From 1^st April 2019, the Government’s Making Tax Digital (MTD) Programme became law. As a result, businesses with a taxable turnover of more than £85,000 will be required to keep their records digitally and file their VAT returns directly from their software package, saving time and hassle for everyone.  It is the latest step on the road to a fully digital and truly 21st Century tax system.

The first step on the MTD journey was to check that your software is compatible.  Now that you have done this you may be mistaken in thinking that is the end of the journey……  Unfortunately, the journey doesn’t end there and YOU HAVE TO REGISTER FOR MTD. 

Registration is carried out via HMRC’s website  here

BEFORE YOU RUSH TO SIGN UP FOR MTD PLEASE CONSIDER THE BEST DATE FOR YOUR BUSINESS TO REGISTER!

If you do not have a direct debit in place you can register for MTD anytime between the day after your last VAT return under the way the old method was due and 72 hours before your first MTD VAT return is due. This may be better illustrated by way of an example;

If your first quarterly VAT submission under MTD conditions will be April/May/June you will register between the following dates:

8^th May and 4^th August.

The relevance of these dates is 8^th May is the day after the deadline of your last VAT return under the old method and the 4^th August is 72 hours before the first MTD VAT return deadline of 7^th August.

If you do have a direct debit in place the period where you can register is shortened as HMRC require extra time to move your direct debit instruction over to the new MTD system.  You can only register for MTD 5 working days after the last VAT return submission deadline under the old method and 15 working days before the first MTD VAT return due date.

Again this may be better illustrated using the example above:

If your first quarterly VAT submission under MTD conditions will be April/May/June you will register between the following dates:

15^th May and 17^th July

The relevance of these dates is 15^th May is 5 working days after 7^th May deadline under the old method and 17^th July is 15 working days before the first MTD VAT return deadline of 7^th August.

If you would like to discuss any particular MTD queries please contact  Julie McVicar 01324 441256.

We are always delighted to support our mini DL teams in their activities and this week two local football teams benefited from our sponsorship.

Here’s Jeff Murray who plays for Bo’ness United Community Football Club 2008, his mum, Lucy, is pictured at the back but some of the team are nearly the same height as her!

The next team is Dunipace Football Club 2012 and our main man is Dylan Jack, you’ll see him jumping up and down in the middle – this team just couldn’t sit still they were so excited by their new match kit!

Where a business vehicle is used privately and VAT is reclaimed on all road fuel, it is important that the appropriate Fuel Scale Charge is applied. The Fuel Scale Charge ensures a standardised VAT add back and is based on the CO2 emissions of the vehicle. Applying a Fuel Scale Charge makes things simpler, as you don’t need to maintain detailed mileage records.

From the 1^st May 2019 the Fuel Scale Charge rates will change and the new rates can be found HERE

These new rates should be applied to VAT returns commencing on or after the 1^st May 2019.

The Fuel Scale Charge is entered on your VAT return as follows:

• Box 1 – VAT element
• Box 6 – net element

Depending on your mileage the Fuel Scale Charge may exceed the VAT you wish to reclaim and a business may therefore decide not to reclaim any VAT on road fuel.

At Drummond Laurie we are always here to help and if you would like to know more about the VAT or other services we offer, please do not hesitate to get in touch.

Today, 5^th of April 2019, marks the end of the 2018/19 tax year.

Over the coming weeks/months you will likely receive important end of year tax documents, such as P60s, P11ds, dividend summaries and annual interest certificates. For those required to submit a self-assessment tax return for the 2018/19 tax year it is important that you keep these safe, to allow your return to be prepared.

We always encourage early preparation of tax returns to allow tax bills to be known as early as possible and help clients manage their cash flow. So don’t delay in handing your tax information into your adviser or in preparing it yourself!

At Drummond Laurie we are always here to help and if you would like to know more about the tax or other services we offer, please do not hesitate to get in touch.

One of the highlights of the farming year, lambing season is a challenging but joy-filled time for our farming clients.

It’s miraculous. Amazing. Unforgettable. And yet it’s commonplace on British farms. Every year, 16 million ewes give birth in the UK.

These days, lambing takes place anytime between November and May – but the birth rate still peaks in spring.

Here’s a lovely picture of Elaine Campbell’s baby son Euan experiencing his first lambing.

With the end of the 2018/19 tax year fast approaching (5^th April 2019), it is important to consider whether you have made full use of the tax allowances which are available.  

Pension Contributions

Each UK tax payer has an annual allowance of £40,000 which can be invested into a pension.  The allowance can be carried forward for a maximum of 3 years, so if no contributions have been made in prior years there could be allowances of up to £160,000 available, including the current year.

For limited companies, contributions are allowable for tax purposes resulting in a reduction in corporation tax liabilities.

For sole traders and partnerships, tax relief is available at the highest rate of tax resulting in a reduction in income tax liabilities.

