We were expecting one or two changes in the PBR to flat rate scheme VAT rates (in terms of reverting to new rates rather than the pre 1 Dec 2008 rates) - what we actually have though is a majority of rates chnaging, both up and down.
This means its essential for all flat rate businesses to check out the new rate, and not just assume it'll revert to the old level. New rates are here: (my apologies for the rubbish formatting!)
Flat Rate Scheme percentage rates from 1 January 2010
Accountancy or book-keeping
13
Advertising
10
Agricultural services
10
Any other activity not listed elsewhere
10.5
Architect, civil and structural engineer or surveyor
13
Boarding or care of animals
10.5
Business services that are not listed elsewhere
10.5
Catering services including restaurants and takeaways
11
Computer and IT consultancy or data processing
13
Computer repair services
9.5
Dealing in waste or scrap
9.5
Entertainment or journalism
11
Estate agency or property management services
10.5
Farming or agriculture that is not listed elsewhere
6
Film, radio, television or video production
11.5
Financial services
12
Forestry or fishing
9.5
General building or construction services*
8.5
Hairdressing or other beauty treatment services
11.5
Hiring or renting goods
8.5
Hotel or accommodation
9.5
Investigation or security
10.5
Labour-only building or construction services*
13
Laundry or dry-cleaning services
10.5
Lawyer or legal services
13
Library, archive, museum or other cultural activity
8.5
Management consultancy
12.5
Manufacturing fabricated metal products
9.5
Manufacturing food
8
Manufacturing that is not listed elsewhere
8.5
Manufacturing yarn, textiles or clothing
8
Membership organisation
7
Mining or quarrying
9
Packaging
8
Photography
10
Post offices
4.5
Printing
7.5
Publishing
10
Pubs
6
Real estate activity not listed elsewhere
12.5
Repairing personal or household goods
9
Repairing vehicles
7.5
Retailing food, confectionary, tobacco, newspapers or children’s clothing
3.5
Retailing pharmaceuticals, medical goods, cosmetics or toiletries
7
Retailing that is not listed elsewhere
6.5
Retailing vehicles or fuel
6
Secretarial services
11.5
Social work
10
Sport or recreation
7.5
Transport or storage, including couriers, freight, removals and taxis
9
Travel agency
9.5
Veterinary medicine
10
Wholesaling agricultural products
7
Wholesaling food
6.5
Wholesaling that is not listed elsewhere
7.5
Thursday 10 December 2009
Wednesday 2 December 2009
What if I can't pay my Tax bill?
One thing we've noticed in the office is the continuing successful usage of the 'Business Payment Support Service' by clients. This service was introduced late last year to assist businesses with tax payments by permitting payments to be spread over a period of time.
The service has been criticised however by those who say the extended payment terms put off the inevitable [business failure], and have been too easily obtainable, without suitable checks being made.
In fact, just this last week, we made a call on behalf of a client with a £2k VAT bill they could not settle - we stated the terms the client could settle over (4 months) and the arrangement was agreed, no further questions. In this instance, a perfectly viable business just having a short term cash flow problem.
Whatever your opinion on the scheme, for many out there its been the lifeline they've needed during the recession.
Its worth noting however, just because HMRC have 'gone a bit soft' on paying them on time, the deadline to get returns in (be that VAT, PAYE, CT, or self-assessment) remain fixed, and missing those deadlines will incur financial penalty.
Following all that I guess the message is if paying will be a problem, get the return completed and filed on time and speak with HMRC before the payment is due to agree a payment schedule that will work for both of you.
AS
The service has been criticised however by those who say the extended payment terms put off the inevitable [business failure], and have been too easily obtainable, without suitable checks being made.
In fact, just this last week, we made a call on behalf of a client with a £2k VAT bill they could not settle - we stated the terms the client could settle over (4 months) and the arrangement was agreed, no further questions. In this instance, a perfectly viable business just having a short term cash flow problem.
Whatever your opinion on the scheme, for many out there its been the lifeline they've needed during the recession.
Its worth noting however, just because HMRC have 'gone a bit soft' on paying them on time, the deadline to get returns in (be that VAT, PAYE, CT, or self-assessment) remain fixed, and missing those deadlines will incur financial penalty.
