December 2004

Points to Ponder

Welcome to our second newsletter – produced during December 2004, to keep you up to date with some of the changes in Income tax, National Insurance and VAT along with compliance regulations for businesses. We have decided to produce these monthly notes about relevant changes and send them out with every letter and e-mail – if you like, we can fax them to you monthly. As we don’t write to all of you each month, we shall run the notes on a rolling three or four month basis, so if you think you have missed a month, just call and we can tell what points were covered.

Please can you let us have your e-mail address by sending us a message, if you haven’t already done so? Also, please let us know if you change your e-mail address. Using this form of communication is quicker and saves money.

These notes will only be basic – if you think they affect you or your business, please call and ask for whoever’s name is next to the note heading, so we can give you more detailed information. Welcome to issue 2.

1. Limited Companies – Online filing at Companies House (call Angela)

Companies House has announced that they are putting up their fees for the first time in many years. The annual fee for filing your annual return will be £30 from 1^st February 2005; however if you register to file via the Internet the fee will remain at £15. We have registered for a few companies to submit returns and forms online. If you would like to register for you will you please phone me so that I can get the necessary authorisations set up.

2. Illegal workers - £5,000 fines.

The Home Office has issued a reminder that employers will be fined if they are using illegal workers. With many more itinerate workers coming to the UK from the new EC member states, it is difficult to know who you can and can’t employ. Please check for National Insurance numbers, or the correct work permit on the applicant’s passport.

3. Scams.

Beware of official-looking documents demanding money. The latest scams are money laundering compliance, Data Protection registration and several “free” entries in directories. If in doubt, check with your local trading standards office or with us.

4. Cheques that never clear. (Call Sue)

Banks have now admitted that they can recall funds months after a cheque has allegedly cleared. Beware of releasing goods too soon, especially to overseas customers. This problem has come to light with the increase in Internet selling.

5. Revenue and Customs and Excise are now officially combined. (call Sue)

This will mean that all returns of income tax and VAT can be viewed by both departments. So if your turnover on your Self Assessment returns has exceeded the VAT threshold and you are not registered for VAT, this will be picked up. There are moves to simplify returns that combine your income tax and VAT – more details are promised in next year’s budget.

6. Late-paying customers. (Call Sue or Angela)

Small businesses often carry large debts with late or slow paying customers. In turn, they pay their suppliers late, causing a vicious spiral that can sometimes mean a profitable business may close because its cash flow is out of control. Can you use automated payments, on-line transfers or standing orders to collect your income? Sometimes a self-addressed envelope sent with your invoice can speed up a payment.

7. Protective clothing. (Call Sue)

The Revenue is tightening up on claims for protective clothing and is disallowing anything that can have “dual purpose” such as jeans. Consider a uniform with your business name on t-shirts and similar items, as this would certainly be a business expense.

8. Deadline for Self Assessment returns

Officially the deadline is 31^st January 2005 for your 2004 return, but this means with your tax office, most of which now are not in the area you live in. We are trying to submit as many returns as possible on line, but certain returns can still only be submitted by post or by hand.

9. Tax-free payments from the Revenue for filing PAYE on line. (Call Dave)

Please see November’s note – we can still offer this service, even if we don’t prepare the payroll for you.