Monthly Archives: January 2018

Basic Advice & Guidance

Capital allowances’ is the term used to describe the allowances which allow businesses to secure tax relief for certain capital expenditure. Most capital’ items, such as computer equipment, vehicles, machinery etc last for more than a year or so. The tax rules do not allow you to automatically deduct the full cost of such items in one go. And different rules apply to different types of capital expenditure. In some cases no tax relief is available at all even though you may have spent the money solely for business purposes.

Corporation Tax Self Assessment for private GP Practitioners
Corporation Tax typically applies to profits made by limited companies, members’ clubs and to trade and housing associations.
Tax Rates:
FY 2016: 20% FY 2017: 19%

Submissions:
The submission must include the company’s Self Assessment return alongside details of any trade and other losses such as capital losses.
A company has a right to amend its return, including the Self Assessment within 12 months from the statutory filing date.

Keeping Records
The background records that must be kept include but are not limited to the following details of the company’s:
‘capital expenditure’ such as the purchase and sale or disposal of company assets, equipment, office furniture and vehicles;
liabilities (money it is due to pay people and other businesses);
income and expenditure (e.g.: sales and purchases);
stock, if any, on hand at the end of each financial year;
receipts and expenses;
all relevant supporting documentation.

Ways in which to keep tax bills to a minimum & better understanding of business expenses

Income Tax
Income Tax is a tax paid on taxable income received by individuals including:
Earnings from employment
Earnings from self-employment
Pensions income
Interest on most savings
Dividend income
Rental income
Trust income

Save A Big Amount On Your Taxes

As investments under the ELSS Funds are made in the equity markets, there is a scope for higher returns as against many other tax-saving investment options from the viewpoint of a long-term period. Thus, in addition to savings on taxes, these schemes manage to pull in hefty profits on your capital employed. However, it is always recommended that you should plan to invest in an ELSS fund over medium to long-term period, so as to draw supreme benefits. While Fixed Deposits and Provident Funds provide returns only to the tune of 8%, ELSS schemes hold a remarkable track record of generating returns that have soared up to 12% or even higher, over the past decade.

� Lowest Lock-In Period:

ELSS Mutual Funds have the minimum lock-in period when compared to other tax-saving investment choices. In comparison to a lock-in period of 5 years and 7 years in Fixed Deposits and Public Provident Funds, respectively, ELSS Funds have a lock-in period of merely 3 years. Thus, investors opting for ELSS against FD’s will be able to secure higher liquidity and will be able to plough back their money much sooner.

� Tax Benefits on Gains Earned:

One of the most compelling features of the ELSS Funds is that the returns which are yielded on the investments are 100% tax-free. Once you stay invested in these funds for the minimum designated lock-in period of 3 years, the long-term capital gains arising will remain intact and the taxman will not be able to touch a penny. Thus, by investing in these schemes, the depositors can fully cherish the entire amount received either on redemption or maturity.

� Flexibility in Investing:

Even though the lock in period is somewhat lengthy considering 3 years straight, investors however, can stay invested in these schemes with or without any further addition for as long as they desire. They also have the option to stop an ELSS SIP at any point, but the amount already invested can be withdrawn only after the completion of 3 years. Since ELSS is a well-diversified scheme, it is suggested that it shall be taken into consideration for a long-term investment period.

� Lesser Influence of Market Fluctuation:

Over a good number of years, ELSS Mutual Funds have proven to be fairly less volatile in comparison to other equity investment options. Thus, many market gurus recommend that the investors should choose to invest in ELSS Schemes, so as to protect themselves from the volatility of the conventional stock market options.

Thus, being an investor, if you are desirous to kill two birds with a single stone � reap high returns together with saving a good amount of tax � then the ELSS schemes are the finest choice for you, where you get the chance to draw maximum benefits if you invest systematically. Lumpsum investment at the end of the financial year will only help you to reduce your tax, but your funds might not be capable of generating the same amount of return. Hence, you could miss the potential returns by ignoring the effect of time value of money.

What To Do After Filing A Tax Extension

Not everyone is ready for tax season, some years can be rougher than others. That’s why tax extensions exist, and they are a great move by you if done right. It’s easy to extend your filing period, simply send in a completed Form 4868 � Application for Automatic Extension of Time to File.
This year if you filed an extension prior to April 18, 2017, you now have until October 16, 2017. The deadline may still seem far off, but time flies by fast and sooner than later that deadline will come up. If you haven’t gotten started on your tax returns yet, here’s a few tips to push you to file your tax returns.

Get Help with Filing Your Taxes

Filing your taxes can be stressful, especially when you don’t have everything ready. This includes not having all the documents required to complete a tax return. If so, use your extension time wisely to contact your employers throughout last year and other entities that owe you information.

