Changing priorities at HMRC


Over the coming years, the government plans to phase in its landmark Making Tax Digital (MTD) initiative, which will see taxpayers move to a fully digital tax system. However HMRC has shared a statement about how they are prioritising change in the department and as a result some parts of MTD will be delayed. HMRC has acknowledged the challenges in:

  • exiting the EU and
  • the ambition to become the world’s most digitally advanced tax authority.

While some of the finer details are still being decided, HMRC have announced that, to achieve the above, some aspects of MTD are to be delayed.  HMRC still plan to go ahead with MTD for VAT from April 2019. Information on some of the delayed projects is set out below:

Plans to introduce further digital services for individuals

There will be ‘halted progress’ on simple assessment and real-time tax code changes. Additional services in this area will only be added where they reduce phone or post contact or otherwise deliver ‘significant savings’.

Other digitalisation of services affecting fewer individuals

This includes Inheritance Tax payments, Tax Advantaged Venture Capital Schemes applications and PAYE Settlement Agreements

Creation of the single digital account for all businesses

HMRC has confirmed this will now happen at a ‘slower pace’. HMRC has confirmed the single digital account remains an aim of the department and they stress it will not impact the delivery of Making Tax Digital.

Voluntary Making Tax Digital for Business service for income tax 

HMRC has confirmed this will continue to be available for any sole trader wishing to make quarterly updates to HMRC.

Mandatory Making Tax Digital for VAT – still ‘on track’

HMRC stated that MTD for VAT is still on track. VAT registered businesses with a turnover in excess of the £85,000 VAT registration threshold,  will be required to comply with the requirements of MTD for VAT for all VAT periods commencing on or after 1 April 2019. 

In addition, the government has confirmed that, it will not mandate any further MTD for Business changes before 2020, at the earliest.

Internet link: ICAEW blog

Karen Richardson Highly Commended as North of England Accountant


We are delighted to announce that Karen Richardson our director has been  awarded a highly commended award in the inaugural English Women’s Awards 2018 for Services to Accountancy.

BUSINESS WOMENS AWARD 2018

Local businesswoman shortlisted in first of its kind awards

Managing Director of Standish based McGinty Demack, Karen Richardson, was  shortlisted for the inaugural English Women’s Awards 2018 – North.

Shortlisted in the category of Services to Accounting and Finance, Karen was nominated by people from around the North-West based on her forward-thinking approach.

Held on 19 March at the Mercure Manchester Piccadilly Hotel, the English Women’s Awards – North acknowledged and celebrated the achievements of women including female entrepreneurs, civil servants, charity founders amongst other professionals in the North of England, whose hard work, talent and commitment is often under-represented.

The awards also provided an opportunity and platform for women to inspire others, particularly younger women, as each nominee had their own story to tell and advice to give.

Karen said: “I’m delighted to have won a Highly Commended Award for the Services to Accounting and Finance , it means so much that people across the North-West appreciate the work we do at McGinty Demack. I hope the awards inspire women across the country to get involved in business, it’s tough but also tremendously rewarding.”

Update for employers and their employees


HMRC’s latest Employer Bulletin includes useful updates for employers as we approach the start on the new tax year on 6 April 2018.

The Bulletin includes articles on:

  • end of year reporting for payroll and reporting benefits in kind
  • P9 Notice of Coding and the system of in year tax code adjustments known as Dynamic Coding
  • new rules for termination payments made on, or after, 6 April 2018
  • Scottish income tax changes
  • a reminder to those paying the Apprenticeship Levy to spend their Levy on Apprenticeship Training
  • National Minimum and National Living Wage increases from 1 April 2018.

If you would like help with payroll contact us.

Internet link: Employer Bulletin

Spring Statement announces consultations


Chancellor Philip Hammond delivered his Spring Statement on Tuesday 13 March 2018. In his speech, the Chancellor announced consultations would be issued on:

  • how to help the UK’s least productive businesses to learn from, and catch-up with, the most productive
  • how to eliminate late payments particularly to benefit small business
  • whether the use of non-agricultural red diesel tax relief contributes to poor air quality in urban areas
  • consultation on reduced Vehicle Excise Duty rates for the cleanest vans.

He also made available further details on some consultations which are considered briefly below:

  • Making Tax Digital sanctions for late submission and late payment
    Following significant support on consultation, the government intends to take forward points based late submission penalties. There will be further consultation on the draft legislation to be published in summer 2018.

  • Tackling the plastic problem
    The government will call for evidence as to how changes to the tax system could be used to reduce the amount of single-use plastics that are wasted by reducing unnecessary production, increasing re-use and improving recycling. The government would also like to explore how to drive innovation in this area to achieve the same outcomes.

  • Cash and digital payments
    The government will consult and seek evidence about how the role of digital payments is to fit into the growing digital economy. This will include identifying what further work can be done to remove barriers to digital payments. At the same time the government acknowledges that cash must remain accessible and secure.

  • Online platforms
    The government has launched a call for evidence on the role of online platforms in ensuring tax compliance by their users. The types of online platforms the government is principally interested in are platforms that allow people to earn money from spare resources such as cars and spare rooms, that allow people to use their time to generate extra income and that connect buyers with individuals or businesses offering services or goods for sale. The government wants to ensure that, where people have tax obligations because of these activities, it is easy for them to comply.

  • VAT collection split payment
    The government wants to combat online VAT fraud by harnessing new technology and is consulting on VAT split payment. This will utilise payments industry technology to collect VAT on online sales and transfer it directly to HMRC.

  • VAT registration threshold call for evidence
    The government considers that the current design of the VAT registration threshold may be dis-incentivising small businesses from growing their business and improving their productivity.

We will update you on the outcome of the consultations.

Internet link: gov.uk Spring Statement 2018

Income tax changes from 6 April 2018


The personal allowance for 2018/19 is £11,850. However, some individuals do not benefit from the full personal allowance. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000, which is £1 for every £2 of income above £100,000. So for 2018/19 there is no personal allowance where adjusted net income exceeds £123,700.

The basic rate of tax is currently 20%. From 6 April 2018 the band of income taxable at this rate is £34,500 so that the threshold at which the 40% band applies is £46,350 for those who are entitled to the full personal allowance. Additional rate taxpayers pay tax at 45% on their income in excess of £150,000.

The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland to taxpayers resident elsewhere in the UK. The Scottish income tax rates and bands apply to income such as employment income, self-employed trade profits and property income.

In the 2018/19 Scottish Budget, the Finance and Constitution Secretary for Scotland, Derek Mackay announced significant changes to income tax bands and rates for Scottish resident taxpayers, introducing five possible income tax rates. The income tax rates range between 19% and 46%. Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK.

Scottish Bands (£)

Band name

Scottish Rate (%)

0 – 2,000

Starter

19

2,001 – 12,150

Basic

20

12,151 – 31,580

Intermediate

21

31,581 – 150,000

Higher

41

Over 150,000

Top

46

From April 2019, the National Assembly for Wales has the right to vary the rates of income tax payable by Welsh taxpayers.

Dividend allowance down to £2,000

In 2017/18 the first £5,000 of dividends are chargeable to tax at 0% (the Dividend Allowance). From 6 April 2018 the Dividend Allowance is reduced to £2,000. Dividends received above the allowance are taxed at the following rates:

  • 7.5% for basic rate taxpayers
  • 32.5% for higher rate taxpayers
  • 38.1% for additional rate taxpayers.

Internet links: GOV.UK spring statement 2018 GOV.SCOT Scottish income tax