Tuesday, November 03, 2009

Tax Investigations - Be Afraid!

This is just the first of many steps to increase the amount of tax from investigations.

Watch the video here

If you want to find out how you can help protect yourself from a tax investigation please call us on 0800 63 444 76 or email taxsorted(at)googlemail.com for a free report on what you can do to help protect yourself.

You have been warned!

Hampshire Accountants
Basingstoke Accountants
Winchester Accountants

Tuesday, October 20, 2009

Are you ready for online VAT filing?

You may be aware that the Government is moving forward with the plan to implement online filing for most business tax returns. The next phase of this it to require businesses to file their VAT returns online from April next year. This requirement will apply to all businesses with annual turnover of more than £100,000, which means that your business will be affected by this change.

Your first return which will be affected by the new rules must be filed online and paid by electronic payment, which includes BACS,Billpay and Direct Debit. It would be wise to start thinking about how you intend to move to online filing for VAT in the run up to that date.

Read more........


Hampshire Accountants
Basingstoke Accountants
Winchester Accountants



Thursday, October 15, 2009

Are you completing your dividend paperwork?

Did you know that if you don't complete the proper paperwork each time you vote a dividend the taxman can argue it was actually a bonus and NIC's are payable on the amount?

If your limited company has made a profit, you are entitled to distribute these profits to shareholders as dividends.

When you do decide to declare a dividend, you must not only record the event in Company minutes, but also create a dividend voucher for each shareholder.

The voucher is a "receipt" of sorts, and is kept by the recipient for self assessment purposes.

For more details about what dividends are, how to account for them, and for template vouchers and meeting minutes please send an email to taxsorted(at)googlemail.com and we will be happy to send you the templates you need.




Wednesday, July 29, 2009

Post 101! Tax-efficient employment benefits-in-kind

Wow! I just realised I have made over 100 posts!

On to the next one..................................


Tax-efficient employment benefits-in-kind

There are still some tax free perks available to employees and if you really DO care about your staff take a look at these:-


· Childcare vouchers. Provided the benefit is made available to all employees, vouchers to a value up to £55 per week can be provided to pay for (non-family provided) childcare for employees. This benefit is free of tax and national insurance, and thus provides a significant saving for employer and employee if it is given on a salary sacrifice basis. Care is required in respect of the impact of vouchers on tax credit claims and their continued availability during maternity leave.

· Mobile phones. These can be provided free of tax and national insurance to selected employees, although it may be advisable to cap the level of bills that the employer will meet!

· Medical check-ups. These can again be provided tax and national insurance-free to selected employees.

· The cycle to work scheme allows the tax-free provision of cycles and cycle safety equipment by employers to employees – the facility must be made available to all employees. In theory the bicycle must be mainly for home to work use, but given that employers are not required to monitor the use of bicycles it is difficult to see how this can be enforced in practice.

· The alternative to the above approach is for the employee to provide his or her own bicycle, for which they can be paid a tax and NI-free mileage rate of 20p per mile for business mileage, on a similar basis to the fixed profit car scheme rates of 40p and 25p per mile.

· Before leaving the subject of bicycles, employers can also provide tax-free cyclists’ breakfasts to employees who cycle to work. We have so far waited in vain for the introduction of joggers’ breakfasts and walkers’ breakfasts!

· Pension contributions by employers are in general a tax-free benefit for employees, although the above regime for those with income in excess of £150,000 must now be taken into account in this respect, as well as the annual pensions allowance (currently £245,000).

· Outplacement counselling provided to help employees to adjust to cessation of employment or to find a new job is a tax-free benefit. It is important to note that this can be provided on retirement as well as on redundancy etc.

· Loans of up to £5,000 can be made tax and NI free to employees. This is a de minimis relief, so if the loan exceeds £5,000 the whole loan is subject to an income tax (and employers’ NI) charge, currently based on 4.75% per year of the amount lent. Care also needs to be taken about making loans to shareholders, as these can give rise to a different tax charge under the corporation tax regime.

Are you getting the BEST deal from your accountant? For a FREE report on this subject click here

Hampshire Accountants

Basingstoke Accountants



Wednesday, July 15, 2009

Is your accountant too big for you?

I was getting some new tyres fitted the other day and the garage owner was complaining his accountant never called him and service standards seem to have fallen


When I asked who they were I was surprised to hear the were a big name firm - Tenon! Tenon are a good reputable firm but in my opinion they are too big for him and not geared up to serve the smaller client. The result? I walked out with four new tyres and one new client!

So next time you are waiting for a call back from your accountant ask yourself the question "Are they too big for me?" And then speak to an accountant who suits your business size and really does care!


Accountant Hampshire

Friday, June 26, 2009

A very worrying article!

I was reading a blog today written by Ken Frost and found it extremely worrying!

In a few weeks time HMRC will have new powers to be able to access individuals salaries and be able to deduct up to £2k per annum in order to collect underpaid tax.
Until now HMRC had to get the taxpayers consent or a court order to do this.

But the rules have changed so watch out!

You can read the full blog here

Wednesday, June 17, 2009

Tax breaks for those letting a furnished holiday home act before 31st July

From April 2010, those letting a furnished holiday property will see it being taxed in a different way.

