Marshall Smalley Accountants Blog
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08 March 2010 03:53
For both the tax year ending on 5 April 2010 and the next year to 5 April 2011 the small earnings limit for exception from payment of the Class 2 “self employed stamp” is £5,075.
If your self employed earnings have reduced you should check your position as you may now be eligible to claim exception from the weekly payment, or even a refund of overpaid contributions.
Alternatively, you may already have been granted a three year exception but if your self employed income has then increased that may no longer be appropriate and you should contact HMRC to start paying class 2, this will avoid you building up arrears of contributions that have to be paid at a later date.
08 March 2010 03:51
Just when staying in is the new going out HMRC have sponsored a new weekly series The Business Inspector being shown on Channel 5 from 10 March, 8pm.
Apparently, the decision to fund the four part programme aimed at small businesses was taken to help raise awareness of the tax problems that result from failing to keep good business records.
Whilst the show is not being billed as a horror we suspect HMRC are hoping they will frighten some businesses to improve their tax compliance and reduce the amount of uncollected tax in the future!
04 March 2010 07:49
HMRC have issued a warning to the majority of tax payers who pay their tax through PAYE, due to weakness in their system it is more likely than ever your tax code could be wrong.
In our experience the most common and best avoided problem with PAYE is operation of incorrect tax codes and you should be alert to this very topical trouble.
Tax codes are the keystone of the PAYE system. Your tax code ultimately determines how much tax you will pay. The accuracy of your tax code depends on HMRC being supplied with correct information on a timely basis and the taxman processing it correctly.
Best advice is to check your tax code carefully and get it changed if it is wrong or your circumstances have changed.
We can help make tax less taxing, if you would discuss how we may help you please contact us
22 February 2010 01:52
The balance of self assessment tax for 2008/09 was due for payment on 31 January 2010, interest has been charged on unpaid amounts from that date.
If tax for 2008/09 has not been paid by 28 February 2010 a 5% surcharge will be added in addition to the interest. The surcharge penalty applies only to the unpaid 2008/09 tax liability and not to the unpaid payments on account being made for 2009/10.
So as far as you are able to paying off or reducing the unpaid tax on your self assessment account by 26 February 2010 will avoid or reduce the surcharge penalty.
If you are unable to pay because of cash flow problems, HMRC may agree to allow you time to pay. The tax man will waive the surcharges on the tax covered by the arrangement if you stick to the agreed schedule of payments.
So if you can’t pay your tax because of cash flow problems take action mow to establish a time to pay arrangement with HMRC by 26 February 2010.
In the event that you haven’t paid your tax or made an arrangement with HMRC by the end of this
22 February 2010 01:50
Capital gains tax is hotly tipped to increase in the next tax year. If you are considering a disposal of chargeable assets completing the sale by 5 April 2010 could reduce your capital gains tax bill.
Of course the starting point is to establish the chargeable gain and any number of capital gains tax reliefs may apply to reduce or even eliminate the tax charged.
Anyone planning a disposal of assets may contact Nottingham accountants Marshall Smalley for a preliminary discussion without obligation.
15 February 2010 04:05
The new 50% income tax band comes into effect for the 2010/11 tax year and will apply to those earning more than £150,000 a year.
Additionally, from 5 April 2010 those earning over £100,000 p.a. will see their personal allowance decrease. The personal allowance is currently £6,475.
If you are affected by these changes you may wish to consider making changes that will reduce your income tax bill. For example those with earnings over £150,000 might accelerate some income into 2009/10 tax year or delay expenditure to 2010/11.
Nottingham Accountants Marshall Smalley has a number of other strategies that may be appropriate depending on individual facts and circumstances, contact us without obligation for a preliminary discussion of your requirements
10 February 2010 03:36
To enrol for VAT online you need the following 5 pieces of information about your business to hand:
• VAT Registration Number
• The postcode of your principal place of business
• Your effective date of registration for VAT
• The final month of the last VAT return you submitted
• The BOX 5 figure from the last VAT Return you submitted
You will find the first two pieces of information on your VAT4 (Certificate of VAT Registration), the third on the letter you receive from HMRC confirming you must in future file online and pay electronically and the fourth and fifth on the last VAT return you submitted.
For all further instructions of how to proceed with your registration, please use this link
Please note for those of you who have engaged us to process VAT returns manually, we will continue to do so and we will inform you of the figures to enable you to file your returns online and make your electronic payment.
09 February 2010 04:48
The regular issue of security alerts from HMRC is a response to the massive volume of phishing emails being used by fraudsters in an attempt to steal tax refunds.
WARNINGS:
• HMRC NEVER MAKE DIRECT CONTACT BY EMAIL.
• DO NOT RESPOND TO ANY EMAILS PURPORTING TO BE FROM HMRC.
• NEVER PROVIDE YOUR BANK OR GATEWAY LOGON INFORMATION TO AN UNKNOWN SOURCE.
To see the latest tax security warnings visit HMRC's security warnings.
If you are in any doubt call us.
