Personal Tax return for Company Directors, Accountant Guide

DO YOU NEED TO FILE SELF ASSESSMENT TAX RETURN AS A COMPANY DIRECTOR

Are Company Directors Required to File Tax Return in Self Assessment?

The subject question has had contradictory answers for many years. HMRC have maintained that tax return has to be filed by all directors quoting certain sections of the tax guidelines. However, the same guidelines have other sections which clearly exclude directors from the responsibility of filing tax returns in normal scenario. You need to dig deep into the tax laws in order to find out the correct answer. While HMRC have persisted with their stand, the position has been challenged with success in various tribunals.

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What’s the Lawful Position?

Company directors have no separate category as such. They fall under the same provisions as all other employees. If all your income has already been taxed at source and you have no other major income amounting to more than 2500, you don’t have to file tax return if you have not been issued with it. You can yourself check whether you are required to file tax return or not using the tool for self assessment updated by HMRC. The tool offers a set of simple questions to you, which when answered lead you to the logical decision.

One important point in this regard is the first question that you get from the tool. It may be reworded, but basically it asks you, “whether you were working for yourself or not”. If you were a director during the tax period, you must give “yes” as the answer irrespective of your stakes in the company. This is so because as the director, you are the boss and even though you are getting a salary, the same comes to your account only after tax is deducted at source. The subsequent questions are quite simple and easy to understand. Just answer them and you will get the decision whether you are supposed to file tax return or not.

Actions on Receipt of Notice to File Tax Return from HMRC.

If you are the company director and have no other major income that falls under taxable criteria, but have received a notice from HMRC for filing tax return, you need to act immediately. If you feel that you don’t have to file the return, you should write back to HMRC requesting them the withdraw of notice. If you fail to do this, you are liable to be penalized for not filing even if no additional tax is due on you. You should contact the GM with your UTR (Unique Tax-payer Reference) and NI number for an early resolution.

Procedure for Filing Tax Return. Get yourself registered online for self assessment. This may take about 10 working days for setting up the initial account before the return can be filed. The balance process for filing tax return is the same as for other individuals and is fairly simple. If you don’t have sufficient time to set up your online account and the deadline is closing in, you should opt to get your return filed through A tax consultant. Timely action is required in order to avoid penalties for late filing.

GM professional are specialist in personal tax returns , we can assist you in your filing and help to make the process simple. We have offices located in London, Manchester and Essex.

E-commerce Tax Advisor guide

E-commerce Specialist Tax Advisor

Taking Specialist advice when starting an E-commerce business is important. It can be challenging to select which platforms to trade on as there are a wide range of platforms. It is important to get your tax affairs in place before trading. As you have options on a few different type of structures, you can choose to trade as a limited company, sole trader, partnership and a Limited liability partnership.

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What structure should you choose?

This will be dependent on your profit, but a sole trader is a simpler model and costs less to operate. But with a limited company, you will benefit from the veil of corporation (protection against your personal assets).  A limited company may suit you if you are in employment and have this as a secondary income, you can take advantage of withdrawing dividends at a lower rate than employment income.

What challenges will you face?

If you are importing stock from overseas , then you will need to ensure that you have an EORI number to allow stock to be collected.  You may use an agent to collect and ship your stock. If you have decided to be vat registered then it is important to work out of your place of supply. As the vat treatment is dependent on the place of supply, if you are trading on platforms that ship your stock to other European countries, then you will need to assess whether these are distance sales or if you need to be Vat registered in that country.

What tax planning ideas can you take advantage of?

Its important to assess whether the expenses you are incurring are remote to the business and don’t have a dual purpose. HMRC defines this as wholly and exclusively for business purposes. Apportionments will be needed if the criteria is not fulfilled.

If you have full personal allowance then you can take advance of the small salary and divided strategy which is the most tax efficient strategy for small businesses.

Plan for Action

1) Market research

2) Hire a good accountant

3 Form a structure as explained above

4) Tax planning

5) Prepare for Vat and accounting deadlines

GM professional accountants are highly rated as we specialise in this sector and provide specialist advice on all forms of tax and vat fields. Speak to one of our tax experts and we will ensure that you are guided efficiently through the whole process. We have office is London, Manchester and Essex.

Choosing a HMRC registered accountant agent guide

HMRC REGISTERED ACCOUNTANT GUIDE

1. How to Choose Your accountant?

Selecting a good tax adviser can be difficult as well as prove to be expensive. However, if you consider the

following points, you can make an informed decision :-

(a) Experience. This is a key factor in making the right selection. An adviser with previous experience in the field can help you save a lot of money through his/her counsel. A tax consultant who can undertake bookkeeping, audit and is proficient in corporate or personal tax regulations can setup and manage your accounts in such a manner as to reduce your tax outflow. Experience in payroll services, tax investigation, VAT submission and landlord support along with the knowledge of current tax regime is an important parameter.