Changes announced in the 2009 Budget mean that UK residents who let (or have previously let) a furnished holiday home in Europe need to act quickly to secure a short term tax break.

At the moment, those who let out a holiday home can offset any losses from the rental against other income. There are also more beneficial capital gains tax reliefs when selling such property. From April 2010, these tax advantages will be withdrawn.

However, until then, the current rules are being extended to apply to qualifying property in the European Economic Area (EEA). The particular qualifying conditions are extremely specific so you would need to speak with us to get more details.

Losses can be set against other income as far back as the 2006/7 tax year, but claims must be made before 31st July 2009. Individuals who may have sold such property in the tax years 2003/4 onwards should also undertake a review.

If you own such a property, or indeed if you previously owned such property, it would be wise to seek professional advice. In these difficult times there is real potential for tax savings through this change in legislation.


Tuesday, June 16, 2009

So long between posts!

Wow! I just realised how long it has been since I posted anythng here and do apologise! But if I have nothing sensible to say whats the point of posting a nonsense blog?

Anyway - I was about to write a blog about tax investigations (again!) but Ray Stewart has beaten me to it

"I know I have mentioned this a couple of times before but it still annoys me the number of clients that either refuse to pay out the £100 per year or so for the cover, or justify their non-action by thinking “it will never happen to me”.

Since April 2009 the investigation regime has changed. There were few trumpets and dancing girls to announce the change and consquently, 99% of business people have no idea things have changed and what it might mean for them.

HM Revenue & Customs are catching up to the 21st century. Instead of the old fashioned “lets ask some questions and if we like the answers, we will go away for another 10 years or so”, now they start with an innocent letter asking to see the books and records. They make it clear an investigation isn’t starting – yet – as long as they don’t find anything awry with the records. But…I can almost guaranteee you that they will find something, no mater how trivial, and a full blown investigation commences.

We still have the “old” aspect enquiries. Where three or four items are looked at in detail, but these are now in the minority.

I think the changes have come about because the government is short of money because the approach is more direct and aggressive than it was. The problem is that although the government is short of money, in the depths of a recession, most businesses are feeling cashflow tighten as well. As it tightens, HMRC knows, as do we all, that people will do what they need to do to allow their business to survive, including cutting corners and dumping established proceedures.

In a recession it is easy then for HMRC to find fault with records and as soon as they do, your business is in trouble. All your records become meaningless and the declared results based on them, entirely questionable. They may only find one mistake, but that one will cause the mindset of HMRC to assume that one will be simply one of many and they will look hard and long for evidence to corroborate their assumption.

This is why the fee insurance is so important. An investigation may be over really quickly and only cost you around 2 times your normal accounts fee. However, even if your books are good, fighting a long and determined HMRC driven assault will cost you dear just to eventually prove your innocence. By dear I mean anything up to 10 times or more of your normal accounts fee. If more professional help is needed to fight technical points such as a tax barrister, the sky is no limit to what costs could be incurred.

Please don’t think you are immune from investigation. HMRC have sophisticated ways to look at the figures you submit on your self assessment or corporation tax return each year. If they think you are running your business slightly differently from others in your industry, they will investigate; if they think your figures are too perfect, they will investigate; if you have not been looked at for many years, they will investigate; if you buy any large equipment which distorts your VAT return, they will investigate; if you consistently declare profits they deem too low for you to live on, they will investigate; if a friend/foe tells them you are up to no good, they will investigate; if you make losses over several years, they will investigate…

Basically you can expect an investigation at any point for any reason.

Why then do businesses think it will never happen to them – it will at some point.
Look at the costs of proving yourself to be innocent – much more than an average yearly accountant’s bill – and the costs will be more if HMRC find faults and ommissions in your records because you will be trying to limit the damage of additions that will be added to your profits and consequently your tax bill.


Why not just insure against this inevitable event for £100 per year or so.

You can get professional fee insurance from membership of the Federation of Small Business (along with a host of other benefits), from your local insurance broker, even from some household policies. It doesn’t cost much but the peace of mind is more than worth it when HMRC come calling.

And don’t forget, the premiums are tax deductible from your profits – so it’s even cheaper than you thought.

Finally, if you are not insured and run up a huge bill in defending yourself from the attentions of HMRC – if they find any faults in your information that mean you pay some extra tax as a result - NONE of the fees you pay will be allowed for tax purposes. Not a penny. Doesn’t that make the insurance option look a little more appealing?

Go and get the insurance. I will shortly be rejecting clients that do not have this insurance in place for 2 reasons. Firstly, trying to get money out of someone who has been hit by a large additional tax bill for defending them and limiting the damage is REALLY difficult. Secondly, if a business person doesn’t appreciate the impact that the inevitable investigation can have on their nerves, their wallet, their reputation and the survival of their business, I don’t think they are the type of client I want to work with.

Go check your policies now and make sure you are covered. Your own accountant may be contacting you soon asking for evidence that you are covered – so be prepared. It is the responsible thing to do. "

Thanks to Ray Stewart for writing this article!