Posts tagged ‘Audit Work’

HM Revenue and Customs (HMRC) has always taken a dim view of the late filing of self-assessment tax returns, but it has now introduced significant new penalties for those who fail to meet the deadlines.

The deadline

If you are registered for self-assessment and have not already filed your paper return then you will need to do so online by 31 January 2012. This may still seem a long way off, but it makes sense to start preparing now rather than leaving your return until the last minute, when it will be more difficult to deal with any issues which may arise.

The penalty

Back of the net!Under HMRC’s new regime, late returns will incur an initial fixed penalty of £100.

This will apply even if there is no tax to pay or any tax due for the year has already been paid on time.

If your tax return has still not been filed after three months, then HMRC will impose additional daily penalties of £10, up to a maximum of £900.

After six months, the penalty increases to either £300 or five per cent of the tax, depending on which is greater.  The penalty could increase to 100 per cent of the tax due if returns have still not been filed after 12 months.

Late tax

Any overdue tax must also be paid by 31 January.  If this deadline is missed then HMRC will impose a penalty of five per cent of the amount due after 30 days, six months and 12 months respectively. It is also worth noting that HMRC will charge interest on top of these penalties.

The Art of ProcrastinatingStop procrastinating

As with any tax matter, it is always better to act sooner rather than later.

The longer you leave it, the bigger the penalty will be.

 

 

At George Hay, we can assist with a wide range of tax matters, including ensuring your self-assessment tax return is filed on time.

Friendly, approachable, reliable professionals

Disclaimer: This article is for general guidance only. All taxation planning should only be undertaken after appropriate professional advice. George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

If you are a tutor, a fitness instructor or make your money by selling through the internet, then the taxman may soon be taking a particular interest in your financial affairs.

More targeted investigations

HM Revenue and Customs (HMRC) is stepping up its tax investigations of specific sectors where it believes tax is being underpaid.

A date for the investigations to launch has yet to be announced and there have been no guarantees of an amnarrow found the targetesty for those who forward to get their affairs in order wish to confess, although those who settle up any unpaid tax early are far more likely to get much better terms than those who are caught out.

Among those targeted will be private tutors and coaches who earn main or secondary income from private lessons, whether they are qualified or not, and ranging from national curriculum tutors to fitness or lifestyle coaches.

HMRC is also interested in individuals who use online marketplaces such as eBay to buy and sell goods as a trader or business without paying the resulting tax. This will, of course, not affect those who buy or sell in low volumes on eBay, such as private individuals selling unwanted items. HMRC is only interested in those who consistently use the online marketplace to make a profit.

Non-VAT registered businesses

Other traders who will come under the spotlight will be those whose turnover exceeds the £73,000 threshold but who have not registered for VAT. Don’t forget that now that the Inland Revenue and Customs and Excise work together as HM Revenue & Customs, they share your business data.

Act early to mitigate penalties

As with any tax matter, it is always better to act now than to wait for the taxman to come calling.

If you fall under any of these sectors then George Hay can help you register with HMRC and get your affairs in order.

Disclaimer: This article is for general guidance only. All taxation planning should only be undertaken after appropriate professional advice. George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

For more business news updates like this, please subscribe to my monthly business support newsletters using the “join my lists”  widget in the top right of your screen.  Thank you.

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Clients often ask us “what is the best way to buy a vehicle?”  If they plan to use it in their business, should they own it personally? Should they buy it through the business? Should they lease it? The list of questions is endless and many of the answers will depend upon your particular situation and requirements but beware getting it wrong could prove costly in terms of time and money.

Your options

Martin Bessell from Midland Autolease Contracts says “The type and terms of your finance will be dictated by your circumstances, if you require a mid range car for business use this often lends itself to Lease purchase or Hire purchase.  An executive car which is mainly used for private use will often be better bought outside the business, so a personal contract purchase should be considered. If you simply need a reliable car for a short period leasing may be the answer, but talk to your accountant about each type they may have a better solution”

Taxation

1959 Porsche 356A Carrera GS CabrioletThe tax position regarding the purchase of your vehicle can be quite complex.

Firstly you will need to consider the VAT position. Generally you can not claim VAT on the purchase price but may be able to claim a proportion of the VAT on lease costs, this is providing it is a car you are purchasing. If the vehicle is a van different rules apply, and the debate as to what is a car and what is a van is not something I wish to discuss here!

