Accountants in Cannock who help you keep more of what you earn.
In the shadow of the Chancellor's Autumn Statement we are bringing you a general round up of the key details, cutting through the jargon.
Most people who have been submitting tax returns for some time are aware of the penalty for late submission of a tax return and not paying tax on time. However since 6th April 2011 the rules have changed and not knowing whats new can cost in excess of £1500 in certain cases.
From April 2012 changes to the way VAT returns have to be filed are coming into force. It's easy to see that HM Revenue & Customs are keen to move to online filing as we've seen with other taxes and now it's VATs turn again. At the moment, only newly registered businesses and those with a turnover in excess of £100k have to file their returns online. However from 1st April all businesses must file returns online. This has not come as a shock to the industry however for many smaller businesses who are registered this could present difficulties. We file all returns for clients online as standard. This ensures that the return is received by HMRC via their secure site and gives an extra seven days to file the return and pay. For more information regarding VAT and your obligation contact us using our enquiry form.
HM Revenue & Customs are pressing businesses who may be liable to be registered for VAT but aren't to come forward. The article from BBC News goes on to explain that businesses who own up before 30th September could get reduced penalties for not registering and explains that
Businesses that send in a VAT registration form less than 12 months after the date on which they should have registered will not be charged a penalty, unless they wilfully avoided registering.VAT law is possibly some of the most complicated law in the UK. While businesses are free to complete their own returns, we offer free VAT registration and can complete your returns online on your behalf. Timely and correctly. If you are unsure if you should of registered for VAT, we offer a free consultation where we can not only advise your VAT situation but look at your business as a whole, how to make it as profitable as possible and pay the legally lowest amount of tax possible. Contact us on 01543 468500 or use the enquiries tab at the top of the page.
A new tribunal case has revealed reasonable excuses for not paying your PAYE/NIC/CIS over to HM Revenue & Customs. We'll skip "the dog ate my tax return" and other not so reasonable excuses we've heard (and given) and get down to business. Alan Kincaid's company, AK Construction Limited, appealed against HMRC trying to remove his gross payment status for not paying over CIS tax on time. Gross payment status allows people working under the CIS to be paid the full amount they invoice and not have any tax stopped at source. The advantage to HMRC of the CIS means that rouge builders will have tax paid over and will not evade tax. The disadvantage to everyone else is you only receive four fifths of the labour that you invoice. Hence why gross payment status is so desirable. Some of the payments AK Construction made to HMRC were late which meant they failed the compliance test, despite that he was unable to pay because of cash flow difficulties. Judge John Walters ruled in favour of AK Construction saying that "the appellant had done all that he could to avoid this problem" and that was a reasonable excuse. Though HM Revenue & Customs still disagree with cash flow being a reasonable excuse, it depends on the tribunal judge you find yourself before.
The deadline for disclosing undeclared income under the Plumbers Tax Safe Plan (PTSP) is the end of this month. For those who don't know here's an overview of what PTSP is. Last year, HM Revenue & Customs were offering medical professions the opportunity to disclose undeclared tax. The take up was higher than expected so HMRC are going through the trades and offering people the chance to disclose. The difference is that HMRC had details relating to the medical profession, whereas they are now 'just hoping' so to speak. The benefits of declaring under PTSP is that HMRC will have a certain amount of leniency when dealing with you. Mistakes when reasonable care has been taken there will be no penalty, however careless mistakes attract a 10% penalty of the tax due and deliberate but not concealed mistakes attract 20%. When the taxpayer has tried to conceal the extent of which the tax is due a penalty of 100% is due. As ever, we fully recommend full disclosure of all income. If you feel that you may have something to declare but are unsure, contact us for a free initial interview and consultation where we can advise you on the best way forward to keep you tax liability as low as possible. HMRC's guidance on PTSP can be found here.
There are a few significant changes happening that will have an impact on businesses; All VAT returns must now be submitted online. Any return submitted after April 2011 must be submitted online. If not, you may be liable to a penalty or surcharges. Registering to complete your returns online is a simple process and we are more than happy to assist you in doing this. Minimum wage is set to increase in October '11. Bear in mind that this will push up employer national insurance contributions so include that in your cash flow forecast! Not paying minimum wage can result in penalties up to £5000 and arrears ordered to be paid to the employee. Increases are as follows;
As promised yesterday we have an overview on how the budget will affect business, unincorporated and incorporated alike. Corporation tax; It is made known last budget that corporation tax rates are going to be falling by 1% every year. However George Osbourne decided to reduce the rate by 2% this year so it will stand at 26% for larger companies. Small companies rate only went down by 1% to 20%. Capital allowance have remained unchanged. From April 2012 the Annual Investment Allowance will be dropping from £200,000 to £25,000. Bearing this in mind it is strongly advisable to purchase capital expenditure sooner rather than later. VAT Thresholds have been tinkered slightly and have increased by £3k to £73,000, deregistration has upped from £68k to £70k. For further details or an in depth analysis of the budget, request on our enquires page.
With the budget over we can all breath a sigh of relief that nothing painful was announced. We are going to go over some of the key points affecting individuals. Tomorrow we will look at the bigger issue of businesses. Personal allowances for 2012/13 are going to £8105. The personal allowance is the amount you can earn before you starting paying tax. Rising to £7475 on April 6th, this will mean that it has gone up £1630 since the coalition came into power. This puts them well on their way to raising it to £10,000 before the end of their term. A review of tax & NIC has been called for with a view to simplify the system. Currently basic rate tax (what most people pay) is 20%, and 40% at the higher rate. On top of this national insurance is 11% up to £844 per week and 1% thereafter. Entrepreneur's relief has very generously been double to £10 million. This means that anyone selling an entrepreneurial business will be taxed at 10% on the first £10 million and the standard capital gains rate of 18% afterwards. This is a lifetime limit so don't get too excited and think you can start selling a business a year... Subscribe via RSS and keep up to date with our articles including the budget review for business tomorrow!
You may recall last year, we wrote about medical professionals been given the chance to own up to undeclared income (article here). Well, as predicted HM Revenue & Customs are trying their hand at other trades. The first of which being plumbing. Going back up to five years, plumbers are been given the chance to declare unpaid tax, offering a special 10% penalty rate for the most plumbers, however is more serious cases a 20% penalty. These penalties will be on top of any tax payable. Disclosure must be before 31st May and if caught out after this date there will be no favourable treatment. However this opportunity is different to the earlier medical push where the tax man had actual information to basis enquiries on. This time they don't, meaning you have less chance of getting caught. However when caught, expect a tonne of bricks to land upon you. If you are a cash-in-hand plumber and would like to talk about disclosing undeclared income we can offer advice catered to your individual situation. If you would like to have a free no obligation consultation please do not hesitate to either contact us or visit the enquiries page.