If you have a question which is not listed below, then please contact us on 020 8313 9117, or email at contact@adivaaccountants.co.uk and we will be happy to help.
Below you will find answers to questions that we are frequently asked.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_toggle title=”Where can I find your offices?”]We are located in Bromley High Street. Our office is above Natwest bank in the middle of Bromley High Street, opposite of Next store. The entrance to the office is between Natwest bank and Thomas Cook, please ring the bell for number 4.[/vc_toggle][vc_toggle title=”Are you hiring?”]We are not hiring for the moment, but please keep checking as we are continually growing and will be expanding our team in the near future.[/vc_toggle][vc_toggle title=”What are your hours of operation?”]We are open:
Monday to Friday from 9am to 7pm and Saturday from 10am to 5pm.[/vc_toggle][/vc_column][vc_column width=”1/2″][vc_toggle title=”What are your most popular services?”]The most popular services are company accounts, personal tax returns, CIS, payroll and VAT returns.[/vc_toggle][vc_toggle title=”Which is your nearest train station?”]Our office is in the middle of Bromley South and Bromley North train stations, they are about 5 minute’s walk away. There are direct trains from London Victoria, London Bridge and London Blackfriars to Bromley South station. Bromley South is connected by direct trains to major towns around London and in Kent such as St Albans, Orpington, Sevenoaks, Ashford, Gillingham and Ramsgate.[/vc_toggle][vc_toggle title=”Which are the nearest bus routes?”]Our office is in the middle of Bromley High Street and is served by 15 different bus routes. The bus routes serving Bromley High street are 61, 119, 138, 146, 208, 227, 246, 261, 269, 320,336, 352, 354, 358 and 367.[/vc_toggle][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_text_separator title=”PERSONAL TAXATION” i_icon_fontawesome=”fa fa-usd” title_align=”separator_align_left” add_icon=”true”][vc_column_text]This group of factsheets covers concise information on a variety of topics relevant to an individual. It covers taxes on the disposal of capital assets and the inheritance taxes. It covers self employed, partnerships and CIS (Construction Industry scheme). Property investment and tax is covered too.[/vc_column_text][vc_column_text]
Please do get in touch if you would like further information about the Construction Industry Scheme (CIS). Whether you are a contractor or a subcontractor, at Adiva Accountants in London we can advise on the CIS for your business in Bromley, Kent and London.
There are three requirements for subcontractors to be paid gross. They include a business test, a turnover test and a compliance test. To qualify for gross payment a subcontractor must:
- have paid their tax and National Insurance on time in the past
- do construction work (or provides labour for it) in the UK
- run the business through a bank account.
The turnover for the last 12 month (ignoring VAT and the cost of materials) must be at least:
- £30,000 for a sole trader
- £30,000 for each partner in a partnership, or at least £100,000 for the whole partnership
- £30,000 for each director of a company, or at least £100,000 for the whole company
If your company is controlled by 5 people or fewer, you must have an annual turnover of £30,000 for each of them.
Subcontractors not registered with the HMRC will suffer the higher rate deduction (30%) from any payments made to them by contractors.
The whole CIS system is backed up by a series of significant penalties. These penalties cover situations in which an incorrect monthly return is sent in negligently or fraudulently. Or for failure to provide CIS records for HMRC to inspect and incorrect declarations about employment status. Penalties are triggered by late returns under the CIS scheme as follows:
- a basic penalty of £100 for failure to meet due date of the 19th of the following month
- where the failure continues after two months after the due date, a penalty of £200
- after six months, the penalty rises to the greater of 5% of the tax, or £300
- after 12 months, the penalty will again be the greater of £300, or 5% of the tax
- where information is withheld deliberately, the penalty is 70% of tax, or £1,500 if greater
- where the withholding of information is deliberate and concealed, it will be 100% of the tax, or £3,000 if greater
- where the return is 12 months late, but the information only relates to persons registered for gross payment (so no tax deduction was due). The penalty will be £1,500 for deliberate withholding without concealment, and the penalty will be £3,000 for deliberate and concealed withholding of information
- where a person has just entered the CIS scheme penalties will be restricted to a maximum of £3,000 in certain circumstances
If you need help with penalties, or for anything else in relation to CIS scheme, please contact us at Adiva Accountants in London and we will be happy to help you.
Not always. The items below should be excluded when entering the gross amount of payment on the monthly return:
- VAT charged by the subcontractor (if the subcontractor is registered for VAT)
- any Construction Industry Training Board levy.
