Accountants in Cannock who help you keep more of what you earn.
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;