Property Accountant Specialist
Development,Investment & Construction

Financial reporting and auditing are governed by various regulations and standards:

1. Financial Reporting:
   • UK Generally Accepted Accounting Practice (UK GAAP) and International Financial Reporting Standards (IFRS) guide how companies prepare financial statements.
   • Larger companies often use IFRS for consolidated financial statements.
2. Auditing:
   • The Companies Act 2006 establishes legal requirements for company audits, auditor appointments, and audit reports.
   • Auditors follow International Standards on Auditing (ISAs) and UK-specific standards issued by the Financial Reporting Council (FRC).
   • The FRC oversees accounting and auditing standards, while other bodies like the Audit Quality Review (AQR) and Professional Oversight Board (POB) regulate audit firms.

1. Personal Allowance: A certain amount of income is tax-free, known as the personal allowance. Beyond this threshold, income is subject to taxation.
2. Basic Rate: Income above the personal allowance up to a certain threshold is taxed at the basic rate. This rate is typically lower than the higher tax bands.
3. Higher Rate: Income above the basic rate threshold up to another threshold is taxed at a higher rate, which is greater than the basic rate.
4. Additional Rate: Income above the higher rate threshold is subject to the additional rate, which is the highest rate of income tax in the UK.

1. Register with HM Revenue and Customs (HMRC) as employers.
2. Collect employee information, like names, addresses, and National Insurance numbers.
3. Use payroll software to calculate and deduct Income Tax and National Insurance Contributions (NICs).
4. Pay employees on time and provide payslips.
5. Report earnings and deductions to HMRC using Real Time Information (RTI).
6. Manage National Insurance Contributions for both employees and employers.
7. Enroll eligible employees in a workplace pension scheme.
8. Provide year-end forms like P60 and submit annual returns to HMRC.
9. Keep payroll records for at least three years.

To claim R&D tax credits in the UK:

1. Ensure eligibility as a limited company engaged in qualifying R&D activities.
2. Clearly identify R&D projects meeting criteria.
3. Keep detailed records of R&D activities and costs.
4. Calculate R&D costs (wages, subcontractors, consumables, etc.).
5. Prepare your claim with a tax advisor.
6. Submit your claim to HMRC online or via paper form.
7. Await HMRC review and provide additional info if needed.
8. Receive approved credits as a reduction in corporation tax or cash payment.
9. Maintain R&D records for future claims.
10. Consult a professional for expert guidance.

In April 2023 the Corporation tax rate was raised from 19% to 25%. However, tax rates and regulations can change, so it's important to verify the current rate with Her Majesty's Revenue and Customs (HMRC) or a qualified tax professional. The due date for Corporation Tax in the UK typically depends on the company's accounting period. In general, Corporation Tax is due 9 months and 1 day after the end of the accounting period.

The Construction Industry Scheme (CIS) in the UK regulates taxation within the construction sector. It involves contractors and subcontractors registering with HM Revenue and Customs. Contractors verify subcontractors' tax status before making payments, with deductions based on the subcontractor's status. Monthly reporting to HMRC is mandatory, and contractors must pay the deducted taxes. Compliance is crucial to avoid penalties, and end-of-year statements are provided to subcontractors. Disputes can be appealed with HMRC. CIS aims to enhance tax compliance and reduce evasion in the construction industry, ensuring accurate tax payments by subcontractors.

Value Added Tax (VAT) is a consumption tax imposed at different stages of production and distribution, ultimately passed on to the end consumer. VAT registration is mandatory when a business reaches a specific annual turnover, typically set by each country, or when engaged in specific taxable activities. In some instances, voluntary registration is an option for businesses below the threshold but looking to recover input tax. The due dates for Value Added Tax (VAT) payments vary by country and can also depend on the specific circumstances of the business. In many countries, VAT payments are typically due on a regular basis, such as monthly, quarterly, or annually. The specific due dates are often determined by the tax authorities and can be influenced by factors like the business's turnover, industry, and filing frequency.

Here are some common VAT payment schedules:

1. Monthly: Some businesses, particularly those with high turnover, are required to remit VAT on a monthly basis.
2. Quarterly: Many businesses, especially smaller ones, are on a quarterly VAT payment schedule.
3. Annually: In certain cases, businesses with very low turnover may file and pay VAT annually.
4. Custom Schedules: Some businesses with unique circumstances or international operations may have custom VAT payment schedules.

businesses can take various legal forms, including sole proprietorships, limited companies, partnerships, limited liability partnerships (LLPs), community interest companies (CICs), non-profit organizations, and franchise businesses. Each of these structures comes with distinct tax implications, making it essential for business planning. Sole proprietorships are straightforward but hold the owner personally liable for debts, subjecting profits to Income Tax. Limited companies are separate entities and pay Corporation Tax, with tax considerations for dividends and salaries. Partnerships distribute profits and losses among partners, who report this on their personal tax returns. LLPs combine limited liability and tax transparency. Community Interest Companies have unique tax rules due to their community-focused objectives, and non-profit organizations benefit from tax relief and exemptions. Selecting the right structure and effectively managing tax obligations are critical for business success. Business owners must grasp the tax intricacies associated with each structure, such as liability, tax rates, and eligibility for tax deductions and credits. Seeking guidance from tax professionals is often advisable to navigate these complexities, optimize tax planning, and make informed choices aligned with business objectives. Understanding the tax implications of the chosen structure is paramount for effective financial management and decision-making.

