Accounting
& Financial News
North
West construction firms face ruin
May 2008
Major North West construction sector businesses could collapse with
the loss of thousands of jobs, due to an aggressive campaign by the
taxman.
HM Revenue
& Customs is operating an ultra-low tolerance policy for companies
that have been late in paying PAYE and national insurance contributions
collected from employees.
As a
result HMRC is cancelling 'gross registrations' of many business in
the construction industry scheme (CIS). This means the labour element
of their revenue will be taxed at source, while damage to their reputation
will be potentially ruinous.
Bank
of England Maintains Bank Rate at 5.0%
8 May 2008
The
Bank of England's Monetary Policy Committee today voted to maintain
the official Bank Rate paid on commercial bank reserves at 5.0%.
The
Committee's latest inflation and output projections will appear in
the Inflation Report to be published on Wednesday 14 May.
Are
you eligible for a repayment of overpaid VAT?
April 2008
In a
recent case, the House of Lords ruled that the three year capping
procedures which came into force in 1996 were introduced illegally.
HM Revenue & Customs (“HMRC”) has accepted the decision.
It should now be noted that the three year cap is legal but a transitional
period for submission of claims should have been given.
HMRC
has said that claims may be submitted for overpaid output tax or under
claimed input tax until 31 March 2009. After that the drawbridge will
come down.
If you
feel you are eligible to make a claim please contact our tax department
on 0161 655 2000.
HMRC
explains 'identical' paper SA return policy
March 2008
From the beginning of the new tax year on 6 April, HMRC has said it
will no longer accept the paper "facsimilie" returns generated
by tax computation programs. Instead, it will only accept paper returns
that are submitted on original tax forms, or the new PDF versions,
which it deems to be "identical" rather than reproductions.
For more information see www.accountingweb.co.uk
Non UK
Domiciled tax payers (non-doms) - Remittance Basis Post 5 April 2008
19 March 2008
The taxation of non UK domiciled individuals who are resident in the
UK for tax purposes will change significantly from 6 April 2008.
An individual resident but not domiciled in the UK is at present entitled
to claim that their non-UK investment income is taxable here only
on the remittance basis. The non-UK ‘earned’ income and
capital gains of such individuals are automatically taxed on the remittance
basis. From 6 April 2008, such individuals will need to make a specific
claim annualy if all non-UK income and capital gains for that year
is to be taxed on the remittance basis. As a consequence many non-doms
are going to pay significantly more tax.
For further advice please call us on 0161 655 2000
Budget
2008
12 March 2008
For
concise, up-to-date and easy to digest Budget information visit Directgov
To find
out how the chancellors budget affects you and your business visit
Businesslink
Additional
publications relating to the Report will also be available from the
HM Treasury Web Site.
HM Treasury
have also provided a separate Budget
microsite which highlights the key points of how the Budget will
affect you.
For any further information see hmrc.gov.uk/budget2008
If you have any queries with regard to how the 2008 budget affects
you, please contact us on 0161 655 2000.
Bank
of England Reduces Base Rate
February 08
The
bank of England's Monetary Policy Committee voted to reduce the official
bank rate paid on commercial bank reserves by 0.25 percentage points
to 5.25%.
The
prospects for output growth abroad have deteriorated and the disruption
to global financial markets has continued. In the United Kingdom,
credit conditions for households and businesses are tightening. Consumer
spending growth appears to have eased. Although the substantial fall
in the sterling exchange rate is likely to promote re-balancing of
total demand, output growth has moderated to around its historical
average rate and business surveys suggest that further slowing is
in prospect. These developments pose downside risks to the outlook
for inflation. For more see www.bankofengland.co.uk
PAYE
Online Customers & Agents Can Now Change Details Online
February
08
From 6 February 2008, employers, and agents authorised to act for
them, will be able to use the links within the 'About your organisation'
or 'About your client' pages to: change
the employer' business contact details, trade name & communication
name & contact details.
Using HMRC Online Services is secure. For more information
see hmrc.gov.uk
Property
Prices Continue to Fall
January 08
Many commentators predict flat house price growth during 2008
House price inflation in England and Wales dropped sharply in December,
according to the Land Registry. Average prices fell by 0.4% in December,
bringing the annual inflation rate down from 8.1% in November to 6.7%
last month.
The
December fall was the first decline recorded by the Land Registry
since August 2005, although prices grew in three individual regions.
It
said the latest data was "a clear indication of a weakening market".
The average house price was £184,469 in December compared with
£186,009 in November.
Most
regions showed monthly price falls, with the largest drop of 3.3%
recorded in the East Midlands. Annual price inflation in the region
now stands at 0.5%.
The
largest monthly price growth was seen in the north-east of England,
at 2.2%. Prices also grew by 1.1% in the East and by 0.6% in London.
Annual
Investment Allowance
November
2007
You
may be aware that the Chancellor announced in the 2007 Budget that
small businesses will benefit from a new £50,000 per annum investment
allowance, to encourage them to invest in the future of the company.
This allowance will become available from 1 April 2008.
The
allowance will provide a deduction from profits of the first £50,000
in any year that the business invests in plant & machinery, other
than cars.
