Right Accoutns

Right Accounts provide professional taxation and accounting services at fixed prices in the UK.

Open:

Phone: 0113 323 5783

Frequently Asked Questions

CIS

What is CIS?

The Construction Industry Scheme (CIS) is a HMRC scheme for construction industry where contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC).

The deductions count as advance payments towards the subcontractor’s tax and National Insurance.

If I work in Construction as employee, does CIS apply as well?

No. CIS only applies to self-employed individuals, who work in the Construction Industry.

When does 0% (gross), 20% net - 30% net rate apply?

0% (gross) tax rate will apply if the subcontractor passes three criteria:

  • you’ve paid your tax and National Insurance on time in the past
  • your business does construction work (or provides labour for it) in the UK
  • your business is run through a bank account

HMRC will look at your turnover for the last 12 months. Ignoring VAT and the cost of materials, your turnover must be at least:

  • £30,000 if you’re a sole trader
  • £30,000 for each partner in a partnership, or at least £200,000 for the whole partnership
  • £30,000 for each director of a company, or at least £200,000 for the whole company

20% net applies when business is registered with HMRC.
30% net applies when business is not registrered with HMRC.

How long Tax Refund will take?

Tax Refunds usually take 1-4 weeks. It is important to provide accurate details as any discrepancies with the information held on HMRC database may delay the recovery process

How many years back can I claim my tax refund for?

The period for claiming a tax refund currently is 4 years. Tax refund is also possible for those no longer residing in the UK.

How can I get my tax refund?

1. The fastest way to get your overpaid taxes back is to fill a Tax Application Form which is available on our website.

2. Contact us. We can send you paper forms, which you will be required to fill out and return to us by post or email together with the scanned document copies.

Tax Refunds PAYE

What is PAYE?

PAYE (Pay as You Earn) is the scheme introduced in 1940 for deducting tax from employees by employers on behalf of the government. Although PAYE scheme doesn’t require employees to complete their self assessment, however some still may have to do so, if their income derives from other sources.

When UK Tax year starts?

The UK Financial year runs from 6th April to the following year 5th April.

How does PAYE work and what is Tax Code?

A tax code is a notice to your employer or pension provider to tell them how much tax to deduct from your salary or pension. Tax codes include any allowances available, such as your annual Personal Allowance, along with any income or benefits that are not taxed at source. Income exceeding annual allowance amount is taxable. Employer is obliged to pay out all the deducted amounts to HMRC.

Can I claim back my overpaid taxes, if I don’t have A National Insurance Number?

There is no possibility, in the UK, to claim back your overpaid taxes if you do not have a NI number. Please contact us to find out more information about getting a NI number.

What is BR Tax Code?

Usually, the BR Tax code is used when:

  • An individual is employed at more than one workplace;
  • An employee did not present his P45 form to his current employer;
  • An employer does not have the information of which tax code he should apply for the particular employee.

Am I entitled to a tax refund?

Usually there are no overpayments under PAYE scheme, but refund may due if:

  • Employee worked for more than one employer;
  • Employee worked less than a full tax year;
  • Incorrect Tax Code been applied;
  • Emergency Tax Code been applied.

Please use our Tax Calculator to see if you are eligible.

What documents do I need to get my taxes back?

To get your tax refund you have to produce the following documents:

  • Form P60;
  • Form P45;
  • Payslips.

How many years back can I claim my tax refund for?

The period for claiming a tax refund currently is 4 years. Tax refund is also possible for those no longer residing in the UK.

How can I get my tax refund?

1. The fastest way to get your overpaid taxes back is to fill a Tax Application Form which is available on our website.

2. Contact us. We can send you paper forms, which you will be required to fill out and return to us by post or email together with the scanned document copies.

Tax Return

What is Self Assessment?

Self-Assessment involves completing a tax return each year. Self-employed individuals show their income and capital gains (profits on the sale of certain assets) as well as their business related expenses on their tax return declaration and can claim tax allowances or reliefs on their tax return.

What is UTR?

All self-employed registered individuals are issued with a Unique Tax Reference ten digit number (UTR). This can be found on your tax return, most correspondence from HMRC.

How can I get UTR and how long does it take?

UTR is issued by HMRC and it usually takes 4-8 weeks to get one after you first registered self-employed.

Who has to complete annual Tax Return?

An annual tax return must be completed by:

  • a self-employed sole trader;
  • a company director;
  • receiving income from selling or renting out property;
  • receiving interest on bank deposits;
  • receiving income from any other business transactions

The above is just the list of most common cases when Tax Return has to be submitted. Please contact us for more information.

Can I submit Self Assessment Tax Return myself?

