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Walking in a Winter Wonderland…..in June


Well, it’s the hottest summer for about 1,000 years and I spent yesterday in a winter wonderland with Father Christmas.

You might be wondering why, in the middle of June, was I with Father Christmas? Well, it’s all about planning and consistent marketing to get customers.

I was at a showcase held by The Christmas Decorators to show off all the stuff they can do to make your building look great for Christmas. They do this in June because they know that waiting until December is too late – customers have already made their plans and bought the stuff elsewhere. Therefore, they do it well in advance knowing that putting that work in upfront will give them lots of income six months from now when the Christmas season hits.

Welcome to Narnia

Welcome to Narnia

This is a massive lesson to all business owners – you can’t wait until the day you need the sales to go out and look for them. You have to put the work in and think about it many months beforehand.

Just in the last couple of weeks, we’ve actually had a couple of enquiries from people who I met at the same networking event back in 2014. We hadn’t actually heard from them since but, three years later, they got in touch to meet up about potentially being their accountant.

That’s because we’ve consistently worked to bring in new customers every week. This includes attending networking events and, of course, following up.

And our best form of consistent follow up is our weekly email newsletter. The fact it drops into your inbox at 10:30am every Thursday morning without fail means that, whether or not you read it, we’re popping into your life and you can’t forget about us….even if you want to!

We do like to think it provides some helpful tips for all of our readers but it also serves a few other purposes – one of which is that we understand that many people we meet don’t need us right now……but we’re on their mind if they do need us.

So, it’s a lesson that all businesses can use.

Planning your marketing well in advance, and being consistent in your efforts, pays off.

And it will bring in the sales that will let you have a very merry Christmas!

PS – The Christmas Decorators are well worth a look! And, given the sweltering heat, Santa was allowed to wear a Hawaiian shirt.

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Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss this, please give us a ring on 0151 380 3800 or drop us an email at growth@mjfaccountancy.co.uk.

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How do I fix a mistake in my Self-Assessment Tax Return?


Mistakes happen. Don’t tell anyone but even we make them – very rarely, but it does happen! So, how do you fix a mistake in your Self-Assessment Tax Return?

If a mistake does crop up in your tax return, it’s possible to file an amended return to fix it.

How long have you got to correct a mistake?

You have precisely 12 months to file an amended return from the date of the original deadline.

A Self-Assessment Tax Return should be filed by 31 January after the end of the tax year so, for example, the 2015/16 tax return deadline was 31 January 2017.

If you submitted a paper tax return for 2015/16, the deadline for this was 31 October 2016.

So, the deadline for amended returns for the 2015/16 year is:

  • 31 January 2018 for online returns
  • 31 October 2017 for paper returns

Even if you miss these deadlines, you can write to HMRC until 4 years after the end of the tax year, ie the deadline for 2015/16 is 5 April 2020.

Amending online returns

Amending an online return is a pretty straight forward process:

  1. Log into your online self-assessment account
  2. Select “Tax Return Options”
  3. Select the tax year for the return you would like to amend
  4. Once you are in the tax return, amend the incorrect pages
  5. File it again

Amending paper returns

If a mistake is made in your paper Self-Assessment Tax Return, you can fix it by:

  1. downloading a new tax return
  2. correcting any mistakes
  3. sending the amended pages to HMRC

Make sure you write “Amendment” on every page. Also, include your name and unique taxpayer reference. It sounds obvious but people do forget!

Sending a letter to HMRC

If you’d rather not resubmit an amended tax return, you can just write to HMRC.

This can also be done if you have missed the window for filing an amended return.

All you will need to do is state in your letter all the details of any corrections. A refund can be claimed up to four years from the end of the tax year it refers to.

Changing your tax bill

Once you have fixed a mistake in your tax return, this might affect the amount of tax you owe.

If the amendment is made online, the calculation will also be updated, as will the tax account. This happens within three days of filing the amended tax return.

If you’re owed a refund from HMRC for over paying tax, this can take up to 4 weeks for you to receive it. If you owe any more tax, you need to pay this and any related interest as soon as possible.

HMRC are quick to take your money but slow to repay!!

If you found this useful, please share it using the icons at the top and bottom of the page, or leave a comment below.

Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss this, please give us a ring on 0151 380 3800 or drop us an email at tax@mjfaccountancy.co.uk.

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How do I claim back tax on a small pension lump sum?


When you take your pension as a lump sum, sometimes too much tax might have been paid. If this does happen, don’t panic –  you can claim this back as a refund.

The way in which you do so is dependent on the nature of the lump sum taken.

In most cases, 25% of your pension can be taken as a tax free lump sum. The balance is then taxable at your marginal rate.

Since April 2015, anyone aged 55 or over can access their pension savings in certain schemes. However, access is not available in defined benefit schemes.

When a pension is less than £10,000, you can usually withdraw the pension in whole as one “small pot” lump sum. Not only can you do this from one pension provider but, if you have multiple pensions, you are able to take up to three “small pots” from different personal pensions. You are also able to take unlimited “small pots” if you have multiple workplace pensions – all “small pots” are tax free on 25%.

Defined benefit schemes have been able to make trivial commutation payments since April 2015 when the pension pot value is no more than £30,000. You can also take small pension pot lump sums separately from any trivial commutation payment.

Have I paid too much tax?