Furthermore, when working out the amount of payment from which the deduction should be made, the following items should be deducted from the gross amount of payment:
- what the subcontractor paid for materials including VAT paid (if the subcontractor is not registered for VAT). Plus consumable stores, fuel (except fuel for travelling) and plant hire used in the construction operations
- the cost of manufacture or prefabrication of materials used in the construction operations.
The gross amount of payment and the amount from which the deduction is made should include any travelling expenses (including fuel costs) and subsistence paid to the subcontractor.
The deadline for paying over the deductions
The deadline for the contractors to pay over all deductions made from subcontractors is by the 19th following the end of the tax month to which the deductions relate. The deadline would be 22nd, if payment is being made electronically, or the next earlier banking day when the 22nd is a weekend or holiday. Often the contractor is a company which operates as a subcontractor and has deductions made from its payments as a subcontractor. In these circumstances, the deductions made may be set against the company’s liabilities for PAYE, NI and any CIS deductions it is due to pay over.
Subcontractors
A subcontractor will need to register for the CIS when first starts working in the construction industry on a self-employed basis. The registration is carried out by the subcontractor who needs to contact HMRC by phone or online.
If you need help with the registration of the subcontractors, or for anything else in relation to CIS scheme, please contact us at Adiva Accountants in London and we will be happy to help you.
The contractor has to contact HMRC to find if he should pay a subcontractor gross or net. You don’t have to verify all the subcontractors all the time. You would normally verify only the new ones. The verification procedure will establish which of the following payment options apply:
- gross payment (no deductions made)
- a standard rate deduction of 20%
- a deduction made at the higher rate of 30%, if the subcontractor has not registered for CIS with HMRC. Or cannot provide accurate details to the contractor and HMRC cannot verify them.
HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own computer. This number will be the same for each subcontractor verified at any particular time. Subcontractors who cannot be verified will have special suffixes for the numbers. The numbers are also shown on the payslips issued to the subcontractors and on contractors’ monthly returns.
These numbers are important and contractors have to ensure that they have a good system in place for obtaining and retaining them. It is crucially important to give precise details to HMRC. As the higher rate deduction (30%) will have to be made, if their computer does not recognise the subcontractor. Mandatory online verification of subcontractors will be introduced from 6 April 2017.
The contractor will not have to verify the subcontractor if they have already included them on any monthly return in the two previous tax years.
Payslips
All subcontractors have to be provided with at least a monthly ‘payslip’. It should show the total amount of the payments and how much tax, if any, has the contractor deducted from those payments. Payslips can have different styles, but certain specific information has to be provided including the:
- contractor’s name and their employer tax reference
- subcontractor’s name, unique tax reference or specific subcontractor reference
- tax month to which the payment relates
- the gross amount of the payment
- cost of any materials which have reduced the gross payment
- amount of any tax deductions made and
- verification number where deduction has been made at the higher rate of 30%.
If contractors include such payments as part of their normal payroll system, it has to be clear that they are classed as self-employed.
If you need help with the payroll of the subcontractors, or for anything else in relation to CIS scheme, please contact us at Adiva Accountants in London and we will be happy to assist you.
We highlight here the key VAT areas you need to consider when running your business. If you are starting or have started a business in Lewisham, Bromley, Kent and London areas we, at Adiva Accountants in Lewisham, can help you comply with the VAT regulations.
The VAT registered businesses act as unpaid tax collectors. They are required to account both accurately and promptly for all the tax revenue collected by them.
The VAT system is policed by HMRC with heavy penalties for breaches of the legislation. Ignorance is not an acceptable excuse for not complying with the rules.
Below we cover some of the areas that you need to consider.
However, it is important for you to seek professional advice appropriate to your circumstances.
