Anna’s Accountancy Alerts – Week 45 (7th – 13th February 2022)

Senior male restaurant pub owner stands outside the entrance

TTS

National Insurance - incorrect NI codes

When you use code M for NI it reduces your Class 1 NI secondary liability to nil. But this only applies until the employee reaches 21.

 You must stop using code M starting with the pay period in which the employee becomes 21 and not in the following month.

You can only use the NI code M in your payroll software if the employee has not had their 21st birthday on the date you pay them. Make sure you have the correct date of birth for each of your employees.

£5k funding for accounting software

Under the Help to Grow: Digital scheme, eligible businesses can now receive discounts of up to £5,000 off the retail price of approved digital accounting and CRM software from leading technology suppliers. The funding is capped at 50% of the total cost of the investment and is open to businesses with 249 employees or less.

Currently, three accounting software providers are signed up to the scheme – Sage, Intuit and E-crunch.

This software will help them to manage their finances and build customer relationships, and is part of the government’s levelling up agenda.

The next phase of the programme will see the scheme extended to e-commerce software.

Further information about Help to Grow: Digital is available here.

Self-assessment tax return for landlords

HMRC states that those with small amounts of profit have a choice between filing a tax return and paying taxes or getting their PAYE code adjusted with the level of profits.

HMRC states that ‘it will ask for a return where rental income is £10,000 or more before allowable expenses’ and under this limit is likely to ask for a return where the rental income falls between ‘£2,500 to £9,999 after allowable expenses’.

If the rental income is below the above levels, then the individual may ask HMRC to deal with the profits by adjusting their PAYE code.

However, if HMRC has issued a tax return, it has to be completed even if there is no tax to pay.

Stay Up-To-Date With Coronavirus & Brexit News

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