Grandparents and other family members under state pension age who look after children under 12 while their parents are at work may be able claim valuable tax credits. These are known as “specified adult childcare credits” and they count as a national insurance credit for those who don’t otherwise work. The reason this is important, is because you need at least 10 years’ worth of credits to qualify for the state pension, and at least 35 years’ to get the full £8,767.20 a year. Missing out on just a year’s credit could mean that you are losing out on £250 and over a typical 20 year retirement, this could amount to around £5,000.

YOU can apply for specified adult childcare credits if :

• You are a grandparent, or other family member caring for a child under 12
• You were over 16, and under state pension age when you cared for the child
• You live in England, Scotland, Wales and Northern Ireland, but not the Channel Islands or the Isle of Man
• The child’s parent (or main carer) is entitled to child benefit and has a qualifying year for national insurance without needing the parent’s class 3 national insurance credits which they receive automatically from child benefit – they can check their national insurance record online to see if they have any gaps in contributions
• The child’s parent (or main carer) agrees to your application by countersigning the form to confirm that you cared for their child for the period stated and you can have their class 3 national insurance credit for the period stated

Please contact Lucy Murray at lucy.murray@drummondlaurie.co.uk if you would like to know more about this.

The sun was shining on Saturday for Doune & Dunblane’s 72^nd Agricultural Show.

Among the attendees was our very own Margaret Bunyan and her son Owen, who enjoyed a great family day out and catching up with a number of friendly faces.

Drummond Laurie were proud to be one of the show sponsors again this year and help support the local farming community.

Congratulations to all our clients who took part in the show and to the winners too!

An internship at Drummond Laurie CA is a very rare and unique opportunity for those considering a career in accountancy to experience first-hand what life is like as a trainee accountant.

Over the course of the internship successful candidates will gain real practical experience within a highly skilled team consisting of a mix of qualified and non-qualified individuals who together boast a breadth of knowledge and experience.

It allows people to sample our culture and working environment to decide for yourself whether it is right for you upon completing your studies and many of our previous interns have gone on to have extremely successful careers with us after completion of their internship.

This year we are absolutely delighted to have two interns join us over the summer.

Fiona Mulder is about to start her 4th year at the University of Strathclyde studying Accounting and Business Law.  Fiona hopes to gain some real hands on experience over the summer enabling her to return to her final year at university with a clearer idea of what the future may shape up to be!

Craig Martin is 24 years old and is a 3^rd year student at the University of Stirling.  He is working towards completing an Honours degree in Accountancy and Finance and hopes to learn a lot from this experience and gain an insight as to what it is like to work in accountancy practice.  Outside of work, he has a passion for football and travelling.

We often have opportunities for experienced and qualified people, please check out our careers page CLICK HERE

Last weekend was one of Scotland’s most iconic agricultural events, The Royal Highland Show. The 179^th Show had a record attendance estimated to be 195,400 and is thought to have generated £65m in economic benefit for Scotland.

Among the visitors to the show were a number of the Drummond Laurie team, who enjoyed celebrating the best in farming, food and rural life.

Drummond Laurie would like to congratulate all the winners and in particular their clients.

Here’s hoping the good weather experienced by the Highland Show will continue for the rest of the 2019 agricultural show season!

We have an in depth knowledge at Drummond Laurie of the agricultural sector and are continually working with clients to provide specialist taxation, accountancy and business advice.    If you would like to discuss any agricultural related accountancy or taxation matter, please get in touch.

HMRC have recently announced the introduction of a VAT Reverse Charge with regards to the Construction Industry. Whilst this term is new territory for the construction industry, this VAT treatment is already resident within other industries such as mobile phone and electricity.

Three important questions at the tip of our tongue:

• Who does this apply to? This only applies to supplies of building and construction services where your customer is registered for both VAT and CIS and these supplies are either standard rated or reduced rated.
• When does this apply? These new VAT rules are due to come into force in October 2019.
• Why?! HMRC believe that the introduction of these new VAT rules will significantly reduce the impact and existence of “missing trader fraud”. In short, this is the process of events whereby a supply chain is set up, with various intermediaries, and VAT is collected with no intent to pass this over to HMRC. The VAT Reverse charge is intended to prevent this by ensuring that VAT is paid over and reclaimed at the same point, ensuring HMRC do not lose out.

Two initial essential parts to this: establishing if your customer is the end user of your services and establishing if your customer is VAT and CIS registered.