(b) Trust. It goes without saying that trustworthiness of your tax consultant can never be overemphasized. You can’t be sharing your personal and financial details with someone, whom you don’t trust.

(c) Qualification. If trust and experience are the 2 most important attributes, you can’t overlook the qualification of the tax adviser. A highly qualified tax consultant may seem to be expensive at the outset, but will ultimately be able to save you more money in the long run.

(d) Integrity and Transparency. You should select a tax consultant, who scores very high in integrity and informs you about all of his/her charges upfront. You should discuss the fees and costs of tax consultancy services with the adviser and an agreement must be reached. This kind of transparency is not only good for your business, but also aids in developing a healthy professional relationship. A consultant who commits to have a fixed fee structure is the best as you don’t have to spend time again and again on the same discussion.

2. HMRC approved (registered) accountants.

Tax planning and timely and accurate filing of tax returns are very critical for any business as well as individual. The rulings and procedures are often confusing. We at GM PROFESSIONAL ACCOUNTANTS provide you an end to end solution for this and are registered with HMRC as agents. With commitment to the job and knowledge of all tax related matters, we’re among the foremost Tax Advisers in London.

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3. GM PROFESSIONAL ACCOUNTANTS – The Right Choice.

Whether you’re an individual tax payer, proprietor of a trader firm or big business organizations looking for the best suited tax advice, GM PROFESSIONAL ACCOUNTANTS meets all your needs. Our bookkeeping services are arguably the best in the market and you’ll never have to worry about any wrong or inaccurate entries. With years of experience, we’ve earned more respect than profit because we put faith and integrity as our topmost goals.

Conclusion.

There are broadly 3 ways to manage your accounts and undertake tax management. First is that you do it yourself, which is perhaps the cheapest option but involves lot of hard work on your part. The second method is to take help from an acquaintance, which will have no guarantee of success. The last method is to hire a good tax consultant and although it may seem to be the most expensive method, it saves your hard- earned money. A bit of research can assist you to get the best quality tax adviser at reasonable prices.

GM Professional Accountants have offices located in London , Manchester and Essex.

Earning over 100k tax return guide

Tax implications of earning over £100k

Tax Filing for High Earners

If you earn more than 100,000 annually, you need to file your assessment tax returns with the HMRC. If you have not been sending your tax returns, you should register by the 5th of October after the tax year in which the income was realized. We can handle your tax returns and help you avoid penalties.

 

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Do I Need to File a Returns if I’m Paid PAYE?

If you happen to be earning more than 100,000, you are classified as a high earner and the HMRC will be looking very closely at your money. Most high earners have more complexities in tax returns due to having more than one source of income. This calls for annual filing of self-assessment tax returns, which will ensure that all income is accounted for.

HMRC will also require that high earners file their returns since it can impact how much of your Personal Allowance will be tax-free. In HMRC language, this is what is referred to as the “adjusted net income”. The figure does not take into consideration Personal Allowance though it will comprise several types of tax relief. It boils down to a loss of 1 of tax-free Personal Allowance for each 2 over 100,000 of the adjusted net earnings. Things can get complex, which is why the HMRC requires that you file a tax return to make everything clear.

Can Submitting a Tax Return Result in Double Taxation?

You do not have to worry about double taxation as the HMRC will not tax the same income twice. However, it is easy to get it wrong if you are unfamiliar with the Self-Assessment system. There are many tax return deadlines and rules that come with Self-Assessment. You will have to register for it and you are likely to pile up penalties if you make mistakes in your filings.

Even if you somehow don’t fall into the pitfalls of Self-Assessment, you could still find that you are paying more tax than you should. Depending on the situation, you might get tax breaks on allowances that might be applied to the taxable income. Most people do not know how much they can claim for or may try to claim more too much.

What Information do the Tax Authorities Need?
HMRC will need a detailed accounting of all your income and expenses. This will include information about earning sources such as share dividends, employment, pensions and interest among others. The authorities will also expect that you declare all employment benefits. The tax authorities will also expect that you declare your allowable expenses too. It can take some getting used to and dropping the ball is more common than you may think. Contact GM If you need any advice or help.

1. Deadlines
2. Directors
3. Penalties
4. Claiming expenses
5. Common mistakes

Will you help with my Tax Returns?

Absolutely! As some of the best tax specialists in the UK, GM Professional accountants provide Self-Assessment tax return services that will be excellent if you have complex tax circumstances. We will take it off your hands and work on your total taxable earnings and then file the returns for you. Our experienced tax experts will ensure you are in compliance with the HMRC regulations and save you money while at it. Contact us and learn how we can help you with your returns.

