home with staff is the equivalent of running a business with staff, there are a multitude of legal matters you will need to consider.

Tax Diary March/April 2015

1 March 2015
Due date for Corporation Tax due for the year ended 31 May 2014.

2 March 2015
Self Assessment tax for 2013/14 paid after this date will incur a 5% surcharge.

19 March 2015
PAYE and NIC deductions due for month ended 5 March 2015. (If you pay your tax electronically the due date is 22 March 2015.)

19 March 2015
Filing deadline for the CIS300 monthly return for the month ended 5 March 2015.

19 March 2015
CIS tax deducted for the month ended 5 March 2015 is payable by today.

1 April 2015
Due date for Corporation Tax due for the year ended 30 June 2014.

19 April 2015
PAYE and NIC deductions due for month ended 5 April 2015. (If you pay your tax electronically the due date is 22 April 2015.)

19 April 2015
Filing deadline for the CIS300 monthly return for the month ended 5 April 2015.

19 April 2015
CIS tax deducted for the month ended 5 April 2015 is payable by today.

Rates & Allowances

Rates and allowances for income tax, corporation tax, capital gains tax, inheritance tax and the pension scheme earnings cap are set out below.

Alexander Probin
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