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H M Revenue and Customs strike back….!!
Businesses struggling with their cash flow are often unable to pay creditors on time.
This creates creditor pressure as the amounts owed to the creditors increases. Struggling businesses often use H M Revenue and Customs (“HMRC”) as an additional credit facility through the non-payment of VAT / PAYE / NIC. Recent examples of this include Portsmouth and Crystal Palace football clubs.
In the 2010 budget, the Chancellor announced he intends to give greater powers to HMRC. From April 2011, HMRC can require businesses which habitually fail to pay their PAYE on time to provide security. Businesses which fail to provide security could be charged with a criminal offence and fined up to £5,000.
HMRC already have the power to demand security for those businesses which habitually fail to pay their VAT.
Ask us for advice on cashflow and debt managmentto avoid these issues.
The Law changes so that HMRC can now focus on the Buy To Let Market
The recent press contained reports that could have a big impact on the buy to let market and other landlords who fail to declare their lettings income. And such stories are not simple press puff. HMRC have been known to be focusing on this area in recent months.
According to the Telegraph lettings agents could soon be forced to hand over the names and addresses of all landlords on their books, past and present.The move would make it easier to identify buy-to-let investors who are avoiding paying tax on their rental income or capital gains when they sell a property.
We might assume that those landlords who fail to declare their rental income probably arrange private lettings. Are there really many people who use a lettings agent and then omit to declare the rental income on their tax returns?
New Service Launched with the sole aim to protect you from the stress and expense of a tax enquiry.
How would you fair if your business was investigated? the disruption to your business, let alone the expense is challenging and stressful for all parties concerned.
In January 2010, Stephens Accountants have launched a brand new service which is a Tax Investigation Insurance Service to take away the pain of a Tax Enquiry, we will simply do it all for you!
Contact us if you think this could be beneficial to your business.
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Free Grant Funding for Your Web Development
Through a marketing professional with whom we have worked with closely, we have managed to bag some free grant funding with reference to web development / new web sites / Search Engine Optimisation (SEO) programs. It is aimed at people looking to get more business from the internet. That should be almost all of you.
£1000.00 is available with a £500 contribution (£1500) in total.
It can be used toward SEO or a new site.
It can be used toward SEO or a new site.
Its amazing what can be achieved with targeted attention to your website. This is open to new or existing clients, indeed anyone visiting this site. The funds will not last forever so give us a call and we will explain the benefits. You need a minimum of 5 employees including part time /company secretaries, directors etc.
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The Modern Tax Enquiry
A Tax Enquiry could cost a client their business
The new enquiry and penalty regime is here with us now. It’s almost as if no one outside the profession has noticed. The old ways of dealing with tax enquiries from the local tax office have been swept away.
Over 200,000 enquiries were launched last year. They can be extremely intrusive, stressful and costly if you’re not prepared or if they are badly handled by the inexperienced.
Winding up a company
Some clients are giving up on trying to sell their business pre-retirement. The continuing recession has reduced turnover in many cases and some clients may be forced to close down their limited companies and become employees of larger concerns.
Generally a licensed insolvency practitioner needs to be appointed to distribute the assets of the company, but this can be expensive. It will however protect the shareholders from subsequent claims by unpaid creditors of the company.
Where there are no such creditors and the company has relatively little share capital you can use an informal procedure under Extra Statutory Concession C16 (ESC C16), which does not need a liquidator.
You need to apply to the HMRC office that deals with the corporation tax of the company concerned for permission to use ESC C16, and that application needs tomade carefully.
It is an established method of avoiding income tax on withdrawals of cash from a business which has ceased to trade. Taking the cash out without careful planning can result in the money being taxed later as Dividends and even worse Salary.
Be careful and make sure you have consulted someone before you start to spend your retirement pot.
VAT online filing
For VAT quarters that begin on or after 1 April 2010 all businesses with a turnover of £100,000 or more per year (excluding VAT) must file their VAT returns online.
Also any size of businesses that first registers for VAT on or after 1 April 2010 will have to file their VAT returns online. All businesses that file VAT returns online must also pay any VAT due electronically, as a paper cheque cannot be matched to an electronic return.
If this worries you at all we can help with the switch and perhaps review your VAT systems and make sure your records are adequate in the event of a VAT visit.
PAYE online filing and penalties
We have all known about the requirement to file end of year PAYE forms online for some years now. Online filing has been optional for employers with fewer than 50 employees until this tax year. Now all employers, with a very few exceptions, will have to file their forms P35 and P14s online.
From 6 April 2010. Where the employer does not file online HMRC can impose a penalty of up to £3,000.
We file all returns online at minimal cost. Call us for details. We also act as payroll managers with our payroll business service for clients who need electronic payslips weekly.
Tax Timetables
The deadline for submission of your paper tax returns is 31st October. If you are struggling to meet this, we as a practice, file everything online. The Revenue agree to allow submission by 31st January 2010 if you or your agent file your tax return online. Otherwise you will be hit with a £100 penalty.
Any PAYE deductions can be paid on a quarterly or even an annual basis by prior arrangement. This aids cashflow and reduces the administrative burden of calculations and payment. Ask for details.
Plans are afoot to insist all businesses submit data and pay all taxes, VAT, CIS and PAYE deductions online. Are you geared up for this? You need online authorisation and the proceedures can be confusing.
Companies House are reducing the time allowed to prepare statutory accounts for limited companies and increasing substantially, penalties for late submision. We guarantee no penalties if you bring your records in to us in good time.
CIS Tax Treatment Qualification Test
The CIS Tax Treatment Qualification Test (TTQT) is scheduled to be fully automatic from this month. This means that the initial and annual compliance checks will be carried out entirely by HMRC’s computer, with consequent absence of discretion. At the moment 30% of contractors fail the TTQT, so the further automation of the system may lead to an increase in the failure rate with consequential loss of gross payment status.
Loss of gross payment status is usually disastrous for contractors, so a failure rate of 30% is truly alarming. The vast majority of the cases we see involve late payment of tax – usually monthly PAYE – rather than late submission of returns. And the rules are draconian – one payment more than 14 days late, or three payments late by even one day is enough to trigger loss of gross payment status. Think about having 20% or even 30% of your payment applications withheld for up to 12 months. Oh Dear.
Loss of gross payment status is usually disastrous for contractors, so a failure rate of 30% is truly alarming. The vast majority of the cases we see involve late payment of tax – usually monthly PAYE – rather than late submission of returns. And the rules are draconian – one payment more than 14 days late, or three payments late by even one day is enough to trigger loss of gross payment status. Think about having 20% or even 30% of your payment applications withheld for up to 12 months. Oh Dear.
The problem is that professional advisors may not be aware that PAYE is being paid late as it is probably being dealt with in-house by the contractor. We can bring this service to you and guarantee, with your cooperation, that you keep this vital cashflow factor under your control.
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