Employment Benefits in Kind Returns
Do you provide your employees with any benefits as a perk of the job, or make regular payments to directors that could be classed as a loan? If the answer is yes then as an employer you are required to complete the required forms and submit them to your tax office by 6 July 2018.

If any company directors have an overdrawn account over £10,000 at any point in the year where loans were made and not repaid, or the dividends are not being declared on the 2018 tax return it needs to be reported.

Most benefits in kind attract Class 1A NIC and form P11D(b) is used to calculate the Class 1A NIC due by the employer.

On the P11D forms, the benefits have to be divided into two types to facilitate the tax and National Insurance calculations that follow. Some items reported on the form do not create a tax charge others do.

Tax and National Insurance is not charged if the expenses are wholly and exclusively for business. However any other Benefits in Kind (company cars, medical insurance etc) would need to be reported.

The Class 1A NIC charged on company benefits provided by an employer in the year ended 5 April 2018 is due for payment on 19 July 2018. If it’s not paid by that date, the tax office will charge interest.

Do not ignore this and get the returns filed as soon as possible as there is a penalty of £100 (for every 50 employees) if the forms are not received by 6 July 2018, with an additional £100 penalty for each further month late.

We would be pleased to offer assistance in completing these forms so please contact us to see how we can help you.
Stress busting with DAWN Coaching & Therapy: Breathing
Have you ever sat at your desk and realised you’re holding your breath or your shoulders are tense? We’re all so busy these days that we often forget to just take a minute to relax.

If this sounds familiar, our next stress busting tip from DAWN Coaching & Therapy could be just what you need…

Simple and effective breathing technique to aid stress reduction.

BREATHING – Something as simple as using a daily focused breathing technique can help to activate the body’s natural relaxation response. The relaxation response is a physical state of deep rest that changes the physical and emotional responses to stress (e.g. decreases in heart rate, blood pressure and muscle tension).

CALM - Deep abdominal breathing for 20 to 30 minutes each day can reduce anxiety and reduce stress, increase the supply of oxygen to your brain and stimulates the parasympathetic nervous system, which promotes a state of calmness.

THE TECHNIQUE – First “smile inwardly” with your eyes and mouth and release the tension in your shoulders. This is a powerful muscle release in the places where most people hold their muscles tense. Then imagine holes in the soles of your feet. As you take a deep breath in, visualize hot air flowing through these holes moving slowly up your legs, through your abdomen and filling your lungs. Relax your muscles sequentially as the hot air moves through them up your body. When you exhale reverse the visualization so you “see” hot air coming out the same holes in your feet. Repeat throughout the day whenever you need to feel calm and relaxed. Continue to read the article here.

If you need support reducing your stress levels, contact DAWN Coaching &Therapy via their website, email dawncoachingtherapy@gmail.com or call 07481 476149.
Make a Tax-Smart Will
Has your Will been drafted so Inheritance Tax (IHT) will be due at 36% rather than 40% on your death?

The reduced rate of IHT applies when at least 10% of your net estate is left to charities. This is the value of your estate after deduction of the nil rate band, and it may be referred to as the 'baseline amount' in Wills drafted after 6 April 2012. A Will made before this date is unlikely to include a specific provision for 10% to go to charity.

Your Will doesn’t have to specify which charities should benefit and how much each will receive. Those details can be included in an expression of wishes, which is a private letter from you to your executors and is normally kept with your Will.  
Loans and Interest
Directors and employees sometimes borrow from their company, intending to pay the money back, but the actual repayment gets delayed. This can lead to a benefit in kind tax charge on the individual, and a class 1A NIC charge for the company.

These charges can be avoided if the amount borrowed at any point in the tax year doesn’t exceed £10,000. If a greater amount is borrowed, there will be no tax charge if the individual has agreed to pay interest on the loan at a rate equal to or greater than the Official Rate (2.5%).

This interest must actually be paid to the company, not just accrued. Although there is no deadline for paying the interest, it’s best to pay before 6 July following the end of the tax year, as that is when the form P11D must report any interest-free loans.

Directors and their family members can trigger an additional tax charge for the company if they don’t repay their loans promptly. That tax charge is calculated as 32.5% of the loan balance which is outstanding more than nine months after the end of the accounting year in which the loan was advanced. There is no minimum threshold for this tax charge.

Get in touch - If you'd like to find out more about how we can help you and your business pay less tax, generate more profits and create long-term wealth for you and your family, please get in touch now