Keep in mind that failure-to-file penalty is more than failure-to-pay penalty. Filing on time will help reduce the amount of interest and penalties that will stack, and will help you find payment options in time before the deadline hits.

If you haven’t already, seek out a tax professional to help you with your return.

Note � If you don’t owe taxes, usually there are no penalties for filing late. That is because penalties derive from the amount you owe. The only hit you take is that you won’t get your coming refund until you file.

What to Do with Your Tax Extension

Finish Up As Soon as Possible

Understand that a tax extension extends only the amount of time you have to file your taxes, it does not extend the time you have to pay. This makes it all the more important to get your tax return done as soon as possible.

Making Strides In Detecting Fraudulent Tax Returns

The audit resulted in the following six recommendations, which the IRS agreed with:

1.Expand the use of identity theft models to include all accelerated W-2s to compare with tax returns for possible identity theft.
2.Develop criteria to identify and evaluate potential fraud in tax returns.
3.Develop a way to use state lead data to help evaluate tax returns for identity theft.
4.Use tax return data to find the refund amount associated with electronically filed tax returns that were rejected when computing revenues, leave out rejected returns that don’t claim a refund, and account for tax returns with multiple reasons for rejection.
5.Review revenues to ensure that duplicate tax returns are omitted.
6.Tax returns with mismatched income because of amended or duplicate income documents should not be considered for potential identity theft.

The Southbourne Tax Group is a complete-package Accounting & Tax company. We provide a wide selection of small enterprise accounting services, including tax services for businesses and individuals. Our services also include outsourced CFO support, bookkeeping support, local and remote service, payroll processing, QuickBooks support and many more! Our rates are reasonable and you get friendly service from our professional staff.

Our policies and procedures authorize Partners of the Firm for consultation on substantial technical, ethical and industry-wide issues and are also designed to ascertain that customers receive the best financial services available anywhere. The greatest public interest is always at the top of our mind. You can rest assured that our Partners and Staff Members can pinpoint and address all essential issues we encounter.

Our group is considered one of the foremost companies in the locality. By integrating our experiences, expertise and the creative abilities of our staff, each customer benefits from the professional and personal attention they provide.

indirect tax system

The current indirect taxation system comprising service tax, state vat and central sales tax(CST) is not geared up to recognize and accommodate the evolving business models of e-commerce. But there are no specific provisions for the e-commerce operators to pay taxes on sale of goods or to make any deductions from the payments being made by them to actual seller of the goods.
A return is a document that a taxpayer is required to file as per the law with the tax administrative authorities. Under the GST law, a normal taxpayer will be required to furnish three returns monthly and one annual return. Similarly there are separate returns for a taxpayer registered under the composition scheme, taxpayer registered as an input service Distributor, a person liable to deduct or collect the tax (TDS/TCS)
TYPES OF RETURNS
GSTR-1 (Registered taxable supplier)
– Details of outward supplies of taxable goods and/or services effected.
– 10th of the next month
GSTR-2 (Registered taxable recipient)
– Details of inward supplies of taxable goods and/or services effected claiming input tax credit.
– 15th of the next month
GSTR-3 (Registered taxable person)
– Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax.
– 20th of the next month
GSTR-4 (Composition supplier)
-Quarterly return for compounding taxable person
-18th of the month succeeding quarter
GSTR-5 (Non-Resident Taxable Person)
– Return for non-resident foreign taxable person
– 20th of the next month
GSTR-6 (Input Service Distributor)
– Return for input service Distributor
– 13th of the next month
GSTR-7 (Tax Deductor)
– Return for authorities deducting tax at source.
– 10th of the next month
GSTR-8 (E-Commerce operator/Tax collector)
– Details of supplies effected through e-commerce operator and the amount of tax collected
– 10th of the next month
GSTR-9 (Registered Taxable Person)
– Annual Return
– 31st December of next financial year
GSTR-10 (Taxable person whose registration has been surrendered or cancelled)
– Final Return
– within three month of the date of cancellation or date of cancellation order, whichever is later.
GSTR-11 (Person having UIN and claiming refund)
– Details of inward supplies to be furnished by a person having UIN
– 28th of the month following the month for which statement is filed.

Inclusion Of Anti Profiteering Clause

Anti-profiteering means to stop a person from earning unreasonable profit through sale of goods and services It mandates a manufacturer and others in the supply of chain to pass on the benefits arising out to input credit and lower taxes to consumers at the pain of penalty. The main intention is to protect consumers from inflation after GST implementation.

