Topical tax issues

Changes to VAT

Are you aware of the changes to VAT for the providers of digital services to private individuals which take effect from 1 January 2015? Previously the rate of VAT was charged according to where the supplier of such services was based, hence why many were based in Luxembourg.

From January 2015, the VAT rate will be based on where the customer is based. This means that if you are a business supplying such services to private individuals you will need to have systems in place to be able to identify where your customers are based and the VAT rate applicable to that country.

This is a potentially massive upheaval for companies but also an opportunity for Web Design companies as it will involve significant changes to their websites.

Employment Allowance

Do you employ staff (this includes directors of family companies)? If you do you are entitled to keep the first £2000 of Employers National Insurance for the current tax year. It is simple to operate and you do not need to seek approval from HMRC. You merely deduct the sum from payments made to HMRC.

If you qualify but have not implemented this yet then you can adjust your next payment to HMRC to clawback any overpayment made in the current year.

Make sure you deal with this in the current year, otherwise you will have to seek a refund from HMRC, and we all know that this is a tortuous process.

As always please contact me if there is anything in this article you would like to comment on or if you would like further information –