All
qualifying expenditure up to that level will receive a 100% first
year allowance, in comparison with the current 40% or 50% allowance.
If you
are considering purchasing plant & machinery may we suggest you
contact our tax department for further
guidance on this matter.
Construction
Industry Scheme: Late Filing Penalties
4 October 2007
The
Honeymoon period is over. Penalties will now be charged under the
Construction Industry Scheme (CIS) with effect from 19th October 2007.
From this date penalties for all CIS Returns not received by their
due date, will be liable to a fixed penalty of £100 and a further
penalty for every additional month that the Return remains outstanding.
This includes all Returns due from the start of the new scheme between
May and September, including nil returns.
Contractors
operating CIS scheme must make sure that all their outstanding Returns
are sent in by 19th October 2007 to avoid penalties.
All
contractors will receive warning letters from HM Revenue & Customs
(HMRC) if there are outstanding returns.. This may even be followed
up by HMRC via direct contact on the telephone.
The
£100 penalty is not fixed and it increases for every 50 sub-contractors
beyond the first 50. A contractor with ten sub-contractors would be
liable to a monthly penalty of £100 for each late Return, whilst
a contractor with 110 sub-contractors would be liable to a monthly
penalty of £300 for each late return and so on.
If you
require any advice in respect of the Construction Industry Scheme
please contact us (tel 0161 655 2000).
Full
Time Education Support - Tax-Free Limits
October
2007
If you
support a member of staff attending a full time course of further
education the tax and National Insurance free allowance you can pay
them is increased from £15,000 to £15,480 for the academic
year 2007-2008 and subsequent years. (From 1 September 2007)
Please
note that the provision of a scholarship for the son or daughter of
a director or employee will likely be treated as the parent's earnings
under the benefits code.
For
those readers who would like more information on this opportunity
please either contact us or read more here.
Pre
Budget Report
October
2007
To see
a concise report click
here.
Capital
Gains Tax Increase
October
2007
You may
be aware that legislation is to be introduced in Finance Bill 2008 to
give effect to a new single rate of Capital Gains Tax of 18%, which
will affect individuals, trustees and personal representatives. Taper
relief and indexation allowance is to be withdrawn but the Annual Exemption
Amount will remain.
This
means that for a higher rate taxpayer disposing of a business asset
held for more than 2 full years, the effective rate of Capital Gains
Tax will increase from 10% to 18%.
For example click here.
"The
Revenge of the Taxpayer"
September
2007
Our latest published article.
Read it here first.
Dividends
- Getting the Paperwork Right
September
2007
If you
run a small limited company and take part of your remuneration as
a dividend, make sure you attend to the administration - get the paperwork
right!
Dividends are treated as part of your income and as long as you remain
a basic rate taxpayer there is no further tax to pay - in effect the
company pays the basic rate tax for you. If you are a higher rate
tax payer you will be assessed for the higher rate element in your
annual self-assessment calculation.
When you make a dividend payment you need to generate two pieces of
printed evidence:
1. Appropriate minutes sanctioning the dividend and
2. Dividend vouchers setting out the amount of the dividend, tax deducted
etc.
If you don't provide this basic evidence you may give the Revenue
an excuse to change the status of the payment.
For instance they may assert that the payment was not a dividend but
a loan to the director - this would create benefit-in-kind charges
for director/shareholders and a 25% corporation tax charge for the
company. (The 25% tax charge is recoverable but potentially there
could be a considerable delay in receiving a refund.)
Alternatively if the dividend is a regular payment, say monthly, the
Revenue may try to argue that the payment is taxable as shareholder's
salary. Assuming of course that the shareholder is a salaried employee
or director. This would create unplanned National Insurance charges
for the shareholder and the company, as well as income tax charges,
with or without penalties.
If you need assistance preparing the required minutes and dividend
vouchers or general advice and guidance please call.
Post
Retirement Benefits
September
2007
On
Budget Day the Revenue clarified its position regarding the provision
of continuing benefits to retired employees. The following benefits
will not be taxable. The first tax year affected by this announcement
is the year ending 5 April 2007.
Non-taxable benefits are:
1. Continued provision by former employers of accommodation and related
removal expenses.
2. Welfare counselling.
3. Recreational benefits.
4. Annual parties and similar functions costing up to £150.
5. Equipment for disabled employees.
6. Writing of wills costing up to £150.
7. Benefits where the right to the continuing benefit arose on retirement
BEFORE 6 April 1998
Rise
in minimum wage
August
2007
As from 1st october, 2007 there will be an increase in the minimum
wage rates as follows:-
16 to 17 year olds - increase to £3.40 per hour
18 to 21 year olds - increase to £4.60 per hour
22 years and over - increase to £5.52 per hour
We should be grateful if you would let us know
when you intend to implement the above rates as we need your authority
to do so. We would remind you that payment of the minimum wage rate
is a legal requirement and it is imperative that you inform us of
the changes as soon as possible. As we have incomplete personnel details
and no hourly rates for some clients we will require each client to
check their own personnel records to ensure that they are compliant
with government legislation.
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