October 2005

Points to Ponder

This is now our eleventh newsletter – produced during October 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. Please note our change of e-mail address above.

November 2004 – June 2005 – notes closed

July 2005 Newsletter

1.CIS Update (Call Sue)

2. Revenue “Enabling” Letters (Call Sue or Angela)

The Revenue has adopted a policy of sending deliberately frightening letters to taxpayers. These are known as Enabling Letters as they can lead the way to letting the Revenue open an enquiry. As we receive a copy, we shall respond to the Revenue and send a copy to you. If you have received one of these, please see the fee protection section in September.

3. Payroll Giving (Call Sue)

End of July Newsletter

September 2005 Newsletter

1.Office changes!

We have recently tried to buy the empty office next door to us, as we are running out of space. Due to a twist in the Landlord and Tennant Act, after agreeing a price with us, the owner had to offer it to the lessees of the flats above the office. They are granted first refusal and have taken up the option. (Learn by our experience and if you are buying part of a property and the sale includes the freehold, ensure your solicitor is aware of this clause). We have now decided to completely refurbish our current premises, which will give us some extra room, and see how things go.

2.Fee Protection Insurance (Call Sue or Angela)

As we have said many times before, the Revenue is checking tax returns in great depth. The time taken up on enquiries is usually at least ten times that it takes to prepare the accounts in the first place! We have previously offered you cover direct but, as there have been changes in the Financial Services Act, we are no longer able to either sell or even recommend insurance. However, we have arranged for this cover to be made available to you, by allowing an insurance company to write to you all.

3.CIS Scheme (Call Sue)

The Construction Industry is about to be hit again by added bureaucracy, disguised, like Self Assessment, with the promise that it will “simplify procedures”. What the new scheme will do is make it easier for HM Revenue & Customs to impose fines and penalties. The new regulations comprise a two-pronged attack on Contractors. First is the need to establish the status of the work force and second to submit signed returns on time each month. Failure to keep up with either part will result in fines. The late submission of the monthly return will be a minimum of £100 each month, but the status aspect will result in much higher and as yet unspecified, penalties. So that we can help you avoid either problem, we shall need your full co-operation. During January and February 2006, please liase with Dave over the new procedures, so that a safe routine is in place when the scheme starts in April. In the meantime, we do hope to set up a meeting with a Revenue officer that all Contractors can come along to.

4. Age Discrimination (Call Sue)

This is the latest anti-discriminatory legislation to come in. From next year, you can no longer advertise for someone with x number of years’ experience, or an employee to join a “young and dynamic” team. On the other hand, the supermarket chains will have to stop advertising for older people. You will not be allowed to move the over 60’s on to lighter duties, apparently, even if they request it! We hope that using the word “mature” will be sufficient.

5. Poor Dress Sense

An Evening Standard survey has just decided that your choice of clothing may affect your business results. We should dress in accordance with the image we want to project for our business – I’m not sure we are actually inviting feedback on this one!

6. Web Sites (Call Sue)

We haven’t got a web site, but are considering setting one up. We are not entirely sure how effective it would be and would welcome comments from our clients who have a website as to how helpful they feel it has been to their business.

End of September 05 Newsletter

October 2005 Newsletter

1.CIS Scheme (Call Sue or Angela)

This may or may not be good news, but the Revenue has suddenly announced that the new CIS plans have been put on hold for another year. It appears that there has not been sufficient time to develop the correct software either for the Revenue or for Contractors. We think that the Revenue has failed to sort out the necessary call centres, with sufficient trained staff to operate them, to deal with the verification process required by the new scheme. Although we do intend to arrange to have a Revenue officer come to us to explain the system, we may hold this off until the new tax year.

2.Status Enquiries. (Call Sue)

In the meantime, while the Revenue “sorts out” the Construction Industry, it has made it very clear that it will continue with Status Enquires. This means that if the visiting Revenue officer decides that one of your sub-contractors should be treated as an employee, you will have to prove them wrong. This is not restricted to the Construction Industry, but affects all businesses. It is not a question of how long someone has worked for you but what they actually do. The old guideline is the “master – servant” relationship. If the Revenue feels there is direct control over the work done, the manner in which it is done and the time at which it is carried out, then it will be deemed employment, not self employment. Their slogan is “employment is a matter of fact, not a matter of choice”. It appears that these enquires will be stepped up as the likely fines and penalties chargeable are much higher than in normal Self Assessment enquiries.

3.Lead at Work (Call Angela or Sue)

The latest directive to come out of Europe is that everything is to be lead-free by next year. OK, we’ve accepted lead-free petrol, although if you are involved in old vehicles, you are aware of the problems this causes. Now this directive covers things like solder, which in turn affects circuit boards. Will more items be imported from non-compliant countries or will prices go up as a more expensive substitute has to be found? This ruling will affect engineers and plumbers initially.

4.Our Office Refurbishment

This is now underway and the place looks like a building site. We shall be without the computer system from mid-day Tuesday 1^st November until at least Monday 7^th November. Someone will be here to answer the telephone (and make the all-important cups of tea for the workmen) but most of our records will be in temporary storage. Please bear with us while we get sorted out and we hope you will pop in for a drink when the work is finished – watch next month’s newsletter.