Category: Personal Tax

Fun excuses for late filing

MY WIFE WON’T GIVE ME MY MAIL!

What was your reason for late filing this year?

We compiled the funniest excuses for late company filings from HMRC’s precious collection.

But before we open the worm can, let’s do some refreshing exercise; As a limited company owner, you need to file your company accounts and tax return within 9 months to Companies House and HMRC. We call it CT600, in some cases, it becomes CT600… And late filing fees aren’t that cute. Take a quick look below at the Companies House penalties;

Time after deadlinePenalty (for private limited companies)
Up to 1 month£150
1 to 3 months£375
3 to 6 months£750
Over 6 months£1,500

Further penalties from HMRC will be applicable, starting from 12 Months after the Accounting period end date:

Time after your deadlinePenalty
1 day£100
3 monthsAnother £100
6 months10% of the unpaid tax
12 monthsAnother 10% of any unpaid tax

Yet again, our benign Companies House is being so kind and allows deadline extensions if you require more time BEFORE the deadline or AN EVENT YOU COULD NOT CONTROL STOPS YOU FROM FILING YOUR ACCOUNT ON TIME.

That’s right, it has to be something big enough to obscure your company filings, on top of being something you cannot possibly stop! Like a tornado, a volcanic eruption, an earthquake (but really a big one) or a tsunami. In other words, you can get away with excuses like “my goat chewed my papers, so I can’ t do my filing on time.” Or can you?! Take a look at these TOP 10 late filing excuses that HMRC and Companies House compiled;

It was Valentine’s Day! (A director in a limited company)

Shame on you English tax system! It was Valentine’s Day, everyone deserves a bit indulgence in lover’s day. But they didn’t accept his excuse, as it turned out to be he is single.

Online Account Filing

Pirates stole my accounts! (A limited company owner)

Sounds like a late filing excuse from the 18. Century. Poor guy was on course to English soil, carrying spice, tobacco and his accounts and pirates stole them all! But they returned it as they don’t know how to finalise a Trial Balance.

Online Account Filing

Our Business doesn’t really do anything… (Kent Financial Services Firm)

Whose does in this day and age? Also, dream job congratulations! Unless you meant your company is dormant! That’s right, you still need to file your company accounts even though your company is a dormant company.

Online Account Filing

I’ve been too busy submitting my clients’ tax returns (London accountant)

We hear you loud and clear friend! This one is to tribute to our colleagues, at online account filing we offer you a back-up filing service. Let us take care of your filings!

Online Account Filing

We delivered the accounts to the betting office, next door to the Companies House.

Oh, you mean old Betfred on Abbey Orchant Street?! Why didn`t you tell us earlier! Filing is going digital, and Online Account Filing is your best bet at doing so.

Online Account Filing

My pet goldfish died.

Please accept our sincere condolences. RIP Dori the goldfish…

Online Account Filing

I found my wife in the bath with my accountant.

Errm… Maybe they were taking a shower together?! Also, please remember the saying “I trust my accountant more than my wife.” (double-edged knife.)

Online Account Filing

Slugs ate my accounts

You must be REALLY slow to take action then! You’ve had 9 months to file them! Plenty of time to get rid of slugs! No sorry, this is unacceptable!

Online Account Filing

I saw a volcanic eruption on TV and couldn’t focus on my filing! (London woman)

We rest our case with this one, she actually used the excuse of being disrupted by footage of volcanic eruption! How about people living in Pompeii!

Online Account Filing

DON’T MISS ANY DEADLINE

Companies House and HMRC constantly encourage taxpayers to file their accounts online, all accounts can be filed on gov.uk. We know how busy you are with the daily grind, you often can’t even remember what you’ve had at breakfast! Did you know you could opt for our free filing reminders?

How to Make Payments on Account

Had enough of the weather in the UK this summer, heading off somewhere warm and sunny for holiday? Renewed your passport, started packing up, booked hotel and flight tickets, called mom to look after the little one at home… You are set and ready to go… Or are you? As your most trustworthy advisors, it is our responsibility to remind you of the boring business before you take your long-awaited vacation this year. Did you pay your second half of installment from the last tax year?