Following all that I guess the message is if paying will be a problem, get the return completed and filed on time and speak with HMRC before the payment is due to agree a payment schedule that will work for both of you.
AS
Thursday 26 November 2009
VAT and Simplified Invoices
If you are a small retailer you are right in thinking that the standard VAT rules leave you with rather a lot of information to include on that till receipt.
There is a simpler way though - you can take advantage of the simplified VAT invoice rules which apply where you make retail sales and you make a sale of goods or services for £250 or less including VAT.
When a customer asks for a VAT invoice, you can issue a simplified version that only needs to show your name and address, your VAT reg number, the date of supply (the tax point) and a description of the goods or services. A full breakdown of the goods purchased and VAT applicable is not required.
For each different VAT rate your simplified VAT invoice must also show the total price including VAT and the rate applicable to the item. If you accept credit cards, then you can create a less detailed invoice by adapting the sales voucher you give the cardholder when you make the sale. It must show the six pieces of information described above and you must ensure you keep copies of any less detailed invoices you issue.
There is a simpler way though - you can take advantage of the simplified VAT invoice rules which apply where you make retail sales and you make a sale of goods or services for £250 or less including VAT.
When a customer asks for a VAT invoice, you can issue a simplified version that only needs to show your name and address, your VAT reg number, the date of supply (the tax point) and a description of the goods or services. A full breakdown of the goods purchased and VAT applicable is not required.
For each different VAT rate your simplified VAT invoice must also show the total price including VAT and the rate applicable to the item. If you accept credit cards, then you can create a less detailed invoice by adapting the sales voucher you give the cardholder when you make the sale. It must show the six pieces of information described above and you must ensure you keep copies of any less detailed invoices you issue.
Wednesday 25 November 2009
Free Training on Kashflow - Nov/Dec offer
TaxAssist Accountants in Plymouth are proud to be partners with Kashflow Accounting Software.
For the remainder of this year, all new and existing clients taking up Kashflow easy to use accounting software will receive a two hour bespoke training session on the software - its ultra easy to use, designed for non-accountants, so we will set it up for you and have you entering information in no time.
If you've always wanted a simple to use system that can follow you where you go, rather than where your PC goes, Kashflow is a great solution as its entirely web based, and all data is securely backed up too.
It allows you to run reports on who owes you money, which product lines are most succesful, VAT is a dooddle, and that is just for starters.
As your accountant, we can also keep an eye on your progress easily and simply from our own login.
To emphasise, our training is 100% bespoke, so will be performed one on one with you and with your business in mind.
The offer is valid for new and existing clients taking up Kashflow for the first time in November and December 2009, and is available through TaxAssist Accountants in Plymouth.
For the remainder of this year, all new and existing clients taking up Kashflow easy to use accounting software will receive a two hour bespoke training session on the software - its ultra easy to use, designed for non-accountants, so we will set it up for you and have you entering information in no time.
If you've always wanted a simple to use system that can follow you where you go, rather than where your PC goes, Kashflow is a great solution as its entirely web based, and all data is securely backed up too.
It allows you to run reports on who owes you money, which product lines are most succesful, VAT is a dooddle, and that is just for starters.
As your accountant, we can also keep an eye on your progress easily and simply from our own login.
To emphasise, our training is 100% bespoke, so will be performed one on one with you and with your business in mind.
The offer is valid for new and existing clients taking up Kashflow for the first time in November and December 2009, and is available through TaxAssist Accountants in Plymouth.
Bank victory in charges case
Astonishing victory for the banks today against all the odds.
If there is a plus side, there must now be a future for free banking continuing for personal customers, at least in some form or other. After all, an OFT victory would surely have marked the death knell for free banking.
What hope now for those waiting for bank charge refunds? Well the OFT did say they'd look at using other powers, including a full competition enquiry - I'm not holding my breath.
Worth noting that small businesses were excluded from the original test case as well on the grounds that such charges were payment for a service, rather than a penalty.
If there is a plus side, there must now be a future for free banking continuing for personal customers, at least in some form or other. After all, an OFT victory would surely have marked the death knell for free banking.
What hope now for those waiting for bank charge refunds? Well the OFT did say they'd look at using other powers, including a full competition enquiry - I'm not holding my breath.
