Tax Guru 10-2013

Hello again!

My name is Andrew Richardson and I have been running TaxAssist Accountants in Elgin for six years. I am hoping that this tax advice section will become an interactive feature. Submit your tax and accountancy questions to Moray Life and I’ll answer a sample of them each month, along with a brief summary of the tax issues we should be looking out for.

Q: I believe in the past that the National Minimum Wage normally changes about this time of year. Is there an increase soon?

A: You're absolutely right; there is typically a change to the National Minimum Wage (NMW) annually on the 1st of October.

The rates are due to change to:

  • £6.31 - the main rate for workers aged 21 and over
  • £5.03 - 18-20 year old (non-apprentice) rate
  • £3.72 - the 16-17 year old rate for workers above school leaving age but under 18
  • £2.68 - the apprentice rate for apprentices under 19 or 19 or over and in their first year of their apprenticeship

Last year, only the over 21s and apprentices saw an increase in the NMW. This year, all of the rates have increased.

Q: I registered for VAT late and must now go back and invoice my customers for VAT. Do I have to charge VAT on top of the invoices I originally issued; or is it already included?

A: Assuming you have already received your VAT registration details from HMRC, you may now begin to issue your customers with proper VAT invoices.

But it is actually up to you whether you charge the VAT on top of the original invoice you've already issued; or choose to suffer the VAT yourselves by deeming it to have been included in the original invoice.

However, there is something you should bear in mind. If you are dealing with other VAT-registered businesses, they won't mind you charging them for the additional VAT because they'll be able to get it back from HMRC on their next VAT return. But if your customers are members of the public or someone else that can't recover the VAT, they won't be too happy to receive this unforeseen bill.

Q: The Student Loans Company sent me a letter querying my employment status. But my circumstances have not changed - I am still employed. What should I do?

A: This sounds like a known issue with HMRC's systems; a very small number of students' employments have been incorrectly creased.

This has prompted HMRC's systems to automatically inform the Student Loans Company (SLC) that those individuals had left their employment. As a result, SLC have issued letter to these borrowers, querying their employment status.

HMRC's advice is to respond to the SLC saying you have not ceased employment or changed employer. HMRC are now in the process of correcting their systems and are due to complete this within the next few weeks.


If you have a tax query then please submit your questions to Moray Life and I'll try to give a response next month.  And always remember...

'Children may be deductible, but they are still taxing'.

By Andrew Richardson

TaxAssist Accountants Moray

Andrew’s contact details:

Please see my TaxAssist page for more details.