We can hear you say “What installment?”. For the definition of Payments on accounts, you can have a look at our other blog posts. (Payment on Account)

Do I need to make payments on account?

YES, unless;

  • Your tax bill for the last tax year was less than £1000,
  • You`ve already paid 80% of your total tax bill.

As a sole-trader (self-employed) if your tax bill for 2018/2019 is more than £1000, including Class 4 National Insurance (annual profit exceeding £8,632), you`ll need to pay the second installment by the 31 st of July midnight. That`s right, yet another midnight deadline is coming. Companies House`s new application “Thumbs Dave” comes quite handy in terms of reminding you, your tax return you can simply sign-up with CoHo`s e-mail reminder to keep yourself updated with your tax return, payment due dates, and variety of other deadlines. Payments on Account is just one of them.

When do I need to make Payments on Account?

You` ll need to make PoA only if your tax bill is more than £1000 after PAYE for the last tax year (2018/2019.) In other words, after PAYE deductions if you are still obliged to pay more than £1000 you`ll have to enroll with Payments on Account. The exemption is to have taxed 80% of your total income in the last tax year.

You should contact HMRC or Online Account Filing if you are about to change your tax status from self-employed to PAYE. In doing so, you`ll have reduced your tax.

Payments on Account | Online Account Filing

How to pay my Payments on Account?

  1. Debit or Credit Card: You can click here  to make your second installment`s payment by your debit or credit card. But before you do anything, remember you won`t get any refund if through credit card payment once your transaction is being processed.
  2. Direct Debit: Setting up a direct debit account with HMRC comes handy, especially if you`re too busy with the daily grid to remember this small (!) detail. Click here to set up your direct debit with HMRC.
  3. Telephone banking or banking app: Yes we know for a fact that telephone banking can sometimes take longer than being psychically in your bank`s nearest branch, therefore we personally recommend you to download your banking app. Bank transfer through your app would be significantly more hassle-free compared to other options unless you have less than 5 days left to the deadline as the transaction could take up to 5 working days depending on the bank.
  4. Check: Alternatively you can simply pop into your nearest Post Office to send a check to HMRC Direct, BX5 5BD. You can click here to print out your “paying-in- slip” form to set up a check payment, please note that you should obtain your Unique Tax Reference Number (UTR) to fill the form. Just as a quick reminder it might take up to 3 days for the check to arrive at HMRC.
  5. In a hurry? Then you can go to the nearest branch of your bank and make the payment by the cashier.

In a hurry? Then you can go to the nearest branch of your bank and make the payment by the cashier.

At Online Account Filing, we help over a 700 sole-traders and professional individuals like yourself in a year. Avoid the rush and high fees by leaving things the last minute, get it sorted today!

Self-assessment penalty notices delayed due to Brexit

Taxpayers baffled by delayed penalty notices

Disturbing news from HMRC for over 700,000 taxpayers has just arrived, it isn`t easy to process the fact that you are likely to receive a penalty notice in the recent self-assessment penalty regime, telling you to you owe at least £100 due to missing the recent self-assessment tax return deadline, with a delay of around 3 months.

HMRC will not commence issuing penalty notices until April 2019, yet it was expected to start when filing the deadline hits, which was in February.

Are you sure your Self Assessment tax return is “ACTUALLY” filed?

It becomes increasingly difficult for taxpayers to make sure if their tax return is filed, as this uncertainty weren`t bad enough the only way to ensure over tax return`s sequel is to receive the actual penalty notice, which is a massive vicious circle.

Several disturbances might occur during filing;

  • It is not uncommon to experience technical issues during filing online of which may lead to the process` suspension at the final stage.
  • Taxpayers may also experience several turbulences owing to their tax agents who are responsible for filing and submitting SA100 returns. Uncertainty over making sure of filing process` finished is just one of them.