Worth noting that small businesses were excluded from the original test case as well on the grounds that such charges were payment for a service, rather than a penalty.
Tuesday 24 November 2009
Employees and Use of own car for work Q&A
Relevant for Employees, Employers. Motor costs for small business owners will be the subject of a post in the near future.
Q: I understand that I can claim tax relief for using my own vehicle for work. My employer currently only reimburses me 20p per mile whilst on business travel. Can I claim more and how do I do it?
Michael, Ivybridge
A: If you use your own vehicle for business travel as an employee, you are entitled to receive tax free payments of up to 40p per mile for the first 10,000 miles in the tax year and 25p thereafter. These rates have been agreed under the HMRC Approved Mileage Allowance Payments (AMAPs) scheme. In order to qualify, the journeys you undertake must be made in the course of doing your job, for example delivering goods or visiting customers. Any private journeys unrelated to work, including most travel from home to work, cannot be paid tax free. If your employer reimburses you at a rate less than the tax free amount, you are entitled to claim Mileage Allowance Relief (MAR) on the difference. You will therefore be entitled to claim an additional 20p per mile for the first 10,000 miles you travel for business in the tax year, and a further 5p per mile thereafter.
If you pay tax at the higher rate of 40p, this equates to a tax reduction of 8p per mile for the first 10,000 miles and 2p per mile thereafter. A basic rate tax payer would see reductions per mile of 4p and 1p per mile accordingly.To claim tax relief, you can include details on the employment pages of your self assessment tax return. If you are not required to fill out a tax return, you can write to HMRC to make a claim, or complete and file a form P87. Alex at TaxAssist Accountants Plymouth can help with its preparation.
AS
Q: I understand that I can claim tax relief for using my own vehicle for work. My employer currently only reimburses me 20p per mile whilst on business travel. Can I claim more and how do I do it?
Michael, Ivybridge
A: If you use your own vehicle for business travel as an employee, you are entitled to receive tax free payments of up to 40p per mile for the first 10,000 miles in the tax year and 25p thereafter. These rates have been agreed under the HMRC Approved Mileage Allowance Payments (AMAPs) scheme. In order to qualify, the journeys you undertake must be made in the course of doing your job, for example delivering goods or visiting customers. Any private journeys unrelated to work, including most travel from home to work, cannot be paid tax free. If your employer reimburses you at a rate less than the tax free amount, you are entitled to claim Mileage Allowance Relief (MAR) on the difference. You will therefore be entitled to claim an additional 20p per mile for the first 10,000 miles you travel for business in the tax year, and a further 5p per mile thereafter.
If you pay tax at the higher rate of 40p, this equates to a tax reduction of 8p per mile for the first 10,000 miles and 2p per mile thereafter. A basic rate tax payer would see reductions per mile of 4p and 1p per mile accordingly.To claim tax relief, you can include details on the employment pages of your self assessment tax return. If you are not required to fill out a tax return, you can write to HMRC to make a claim, or complete and file a form P87. Alex at TaxAssist Accountants Plymouth can help with its preparation.
AS
Sunday 22 November 2009
That time of year again....Silly Season Approaches
Most non accountants won't have a clue what I mean by 'silly season'. But for us accountants and tax advisors, that time of year is approaching once again...
Silly season is the period in which we tackle the flood of last minute tax work that hits us before the January 31 deadline. Last week, we did a final ring round to those clients who we've not heard from to try and coax the work in before Christmas. Its human nature, doing stuff at the last minute, and we never expect it to go away, but if this sounds like your approach to the whole tax return thing then maybe I can persuade you that getting it done early has its pluspoints.......
The final deadline for getting returns in is 31 January 2010, if you are planning on using an accountant do consider the disadvantages in presenting information so close to the deadline:
Silly season is the period in which we tackle the flood of last minute tax work that hits us before the January 31 deadline. Last week, we did a final ring round to those clients who we've not heard from to try and coax the work in before Christmas. Its human nature, doing stuff at the last minute, and we never expect it to go away, but if this sounds like your approach to the whole tax return thing then maybe I can persuade you that getting it done early has its pluspoints.......
The final deadline for getting returns in is 31 January 2010, if you are planning on using an accountant do consider the disadvantages in presenting information so close to the deadline:
- You will not know you tax bill until the last minute leaving you no time to save up to pay it.