MAIN REASONS FOR ANTI-PROFITEERING CLAUSE

There are three main reasons which make this clause necessary is

To set up honest pricing policy, this will help to retain consumers in the GST regime.
To examine whether input tax credits or lower tax rates actually result in a commensurate reduction in price.
To observe the inflationary trends during the initial stages of GST introduction and to analyze and control its long-term effects.

FEATURES OF ANTI-PROFITEERING CLAUSE

A state wise single registration for a taxpayer for filing returns, paying taxes and to fulfill other compliance requirements.
(Most of the compliance requirements would be fulfilled through online)
A taxpayer has to file one single return state wise to report all his supplies, whether made within or outside the state or exported out of the country and pay the applicable taxes on them. (CGST, SGST, IGST etc.)
A business entity with an annual turnover of up to Rs 20 lakh would not be required to take registration in the GST regime, unless it voluntarily chooses to do so to be a part of the input tax credit (ITC) chain.
In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course of business except on a few items listed in the law.
In order to ensure that ITC can be used seamlessly for payment of taxes under the Central and the State law, it has been provided that the ITC entitlement arising out of taxes paid under the central law can be cross utilized for payment of taxes under the laws of the states or union territories.
Detailed transitional provisions have been provided to ensure migration of existing taxpayers and seamless transfer of unutilized ITC in the GST regime.
In order to mitigate any financial hardship being suffered by a taxpayer, commissioner has been empowered to allow payment of taxes in installments.
To provide certainty in tax matters, a provision has been made for an Advance Ruling Authority.

6 Ingenious Ways To Organize Your Small Business

Staying organized seems easier with plenty of money & volume of employees but what about the small business who are running out of both? That’s true! Every one of us had been started as a small startup and raised our business to a massive level. But what are the major strategies that followed by businesses to transform into huge-enterprises?

Proper organization & keen planning are two big things that normally have been followed by each highly ranked business. The pain of handling all activities on your own is not hidden to any, but the relief of having an organized business can be acknowledged by each person effortlessly. Are you lagging in the business growth game even after using all the tools? Don’t worry. These below mentioned seven ingenious ways will definitely help you to stay organized in 2018.

1. Say Hello To Cloud, Go Paperless

Most of the Startups don’t actually deal with volumes of documents but it is better to stay away from clutter and work digitally. cloud based quickbooks is one of the most renowned accounting software, powered and designed by Intuit, of today’s era which is simplifying data related tasks for millions of SMBs. Keeping balance sheets and reports over excel alike software were old talks, businesses nowadays are falling rapidly for accounting software that will organize reports, bookkeeping, invoices, Payroll etc. on a single place and reduces the use of paper within business premises.

2. Decrease Your Issues, Increase Business Productivity

It is equally important, to claim that business growth, to forecast alike environment within the business that supports your vision of growth. The engaging of QuickBooks software actually helps you to lower your daily hassles that fetched while working on-site. Including with, hosting QuickBooks on a server of the third party allows your business to have a 24*7 backend support. Any business with no worry of technical issues do perform better than others who aren’t engaged with the same support.

3. Track Upcoming Tasks In The Cloud

Usually, it sounds quite hectic to remember all the work that you need to do in the coming time. Using cloud computing QuickBooks is yet another ease any business can avail effortlessly. Tracking of data files & remembering due payment dates will be nothing to worry about after allowing QuickBooks accounting software. The issue of offering lots of time in scheduling events, dues & tasks will be not there in the year 2018 anymore.

4. Manage Business Working Space & Storage

It is equally important to manage your office’s physical space even if you’re integrated over the cloud computing network. The best approach to arrange things vertically in the office space. Though most of the businesses are now dealing with less paperwork as they’ve working digitally now. Mitigating data to cloud helps SMBs to save the expenses of having on-site resources as all the cloud-stored data can be accessible to as many members as required. Using proper space & storage management, businesses can efficiently organize their small start to gain more of what they are inputting.

5. Precisely Plan For Your Quarterly Taxes

It is vital for business persons to be compliance with tax regulations 2018 that will be revealed soon by respective authorities. The QuickBooks software helps SMBs to acknowledge all the needed information right on their dashboard. Organizing your tax is yet another vital task to be an organized business claiming for growth. Pre-planning of your quarterly taxes saves you from the penalty and helps you to know the deductions over tax.

6. Manage & Free Space In Your Inbox

If your business email inbox is overflowing then, it is better to filter the important emails first and delete the rest ones. As full inbox doesn’t allow new emails to arrive and many times it could be dangerous for businesses. Another main reason for having empty and full read inbox is that you’ll concentrate on useful bundles of emails and stay away from irritation while working.