April 2006

Points to Ponder

This is now our seventeenth newsletter – produced during April 2006 and issued in May, 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.

May 2006.

A shorter newsletter this month, as things are very busy in the office, with plans for the new “branch” at 220 Chessington Road and the PAYE and CIS year-end, plus the main quarterly VAT returns. Apart from that, following the budget, everything has gone rather quiet on the news front, at least concerning business!

1. New Office

We have now collected the keys for our second office at 220 Chessington Road, West Ewell, and are waiting for the telephones to be installed. Once everything is organised, we shall send out the full details. Initially our plan is for Angela to move there with a new assistant, to take care of limited companies and provide more tax planning and advice, as we announced in our last newsletter. Please see shortened report at the bottom of this page)

2. CIS Arrangements (Call Dave or Sue)

Although the new CIS regulations have been delayed until this time next year, we intend to try and bring in the changes in our arrangements for handling these returns as soon as possible, so that any glitches will be well ironed out before the new regime of over-the-tops fines is introduced. For many of our building contractor clients, we agree the subcontractor payments quarterly, when we complete the VAT returns, and any omissions or differences are corrected at that point. Under the new regulations, returns and payments must be made on time or a fine of £100 will be levied. This includes nil returns too!

The new regulations will mean a much heavier burden of paperwork but we shall make things as easy as we can for you, but will need your full co-operation to make sure nothing is overlooked and that there are no errors.

3. Environment Day

5^th June 2006 is World Environment Day, sponsored by the Environment Agency – if you want to find out more and what your business can do to help, visit www.environment-agency.gov.uk/wed

November 2004 – March 2006 – notes closed

April 2006.

1. Practice update.

Our plans for the second office are moving forward. All clients will be welcome at either office, so please call in where and when it is most convenient for you.

As soon as the completion date is confirmed, we can arrange the new telephone lines and have some stationery printed – stocks are running low at the moment. We shall be able to access all our computerised records from both offices, and instead of talking to each other across the office, we can use e-mails. This may be slightly slower but will certainly be quieter! We are looking at “Voice over Internet”, so that we can use the internet, rather than the telephone for a full conversation, but this technology is a mystery to me, so we’ll consult the experts, when we are up and running.

2. Trouble with AOL (Call Sue)

Somehow we have been labelled as “spam” by an AOL-user so that we can receive messages from AOL addresses, but not reply.

3. The Budget (Call Sue or Angela)

The zero rate of Corporation Tax for the first £10,000 of company profit has gone from the start of tax year but all other rates of Corporation Tax and the tax bands are unchanged. There were the usual small increases in taxation thresholds; personal allowances, some capital allowances and Capital Gains Tax exemption amount, Inheritance Tax and the VAT registration level but income tax and VAT rates stay unchanged.

4. Self Assessment Deadlines to be Earlier (Call Sue or Angela)

One background item that will have an impact on everyone, is the proposal to bring forward the deadline for Self Assessment returns submitted on line from 31^st January to 30^th November. If a client isn’t registered for on-line submission, the paper returns will have to be in by 30^th September! Although this isn’t going to be in force until April 2008, we would like to start planning now, as effectively we shall have two months less in which to complete the work. Currently our last date for accepting records so that we can guarantee beating the deadline is 30^th. November. For this year, we intend to make it 15^th October, so please help us to help you by bringing in your paperwork well before our deadlines. Anything that arrives late may have a surcharge on the invoice to cover our additional overtime payments.

5. Limited Company Status (Call Angela)

With the changes in the CIS regulations and the increase in fines and penalties available to HM Revenue and Customs, we are advising many more Construction Industry clients, who are contractors, to consider registering as a company. Although this will involve more costs, it will offer more benefits and protections. We would also urge other clients, whatever their trades or professions, to seriously consider this option, especially when the business incurs debts and has to allow credit to customers. Once upon a time, this would be almost the last thing we would advise, due to costs and regulations, but circumstances certainly are changing.

6. National Identity Card.

7. Small Business Rates Relief (Call Sue)

Please do try and apply – it has saved us just over £1,000 to date.

8. Company Cars and Benefits in Kind

These rates, not the rules, are amended by the Budget. If you do want a company car, the only tax-effective one is a van! If you need all-round windows, then a low CO2 emissions type is best.

9. Eye tests & glasses for VDU Users (Call Sue)

From 6^th April 2006, employers must pay for eye tests and glasses prescribed for any staff who use a computer or any VDU, such as a microfiche reader. If you are the company director, this is another expense you can have tax-relief on, but as an employer, it’s another expense but still tax deductible!