April 2009

Points to Ponder!

Welcome to our fiftieth newsletter issued in April 2009, to keep you up to date with some of the changes in Income tax, National Insurance and VAT along with compliance regulations for businesses, plus other oddments that have caught our eye. If you would like a copy of any past newsletters, please call and we can either send or e-mail them to you.

Have you found us on Facebook yet? (courtesy of Sam) If not, go to www.facebook.com and type in Jackson Scott Associates Ltd. You will need to be a member of Facebook however before you can access our page. This is really easy to do, costs nothing and is fun! Once there you can catch up on our news, see photographs, make new friends and comment on our services. So, come and scribble on our Facebook wall - we look forward to hearing from you. Talking of new faces, we are pleased to welcome John O'Keeffe to the Chessington office team. Sadly Caroline didn't stay due to unforeseen family commitments, but John has stepped in to help with the book-keeping.

Working Family Tax Credits are increasing divorces.
A recent survey shows that divorce rates have increased by 2% in low-income families to ensure maximum claims.

A Penny on a Pint.
Following a recent VAT case, HMRC won a ruling at the European Court of Justice that they can insist that retailers round up to the nearest penny, not down. The Wetherspoon chain of pubs was arguing the case but this ruling effectively means an extra penny on a pint.

Statements of Employment (speak to Sam in the Chessington Office, Gilders Road)
All employers should give their employees a contract or statement of employment. Certain clauses are mandatory but the main parts can be tailored to suit your specific business and terms of working, such as "employment only while there is work". If you need help putting something together, please give Sam a call or drop in to Gilders Road.

Pay to Park
Under the Transport Act 2000, local authorities can charge firms that provide employees with private parking. The Department for Transport is asking for feedback as to how the Act should be enforced. I think it is disgraceful as, if we allow our staff to use the space we have out the back, we could be charged. Could this be extended to a charge for letting an employee leave his car on your drive while you go to work in the business' van? As we already pay large business rates, with no say as to what the Council does, this seems just another imposition. Has anyone else strong views on this?

Tendering for council work
At a recent Federation of Small Businesses meeting, we had a presentation from Graham Friday, the Chief Procurement Officer for Tandridge, Mole Valley and Reigate and Banstead Councils. He is keen to support the FSB's "Keep Business Local" initiative and suggested ways for small businesses to be accepted for work on Council Projects. He has subsequently e-mailed us the slides from his presentation, so if anyone would like to approach the Council for work, please let us know, and we can forward the details. We would also be pleased to help with any applications you may want to submit.

Changes in Capital Allowances
To date, assets have been written off over their expected life, roughly four years. This has changed and capital expenditure up to £50,000 per annum can be claimed in the year in which it is spent. The exception is for cars, which are still to be written off over their expected life. This does mean that any assets sold in later years will give rise to a taxable gain.

Don't lose your CIS deductions details - the Revenue will no longer help.
In the past, if a sub-contractor lost or failed to record his income and tax deductions, the Revenue would supply the information it had on file from contractors' returns. HMRC is no longer going to provide this service, as they state that it is the taxpayer's responsibility to keep his own records.

HMRC is changing banks
Over the coming year, the accounts to which you make tax payments will be changing. The first will be the PAYE payments and should be changed in time for the April payment.

New penalties if you pay below the National Minimum wage.
Not only will the correct rates be back-dated and due to your employees, but so will the new fines and penalties.

Working tax credit
HMRC is currently encouraging workers to claim. An employee is eligible to claim, even if they don't have children, if they are 25 or over, work at least 30 hours a week and earn up to £12,865 per annum as a single person or £17,400 as a couple. A working parent or someone over 50 returning to work after a period on benefits or a disabled worker needs to only work 16 hours a week or more.

A request for records
Please could everyone bring their records in within two months of the end of their trading year, so if your year end was 30th September, we should have received your records by 30th November 2008, ready for your 2009 returns. As HMRC is trying to bring forward the submission date, we shall need records much quicker please. Deadlines for limited companies have already been reduced, so please don't put yourselves at risk of being fined. The new penalties regime, being introduced fully in April, sets higher levels of fines, interest and penalties, with less room for mitigation or negotiation.

How is the current economic climate affecting you? Are you using this as a time to take positive action and review your business? If you feel you have a good service or product to offer, then this is the time to advertise it. Firms that kept a positive outlook during the last major recession in the 1980's weathered the storm and came out stronger. We are hoping to take on more clients so how do you stand?

New Business Payment Support Service
If you are having problems finding your tax money, you can contact the HMRC Support Service on 0845 302 1435, Monday to Friday between 8 am and 8 pm and at the weekend between 8 am and 4 pm.

New record keeping requirements
Under the new penalties regulations, the Revenue has issued the following statement - "from 1 April 2009 we will have the powers to dictate exactly what records we think you should keep and that our requirements will become the new regulations".

Making a will
Perhaps not a subject most people want to think about, but if you own property or want certain items to go to specific beneficiaries, then it is vital. Once you have made a will, please make sure your executor knows where it is?

Retaining Records.
I have been asked a couple of times recently, how long should records be stored? Basically you need to keep at least the last 6 tax years' paperwork, including personal accounts as well as business records. So on 6th April 2009, you can shred everything up to 5th. April 2003.

Underpaid postage.
I know we have covered this before but we still have to collect letters from the local sorting office and paying not just the shortfall in postage but an additional £1 handling charge.

After the Off-shore Accounts - what is the next target?
HM Revenue & Customs has announced that it plans to target property owners who have "forgotten" to declare income from lettings, be that buy-to-let landlords or householders letting the odd room to help with the mortgage. Even if you genuinely are not making a profit from your lettings, under Self Assessment, you have to declare all sources of income.