In all such cases, taxpayers are often kept in dark until they find out they actually never managed to file their Self-Assessment Tax Returns, on top of that, they are being made subject to pay heavy penalties to HMRC by an awfully delayed letter, telling them they owe at least £100 to HM Revenue & Customs. Is self-assessment penalty appeal an option? But this is the worst-case scenario!

Details of the penalty imposed

Self-Assessment penalties and interests are always two of the worst nightmares of a business owner. It is good to know for a start that if the delay for filing the return is over 3 months, an additional penalty of £10 is charged on a daily basis as of 1st May and if it stays outstanding after six months, the inflicted penalty that is either £300 or 5% of the tax you owe to HMRC. They are equally agonizing and great amounts to waste.

Brexit Tax Implications 2019

HMRC had the perception of Brexit for over two years by now, yet the tax institution has failed in addressing the situation and the following queries that would result. They appear to accept the fact that this “unexpected” delay in issuing penalty notices is primarily because of lacking resources in its departments, blaming their call centres are being overloaded with Brexit tax impact enquiries.

For this reason, HMRC has displayed a disclaimer by stating the following;

“This year, we expect an increased demand in our call centres as the UK leaves the EU, so we intend to delay the issue of these notices to ensure we can provide the best service to our customers. This will release those staff for EU Exit related work.”

While tax after Brexit is expected to be yet another enigma, the statement above is not really helping to millions who are already in distress.

Conclusion

Inevitably, taxpayers are pushed down in uncertainty in which you can`t even ask the sequels of Brexit and its effects on taxation to the highest authority in tax in the country and what is worse is that the penalty might even go higher than £100.

Tax anxiety is real? But don`t worry, our team of experts is here to give you a hand. Just drop us an enquiry and let`s find a solution about your self-assessment tax return penalties.

Payment On Account (POA)

Introduction

Payment on Account can easily be confused with the advance payments, which you make as a part of your tax bills. HMRC runs and manages a system which is known as “Payment on Account” for professional individuals who pay their taxes through self-assessment.

Payment on Account | Online Account Filing

What are Payment on Account (POA)?

There are several debates over the way concept works amongst people who are still not able to precisely comprehend one of the most fundamental elements of the Self-Assessment process. Essentially, Payment on Account`s been introduced by HMRC to help sole-traders to spread their tax payments throughout the year to make life easier for themselves. However, it became an obstruction for those who struggle with clearing their bills off by causing extra financial burdens.

Application

Payment on Account is not applicable if at least 80% of your income has already been taxed through PAYE or any other deductions. Payment on Account shall also not be calculated if the last self-assessment tax bill was less than £1,000. As the concept is designed to make you pay your tax bill partially in advance, there is a difference between the tax amount payable and the amount expected. The first installment is due on 31st January and the second installment is due on 31st July.

The first installment of the Payment on Account is usually around 50% of the last tax bill. The system also includes Class 4 National Insurance Contributions but does not include the repayment of student loans or Capital Gains Tax.

Reducing the Payment on Account

The applicable figure of Payment on Account primarily depends on how much the previous tax bill is, as HMRC is already convinced that your business will continue to grow substantially at the previous year’s rate.

It is a real-life scenario in which your income may drastically change over the years and, hence the applicable taxes will also be as part of your generated income. If you expect your next year’s income will be relatively lower, then you may apply to subdue the Payment on Account. Our expert accountants can assist you in doing this.

Unfortunately, the vast majority of professional individuals often face difficulties in paying their tax bill as they prefer to decrease the Payment on Account. People also favor using this option when they are confident over being on a better off financially in the future.

Underpaying the Taxes

You can always keep Payment on Account option open to use, but you should also be aware of the consequences that may follow for any underpaid tax. The prospective issues are almost always in relation to the interest rates, that may increase as a result of underpaying.

Let us deal with your Self-Assessment

We at Online Account Filing have a dedicated team of experts who are fully trained to handle your entire Self-Assessment process on your behalf.

Your exclusively assigned account manager will assist in managing your accounts and primarily responsible for delivering an unmatched service by laser-focusing on your self-assessment process.