You will also need to consider the costs that you can deduct in arriving at your taxable business profit. The rules on both Capital Allowances and Lease rental deductions changed significantly in the last budget and many clients are now taking a more serious look at leasing.

Finally don’t forget if a vehicle is provided as a company car there will be PAYE and National Insurance arising from the benefit.

Get advice

The important aspect is to seek advice when buying a vehicle don’t just be blinded by that shiny new car.  Make the right commercial decision for you and your business, search the market and then present the facts to your accountant who will crunch the numbers and tell you what the tax consequence will be.  HAPPY SHOPPING 😀

 

Disclaimer: This article is for general guidance only.  All taxation planning should only be undertaken after appropriate professional advice.  George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

For more business news updates like this, please subscribe to my monthly business support newsletters using the “join my lists”  widget in the top right of your screen.  Thank you.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

New businesses excluded from a Government scheme to encourage more start-ups should still ensure they plan ahead to minimise their tax liabilities.

The National Insurance Contributions (NIC) holiday scheme

The scheme was launched on September 6th 2010 and means employers do not have to pay the first £5,000 in NICs for each of the first 10 workers during the first 52 weeks of their employment, provided that year falls within the three-year period up to September 5th 2013.

However, while new firms across the UK are set to benefit from potential tax savings of up to £50,000, those in the East, South East and London regions are being excluded from the scheme.

Another postcode lottery?

Barry Jefferd, Tax Partner at George Hay, said: “This is incredibly unfair on new businesses in the region who will be at a disadvantage compared to their counterparts in other areas.

“However, employers should still give serious thought to tax planning in order to minimise their liabilities and take advantage of any opportunities that might not be available at a later stage.

“While businesses in the East may not be able to enjoy the same tax breaks as others around the country, we can still help them make valuable tax savings, ensuring more of their hard-earned money goes back into those companies rather than the taxman’s pocket.

“Equally, if any new businesses in the area are unsure of their NIC obligations, then we can advise them accordingly.”

 

Further reading: NI holiday scheme slammed by Labour, Accountancy Age 04.01.12 – Administration costs more than savings.

Disclaimer: This article is for general guidance only.  All taxation planning should only be undertaken after appropriate professional advice.  George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

 

 For more business news updates like this, please subscribe to my monthly business support newsletters using the “join my lists”  widget in the top right of your screen.  Thank you.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

If you are a plumber or heating engineer and have undeclared earnings then now is the time to tell the taxman.

 

New amnesty launched 

Plumber James #2HM Revenue and Customs (HMRC) has launched a ‘tax amnesty’ known as the Plumbers Tax Safe Plan (PTSP).

 

The PTSP is the fifth tax amnesty to be offered to UK residents. Those targeted in previous schemes have included doctors, dentists and offshore account holders.

  

The amnesty provides an opportunity for plumbers who have not yet done so to make a full disclosure about their income without receiving excessive penalties and is only open until May 31st. Those who register with the scheme before this date will then have until August 31st to pay any back taxes as well as interest and penalties.

 

Potential Penalties

 

The Look of (Un)certainty...In most cases, HMRC will impose a penalty of 10%, although this could vary between zero and 20%, depending on your individual circumstances.

 

Those with undeclared earnings who fail to take advantage of this opportunity will face a crackdown by HMRC, which will be using information from the CORGI and Gas Safe registers to identify individuals it wants to question.

 

You can be sure that the penalties will be a lot higher if the taxman catches you out – and he is unlikely to be too sympathetic if you did not use the disclosure opportunity available.

  

While there are still costs involved, including the reduced penalty, the bill for making a full disclosure will still be a great deal cheaper than it would be when the taxman comes knocking.

 

Barry Jefferd, Tax Partner at George Hay, can advise on a wide range of taxation matters, including making a disclosure to HMRC. This opportunity is unlikely to be repeated, making it all the more important to act sooner rather than later.

 

Disclaimer: This article is for general guidance only.  All taxation planning should only be undertaken after appropriate professional advice.  George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

 

 For more business news updates like this, please subscribe to my monthly business support newsletters using the “join my lists”  widget in the top right of your screen.  Thank you.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.