APPENDIX: Table of sectors and rates in Flat Rate VAT Scheme
| Trade Sector | Appropriate % |
| Accountancy or book-keeping | 14.5 |
| Advertising | 11 |
| Agricultural services | 11 |
| Any other activity not listed elsewhere | 12 |
| Architect, civil and structural engineer or surveyor | 14.5 |
| Boarding or care of animals | 12 |
| Business services that are not listed elsewhere | 12 |
| Catering services including restaurants and takeaways | 12.5 |
| Computer and IT consultancy or data processing | 14.5 |
| Computer repair services | 10.5 |
| Dealing in waste or scrap | 10.5 |
| Entertainment or journalism | 12.5 |
| Estate agency or property management services | 12 |
| Farming or agriculture that is not listed elsewhere | 6.5 |
| Film, radio, television or video production | 13 |
| Financial services | 13.5 |
| Forestry or fishing | 10.5 |
| General building or construction services* | 9.5 |
| Hairdressing or other beauty treatment services | 13 |
| Hiring or renting goods | 9.5 |
| Hotel or accommodation | 10.5 |
| Investigation or security | 12 |
| Labour-only building or construction services* | 14.5 |
| Laundry or dry-cleaning services | 12 |
| Lawyer or legal services | 14.5 |
| Library, archive, museum or other cultural activity | 9.5 |
| Management consultancy | 14 |
| Manufacturing fabricated metal products | 10.5 |
| Manufacturing food | 9 |
| Manufacturing that is not listed elsewhere | 9.5 |
| Manufacturing yarn, textiles or clothing | 9 |
| Membership organisation | 8 |
| Mining or quarrying | 10 |
| Packaging | 9 |
| Photography | 11 |
| Post offices | 5 |
| Printing | 8.5 |
| Publishing | 11 |
| Pubs | 6.5 |
| Real estate activity not listed elsewhere | 14 |
| Repairing personal or household goods | 10 |
| Repairing vehicles | 8.5 |
| Retailing food, confectionary, tobacco, newspapers or children’s clothing | 4 |
| Retailing pharmaceuticals, medical goods, cosmetics or toiletries | 8 |
| Retailing that is not listed elsewhere | 7.5 |
| Retailing vehicles or fuel | 6.5 |
| Secretarial services | 13 |
| Social work | 11 |
| Sport or recreation | 8.5 |
| Transport or storage, including couriers, freight, removals and taxis | 10 |
| Travel agency | 10.5 |
| Veterinary medicine | 11 |
| Wholesaling agricultural products | 8 |
| Wholesaling food | 7.5 |
| Wholesaling that is not listed elsewhere | 8.5 |
The only way to establish whether your business will benefit from this scheme is to carry out a calculation and comparison of the normal rules and the flat rate rules.
If you are starting, or have started a business in Lewisham, Bromley, Kent and London areas we can advise as to whether the VAT flat rate scheme would be beneficial for your business and help you to operate the scheme. Please do not hesitate to contact us at Adiva Accountants in Lewisham.
In the flat rate scheme, you must keep a record of your flat rate calculation showing:
- your flat rate turnover
- the flat rate percentage you have used
- the tax calculated as due
You must still keep a VAT account. There will only be one entry for each period, if the only VAT to be accounted for is that calculated under the scheme.
The VAT due is calculated by applying a predetermined flat rate percentage to the business turnover of the VAT period. The turnover will include any exempt supplies, so it will not be beneficial to join the scheme where there are significant exempt supplies.
The percentage rates are determined according to the trade sector of your business and range from 4% up to 14.5%. In the first year of VAT registration, a further 1% reduction applies off the normal rates for businesses. If your business falls into more than one sector, you should use the percentage of the main business activity as measured by turnover. This can be advantageous if you have a large percentage rate secondary activity and a modest major percentage trade. You should review the position on each anniversary. If the main business activity changes or you expect it to change during the following year you should use the appropriate rate for that sector.
Despite that you pay VAT at the flat rate percentage under the scheme, you will still be required to prepare invoices to VAT registered customers showing the normal rate of VAT. This is so that they can reclaim input VAT at the appropriate VAT rate.
If you are starting or have started a business in Lewisham, Bromley, Kent and London areas we, at Adiva Accountants in Lewisham, can advise on whether the VAT Flat Rate scheme would be suitable for your business. Please do not hesitate to contact us at Adiva Accountants in Lewisham for further advice.
Capital assets treatment
Capital goods are excluded from the flat rate scheme. If you purchase capital assets costing more than £2,000 (including VAT), you can claim input VAT on such items on your VAT return in the normal way. You must then account for VAT on a subsequent sale of the asset at the normal rate, instead of the flat rate.
European Community transactions
Income from sales of goods is included in your turnover figure. Where there are acquisitions from EC member states you will still be required to record the VAT on your VAT return in the normal way. Even though you will not be able to reclaim the input VAT unless it is a capital item as outlined above.
The rules on services are complex. Please get in touch if this is an issue so that we can give you specific advice.
