November 2006

Points to Ponder

This is now our Twenty Third newsletter – produced during November 2006 and issued in December, to keep you up to date with some of the changes in Income tax, National Insurance and VAT along with compliance regulations for businesses. If you would like a copy of any past newsletters, please call and we can either send or e-mail them to you. As we missed one month, this issue marks two years of newsletters so we thought we would splash out on colour. As we have had several changes in personnel, we all posed on the green outside 100 Gilders, so you can match faces to names when you call or drop in. From left to right, first Angela, now at 220 Chessington, Bernadette, also at 220, Gemma, Sally, Nimmy, Paul – another 220 person, Pat, Dave, Valerie and Sue. Quite a rogues’ gallery! All of wish you a very Happy Christmas and a Prosperous and Peaceful New Year. Now back to the serious stuff.

November News

1. Standing Order payments (Call Sue, Angela or Bernadette)

Cash flow is always a problem for all of us. Several of our regular clients, especially those with large amounts of book-keeping or a regular payroll, pay by regular standing order, which we review with them annually. If using this method of payment would help you, we would be pleased to discuss a monthly or quarterly arrangement.

October News

1. Yet another scam.

West Midlands Police are investigating a recent scam where a card is posted through your door from a company called PDS (Parcel Delivery Service) saying that they had been unable to deliver a parcel and you should call them on 0906 6611911, which is a premium rate number. DO NOT CALL THIS NUMBER, as this is a mail scam originating in Belize. As soon as you call, you will be billed £15. If you receive a card with these details, contact Royal Mail Fraud on 020-7239 6655 or ICTIS (the premium rate service regulator) at http://www.ictis.org.uk or your local trading standards office.

2. Inland Revenue Business Support Team (call Sue)

We have received a circular from HM Revenue & Customs Business Support Team, announcing dates for seminars covering the new Construction Industry Scheme regulations. These are free but are booked up very quickly. Please call either us or the Revenue office on 020-7667 5661 for full details. We hope to be arranging another presentation, as we did last year, for all contractors and subcontractors who want more information.

3. Worker status review service. (call Sue)

As we have pointed out before, worker status is not a new law or issue, it is just that HMRC is about to get heavier over enforcement. We recently attended a presentation given by an employment lawyer, who has been reading up the bits in the new regulations that the Revenue hasn’t been publicising. A clause in the regulations will help anyone who can show they have made a proper attempt to review their workers’ status in advance of the start of the revised scheme. Basically, you need to carry out a thorough review, either via the Revenue’s website, or with someone whom the Revenue considers “Competent”. We are proud to say that we would be classified as this. We are therefore preparing a check list to use with you to review your subbies and other self-employed service providers you use (not necessarily construction workers) to be able to prepare a report on your behalf to have ready if the Revenue decide to launch a status enquiry. This would not guarantee that the Revenue will agree with our conclusions, but the lawyer concerned was of the opinion that, if such a report was on file, the Revenue would not backdate any required change in status. This should therefore avoid back-dated fines, even if the Revenue insists on your previously self-employed subbies being moved on to PAYE. We hope to be in a position to offer this service from mid-November.

4. Is emigration really the answer?

At one time, when the world seemed a bigger place, there were so many corners to hide away from the Tax Man. Not any more – even the tax havens are no longer so likely to help the errant taxpayer avoid his dues. If you move abroad, the Revenue now has a new department to look for you. When the tax man believes you have a liability to UK tax, the new department will go hunting, even to the extent of involving their counterparts in your new country of residence. So the answer is, if you want to enjoy warmer weather without looking over your shoulder for the tax man, inform your tax office before you leave the country and give them a forwarding address. This way, you can be sure your file is closed and you are not at risk of being fined for not making Self Assessment returns, even when you have no liability to UK tax.

5. Agency Staff and Worker Status (call Sue)

Going back to the employment presentation, the lawyer also mentioned the increase of the use of agency staff to ensure worker status. Although these staff should be employed on PAYE by the agency, she recommended that contractors checked the agency’s agreement with them for provision of workers, and ensure that there is a clause which indemnifies them from being deemed a direct employer of the contracted worker. In other words, make sure that the staff you use are employed by the agency, with a proper contract of employment and that your agreement with the agency is for the supply of temporary workers, not sub-contractors.

6. Offshore accounts

We may have mentioned this before, but if you hold offshore accounts which you access via cash points or by transfer of funds to a UK account, information will be passed to the Inland Revenue. You must declare the interest on these accounts and the source of the deposits.

From the September News

1. Impending fees increase

We have recently reviewed our pricing structure, and to keep in line with rising costs we propose to increase our charge out fees.

Due to cost efficient & effective management we have been able to hold our fees for the last 2 years, however, we now have to bring our fees in line with the expense of running the business; we will continue our resolve to provide an efficient, friendly, approachable service to our clients. We believe our fees will continue to compare very favourably with our competitors

Our review revealed an increase in time being spent on chasing late payment of monies due. We feel it is unfair to pass on these costs to clients who pay on time and so we propose to charge a £10 fee for every letter written to chase payment and we reserve the right to charge interest under the Late Payment of Commercial Debt (Interest) Act 1998. These costs will be invoiced out on a monthly basis.

2. Home Information Packs.

If you sell your home after June 2007, you will have to supply the purchaser with a Home Information Pack, including an Energy Rating Certificate. This will cover your home’s energy efficiency and carbon emissions rating and must be completed by a qualified home inspector. Find out more from the Department for Communities & Local Government Public Enquiries on 020-7944 4400.

End of September newsletter

From July’s and August’s Newsletters

1. Composite Companies

Time to get out from under these “Umbrella” companies. Beware of IR35

2. HMRC Enquiries – Trials of Alternative Interventions

If you receive any of these forms of contact, please let us know immediately.

3. Regulatory Reform (Fire Safety) Order 2005

4. Status Enquiries

The Revenue is stepping up status enquiries via the Employers and Contractors PAYE schemes and is already implementing the new powers they have been granted. Don’t get caught out, review your workers’ status NOW; get it wrong and the Revenue could bankrupt you.

5. Business Rates

There are some reliefs available – are you claiming your entitlement?

6. Revenue v Police – access to information.

If the Police open a fraud enquiry and request information, they need a full warrant to obtain paperwork from an accountant. If the Revenue opens an enquiry, the most junior officer has the full right to everything, by just sending a letter, demanding whatever papers he feels necessary to enquire in to a return. To refuse to comply is a criminal offence. At the moment, there doesn’t appear to be any co-operation between these bodies but with the Revenue publicising a free, anonymous phone line for callers to inform on their neighbours who they think are moonlighting, there is certainly a large opportunity here for underhanded access to records.