- If information is missing you have the stress of rushing to provide it / get duplicates
- The accountant may not have enough time to work to reduce you tax bill because there is insufficient time to check things
- Because it is peak filing season some accountants will charge a premium.
- 'Issues' are identified late int the following tax year - if there is a better way to do something (for example treat motor costs), you will have missed 8/9 months worth of additional tax relief
If doing the return yourself, bear in mind that in January HMRC helplines are busy and overstretched, and you should leave yourself a minimum of 14 days to get registered with the government gateway and HMRC if its your first return.
In previous years, filing tax returns as close to the deadline as possible was routine as it limited the period during which the taxman could raise a tax enquiry. This is no longer the case - the 'enquiry' window' as its known is now one year from date of filing.
If your self-employed, have property or other investments, in fact if you have a tax return for any reason whatsoever, do consider giving us a call, first meeting is always free, easy free parking at City Business Park and chances are we'll be able to save on the tax bill and take all the stress of getting the return done in the process.
Friday 20 November 2009
HMRC Aspect Enquiry Over
We've been working on a particular 'aspect enquiry' for a client on and off for a good few months now - an aspect enquiry is an enquiry into a couple of 'aspects' of a tax return, rather than a full enquiry into all affairs.
This one was batted back and forth with HMRC several times, and today we received the news that all was found to be satisfactory as expected, so great for the client who can get on with business now without the worry of a possible full enquiry developing (as can happen).
The great thing here (and where we'll earn brownie points from the client), is that unlike many Tax Enquiry Fee Protection policies out there (including that promoted by the FSB), aspect enquiries are covered under the policy we provide to our clients -all the client pays is a £100 excess, saving some £700 in our fees here.
And how much is this policy I hear you ask?
Well, our client pays nothing - it is FREE, yes - complimentary, gratis, without charge, muchos benefitos - no costos, you get the message.....!!! And to think our competitors still charge in the hundreds for it....
This one was batted back and forth with HMRC several times, and today we received the news that all was found to be satisfactory as expected, so great for the client who can get on with business now without the worry of a possible full enquiry developing (as can happen).
The great thing here (and where we'll earn brownie points from the client), is that unlike many Tax Enquiry Fee Protection policies out there (including that promoted by the FSB), aspect enquiries are covered under the policy we provide to our clients -all the client pays is a £100 excess, saving some £700 in our fees here.
And how much is this policy I hear you ask?
Well, our client pays nothing - it is FREE, yes - complimentary, gratis, without charge, muchos benefitos - no costos, you get the message.....!!! And to think our competitors still charge in the hundreds for it....
The Construction Industry Scheme (CIS)
The Construction Industry Scheme (CIS) is a series of regulations for contractors and sub-contractors within the construction industry. If you work in the construction industry, whether as contractor, sub-contractor, or both, we can help you fulfil your obligations to the tax man.
If you are a contractor we can:
Register you with HM Revenue & Customs (HMRC) as a contractor
Verify your subcontractors with HM Revenue & Customs
Ensure you pay your subcontractors correctly within the scheme making deductions if necessary
Supply deduction statements to the sub-contractors
Keep your records in good order and supply HM Revenue & Customs with monthly returns
Make sure you do not incur penalties by failing to submit your monthly returns to HMRC.
We have many contractors as clients and can look after your needs quickly and efficiently. We make sure we are up to date with any changes to the law and as a client will always notify you of these changes.
If you are a sub-contractor we can:
Prepare your self-assessment tax return for you
Keep your records in good order
Ensure you pay only the right amount of tax by claiming all available deductions
Sub-contractors normally receive their earnings after 20% tax is deducted by the contractor. Often a refund is due to the sub-contractor, as these deductions outweigh the final tax bill - where this is the case we can calculate the refund and apply for it to be paid on the sub-contractors behalf.
AS
If you are a contractor we can:
Register you with HM Revenue & Customs (HMRC) as a contractor
Verify your subcontractors with HM Revenue & Customs
Ensure you pay your subcontractors correctly within the scheme making deductions if necessary
Supply deduction statements to the sub-contractors
Keep your records in good order and supply HM Revenue & Customs with monthly returns
Make sure you do not incur penalties by failing to submit your monthly returns to HMRC.