If your customer is both VAT and CIS registered, and they are not the end user of the services provided, VAT reverse charge scheme will apply. Once under this VAT arrangement, you will consequently omit charging VAT on your invoice. A tax shift mechanism will take place and effectively your customer will adopt the “collection of output tax” role. As a result, the customer will account for both output and input VAT on their VAT Return. On the other hand, where the customer of the supply of construction services has confirmed that they are instead the “end user” of these services, the VAT reverse charge will not apply and VAT will be charged in the usual way.

VAT Reversal Charge will likely always apply in situations where there is Business to Business supplies of construction services between VAT registered businesses and the customer’s activities then provide an ongoing supply of the same construction and building services to another user.

How does this work practically?

Establishing Customer – Supplying services in the realms of CIS requires you to establish the position of your customer. Your customer is required to confirm, in writing, that they are the end user of the construction services to trigger the treatment of VAT under the normal method. Penalties may be due where the VAT Reversal Charge is not implemented correctly, however, HMRC have confirmed that there will be a 6 month period, following implementation date, where errors will be looked at more lightly.

Administrative Changes – Where the VAT Reverse Charge applies, declaration must be made, in words, on your invoices that this VAT treatment has been applied. This may require adjustments to systems which generate the invoices.

Cash Flow Considerations – Under the VAT Reversal Charge, the supplier passes the responsibility of charging VAT to the customer. As a result, the supplier charges and receives only the net amount.

Suppliers must consider the cash flow impact of receiving only the net amount and losing out on the benefit of retaining the output VAT for the time period prior to paying this over to HMRC.

HMRC have provided initial guidance on this which can be found at www.gov.uk/government/publications/vat-reverse-charge

Further announcements and guidance are expected from HMRC over the coming months.

Please do not hesitate to contact your usual Drummond Laurie contact to discuss further.

We are just days away from one of the UK’s premier agricultural shows, the 2019 Royal Highland Show.

From Thursday 20^th June to Sunday 23^rd June the Royal Highland Centre at Ingliston, Edinburgh will open its doors to the 179^th Royal Highland Show and showcase the best in farming, food and rural life. There is something for everyone at the show.

Some of the team from Drummond Laurie will be going to the show and are counting down the days till they “meet, touch, smell, taste and take home the best in the country”.

We would like to wish all of clients who are competing at the show the best of luck.

More details about the show can be found at www.royalhighlandshow.org

When do you need to register for VAT?

The questions you need to ask yourself are:

1. Has my VAT taxable turnover exceeded the current VAT registration threshold (which is currently £85,000) over the last 12 months*?
2. Is my VAT taxable turnover expected to exceed the current VAT registration threshold in the next 30 days?

If the answer is yes to either of the above, then you do need to register with HM Revenue & Customs (HMRC) for VAT.

*This is a rolling 12 month period rather than a fixed 12 month period and thus can be any period.

What are the timescales for registering?

If you exceeded the VAT registration threshold in the last 12 months:

• You need to register within 30 days of the end of the month in which you went over the registration threshold.
• You will be treated as being VAT registered from the first day of the second month after you exceeded the threshold.
• For example if your VAT taxable turnover was £90,000 between 16th May 2018 – 15th May 2019, you would need to register for VAT by the 30th June 2019.  Your effective date for registration will be 1st July 2019.

If you expect to exceed the VAT registration threshold in the next 30 days:

• You need to register by the end of that 30 day period.
• You will be treated as being VAT registered from the date you realised, not the date your turnover went over the threshold.
• For example if on the 1st May you realise that your VAT taxable turnover in the next 30 days will exceed the VAT registration threshold, you will have until the 30th May to advise HMRC. Your effective date for registration would be the 1st May.

It is important to note that failure to register for VAT on time will potentially result in penalties.

You will also have to pay the VAT on what you owe from when you should have registered.

Are there any exceptions?

If you answered yes to either of the questions above, but expect your VAT taxable turnover to fall below the current de-registration threshold (which is currently £83,000) in the next 12 months you can apply to HMRC for a registration exception. This is on the basis that your VAT taxable turnover only goes over the threshold on a temporary basis. It is important to note that HMRC ultimately makes the decision as to whether or not you need to register for VAT.

What do I do before I get my VAT registration number?

You need to start charging VAT and include this on your invoices, although this cannot be shown separately. A statement should be added on the invoice advising that an application has been made for VAT registration and a VAT invoice will be issued as soon as a VAT number has been allocated.

VAT of course is payable on this period.

Key VAT responsibilities

From your effective date of registration you must:

1. Charge the correct amount of VAT
2. Keep VAT records
3. Submit VAT returns
4. Pay any VAT due to HMRC
5. Comply with Making Tax Digital for VAT rules, if your VAT taxable turnover exceeds £85,000.

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., email adviser@drummondlaurie.co.uk or call us on 01324 441250.

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.