Making Tax Digital (MTD) represents a fundamental transformation in how the UK manages its tax processes. This initiative mandates that businesses maintain digital records of their financial transactions and submit tax returns electronically. The significance of understanding and adhering to MTD requirements cannot be overstated. Compliance with MTD is a legal necessity, backed by the potential for penalties and fines imposed by HM Revenue and Customs (HMRC). By encouraging real-time financial record-keeping and digital submissions, MTD aims to enhance accuracy and efficiency, thereby reducing errors, late payments, and the risk of tax investigations. Furthermore, embracing MTD provides businesses with up-to-date financial data that can inform strategic decisions and financial planning. It also promotes financial transparency by offering a real-time view of tax obligations throughout the year, alleviating the stress traditionally associated with year-end tax filings. It is imperative for businesses and individuals in the UK to remain informed about MTD's evolving regulations, ensuring continued compliance and the full utilization of the benefits it offers in terms of accuracy, efficiency, and financial management.

Claiming VAT on residential developments is not as straight forward as it seems, we strongly suggest you engage a Property Accountant when considering development as there are many pitfalls. As an example, only new build is Zero Rated where refurbishment, or conversion, from Commercial to Residential development is 5%. However there are many examples that vary, your contractors should charge you zero-rated or 5% dependent on producing an HMRC certificate confirming your status. It is common for materials and consultants to charge VAT. The type of build contract also varies the VAT. Further information can be found at HMRC Information or alternatively contact Steve Watts at Merranti Property Accounting.

Financial reporting and auditing are governed by various regulations and standards:

1. Financial Reporting:
   • UK Generally Accepted Accounting Practice (UK GAAP) and International Financial Reporting Standards (IFRS) guide how companies prepare financial statements.
   • Larger companies often use IFRS for consolidated financial statements.
2. Auditing:
   • The Companies Act 2006 establishes legal requirements for company audits, auditor appointments, and audit reports.
   • Auditors follow International Standards on Auditing (ISAs) and UK-specific standards issued by the Financial Reporting Council (FRC).
   • The FRC oversees accounting and auditing standards, while other bodies like the Audit Quality Review (AQR) and Professional Oversight Board (POB) regulate audit firms.

1. Personal Allowance: A certain amount of income is tax-free, known as the personal allowance. Beyond this threshold, income is subject to taxation.
2. Basic Rate: Income above the personal allowance up to a certain threshold is taxed at the basic rate. This rate is typically lower than the higher tax bands.
3. Higher Rate: Income above the basic rate threshold up to another threshold is taxed at a higher rate, which is greater than the basic rate.
4. Additional Rate: Income above the higher rate threshold is subject to the additional rate, which is the highest rate of income tax in the UK.

1. Register with HM Revenue and Customs (HMRC) as employers.
2. Collect employee information, like names, addresses, and National Insurance numbers.
3. Use payroll software to calculate and deduct Income Tax and National Insurance Contributions (NICs).
4. Pay employees on time and provide payslips.
5. Report earnings and deductions to HMRC using Real Time Information (RTI).
6. Manage National Insurance Contributions for both employees and employers.
7. Enroll eligible employees in a workplace pension scheme.
8. Provide year-end forms like P60 and submit annual returns to HMRC.
9. Keep payroll records for at least three years.

To claim R&D tax credits in the UK:

1. Ensure eligibility as a limited company engaged in qualifying R&D activities.
2. Clearly identify R&D projects meeting criteria.
3. Keep detailed records of R&D activities and costs.
4. Calculate R&D costs (wages, subcontractors, consumables, etc.).
5. Prepare your claim with a tax advisor.
6. Submit your claim to HMRC online or via paper form.
7. Await HMRC review and provide additional info if needed.
8. Receive approved credits as a reduction in corporation tax or cash payment.
9. Maintain R&D records for future claims.
10. Consult a professional for expert guidance.

In April 2023 the Corporation tax rate was raised from 19% to 25%. However, tax rates and regulations can change, so it's important to verify the current rate with Her Majesty's Revenue and Customs (HMRC) or a qualified tax professional. The due date for Corporation Tax in the UK typically depends on the company's accounting period. In general, Corporation Tax is due 9 months and 1 day after the end of the accounting period.

The Construction Industry Scheme (CIS) in the UK regulates taxation within the construction sector. It involves contractors and subcontractors registering with HM Revenue and Customs. Contractors verify subcontractors' tax status before making payments, with deductions based on the subcontractor's status. Monthly reporting to HMRC is mandatory, and contractors must pay the deducted taxes. Compliance is crucial to avoid penalties, and end-of-year statements are provided to subcontractors. Disputes can be appealed with HMRC. CIS aims to enhance tax compliance and reduce evasion in the construction industry, ensuring accurate tax payments by subcontractors.