Yes. You can register for HMRC online services for Tax Return or send your paper tax return. https://www.gov.uk/log-in-file-self-assessment-tax-return

HMRC offers information and help on Tax Return submission and calculations: https://www.gov.uk/government/collections/self-assessment-helpsheets-main-self-assessment-tax-return

What is the deadline to submit Tax Return?

The deadline to submit Tax Return online is 31st of January, paper return deadline is 31st of October.

What are the Self-Assessment payment deadlines?

The balance of any tax owed, must be paid by 31st of January following the end of the tax year. 31st of July is the date when individuals may have to pay the second 'payment on account' towards their next tax bill.

What will happen if I fail to submit my Tax Return? Are there any penalties?

From the 31st of January 2012, the HMRC tightened their penalties for late Tax Return submissions and eliminated the possibility of penalty cancelation. If you fail to submit your Tax Return:

  • One day late – the penalty will be £100;
  • More than 3 months - £10 for each day together with the sum, mentioned above;
  • More than 6 months - £300 or 5% of the tax amount, depends which one is higher, together with the sums, mentioned above.
These penalties apply:
  • Even if your income for the last tax year was very low and you do not owe any taxes to HMRC;
  • Even if you overpaid taxes and you are entitled to a tax refund.

What will happen if I fail to pay taxes? Are there any penalties?

If you are late paying your income taxes, HMRC will calculate interest on your income taxes you owe.

Shall I keep any documents of my Tax Return?

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. HM Revenue and Customs (HMRC) may check your records to make sure you’re paying the right amount of tax

How many years of my previous tax returns can HMRC investigate?

The HMRC has the right to open a tax enquiry within 12 months after the Tax Return submission date. If the HMRC discovers any inaccuracy, the enquiry can be extended up to 6 years. If the HMRC suspects any scam or money laundering, the enquiry can be extended up to 20 years.

Ltd Company

How long it takes to set up a limited company?

The shareholders have to provide a chosen name for the company, the personal details of the director to be and the value of the shares. The company can be set up in 1 day.

I live in abroad. I am interested in starting a business in the UK. Is it necessary for me to come to the UK for company registration? Will it be possible to maintain the business from abroad?

Right Accounts mediates in limited companies’ formation, even if the shareholders live abroad. We provide consultations and services related to company’s financial and accountancy affairs. With the help of technology, communication with our clients is possible worldwide. By trusting and leaving all accountancy work to Right Accounts, our clients are able to devote to the development of their business only.

What is VAT?

Value Added Tax is a tax levied on goods and services. You must register for VAT if: your VAT taxable turnover is more than £81,000 (the 'threshold') in a 12 month period. You receive goods in the UK from the EU worth more than £81,000. you expect to go over the threshold in a single 30 day period. The company registered for VAT is able to claim back VAT for business related expenses and, in this way, save some money. VAT law is strict and complicated. Those who fail to follow it are penalised with high penalties. Right Accounts provides consultations on VAT affairs, prepares and submits the VAT returns to the HMRC within the time limits.

Does every business have to pay VAT?

Businesses that are not registered for VAT cannot charge it as they are not expected to pay VAT.

How do I employ employees and how do I payroll them?

As a business owner, you can employ employees. PAYE (pay as you earn) and NI (National Insurance) are taxes levied on the salary you pay to your employees. Right Accounts provides consultations related to Payroll affairs: prepares payslips, calculates PAYE and NI taxes, prepares annual declarations and submits them to the HMRC.

What kind of declarations should a limited company submit?

Companies are obliged to submit:

  • Company Annual Return (Corporation Tax);
  • VAT return every three months (if registered for VAT);
  • PAYE and NI return.
  • CIS return and subcontractor payments return if company is a CIS contractor.
  • Annual Accounts for Companies House

What is Corporation Tax?

Corporation Tax is the tax charged on the profits of the company. Currently the CT in the UK is 20%.

How do I manage the company’s accounting?

Accountancy education and experience is needed in order to manage a company’s accounting correctly. Right Accounts provides valuable consultations and advice on bookkeeping and accounting affairs as well as represents clients in the dispute of tax enquiry with the HMRC.

Can I do my own bookkeeping and Payroll?

Yes. Right Accounts offer advice and training on bookkeeping and payroll software. We help to set up the chosen software and provide training. Our training and consultation is charged hourly at £20 per hour.

Currently we can offer you training on VT Transactions, Sage, Moneysoft and HMRC Basic PAYE Tools.

What is the price for your accounting services?

The service price of Right Accounts varies depending on every individual company’s activities, business area, business development, volume and etc. The annual accountancy service contract is signed after the discussion and evaluation of each company’s specific needs and desires. The agreed amount is divided into equal monthly payments and is paid by direct debit.