Phillips & Co are a firm of Chartered Certified Accountants in Chester. With over 30 years experience we provide a professional and cost-effective tax and accounting service especially tailored for the small business. Our aim is develop a proactive and approachable relationship with our clients and to deliver them the high quality service they deserve.
01244 220 062
Obsidian Offices, Chantry Court, Chester, CH1 4QN
"They greatly assisted with my financial responsibilities and accounts."
Ray Parr -
Harl Training and Consultancy Limited
Let Property Campaign
The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms. If you’re a landlord and you have undisclosed income, you must tell HMRC about any unpaid tax now. You’ll then have 90 days to work out and pay what you owe.
The Let Property Campaign is an opportunity open to all residential property landlords with undisclosed taxes. This includes:
Those that have multiple properties;
Landlords with single rentals;
Specialist landlords with student or workforce rentals;
Renting out a room in your main home for more than the Rent a Room scheme threshold;
Those who live abroad or intend to live abroad for more than 6 months and rent out a property in the UK, as you may still be liable to UK taxes.
We can work out how much tax you owe, the penalties/interest chargeable and complete/submit the relevant HMRC disclosure form.
For more information, please follow the link:
"Phillips & Co have been extremely prompt, clear and polite at all times."
Marcus Baker -
MZB Property Limited
Making Tax Digital
Making Tax Digital (MTD) is the most fundamental change to the administration of the tax system for at least 20 years.
The essential elements for businesses and organisations are:
Paper records will no longer be sufficient: It will become mandatory for almost all businesses and organisations (self-employed, partnerships; limited companies and others) to use software or a spreadsheet to keep accounting records. Paper accounting records will cease to meet the requirements of tax law.
Returns and quarterly reporting: There will be a requirement to submit VAT returns and income tax updates (quarterly and annual) to HMRC, directly from software.
Non-VAT registered businesses
When does it start?
VAT: MTD for VAT starts in April 2019. You are not currently VAT registered; MTD for VAT will be relevant to you only if you become VAT registered.
Income Tax (self-employed, partnerships, trusts and landlords who compete self assessment tax returns): MTD is expected to become mandatory for income tax reporting, but not before 2020. Pilots of MTD for income tax have started.
Corporation Tax (limited companies): The timings for MTD for corporation tax have yet to be confirmed but it will not become mandatory before April 2020.
When does it start?
VAT: As your business is registered for VAT and your turnover is above the VAT threshold you will be required to keep digital accounting records and to file your VAT returns using MTD compliant software from April 2019 (the first VAT period starting on or after 1 April 2019). The current online VAT return will no longer be available.
Voluntary VAT-registered businesses
When does it start?
VAT: Although your business is registered for VAT your turnover is currently below the VAT threshold and as it stands you will not be required to keep digital accounting records or to file your VAT returns using MTD compliant software until 2020 or later. However, you do need to monitor your annual turnover each month, as if it increases to above £85,000 you will be required to comply with MTD for VAT rules.
"They immediately struck us as being interested in the nature of our business."
Hilary Roberts -
Wirral Riding Centre
Sole Trader vs Limited Company...which is right for your business?
Lets look at some comparisons to help you decide.
As a sole trader you are personally liable for any debt of the business.
Sole traders pay tax on their business profits via a self-assessment tax return.
The deadline for filing online self-assessment returns to HMRC is
31 January after the end of the tax year. The personal allowance for the
tax year 2019/20 is £12,500.
The Basic rate of 20% is paid on income from £12,501 up to £50,000, the Higher rate of 40% is paid on income between £50,001 and £150,000 and the
additional rate of 45% is paid on income over £150,000.
Losses can be offset against other income in the same year, carried back
and offset against previous year's profits or carried forward and
offset against future profits.
National Insurance (NI)
A sole trader pays Class 2 NI contributions and Class 4 NI contributions of 9% on
profits in excess of £8,632 (2019/20).
Accounts and Tax Returns
Sole Traders and Partners are not legally required to file annual accounts.
They must, however, keep records of income and expenses for the
purpose of completing their tax returns.
A limited company is a separate legal entity, so as a shareholder your personal
liability is limited to your shareholding.
A director of a company may take a salary from a limited company and this is
taxed at source under the Pay As You Earn tax system (PAYE).
Unless they have absolutely no pay or benefits then a director MUST
file a tax return. This is regardless of whether tax is owed or not.
A limited company pays corporation tax on its profits which is charged
at 19% from 1 April 2019 and is payable 9 months and 1 day
after the accounting period end. A company tax return must be
filed 12 months after the accounting period end.
The dividend allowance (the value of dividends that shareholder can receive
tax free) currently stands at £2,000. For dividends above the dividend
allowance the following tax rates apply: 7.5% at the Basic rate, 32.5% at the
Higher rate and 38.1% at the Additional rate.
Losses can be carried forward and offset against future profits or carried back
and offset against the previous year's profits.
National Insurance (NI)
Class 1 National Insurance may be payable on directors' salaries and bonuses
depending on the level of income. Employers National Insurance at
13.8% may also be paid on directors' salaries and bonuses.
Accounts and Tax Returns
Please see below for more details of the legal requirements of a limited company.
"Fantastic advice and help in setting up our limited company."
Debbie Owen -
Stuart Owen Plant Repairs Limited
Thinking of setting up a Limited Company? Here's a brief outline of what is involved...
The following information must be provided to Companies House:
Memorandum of Association - limited company name, location, business type.
Director's names, addresses and registered limited company address.
The limited company must be said to comply with the terms and conditions
of the Companies Act.
Articles of Association - director's powers, shareholders right etc.
A director of a limited company has certain legal responsibilities, including:
Your newly set up limited company must be registered at Companies House.
Annual accounts and confirmation statements must be filed with Companies
House every year.
Statutory accounts must be filed with HMRC every year.
A Corporation tax return must be completed each year and filed with HMRC.
We can form your limited company and complete all necessary legal requirements, leaving you to get on with running your business.
Have a company name in mind? Click on the link below to see if it is available.
"Value for money is combined with a wealth of experience."
Ben Raffe -
English Village Homes Limited
Tax News in Brief
HMRC tax investigations takings up to three years to complete
Data published by law firm Pinsent Masons has suggested that government tax investigations into large businesses are taking 'three and a half years' to complete.
According to the law firm, HMRC's litigation and settlement strategy makes it difficult for government investigators to settle for less than the full amount.
HMRC scam targets the elderly and vulnerable
A scam used by criminals in 2018 is now doing the rounds again. Criminals purporting to be from HMRC are targeting the elderly and vulnerable people including those with dementia.
The scam involves telling the target that HMRC have a warrant out for their arrest as they haven’t paid the correct tax.
HMRC warns young people in the UK to 'stay vigilant' in order to avoid falling victim to tax refund scams
According to HMRC, criminals often target young individuals or the elderly as these groups of people are 'more likely to be less familiar with the UK tax system'.
HMRC has warned taxpayers to be especially vigilant about so-called 'Springtime refund scams'. In the Spring of 2018, 250,000 reports of tax scams were received by HMRC.
"Exceptional service and nothing is too much trouble."
Melanie Joynes -