09 February 2010 04:45
From 1 April 2010 existing VAT registered businesses with a VAT exclusive annual turnover of £100,000 or more and all businesses newly registering for VAT will have to file their VAT returns online and pay any VAT due using an approved electronic method.
This is now VAT law so failure to comply will result in penalties.
If you are affected by this change don’t wait for HMRC to write to you, register for online filing and sign up for VAT online services. Contact Accountants in Nottingham, Marshall Smalley Accountants for assistance now.
01 February 2010 02:26
To find out if you qualify for Working Tax Credits and how much you might receive;
take a look at the online calculators available on the HMRC website at Tax Credits Guide - Tax Credits Questionnaires,
call the Tax Credits helpline on 0845 302 1415, or
find out more information on Tax Credits and benefits on the HMRC Website or on the DirectGov Website.
01 February 2010 02:24
There is an automatic penalty of £100 for late filing, but the penalty is capped by the amount of tax outstanding i.e. you will not have to pay the full £100 if you owed less than that amount in tax on 31 January; and if you owe nothing on that date, you will not be charged any penalty.
Furthermore, if HMRC accept you have a reasonable excuse, perhaps they didn’t provide a UTR within their promised service deadline; you may also avoid the late filing penalty. Contact us if you have a self assessment tax problem.
01 February 2010 02:18
If you're worried about being able to meet Tax, National Insurance, VAT or other payments owed to HMRC or you anticipate that you can’t afford to make payments becoming due, we can contact HMRC Business Payment Support to ask for time to pay. Please call Nottingham Accountants Marshall Smalley for help.
26 January 2010 07:57
If you do not file your tax return on line by midnight on Sunday 31 January you may receive a late filing penalty from HMRC.
Please do speak to us if you need assistance to beat the deadline or calculate how much tax you should pay.
Call Nottingham Accountants Marshall Smalley on 0115 9565171 for help and advice
11 January 2010 11:26
HMRC are obtaining information from various sources, including NHS trusts, private hospitals and medical insurers and will pursue those with undeclared tax liabilities who decide not to make a disclosure by 31 March 2010.
Whilst those who voluntarily contact HMRC by 31 March, make a full disclosure and qualify under THP are assured by HMRC they will be able to put their tax affairs in order simply and benefit from the certainty of a reduced 10 per cent penalty.
THP is the first initiative in a new HMRC campaign focused on professionals and will operate in two stages:
• Up to 31 March 2010, medical professionals can register their intention to make a voluntary disclosure
• By 30 June, those who have registered must have made their disclosure as well as arrangements to pay all tax interest and penalties due.
Please contact us for expert advice and support if you think you may benefit from the Tax Health Plan.
07 January 2010 09:58
Don't panic if you haven't yet filed your self assessment tax return for 2008-09 due by the 31st January 2010. With our help you may still be able to file ontime and avoid a penalty. If your return is complicated there maybe options to file an estmated return to avoid the penalty and then you can bring your affairs upto date after the deadline.
Don't forget that although HMR&C advertise the penalties thay can only be enforced if tax is actually due.
Visit www.marshallsmalley.com to find out more.
19 December 2009 11:45
The standard rate of VAT, which fell temporarily to 15%, is due to go back up to 17.5% from the start of the New Year.
HMRC recognise that the change may cause problems for certain businesses at a particularly busy time of year, and has announced a measure designed to help.
Special accounting arrangements for businesses operating beyond midnight on 31 December 2009 effectively defer the start of the new VAT rate for some traders. These mean that pubs, clubs, restaurants and other retail businesses remaining open past midnight on New Year’s Eve will be allowed to continue charging VAT at 15% on their sales until they close or until 6am on 1 January 2010, whichever is the earlier.
19 December 2009 11:43
The rate of vat is changing back to 17.5% from 1st January 2010.
Here is the process to folow to change the vat rate in Sage.
From the settings list (Sage 50 Accounts v16)
• Configuration
• Tax codes
• Highlight the T1 code (should currently say 15%)
• Select edit
• Change rate to 17.5%
• Select OK
• Select apply
• Select close
NB
Best to go back into configuration and tax codes and make sure T1 now reads 17.5%.
30 November 2009 08:13
Whether you are a sole trader or in partnership there could be tax savings if you transferred your business to a company.
Not only can incorporation mean that you pay lower corporation tax on your business profits and keep more of your earnings it also presents a number of interesting tax planning opportunities.
This is especially topical as we have the introduction of 50% income tax from 6 April 2010.
For example if your business has valuable goodwill or other assets that would be chargeable to capital gains tax you might consider an incorporation that involved you selling such assets to your company and paying 10% tax now. This could then give you the ability to withdraw capital from you company in the future and avoid the 50% income tax rate.
Alternatively you may wish to consider splitting income to use your spouse or civil partners lower rates of income tax and/or their annual tax free personal allowance.
Of course there are many factors to be weighed in each case, the decision to incorporate needs to be considered carefully and in practice it doesn’t happen overnight.