High Income Child Benefit Charges Tax Return Guide 

Child Benefit Charges Tax Return Guide

Getting a pay rise is a good thing that is to be celebrated but it could bring with it new problems especially if your income goes above 50,000.

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If you have children and have been getting Child Benefit tax breaks, you may have to pay back some of the benefits. The good thing is that there are morally acceptable and legitimate ways to reduce tax liability.

Child Benefit if you are Earning More than 50,000

If you or your spouse are earning an income of 50,000 or more in a year before tax, then the HMRC will expect that you pay back a portion or in some instances all of the Child Benefit that has to be declared in the form of Extra Income Tax.

What Happens when you and your Spouse are Making Less than 50,000 Annually?

In the instance that you and your spouse each make less than 50,000 annually, you will be eligible for Child Benefit and will not have to remit or pay back anything to the HMRC.

What Happens when either you or your Spouse is Making between 50,000 and 60,000 Annually

If either you or your spouse is earning between 50,000 and 60,000 annually, you will be expected to declare and pay back part of the Child Benefit you got which will now be deemed extra Income Tax.

What Happens of either you or your spouse is making more than 60,000 per year

If one or both of you are making more than 60,000 a year, then you will need to pay back the Child Benefits as Income Tax.

What Happens When a Spouse Moves In
If you move in with a spouse that is earning more than 50,000, the tax situation will change. If you are earning more than 50,000 and your income is higher than that of your spouse, you will have to pay the tax charge. If their income is higher they will pay the tax charge.

How does it work?

Top tip
One of the biggest benefits of claiming Child Benefits is the effect on your State Pension. This works if you are currently unemployed and happen to be at home looking after your child or children. Since you may not be making payments to National Insurance, the Child Benefits will be credited to your State Pension. You can always call 0300 200 3100 and talk to a Child Benefit Office representative if you need more information on how this works.

If you are being paid on a weekly basis the full amount of Child Benefits will still be paid to you every single month. However, this is only applicable if the amount of money you are making is below the 50,000 income mark.

However, things will typically change if either you or your spouse start making more income. For instance,

if either of you starts getting more than 50,000 a month, the HMRC will expect that you pay more Income Tax. The reasoning for this is that you will need to repay part of the Child Benefit that you are no longer eligible for.

The HM Revenue and Customs authority (HMRC) requires that you file a Self-Assessment tax return. This makes it possible for the HMRC to determine how much in extra Income Tax you should pay.

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Choosing an Accountant in London Guide

How to choose an Accountant for your small business

Selecting an Accountant for Your Business

Business and tax affairs are sometimes complicated and hence the choice of an accountant is critical, whether you are an established company or a new business. The best accountants will typically have the necessary qualifications, and be members of a regulatory and professional body. Such accountants is good for your business since they have not only the practical experience but also the technical expertise in the field.

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Choosing Your Accountant

A good account is one that is suitable for your business and also for your individual needs. As such, whether you are seeking qualified accountants in London or any other location in the United Kingdom, it is absolutely critical to be very careful. Take your time rather than engage in the last-minute rush when the deadline for filing your returns is imminent. When selecting accountants, ensure that the firm has the necessary skills and experience in your industry. The best way to determine their experience is if they have clients that are of the same size and are in the same industry. Such a firm will understand the types of issues the business is likely to face. GM professional accountants work in a number of sectors and are awarded the tree best rated accountants.

Why Get a Licensed Accountant for Your Business

1. They will handle the tedious activities of account preparation so that you can have time to take care of other important activities.
2. Help you to be more efficient in structuring your tax obligations
3. They offer specialized tax saving advice
4. Help you secure funding and loans critical for the growth of the business

Where to Hire a Highly Qualified Licensed Accountant in London

You can always start with asking other people for recommendations though you will still need to ensure that your recommendations are a proper fit. A friend of a friend in your locale might have been great at helping file individual tax returns but they will not cut it if you are a fast-growing business in London.

You should also take into account the benefits of hiring an accounting firm. You will always have someone to step into the gap and take care of all your accounting needs whenever an urgent matter comes up or when your dedicated accountant is on holiday or otherwise incapacitated. A firm will also have accountants with a range of specializations and experience should you need it. However, you should find a firm that is not too large that it is impossible to speak to the same person whenever you email or call in. In an ideal situation, you want a firm that gets you a dedicated accountant that will come to learn how your business works and also build a working relationship with you. Since they will have an intimate understanding of your business they will be able to give highly relevant advice to you.

