Posts tagged ‘New Businesses’

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.

 

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If you have discovered that you have underpaid VAT  to HM Revenue & Customs and are concerned what action you should take, read on. 

When did the error occur?

TaxHMRC are now able to look back at the previous four years records should they chose to carry out an inspection whereas previously they were only able to look at the previous three years.

The extra year is not all bad news it also means should you have made an error in your favour you now have an extra year to rectify it.

Declaring errors

For accounting errors beginning on or after 1 July 2008, businesses can adjust past errors on the next VAT return they submit providing the error is less than £10,000 or one per cent of the Box 6 turnover figure up to a maximum of £50,000. Any errors above these amounts must be notified to HMRC on a separate form.

Penalty charge noticePenalties

A new penalty system was introduced for VAT returns due to be submitted after 1 April 2009.  Penalties are now charged based on a percentage of the VAT payable.

If an error has been made but reasonable care has been taken then no penalty is applicable, but deliberate or concealed errors are dealt with more seriously and can attract a penalty equal to 200% of the VAT undeclared.


Honesty is always the best policy

Should you have made a mistake and are likely to incur a penalty then honesty is your best policy, as this can lead to a reduction in the penalty charged. But beware if you have already been notified of a visit by HMRC voluntary disclosure before they carry out their inspection will not reduce your penalty.

Evading VAT registration

Failing to register your business for VAT when it should have been can be costly.  Now that HM Revenue & Customs  manage direct and indirect taxes it is easy for them carry out checks with regards to business turnover.

The annual registration limit increased to £70,000 from 1 April 2010.

And finally,

Don’t forget, all new businesses and those with a turnover over £100,000 must now submit their VAT Return electronically. If you have not already registered make sure you do as soon as possible. Do not leave it until the day your return is due it will be too late. For more information click here

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.