When I submitted my Tax Credits renewal forms, I had to estimate my self-employment income because I had not put my accounts together. I have now completed my accounts and I am about to file my tax return. Will the Tax Credits office be informed of the actual figures on my tax return?

Unfortunately that is not the case. You will have to give the Tax Credits Office a call to inform them of your actual figures and you must do so by 31st January.

If you fail to meet the January deadline, your tax credits won’t stop but the tax credits you receive from 6th April may not be accurate. And if you’re overpaid, you may have to pay it back later. You even risk being charged a penalty.

Whilst I was preparing this year’s tax return, I noticed I had made a mistake on last year’s return. This mistake had quite a significant impact on
my tax position for last year. Can I change it?

If you make a mistake on your  tax return, you’ve normally got 12 months from 31st January after the end of the tax year to correct or amend it. For example, if you send your 2014/15 online tax return by 31st January 2016, you have until 31st January 2017 to amend it. You can only amend your return after this timeframe if you received your return late (after 31st July). 

If you owe more tax or have to pay a penalty as a result of the mistake, HMRC should tell you how much you need to pay and when and how to pay it. If you think you’re due a refund you can tell HMRC how you’d like to receive it.

If you sent your tax return electronically, you can also amend it online. If you send it in hard-copy, you don’t need to send in the whole tax return again. Just write to HMRC and attached the pages you want to change.

If you are having trouble preparing your tax return, then you should seek help from a qualified professional to avoid future problems.

Tax on Staff  Christmas Gifts

I’m looking at what to order for my employees for their Christmas presents. Is there any advice you have for me? I don’t want my employees to pay tax or National Insurance on their gifts. At the same time, I don’t want the hassle of any extra admin for myself!

If you buy your employees a seasonal gift such as a joint of meat or a box of chocolates, then this would be deemed ‘trivial’. Where a gift is considered trivial, there are no reporting requirements and nor would any tax or National Insurance be triggered. Since 6th April 2016, HM Revenue & Customs (HMRC) will accept a benefit is trivial if it satisfies the following three conditions:

 the cost of providing the benefit does not exceed £50 (or the average cost per employee if a benefit is provided to a group of employees and it is impracticable to work out the exact cost per person);

 the benefit is not cash or a cash voucher;

  the employee is not entitled to the benefit as part of any contractual obligation (including under salary sacrifice arrangements); and

 the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties.

 For more generous gifts, the cash equivalent must be taxed via the payroll, form P11D or  a Pay As You Earn Settlement Agreement (PSA). With the first two options, tax and National Insurance will be triggered and will be deducted from the employee. Under the third option, the tax and National Insurance liability is the same, but there  is an agreement that it will be settled by the employer instead  of deducted from employee wages.

 For assistance with these, or any other tax or accounting matters, call Steve Brown at TaxAssist Accountants on 01424 211800 to arrange a free, no-obligation appointment
to discuss your needs.