January 2005

Points to Ponder

This is now our third newsletter – produced during January 2005, to keep you up to date with some of the changes in Income tax, National Insurance and VAT along with compliance regulations for businesses. 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. Don’t forget to keep us updated with any changes of address, including e-mail addresses.

These notes will only be basic; reduced to just headings once they have been included for two months so 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 3.

November 2004

1. Classification of Construction Industry Workers. (call Sue)

2. Company vans and benefits in kind (call Sue or Angela)

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

£225 TAX FREE with similar sums over the following four years, to a total of £825.

4. TaxSure Fee Protection Insurance. (call Angela or Sue)

5. Limited Companies – profit extraction. (call Angela)

6. Records to return (call Andy)

We are desperately short of space and need to return records. If you cannot collect your old records, we shall have to return them by post or TNT and pass on the cost. You are required to keep all your records for 6 years – please take them back!

Close of November notes

December 2004

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

Companies House has announced that they are putting up their annual filing fees to £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 us to register for you will you please phone me so that I can get the necessary authorisations set up.

1. 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.

1. 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.

1. 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.

1. 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.

1. 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.

1. 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.

1. 8. Deadline for Self Assessment returns – you are now too late!

1. 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.

End of December’s notes

January 2005

Happy New Year!

1. New Year’s Resolutions

For those of you who let us have your records after our deadline of 30^th November, please ensure you get them in earlier this year. We shall be charging a premium on last minute records, to cover our own overtime costs etc.

2. Under-paid postage. (Call Dave)

We have experienced problems with records sent to us with insufficient postage on the packages or envelopes. Some of this is due to the new self-adhesive stamps not sticking properly! In some instances, not only has this cost us the missing postage plus a £1 handling charge from the Royal Mail, but also a delay in delivery of up to a month.

3. Small Business Rates Relief (Call Sue)

If you rent or own business premises and only have one branch with a rateable value of less than £10,000, you may be entitled to a small business rates relief. This isn’t an automatic reduction, you need to register, so don’t miss out.

4. Disciplinary and Grievance procedures. (Call Sue or Angela)

Yet more new employment legislation states that all employers must let their staff know what procedures are in place if they are to be disciplined or if they have a grievance. This should be supplied in writing and form part of their contract of employment.

5. PAYE Year End Returns may be rejected by the Revenue (Call Dave)

THIS NOTE IS VERY URGENT AND MOST IMPORTANT.

After announcing the tax-free bonus for making your PAYE year end returns on line, the Revenue has now announced that it will reject all returns where employees’ dates of birth or National Insurance numbers are missing. Rejection of the returns means that re-submitted forms will be treated as being late, so attracting the statutory £400 fine for late PAYE returns. The Lord giveth and the Lord taketh away!