Archives for Auto-Enrolment Tax Break

Cloud Computing and Nature Concept

Cloud Accounting Software a Must for Making Tax Digital

The government’s vision of being one of the most digitally advanced tax systems in the world relies on modernising the tax system and making it easy for businesses to work with and therefore comply with their tax obligations and requirements. Making Tax Digital is being rolled out and the first step comes into force in April 2019 for business that have a turnover which is above the VAT threshold. This does not preclude smaller businesses from using the system, but they are not yet required to do so. So how does it work and what part does cloud accounting software have to play in making it happen?

Making Tax Digital is underpinned by four elements:

  • Using information more effectively
  • Real-time tax
  • A single financial account
  • Digital interaction between HMRC and businesses

Cloud-based accounting systems can help achieve all these in the following ways:

  • Real-time data. By being stored on the cloud, digital accounting systems offer the flexibility of storage and access of data from anywhere, as long as there is an internet connection and a device to access it from – e.g. a tablet, laptop, or even a mobile phone.
  • Onestop access. Cloud-based accounting systems will reconcile your invoices, payments, and orders and can even manage payroll for you. This automatic reconciliation means you do not have to go through your paperwork every so often and do it manually; this way the most up-to-date information is at your fingertips and can be submitted to HMRC at the push of a button. With quarterly accounting becoming part of Making Tax Digital, what could have introduced additional work without cloud-based accounting packages will actually make your, and your accountant’s life, much easier and with a lower margin of error.
  • Effective use of information. Whereas you now have to submit much of the same information year-on-year to HMRC when you file your tax return, using cloud-based accounting software this will not only be automatically submitted the first time, but will not need to be re-submitted unless something changes. An online HMRC account also allows you to keep an eye on what information they hold for your business and only update it when things change. Using systems that will ‘talk’ to each other – including banking details, other government departments, and employers – HMRC can access what they need without regular re-submission of the same data.
  • Digital interaction. You will be able to interact with HMRC whenever you want. No longer tied down to a set time each year, the link between your online accounting software and your HMRC account means that at the press of a button you can send or receive whatever information is required whenever you choose.
  • A single account. As the roll-out of Making Tax Digital takes effect businesses will be able to see all their liabilities and entitlements in one place – as they currently do with a bank account – saving everyone time and money.

If you would like more information on Making Tax Digital and how cloud-based accounting software can help your business meet its obligations, our tax specialists at Cain and Beer can help and advise. We are on 020 3633 1340 or at whenever you need us.

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Auto-enrolment Tax Break

If your business employs staff then after 30th September 2018 you will be faced with up to an extra 3% on your wage bill. Auto-enrolment is something that all employers will need to embrace very soon if they haven’t had to already.

Every employer will have to contribute to their employee’s pension funds from of around 2% of each employee’s wages who earn above £833.33 per month. This will increase to up to 5% but not lower than 2% from 1st October 2017 and then from 30th September 2018 it will rise to 8% with a minimum of 3% payable.

It’s not all doom and gloom though as there is a tax break that employers can take advantage of by simply ask you employees whether they would consider a salary sacrifice arrangement. This basically means that the employer will cover the employee’s pension payments in exchange of a salary reduction for the same amount.

It’s an equal swap and there is no net cost, just PAYE and National Insurance savings for the employer and employees alike. The good news too is that HMRC are completely happy for employers to use salary sacrifice schemes. Employees will need to have volunteer for these schemes and it is obviously the duty of the employer to make sure that full explanation is given to their employees

If you need help with your auto-enrolment or have any general bookkeeping questions then please get in touch by calling us on 020 3633 1340 or email

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