Although the first 25% of your pension lump sum is tax free, the rest is taxed at your marginal rate.

Tax is usually taken under a PAYE code but sometimes the code used is changed to a BR (basic rate) code or an emergency code. This means that personal allowance or any other income received is not taken into account, Therefore, the tax deducted and the amount actually due might not match.

How do I get a refund?

How you claim you refund depends on your circumstances.

Use a Form P50Z when:

  • the lump sum is from a defined contribution scheme; and
  • the pension pot has been used up; and
  • you have no other income in that tax year

Use a Form P53Z when:

  • the lump sum is from a defined contribution scheme; and
  • the pension pot has been used up; and
  • you do have other income from the tax year

A Form P55 should be used if:

  • the lump sum has not used the full pension pot: and
  • the provider can’t refund the overpaid tax; and
  • regular payments are not being taken from the pension.

A refund can also be claimed through a self-assessment tax return if the overpayment has happened via a trivial commutation lump sum. If you don’t prepare a self-assessment, you can use a Form P53 to claim your refund.

All of the forms can be downloaded from the Gov.uk website – the links are above.

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Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss this, please give us a ring on 0151 380 3800 or drop us an email at tax@mjfaccountancy.co.uk.

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Don’t get fined – here are the June 2017 deadlines


Here are the key dates for June 2017. Don’t miss any of them or you’ll risk a fine.

  • 1 June – Corporation Tax payment deadline for companies with accounting year ended 31 August 2016. (Only applicable for companies with profits of £1.5m or less. Companies with profits > £1.5m pay by instalments.)
  • 7 June – VAT return and payment deadline for April VAT returns
  • 19 June – Construction Industry Scheme (CIS) monthly return deadline for period to 5 June
  • 19 June – PAYE/NIC cheque payments deadline for month to 5 June
  • 22 June – PAYE/NIC electronic payments deadline for month to 5 June
  • 30 June – Company accounts filing deadline for private companies with a year ended 30 September 2016 and for public companies with a year ended 31 December 2016
  • 30 June – Corporation Tax Return (Form CT600) filing deadline for period ended 30 June 2016

If you found this useful, please share it using the icons at the top and bottom of the page, or leave a comment below.

Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss this, please give us a ring on 0151 380 3800 or drop us an email at growth@mjfaccountancy.co.uk.

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Aged 55 or over? You can unlock your pension now!


It’s now two years since changes were made to the pension rules to allow you to access your pension at 55. But not many people are taking advantage. Could you?

If you have a defined contribution scheme, you don’t have to purchase an annuity with the pension pot. You can have a tax-free lump sum of up to 25% of your pension pot. The excess is then taxed at your marginal rate of tax, ie a basic rate taxpayer pays 20%, higher rate pays 40% and, if you earn more than £150,000, you’ll pay 45%.

This is a big improvement on the old rules – up to 5 April 2015, you were taxed at 55%!

What are the options?

Once you reach 55, you have a number of options for your defined contribution pension pot. You can:

  • leave it where it is
  • invest in an annuity
  • take a flexible income
  • cash in the whole pot; or
  • mix and match from the above.

Do I have to take it when I turn 55?

You can access your pension savings any time after your 55th birthday. However, you don’t have to – it might not be the best option for you.

For example, if you’re still working, you might be better off leaving it in the pot and carrying on investing. This will give you a bigger pot when you retire.

How much can I take tax-free?

Once you have reached 55, you can take 25% of your pension pot as a tax-free lump sum.

Can I still have an annuity income?

It is no longer compulsory to use your pension savings to buy an annuity. However, you might still want to do so to secure your income during your retirement.

You can invest some or all of your pot to do this. As always, it’s worth getting expert advice from an Independent Financial Adviser to find the annuity that’s best for you.

How do I draw the cash down?

If you want a flexible income when you retire, you have a couple of options:

  1. Take 25% of your pension pot as a tax-free lump sum. You can then take the rest of your pension pot whenever you want it – as a lump sum immediately or in withdrawals over a number of years whenever you need the cash. These further withdrawals will be taxed at your marginal rate of tax.
  2. Take smaller sums over a number of years. If you do this, the first 25% of each withdrawal is tax-free and the balance is taxed at your marginal rate of tax.

Under both options, it’s worth planning the timing. The excess cash is taxed at your marginal rate in the year you withdraw it, and this rate can change depending on your other earnings.

Spend, spend, spend

You are more than welcome to take out your full pension pot on your 55th birthday and spend it all on a massive birthday party. The first 25% will be tax-free and the rest taxed at your marginal rate.

However, you do need to remember that you need something to live on for the rest of your life!

Can I mix and match?

Depending on the individual rules of your pension scheme, you could take some for that big birthday party, put some into an annuity, and leave the rest where it is to grow. You can then draw down as and when you want a treat.

Watch out!!!

There are a number of people offering scam schemes to unlock your pension early. You cannot do this before you reach 55.

If you do, you’ll be hit with a big tax charge. So don’t do it!

Summary

The big change is the number of options available when you turn 55. The key is to find the best one for you. We’d recommend speaking to an Independent Financial Adviser.

If you found this useful, please share it using the icons at the top and bottom of the page, or leave a comment below.

Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss this, please give us a ring on 0151 380 3800 or drop us an email at growth@mjfaccountancy.co.uk.

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