August 2009

Points to Ponder!

It's here - our website is live!

All thanks to our newest member of staff, John O'Keeffe, we have this website. Please let us know what you think. From now on, you will be able to pick up the latest newsletter and find out what else we have been up to or what is coming. 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. If you like the website and have been thinking about one for your business, please call John and have a chat with him - he can help. We are really pleased with the site and hope you find it useful too.

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

A Family Affair
Only one-third of family businesses successfully moves in to a second generation, and an even lesser percentage of those go on to a third generation. Yet this could be the best tax planning you could carry out, while also helping with your family's future and ensuring all your hard work continues to pay off. Succession requires careful planning and training, although a great amount of open-mindedness is required for future changes. What has worked for the first generation may require much up-dating by the second. Just remember which age group is more at home with computers and whose first wage packet came in £sd. (That's pounds, shillings and pence - not a mind-expanding substance). We can point you in the right directions for tax planning and transfer of assets, but you need to ensure family agreement.

Migrant Workers
If you want to employ skilled workers, you must advertise the job in the UK at the Jobcentre Plus for up to 2 weeks before offering it to anyone from outside the European Economic Area. If you don't do this, you will not be allowed to sponsor a migrant worker under the new points-based immigration controls, which stop unskilled workers from outside the EEA coming to the UK. The new Home Office department, the UK Border Agency, is overseeing these regulations. Find more information at ukba.homeoffice.gov.uk.

Most hated expressions.
One of our tax magazines has compiled a list of the editorial team's most hated office expressions. This list includes "Give me 110%", "360-degree thinking" and "strategic staircase". From a child, my most hated expression is "If I were you". What's your most hated phrase? Perhaps we can run a competition on the Website? Send your ideas to John and he can put them on our Fun Page - and also publicise your business.

Off Shore Accounts
HMRC has announced another onslaught on undeclared off shore accounts. Please do let us know if you have any accounts held overseas so that we can make sure you are making the correct returns.

Work-place Parking Tax
We have mentioned this before but in 2012, Nottingham will tax companies that provide parking spaces for staff or for visitors. Will this move raise revenue or cause a drop? When you consider the amount businesses have to pay in rates, this additional charge could mean companies decide to move out of city centers for cheaper accommodation.

VAT Rises
We know the Government is going to raise the rate of VAT at the end of December and the message is that it will go back to 17.5%. The Conservatives have announced that they will set VAT at 20%, but could this be another opposition idea that Labour will steal?

Cross-border VAT Changes from 1st January 2010
We have mentioned before that the point of supply and receipt of supply rules are being changed but in addition, cross-border services will now have to be accounted on returns, with the added burden of Intrastat forms.

A review of recent points.

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. We hoped to raise £500 and managed over £800 - thank you to all our sponsors. Next year we plan to do the longer 10K route. 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
Recently we met Andrew of Harvest Financial Management at a Federation of Small Businesses meeting and feel confident in recommending his services to you. We are not licensed to offer financial advice and 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. 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.
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 into your accounts papers so you wont need to print it off.
Car scrappage scheme - update
I got my new car on 29th May - the first day the scheme went live! 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.
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.
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".