Critical Things to Take Into Account for When Choosing an Accounting Firm

1. Dedicated accountant for your business
2. Fixed fee options so that you can control costs
3. Have clients of similar size and industry
4. Local accountants that you can meet for one on one meetings

Having fixed fees is particularly critical especially if you are just starting out and need to know the exact costs of accounting services. GM Accountants are located in Ilford and central London and provide fixed price accounting services if you need such services. You get a range of pricing option for anything from basic service to one on one meetings or regular phone support depending on your needs and budget.

GM Professional accountants have offices located in London, Manchester and Essex.

Tax Return for Deceased Person Guide

Tax Return for Deceased Person Guide (on death)

Calculating and Paying Taxes after Death

The estate of the deceased will typically have to pay tax prior to any division of money to their heirs. You may not have to pay tax immediately after you get your inheritance, but tax obligations might arise down the road. Here is a handy guide on when and what to pay in taxes in the instance of death.

1. Work out the Income Tax obligations up to the day of their decease 2. Complete tax returns
3. Pay tax on any income that the estate receives
4. Determine if the estate needs to pay any Capital Gains Tax
5. Calculate the Inheritance Tax and determine who is responsible for it 6. Determine if you have to pay any inheritance tax

Work Out income Tax Obligations till the Date of Decease

It is possible that the dead person may have paid too little or even too much Income Tax.
This might mean that the estate might owe or be owed a tax refund.
To ensure that the Income Tax paid is in line with what is owed, you need to contact HM Revenue & Customs (HMRC) who will adjust the tax calculation and make it right.

If the dead person was resident in Wales, Scotland, or England, you could use the Tell Us Once service to have the calculation reviewed. The Department of Work and Pensions (DWP) and the HMRC will then contact you with details about the entitlements, benefits, and tax regarding the dead person’s estate.
If they were resident in Northern Island, you can call the Bereavement service, which provides a toll-free number (0800 085 2463) for any queries on a deceased’s estate.

Completing their tax return

If the deceased used to complete a self-assessment tax return you might have to do it too.
If you decide to use the Tell Us Once service, the HMRC will contact you in case you need to complete the self-assessment tax return.

If you cannot tell if the dead person regularly filed their tax return, consult the HMRC, which will furnish you with the information on how regularly they did so including the last time they submitted their returns. The HMRC will need you to have the National Insurance number of the deceased before they can provide you with the information you need.

Taxation on Foreign overseas Pensions Guide

Taxation on Foreign Pensions

For some professionals, working overseas is a critical component for the growth of their careers. This means that such persons may over the years accumulate significant retirement savings abroad. The big question is “How will these retirement benefits and pensions be taxed once they come back home to the UK to retire?”

The tax obligations could vary depending on how much a person accrued in retirement benefits and savings during that time and the country where they accumulated such savings, the type of retirement provisions employed and the manner of distribution of such benefits. You may have pensions in the US or Europe and its important to assess the tax and look at tax planning solutions before making that choice.

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Combined with the fact that there have been changes made to the tax obligations for persons with non-UK retirement benefits, things have become more complicated.

Determining the Nature of Payments

Before providing any advice, the first thing the adviser needs to do is to determine that nature of the client’s benefits. This article analyzes the treatment of pension earnings made while a professional is working abroad. However, it is possible that such a professional might also have other income while they are in retirement.

Different jurisdictions have different ways of encouraging people to save for retirement and not all of such schemes may have the structure or characteristics of what would be considered a pension scheme in the UK.

In some countries, the benefits may include end of service awards, savings schemes or deferment of receipt of employment income. All of these may be treated differently in the UK when they are declared as pension benefits.

The second part of this article makes the assumption that any of the retirement benefits the professional is earning come from a regime that may be regarded as a pension scheme in the UK, even if it is not registered.

Taxation of Lump Sums from a Foreign Pension Scheme

Generally, a person resident in the UK would have to pay income tax on any lump sum payments they get from their foreign pension scheme.

By and large, such lump sums will be fully subjected to income tax regulations.

While the basic premise is that the lump sum will be subjected to income tax, there is need to take into account exemptions that may reduce obligations, given that the professional accumulated the benefits when they were not living in the United Kingdom.

Reduction of Obligation for Foreign Service
You could get a partial reduction or complete exemption of income tax obligations for pension savings that a person might have accrued while working abroad in the Foreign Service.

The FA of 2017 made recent changes to relief for Foreign Service workers and the details of these changes are set out below.

Getting Relief through Invoking a Double Taxation Agreement

The United Kingdom has many Double Taxation Agreements (DTAs) with many countries and these DTAs have articles governing how pension income will be taxed. The pension article in a DTA will typically grant taxation rights to one country and exclude the other. As such, it will be critical to establish when and where the individual was resident in when the pension benefits were accumulated, and what the DTA stipulations say regarding the tax obligations on their pensions.