July 2009

Points to Ponder!

Welcome to our fifty third newsletter issued in July 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.

Race for Life Event for Cancer Research UK

We are proud to announce that we completed this year's event on Epsom Downs Racecourse on 28th June 2009. Race for Life is the UK's biggest women-only charity fundraising event. Sue, Sam, Sally, Shirley, Lorraine and Sase came from the offices while Angela helped man "base camp" and check up on Stuart's Bar-B-Que skills to ensure something was ready to revive the participants. Her daughter Jackie (who designed our new logo) completed the event on her behalf. Even the male staff members were involved as they nominated their wives to race for them! Amber represented Ian and Paul sent Helen along. Paul's boys quality-checked the Bar-B-Que by eating several burgers. All in all, this was a great office outing, despite the heat. The pre-walk warm-up was harder work than the actual walk! (Super-fit Sase ran the course, helped along by Lorraine's son Daniel)

The sponsorship money raised is vital to help Cancer Research UK continue its life-saving work. Thank you to all our clients and friends who have sponsored us but if you would still like to sponsor the girls for this worthy cause, please use the following link which will take you to a safe and secure page where you can pledge anything from £2 upwards. The link will be available until the end of this month. Alternatively, we would welcome donations payable to "Cancer Research". We hoped to raise £500 and have so far managed just over £625, but we'd like to do better.

Now on to the rest of this month's news.

Coming soon - our website
All thanks to new member of staff, John O'Keeffe, we shall soon have a website. John has started the build and design and plans to keep it updated with this newsletter. We shall also be reviewing an on-line service available via our Iris software, where clients who wish to maintain their cash book and some basic book-keeping entries, can do so via our website. We shall then be able to access this information and update records where needed. It may be a while before we introduce this, but as they say, watch this space.

Diversification, dedication and optimism.
These are supposed to be the key elements to surviving the current economic crisis. None of them is easy but it may help to share ideas. What are you doing to review and possible change your business? Please let us know as it may help others.

Independent Financial Adviser.
I have often wondered how independent financial advisers can be, as they all need to earn a living. As this is usually by way of commission, it seems tempting to opt for the highest paying company. However, we met Andrew of Harvest Financial Management at a Federation of Small Businesses meeting and feel confident in recommending his services to you. He will earn a commission, which will be shared with us, but as we are not licensed to offer financial advice, we feel Andrew will fill this gap in our services. Andrew also offers a very competitively priced Wills service - again something missing from our services. Please call if you would like his contact details.

Registration for Money Laundering.
Under the regulations, anyone who supplies accountancy services, book-keeping or tax advice must register with HMRC, if they are not registered with their own governing body. Some of you use part-time self employed book-keepers to look after your records - please check they have the correct registration or you too may be in breach of these rules.

On-Line VAT returns.
From 1st April 2010, all VAT-registered businesses with a turnover in excess of £100,000 and all newly registered businesses regardless of turnover, will be required to file on line and make their payments electronically. We are currently in the process of registering to be able to do this for you, but it will mean that, unless you make alternative arrangements, HMRC will take the VAT due from your account by direct debit. The good news is that you have 5 working days after the normal due date before the payment is taken. Paper returns for all businesses will be phased out by 2012.

VAT payments by credit or debit card - on line only.
Please be aware that credit card payments will carry a 1.25% transaction fee.

Review of recent points.
Can we e-mail your paperwork to you?
Along with the rest of the country, we are trying to cut down on our overheads and want to use e-mails much more. This will save time, postage and stationery, especially in respect of payrolls, draft accounts and invoices. Please may I give you more details? Payrolls and CIS returns - we can e-mail all your reports, including payslips and you can print only those you wish to or need to pass on to staff. Sam will run the payroll as normal, scan the reports and payslips then e-mail them to you. We shall then have the originals on your file in our office. If your subcontractors agree and can provide an e-mail address, their deduction certificates can be e-mailed direct to them, saving your stationery too. Draft accounts - as you know, these run in to many pages but if you agree, we can e-mail a draft to you to check through on screen, with no need for either of us to print it out. When you do agree the accounts, we can print and send formal copies. Invoices - we can print a copy on our headed paper and e-mail it to you. The original will go straight in to your accounts papers so you wont need to print it off.
Car scrappage scheme - update.
In another attempt to attract voters, the Government announced this scheme with major publicity and the manufacturers started their advertising campaigns. Everything was due to happen on May 18th. True to form, the powers-that-be failed to sort out the details and the final paperwork requirements were agreed with the car industry on 27th May to go live on 29th May. I got my new car on that day! This scheme is also available for light vans, with useful tax and VAT advantages too.
MP's Expenses - another angle?
Basically it seems that MPs are just using the system to its maximum advantage. Anybody with two homes is entitled to declare whichever they wish as being their main residence in order to minimise capital gains tax liabilities. All employees can reclaim expenses which are "wholly and exclusively incurred in connection with their employment". MPs have just been too creative in their claims and should all be subject to a Revenue enquiry.
Income Shifting.
This is where income is "shared" between family members to reduce the tax liability of the prime income generator. The Government has been trying to stop this but please contact us if you would like to discuss how to maximise this opportunity before it is lost.
HMRC's New Penalties Regime.
The heavy handed new penalties covering incorrect or late returns of all taxes came in to force at the end of April. The number of enquiries are also going to increase so, if you haven't got it, please consider taking out Fee Protection Insurance - we can help.

Budget Highlights.
The car-scrap scheme payout - £2,000 off the price of a new car if you trade in a car that is more than 10 years old, providing it is taxed and has a current MoT.

The tax on income above £150,000 will go up to 50% from 40%.

Statutory redundancy pay will rise from £350 to £380 per week.

VAT will revert to 17.5% by December.
The stamp duty tax holiday on the sale of properties up to £175,000 is extended.

The duty on alcohol and cigarettes has been increased and fuel will rise in September.

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. 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?
Tendering for council work.
At a recent Federation of Small Businesses meeting, we had a presentation from 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. 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.
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.
It is vital that you ensure you obtain vouchers from your contractor and don't lose them. The Revenue will check what they have on file when your returns go in, but they are imposing "Self Assessment" to the letter and will not give you information if you don't have the vouchers.
New penalties if you pay below the National Minimum wage.
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.
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".

Please call us if you would like more details about any of the above topics - we are here to help.