WITH the festive season fast approaching many companies start to wind down with thoughts about work turning into dreams about time off during Christmas and New Year.
Although it’s good for bosses to take a break, SBP Accountants and Business Advisors, which has offices in Aberdeen, Peterhead, Fraserburgh and Banff has warned businesses and individuals to take extra care throughout December to ensure they are up-to-date with their taxes or they could get a nasty surprise from the taxman.
Head of tax at SBP, Alan Masson, said that although the January 31 tax deadline might feel like a long time away, getting carried away with celebrations could see people forgetting to set time aside to complete the form. Failure to return your digital form to HM Revenue and Customs (HMRC) and pay any remaining tax due will result in a fine of £100, which is the last thing needed after the excess of the Christmas season.
There are, however, a few exceptions to the rule, which could mean your deadline is much earlier than you might expect. If, for example, you are completing your return online and owe less than £3,000 and want HMRC to try to collect tax through your PAYE code then your deadline would be December 30.
By employing a qualified accountancy firm such as SBP, you can ensure that a team of tax experts completes your returns and that you avoid a nasty penalty.
Alan Masson, head of tax at SBP, said: “At this time of year, when people have lots of things on their mind, it is easy for things to slip through the net, however HMRC accept no excuses for late tax returns and a £100 fine will be headed your way if you miss the deadline.
“Making use of the services of a qualified tax advisory firm like SBP can take away the stress of completing your tax returns and means you can enjoy Christmas and New Year without the additional worry.”
Christmas can also be a time for showing your appreciation to clients for their custom over the last year, however it is important to ensure that you are not also giving the taxman a gift at the same time.
Generally you would have to pay tax on anything you buy specifically to give as a gift to someone, such as hampers, meaning that as well as paying a potentially high price for the gift you would also be giving a healthy bonus to the HMRC.
Mr Masson said: “The festive season is a time for giving, and we understand that companies will be thanking clients for their custom, however the taxman is one person you don’t want to be giving extra to, so it’s always worth thinking about what you are giving and avoiding the temptation to splash out.
“Luckily there are some exceptions to the rule, which would allow you to show your appreciation while also avoiding an extra tax bill when it is least welcome – at the start of the New Year.”
Mr Masson also highlighted some important tax rules to follow this festive season:
Give it away: If the gift is a product which it is the company’s job to produce, such as a baker giving away cakes, then the cost is simply deducted from regular trading profits and would not incur additional tax.
The sooner the better: Ensure you are on top of your tax return before the Christmas break so you can avoid a last-minute rush in the New Year to get it in – consider using an accountancy firm, such as SBP, to help take away the stress.
Don’t entertain extra tax: Businesses that choose to entertain clients, such as by hosting a Christmas party or event rather than giving a gift, would not be eligible for tax relief for doing so. In some cases, especially if staff are also involved, HMRC may also seek additional benefit charges.
Issued by Frasermedia Ltd on behalf of SBP Accountants
MEDIA RELEASE issued by Frasermedia. You too can post your story ideas for journalists (aka Press or media releases), on allmediascotland.com. Email email@example.com for more information.