Accounting
& Financial News from 2009
Making
the most of loss relief
07 Oct 2009
Under
concessions offered in the Finance Bill 2009, trading losses for businesses
can now be carried back up to a maximum of three years. To qualify the
losses must be suffered:
1.
For limited companies, during trading periods ending in the two year
period to 23 November 2010, and
2.
For unincorporated, self-assessed businesses, during the tax years 2008
-09 and 2009 -10.
Losses
have to be carried back to the latest year first. For example if the
loss is incurred in the year to 31 March 2010 the first carry back is
to the year ending 31 March 2009 (there is no restriction on the amount
of losses carried back to this year). If losses are still available
after this first set off they can be carried back a further two years.
However
the carry back to these further two years is capped at £50,000
per year against total profits for companies. For unincorporated businesses
the carry back to the two earlier years is also capped at £50,000
per year but only against profits from the same trade.
Readers
might like to contact our tax department
for further information
Travelling
from home to work
07 Oct 2009
For the
latest guidlines from HMRC for both employed & self employed allowances,
click here
Rise
in Minimum Wage
01 Oct 2009
As
from 1st October, 2009 there will be an increase in the minimum wage
rates as follows:-
16 to
17 year olds - Increase to £3.57 per hour
18
to 21 year olds - Increase to £4.83 per hour
22
years and over - Increase to £5.80 per hour
We would
remind you that payment of the minimum wage rate is a legal requirement.
Construction
subcontractors beware!
21 Sep 2009
HMRC have
indicated that they are considering reclassifying self-employed construction
workers as employed. They have actually launched a consultation process
with interested parties.
Reclassified
workers would be taxed through the PAYE system regardless of the length
or brevity of each employment assignment.
HMRC are
convinced that a significant number of construction workers are taxed
as if self-employed even though they are providing their services to
contractors effectively as if they were employees.
HMRC are
calling this status issue "false self-employment". HMRC plan
to introduce legislation to protect income tax and national insurance
revenue that they feel is being lost.
The consultation
document that HMRC have published assumes that these changes will happen
and simply seeks input as to how such changes should be introduced.
Comments
on this proposal have to be sent to HMRC before the 12 October 2009;
so change, if it is coming, may not be that far away!
What
happens to your pension fund when you die?
21 Sep
2009 For more information >
More
changes at Companies House
21 September 2009
From the
1 October 2009 a director's home address can be protected from
disclosure. If
you would like take advantage of this new concession you need to register
a service address, which could be your registered office address, with
Companies House. This can be done online www.companieshouse.gov.uk from
the 1 October 2009.
If you
take no action your home address will be taken as your service address
until changed.
Just a
quick reminder that other recent changes include:
1.
You must be aged 16 or over to be appointed as a director.
2.
You no longer have to appoint a company secretary, although you can
do so if you wish.
3.
You no longer need to hold an AGM unless you opt to do so.
Vetting
and Barring Scheme
14 August 2009
It is
to be called the Vetting and Barring Scheme (VBS) and will be administered
by a new public body to be called the Independent Safeguarding Authority
(ISA).
From July
2010 all new employees can register with the ISA.
From November
2010 all new employees and volunteers must register before they start
work. Until they have registered they cannot be legally employed.
Failure
to comply with the new registration demands could possibly result in
custodial sentences for the employee and the employer!
A range
of useful online tools, posters and leaflets can be downloaded from
the ISA web site at www.isa-gov.org.uk/toolkit
or call 0300 123 1111.
Changes
to the Childcare Approval Scheme
August 2009
In
order to qualify for Child Tax Credits (CTC's) the person responsible
for taking care of your children (child) needs to be registered with
the Childcare Approval Scheme.
From 18
July 2009 the Childcare Approval Scheme will no longer exist and all
childcare providers approved under this scheme (for example a nanny
or foster carer working as a childminder) must either become registered
with Ofsted or they will become unregistered providers.
Taxpayers who are affected by this change are advised to check with
their childcare provider to see what they plan to do from 18 July 2009.
It is
no longer possible to claim tax credits unless the childcare provider
is registered with Ofsted from 18 July 2009.