If you are interested, please let
30 November 2009 08:11
Many partners in business don’t have a formal agreement or realise that not having one could mean they are at risk when changes happen. Without an agreement, firms are governed by The Partnership Act that dates from 1890! The application of this Victorian legislation could be the source of problems if it doesn’t fit your modern day requirements.
A good partnership agreement will ensure that other partners have a survival plan to follow in different circumstances and that protects the future of your business.
While it’s advisable to draw up partnership agreements early on, there is no legal duty to do so; many businesses operate on trust alone. Whilst trust has to be a major factor in any successful partnership this can present dangers which partners may not be aware of.
For example The Partnership Act may be problematical because without an agreement:
• any Partner has the right to dissolve a firm
• there is no restrictive covenant on a partner who is leaving
• all partners are entitled to an equal profit share
• if one partner wants or has to retire other partners can just take over and make no goodwill payment.
• no person may be
17 November 2009 08:21
The IR35 legislation enables HMRC to tax some contractors as though they are employees those caught may pay significantly more tax, reducing take home pay by up to 25%!
If you are a contractor your Company could have an increased IR35 risk if for example:
• You cannot decide your hours
• Your tasks are not clearly defined
• You are personally named in the client contract
• You cannot provide a substitute
• You cannot work for other clients
• You receive benefits from your client
HMRC can backdate tax liabilities if you are found to be inside IR35 so avoid the pitfalls and speak to us if you need help.
17 November 2009 08:19
If you are in the process of buying a house you may be able to take advantage of the higher stamp duty land tax threshold before it reverts back to £125,000 from 1st January 2010.
To give the property market needed boost, the chancellor announced a stamp duty land tax holiday on purchases of residential property costing no more than £175,000. The holiday period ends on 31 December 2009. From 1 January 2010, the threshold will revert to £125,000.
This means if you are eligible to save stamp duty on residential property completion must take place on or before 31 December 2009. Missing the deadline could be costly!
17 November 2009 08:17
Students in the UK are liable to pay income tax and national insurance contributions on their earnings, just like everyone else.
However there is a statutory exemption that may remove any possible tax charge where an employer, or a third party, incurs expenditure on work-related training for employees. It does not matter whether the employer directly incurs the expenditure or reimburses the employee's expenditure. The exemption covers sums that would otherwise be taxable as earnings, as benefits, or under the vouchers rules.
So if you have or are thinking of employing a part time employee who is in further education we could perhaps look at the package and think about restructuring to take advantage of the available exemption. You don't have to pass all the savings on to the employee!
09 November 2009 03:41
In certain circumstances subsidies are available if you employ someone who has been claiming Job Seekers Allowance for more than 6 months. Please follow the link below for more details:
http://www.jobcentreplus.gov.uk/jcp/Employers/AdvertiseaVacancy/recruitmentsubsidy/
For commercial reasons our advice generally is to base your recruitment decision making on the qualities of the applicants and if that results in you receiving a £1,000 subsidy then think of it as a bonus.
09 November 2009 03:39
As a business evolves its good practice to consider the shareholders agreement or consider implementation of such an agreement if you don’t already have one.
A properly prepared shareholders agreement should be a useful tool that protects the owners of a Company. The agreement may for example cover:
• The price to be paid for shares or a formulae that needs to be used.
• Directors decision making powers.
• Matters requiring shareholder approval.
• Responsibilities.
• Dividend policy.
• Restrictive covenants and confidentiality.
In our experience it’s too easy to underestimate the value of such an agreement to the owners of a Company.
We work with a number of legal practices who are prepared to undertake a free initial appraisal of existing shareholder agreements. Please contact us if you would like to take advantage of this offer.
09 November 2009 03:37
In light of Companies Act 2006 changes we recommend companies review their articles and memorandum of association and consider making changes, you may for example:
• Change the objects clause so that the powers of the Company are unrestricted.
• Remove references to alternate directors.
• Eliminate references to annual general meetings.
• Unrestrict the authorised share capital.
• Enable board meetings by telephone and other forms of electronic communications.
We are working with a number of legal practices who are prepared to undertake a free initial appraisal of constitutional documents. Please contact us if you would like to take advantage of this offer.
08 March 2010 03:53
For both the tax year ending on 5 April 2010 and the next year to 5 April 2011 the small earnings limit for exception from payment of the Class 2 “self employed stamp” is £5,075.If your self employed earnings have reduced you should check your position as you
Read More
08 March 2010 03:51
Just when staying in is the new going out HMRC have sponsored a new weekly series The Business Inspector being shown on Channel 5 from 10 March, 8pm.Apparently, the decision to fund the four part programme aimed at small businesses was taken to help raise awareness of the
Read More
04 March 2010 07:49
HMRC have issued a warning to the majority of tax payers who pay their tax through PAYE, due to weakness in their system it is more likely than ever your tax code could be wrong.In our experience the most common and best avoided problem with PAYE is operation of
Read More
22 February 2010 01:52
The balance of self assessment tax for 2008/09 was due for payment on 31 January 2010, interest has been charged on unpaid amounts from that date.If tax for 2008/09 has not been paid by 28 February 2010 a 5% surcharge will be added in addition to the
Read More