We have many contractors as clients and can look after your needs quickly and efficiently. We make sure we are up to date with any changes to the law and as a client will always notify you of these changes.
If you are a sub-contractor we can:
Prepare your self-assessment tax return for you
Keep your records in good order
Ensure you pay only the right amount of tax by claiming all available deductions
Sub-contractors normally receive their earnings after 20% tax is deducted by the contractor. Often a refund is due to the sub-contractor, as these deductions outweigh the final tax bill - where this is the case we can calculate the refund and apply for it to be paid on the sub-contractors behalf.
AS
Thursday 19 November 2009
Starting up in business
If you've started up in business for yourself in the last 18 months or so, you will be facing completing what is possibly your first self-assessment tax return.
Appointing an accountant to help get the return completed correctly will normally prove a shrewd investment, as the accountant will be able to advise you on what is and what is not claimable, more than likely make suggestions for improving the profitability of your business, and of course manage all the deadlines so it doesn't all become a last minute rush.
I've just got a painter/decorator in to do my hallway/landing - and yes here I reel out the well worn cliche in the small business world - but there is a huge amount of fact in that as much as I'd like to think I could do the job myself, I know that if I attempted it, it would take me an age (read months), during which I could earn more by working at what I'm good at (yes, read tax returns). Most importantly, the end result will be 10x better (at least it better be haha). With ever-changing tax legislation, the modest outlay on a good accountant who you get on with can only be money well spent.
Appointing an accountant to help get the return completed correctly will normally prove a shrewd investment, as the accountant will be able to advise you on what is and what is not claimable, more than likely make suggestions for improving the profitability of your business, and of course manage all the deadlines so it doesn't all become a last minute rush.
I've just got a painter/decorator in to do my hallway/landing - and yes here I reel out the well worn cliche in the small business world - but there is a huge amount of fact in that as much as I'd like to think I could do the job myself, I know that if I attempted it, it would take me an age (read months), during which I could earn more by working at what I'm good at (yes, read tax returns). Most importantly, the end result will be 10x better (at least it better be haha). With ever-changing tax legislation, the modest outlay on a good accountant who you get on with can only be money well spent.
Wednesday 18 November 2009
Q&A Christmas Lunch
Q: In addition to our annual staff Christmas party, I would like to treat my employees to a Christmas lunch as a thank you for their hard work and commitment this year. Can I claim the costs for the lunch as a business expense and what are the implications on the employee?
A: The cost of providing the Christmas lunch for staff will be a tax deductible expense for your business. However you will need to consider the benefit in kind rules for the employees.
If the employer provides employees with one annual function, no charge to tax arises if the cost of the event per head does not exceed £150. It is important that you must provide this event to all employees, and cannot just provide it to a select few, as this will not be covered by the exemption.
As you will be providing two functions, then you must aggregate the cost for each employee, and if this does not exceed the limit no benefit in kind will be assessed. The figure of £150 is not an allowance, and if the employee chooses not to attend the meal or party, they cannot receive the allowance in cash tax free.
You should be aware that if the combined costs, including VAT, exceed £150 per head, then a benefit in kind is assessed on full cost of the event which exceeds the limit, as it is not just the excess over the exemption which is chargeable.
TaxAssist Accountants are accountants for small businesses and the self-employed
A: The cost of providing the Christmas lunch for staff will be a tax deductible expense for your business. However you will need to consider the benefit in kind rules for the employees.
If the employer provides employees with one annual function, no charge to tax arises if the cost of the event per head does not exceed £150. It is important that you must provide this event to all employees, and cannot just provide it to a select few, as this will not be covered by the exemption.
As you will be providing two functions, then you must aggregate the cost for each employee, and if this does not exceed the limit no benefit in kind will be assessed. The figure of £150 is not an allowance, and if the employee chooses not to attend the meal or party, they cannot receive the allowance in cash tax free.
You should be aware that if the combined costs, including VAT, exceed £150 per head, then a benefit in kind is assessed on full cost of the event which exceeds the limit, as it is not just the excess over the exemption which is chargeable.
TaxAssist Accountants are accountants for small businesses and the self-employed
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