Welcome to the January 2019 Newsletter from Walsh & Co

The political and economic uncertainty surrounding Brexit reached crisis point this month, while separately HMRC wrote to some businesses advising them to take steps now to prepare for a potential ‘no deal’ Brexit.

Meanwhile, with the end of the tax year drawing closer, we outline some key strategies to help minimise your tax liability.

We would like to send all of our customers our best wishes for the festive season and a happy and prosperous New Year.

Minimising your tax liability ahead of the tax year end

With the end of the tax year drawing closer, now is a good time to review your financial planning strategies to ensure that your tax liabilities are kept to a minimum. Some key strategies might include:

Making use of your ISA allowance

A range of ISAs are available to savers, including the Lifetime ISA for those under the age of 40, the Help to Buy ISA for first-time homebuyers, and the Junior ISA for individuals aged under 18. Savers can invest in any combination of cash or stocks and shares, up to the overall annual subscription limit of £20,000. Individuals have until 5 April 2019 to make their 2018/19 investment.

Maximising personal allowances

Individuals are entitled to their own personal allowance (PA), which is £11,850 for 2018/19. If your spouse or partner has little or no income, you may wish to consider transferring income or income-producing assets to them. Talk to us first, as special rules apply.

Keeping more of your profit

The Dividend Allowance reduced to £2,000 in April 2018, and the question of whether it is better to take a salary/bonus or a dividend requires careful consideration. Dividends are taken after corporation tax has been calculated, while a salary is taken before corporation tax is deducted. On the other hand, national insurance is due on any salary taken, which can be up to 25.8% in combined employer and employee contributions.

Alternative means of extracting profit might include considering incorporation, and increasing contributions to pension schemes.

To discover more on this topic, please visit the Hot Topics section of our website.


Businesses urged to prepare now for potential ‘no deal’ Brexit

With Brexit uncertainty continuing, HMRC recently wrote to 145,000 UK businesses to urge them to begin preparing now for a potential 'no deal' Brexit scenario.

The letters, which have been sent to VAT-registered businesses which trade only with the EU, outline changes to customs, excise and VAT in the 'unlikely event' that the UK leaves the EU without a deal.

The letters urge affected firms to take three actions now:

  • Register for a UK Economic Operator Registration and Identification (EORI) number, in order to continue trading and in order to apply for customs authorisations
  • Decide whether a customs agent will be used to make import and/or export declarations, or whether declarations will be made by the business via software, and contact an agent or software provider to confirm what information or systems are required
  • Contact the organisation responsible for moving goods (for example, a haulage firm) in order to ascertain whether you will need to supply them with additional information to complete safety and security declarations, or whether you will need to submit these declarations.

HMRC intends to write to businesses in the future to instruct them on any additional action they will need to take, and when.


ESSENTIAL TAX DATES FOR JANUARY

1 January
Due date for payment of corporation tax for period ended 31 March 2018.

14 January
Due date for income tax for the CT61 quarter to 31 December 2018.

19 January
PAYE, Student loan and CIS deductions are due for the month to 5 January 2019.
PAYE quarterly payments are due for small employers for the pay periods 6 October 2018 to 5 January 2019.

31 January
Deadline for submitting your 2017/18 self assessment return (£100 automatic penalty if your return is late) and the balance of your 2017/18 liability together with the first payment on account for 2018/19 are also due.
Capital gains tax payment for 2017/18.
Balancing payment – 2017/18 income tax and Class 4 NICs. Class 2 NICs also due.


QUOTE OF THE MONTH

‘We are edging closer and closer to no deal as a result of constant can-kicking and internal domestic political strife.’

Stephen Martin, Director General of the Institute of Directors, commenting on the recent confidence vote instigated against Prime Minister Theresa May.


WEBSITE OF THE MONTH

www.cybercalculator.co.uk

Online tool for determining your level of exposure to cybercrime.


ON OUR WEBSITE

A wealth of resources for businesses
With topics ranging from group VAT registration to corporation tax self assessment, the Your Business section of our site is a hub of essential information.

Useful information for individuals
For a comprehensive bank of guides covering furnished holiday lettings, Tax-Free Childcare and much more, please visit the Your Money area of our website.


IN THE NEWS

Finance Secretary for Scotland outlines tax plans in Scottish Budget
Derek Mackay has outlined his plans for Scottish taxation and spending.
Click here for the full story

Redesign tax system to help 'fight against climate change', says ACCA
The Association of Chartered Certified Accountants has called on governments to help tackle climate change by redesigning their tax systems.
Click here for the full story

Confidence amongst small businesses 'falls to seven-year low'
Confidence amongst UK small businesses has 'fallen to its lowest point since 2011', according to the latest quarterly Small Business Index.
Click here for the full story

'Bad payment practices lead to SME failures', report suggests
A new report published by the Business, Energy and Industrial Strategy Committee has highlighted how 'bad payment practices' have led to the failure of many small and medium-sized businesses.
Click here for the full story

Report suggests HMRC 'treating taxpayers unfairly'
A report from the Economic Affairs Committee has suggested that HMRC is 'treating taxpayers unfairly', and has called for the Revenue's tax avoidance and evasion powers to be reviewed.
Click here for the full story