Payment on Account | Online Account Filing

Still not too sure? Why not take a closer look at our EXCELLENT Trustpilot reviews.

SA100 Deadline – Things every taxpayer must know

SA100, in other words, annual self-assessment tax return and is commonly known as the personal tax return is your major compliance work to carry out as a sole trader.

This article aims to help you in having a basic understanding of the concept and to address the frequently asked questions.

Who needs to file SA100 tax return?

  • Self-Employed Individuals: All sole traders dealing in goods or services in their own capacity (not as a Company),
  • Directors of a limited company,
  • All individuals having a gross income of over £100,000 in a year,
  • Individuals receiving income from savings, investment or property,
  • Individuals having foreign income,
  • Any other category of individuals who have received a letter from HMRC for filing SA100 return
  • Other special categories? contact us to find out more.

You don`t need to file SA100 if your only income is through being on payroll unless you`re on dual-income, both on payroll and self-employed. Then, HMRC expects from you to file your SA100 on time by indicating the exact number on your P60.

What do you need to make ready for the SA100 form?

The form shall contain the Self-Assessment UTR, personal details of the assessee such as date of birth, national insurance number, home address etc. It should also contain comprehensive particulars of the total income from various sources such as interests, salaries, dividends, self- employment income, income from rent, the sale of the property, etc. in the prescribed format as per HMRC guidelines. You may also need to fill out various supplementary pages such as:

  1. Self-Assessment Tax Form shall contain the UTR (Unique Tax Reference),
  2. Personal details, such as date of birth, national insurance number, home address, etc.
  3. It should also contain the full scale of the total income from various sources such as interests, salaries, dividends, self- employment income, income from rent, the sale of a property, etc. in the prescribed format as per HMRC guidelines.
  4. You may also need to fill out various supplementary pages such as:
  • Employees or Company Directors – SA102
  • Self-Employment – SA103S or SA103F
  • Business Partnerships – SA104S or SA104F
  • UK Property Income – SA105
  • Foreign Income or Gains – SA106
  • Capital Gains – SA108
  • Non-UK residents or Dual Residents – SA109

When to submit the SA100 return?

The deadline for paper forms for the period 6 April 2018 to 5 April 2019 is 31st October 2019, however, HMRC offers extra time until 31st January 2020 if you prefer to submit it online.

Last but not least, try to remember to make your self-assessment tax return payment on the same day of submission before the deadline.

Self-Assessment Tax Return penalties 2019 are starting from £100 for a 3 months’ delay. The daily penalty rate is £10! So, you might as well end up paying fortunes just for delaying a couple of weeks. Estimate your penalty (here).

Penalties and Deadlines for Self-Assessment Tax Return 2019:

We strongly recommend you don`t leave your registration and self-assessment tax return payment to the last minute. There`s a lot of things on HMRC`s plate due to Brexit and the brand-new initiative called MTD for VAT.

Self-Assessment RegistrationDeadline for return and payment
Register if you`re sole-trader or self-employed5 October 2019
Paper Tax ReturnMidnight 31 October 2019
Online Tax ReturnMidnight 31 January 2020
Self-Assessment Tax PaymentMidnight 31 January 2020

Personal Allowances in 2019

Personal Allowances from your taxable income has risen from £11,850 to £12,500 as of April 2019. Take a look at the table below, see what percentage you should pay as tax until January 2020 for your personal tax return due date 2019;

Personal Tax 2019 rate;

Personal Tax Rate | Online Account Filing

Note: You start losing £1 of your personal allowance for every £2 you earn above £100k

How quickly can I get this filed with Online Account Filing?

We have a proficient team who is expert in handling the whole process of personal tax return related compliance works in about 2-3 business days once you submit all the necessary data. All we need is the relevant details that are to be submitted in due course, simple and easy-to-understand spreadsheet.

More questions?

Online Account Filing is at your service, we are just an email or a phone call away to assist you further with the detailed information on the subject.

We encourage the readers to contact us for any query.