Dividend Allowance

Dividends up to £2,000 are tax free for each tax payer.  For those who are married, an effective way to utilise this exemption would be to ensure assets returning dividends are jointly owned by spouses meaning both individuals allowances can be used.

Individual Savings Accounts (ISA’s)

Up to £20,000 per tax year can be invested by each tax payer into ISA’s.  Interest and capital gains from returns generated by funds held within an ISA are not subject to income tax or capital gains tax.  With funds generally available to withdraw at any time, ISA’s offer a tax efficient investment while also offering an element of flexibility to the individual.

Marriage Allowance

For married couples or civil partners where one spouse earns below the personal allowance (£11,850) and the other is not a higher rate tax payer, there is the opportunity to transfer 10% of your personal allowance.

These are just a few of the options available – for more details please contact us via e-mail on adviser@drummondlaurie.co.uk or phone 01324 441250.

Estate planning is a difficult area for many to think about and as a result is often not addressed. As professional advisers we encourage our clients to think about the future and ensure that their affairs are in order, their wishes can be upheld and any taxes are minimised. Everyone is different and the action needed therefore varies.

Having an up to date will in place which reflects your current wishes is arguably one of the most important things you can do. A will is a legally binding document which states how you wish your estate to be handled upon death. Not only does it make things easier for your loved ones, it can also help prevent a lengthy and costly legal process.

Another important legal document is a power of attorney (PoA). This document is drawn up when you have the capacity to do so and gives someone, known as the attorney, the legal authority to take action and make decisions on your behalf in relation to your financial/property matters and/or personal welfare. A PoA will be used when you become incapable and thus unable to make decisions yourself, although can be used prior to this to help you with your finances. Without a PoA your family/friends potentially could have to go to court to seek authority to act on your behalf.

It is important that you regularly review your plans and ensure that such documents as your will and PoA are up to date and reflect your current wishes.

It’s never too early to plan for the future and speaking with professional advisers such as ourselves is often crucial in successful succession planning. If you have any concerns around this or need some assistance, we can be contacted on 01324 441 250 or adviser@drummondlaurie.co.uk

Holly joined us a couple of weeks ago as an Accounts Assistant who will be working in both the Grangemouth and Perth offices.

Holly graduated last year from the University of Stirling with a BAcc Hons in Accountancy & Economics, she is looking forward to the challenges that lie ahead and hopes to start studying towards becoming a Chartered Accountant with ICAS in September this year.

In her spare time she enjoys going on holiday, cooking and reading.

A temporary increase in the Annual Investment Allowance (AIA) up to £1,000,000 for a two-year period was recently announced by HMRC.  The increase is applicable from 1 January 2019 to 31 December 2020, at which point it will reduce back to £200,000.  The timing of the change means that for businesses which do not have a 31 December year end, a hybrid level of AIA will initially be available.  Below is a note of the AIA available based on the year end date of the business in 2019:

The significant size of the temporary increase means that, more than ever, it is important to consider the timing of any purchase of assets to ensure that maximum tax relief can be obtained.

For further advice on AIA, or any aspects of capital allowances, please contact us via e-mail on adviser@drummondlaurie.co.uk or phone 01324 441250.

We are delighted to announce we have now successfully submitted our first VAT MTD live submissions on behalf of a few of our clients who joined our pilot early ahead of the 1^st April 2019 deadline.  During this time, we have been able to test the MTD sign up process and software for our clients to ensure we are fully ready to answer all their questions and advise them of their best course of action to be MTD compliant.

Here’s a reminder of what MTD is.

It will introduce a requirement for all businesses with a taxable turnover above the VAT registration threshold (£85,000) to keep digital records. For businesses with a turnover below the threshold, it´s not compulsory, but they may also opt to file their VAT returns through MTD.

How will it work?

Under MTD, the following information must be kept using functional compatible software approved by HMRC:

• Name and address of the VAT registered person
• Address of the VAT registered person’s principal place of business
• The VAT registration number
• The VAT accounting schemes
• The date and value of each supply made, and the type of VAT charged
• The date and value of each supply received, plus the amount of any input tax that needs to be recovered
• The VAT exclusive value of each of the following outputs: standard rated, reduced rated, zero-rated, exempt or outside the scope.

How can my company prepare?

If you are a Drummond Laurie client, we will be in touch with you very soon to discuss your specific needs and advise you of how to progress using our knowledge from the pilot.

Businesses will have to submit their VAT returns under MTD for VAT quarters beginning April 2019. The first step to ensuring MTD compliance is to ensure your accounting package will be deemed ‘functional compatible software’ for MTD purposes.

If you have concerns around this or need some assistance, we can help, email adviser@drummondlaurie.co.uk or call 01324 441250 as soon as possible to discuss your options.