August Newsletter

On 31 July 2024 Sally and I formally completed our 5 year buyout of Clear Vision Accountancy Limited. To mark the occasion we celebrated in style with the whole team at Salisbury Racecourse, watching the horseracing, eating delicious food, having a few celebratory drinks and then dancing the night away with Roman Kemp as guest DJ.

We couldn’t have achieved our journey as business owners without the support of our fabulous team and our wonderful clients and I want to express my sincere thanks to you all – we will always be grateful for your support. Here’s to the next chapter of Clear Vision Accountancy…

Clear Vision Workflow Commitments

We usually work with at least a two week planned timetable, which can often extend to four weeks during busy periods.

Our ethos of responding quickly to client requests has sometimes been challenged during current times. The last thing we want is to appear unhelpful, so we will always do our best to respond quickly to client needs and timescales but we wanted to share how our workflow may impact on this from time to time.

Therefore the more notice we get for scheduling in work will help to ensure that we are able to continue to meet the expectations of our clients. Thank you for helping us to support you.

HMRC Cuts Late Payment Interest Following Base Rate Changes

Late payment interest rates on underpaid taxes will decrease, following the cut in the Bank of England’s base rate to 5.0% on 1 August. This is the first reduction for over four years.

As HMRC’s late payment and repayment interest rates are linked to the base rate, they will also reduce.

What this will mean for individuals and businesses:

• From 20 August the late payment interest rate was cut to 7.5% from 7.75%
• From 20 August the repayment interest rate on overpaid tax was reduced to 4.0% from 4.25%
• From 12 August corporation tax interest rates on underpaid quarterly instalment payments dropped to 6.0% from 6.25%
• From 12 August corporation tax interest rates on overpaid quarterly instalment payments was cut to 4.75% from 5.0%

Whilst the reduction is welcome, the rates are the same as they were this time last year.

Please ensure all tax payments are made on time, to avoid penalty interest.

VAT – What to Do While Waiting for Your VAT Registration Number

Business owners are finding that HMRC are taking longer to send out their VAT registration numbers.  Whilst there isn’t much you can do to help speed up the process, there are some steps you can take to help your business as you wait:

Collect VAT from your planned VAT registration date – you need to assume that your business is VAT registered from the Effective Date of Registration (EDR) that you specified in your application. Regardless of how long HMRC takes to issue your VAT number to you, it will be effective from the date stated in your registration form.

Handling Invoices While You Wait – even though you must operate as if you are VAT registered from your EDR, you cannot display VAT on your invoices until you receive your VAT number. Instead, you could include some wording on your invoices, for example, “Please note, we have registered for VAT and are awaiting our VAT registration number. Once we receive this, we will issue a valid VAT invoice to you.”

You can then charge a gross amount whilst waiting for your VAT number – for example if your price is £100 plus VAT, charge £120 as the total amount and include the wording above on your invoice.

Once you receive your VAT number, re-issue the invoices that you initially charged at the gross amount. You will need to show the net amount, the VAT amount and the total amount. Be sure to add your new VAT number and remove the wording above from your invoices. You can use these re-issued invoices to declare VAT on your first VAT return to HMRC.

New HMRC VAT Registration Estimator Tool

HMRC has introduced a new digital tool which estimates what registering for VAT might mean for a business.

You can use the tool to estimate what VAT might be owed or reclaimed by your business when you register for VAT. You can also use the tool multiple times, to compare different scenarios that could apply to your business in the future.

A reminder that you must register for VAT if:

• Your total taxable turnover is over £90,000 (the VAT threshold)
• You expect your turnover to go over the VAT threshold in the next 30 days
• You and your business are based outside the UK and you supply any goods or services to the UK (or expect to in the next 30 days)

You can also register for VAT if your taxable turnover is less than £90,000 – this is known as voluntary registration.

How to Pay Duties and VAT on Imports

HMRC has updated its guidance on how to pay Customs Duty, Excise Duties and VAT on imports from outside the UK.

The guide covers the following:

• Using a duty deferment account
• Setting up cash accounting
• Using a general guarantee account
• Authorising someone to use your deferment, cash or guarantee account
• Making immediate payments
• Using postponed VAT accounting
• Getting an import VAT certificate

The update includes the removal of references to the Customs Handling of Import and Export Freight (CHIEF) system, as all import declarations must now be made through the Customs Declaration Service. 

How ever you need us to support you through your journey as a business owner, we’re here for you! To stay up to date with business legislation and guidance,  please get in touch.