If a childcare
provider does not intend to register with Ofsted, an alternative registered
provider would need to be used in order to be able to claim or continue
claiming the childcare element of tax credits.
VAT Updates from HMRC -
for the last updates visit our Bookkeeping
page
Making
the most of Capital Allowances 2009-10
August 2009
If you
are thinking of investing in assets that qualify for the Annual Investment
Allowance (AIA) during 2009-10 it is worth bearing in mind the additional
relief you can claim to take advantage of the 40% First Year Allowance
(FYA) that is available for one year to 5 April 2010 (1 April 2010 if
you trade as a company.)
For most
businesses the only assets that do not qualify for the AIA or the FYA
are motor cars. Although don't forget that if you buy a car with CO2
emissions under 110g/km a special 100% allowance can be claimed.
The AIA
allows you to write off 100% of qualifying expenditure during 2009-10
up to a total spend of £50,000.
But what
happens if you spend more than £50,000? Let's say you invested
£80,000 during 2009-10 in assets that qualify for the AIA and
FYA. You would be eligible to claim the maximum £50,000 AIA and
a 40% FYA on the excess. This would make your potential, combined claim
£62,000, or an overall 78% tax write down in one year.
Even if
the claims created net tax losses in 2009-10 this may enable your business
to recover some of the tax paid in the previous three years.
Please
call if you need more information on this topic, particularly, does
your intended investment in new equipment qualify for these reliefs?
Paternity
leave extension deferred
July 2009
The UK
Government had planned to give fathers the right to claim up to 6 months
paternity leave from April 2010. Because of the economic slowdown, they
have decided not to bring the changes in that soon. As a result fathers
are still only entitled to two weeks leave which is usually taken immediately
after the baby is born. For more click here
HMRC
changed bank account details
03 July 2009
Taxpayers
who currently make bank payments direct to the Accounts Office at Shipley
and Cumbernauld should note the following bank account change.
The
new bank account details are:
Accounts
Office Shipley
-----------------------
Account Name: HMRC Shipley
Sort Code: 08 32 10
Account Number: 12001020
Accounts
Office Cumbernauld
---------------------------
Account Name: HMRC Cumbernauld
Sort Code: 08 32 10
Account Number 12001039
If you
use online banking and have stored templates to make payments to Shipley
or Cumbernauld, make sure you change them to include the new account
details set out above.
Full details
of the change can be found on the HMRC website www.hmrc.gov.uk/payinghmrc
Company
cars - new advisory fuel rates
02 July 2009
These
are the rates you would use to calculate the petrol cost of your private
motoring, if you pay this back to your employer to avoid the fuel based
benefit in kind charge. Employers can also use the figure to isolate
the petrol cost of car mileage claims in order to recover an appropriate
amount of VAT - businesses still need to retain fuel receipts.
Some of
the rates have been reduced in light of slightly lower fuel prices at
the pumps. The figures are arranged as engine size first, followed by
three rates (pence per mile), for Petrol, Diesel and LPG.
1400cc
or less: 10p, 10p, 7p
1401cc
to 2000cc: 12p, 10p, 8p
Over 2000cc:
18p, 13p, 12p
Petrol
hybrid cars are treated as petrol cars for this purpose.
The fuel
rates are usually reviewed twice a year effective 1 January and 1 July
although may change more often where there is significant fluctuation
in fuel prices
Car
benefit changes
01 June 2009
A
number of changes to the tax calculations for company cars have been
announced over the last few months and during the Budget. For the current
2009/10 tax year please note the following changes:
Disabled drivers who are required to drive an automatic car as their
company car will be allowed to use the list price of an equivalent manual
car when calculating the company car tax benefit
The requirement for a new P46 (car) form is withdrawn where an employee’s
car is returned and replaced with another car.
From 2010/11
the lower threshold for CO2 emissions figure will be reduced to 130g/km
(from 135g/km).
From 2011/12
the lower threshold for CO2 emissions figure will be reduced to 125g/km.
In addition, the current £80,000 list price cap used to calculate
the company car tax will be abolished and current discounts given to
cars using alternative fuels (such as bio-fuels and bioethanol) will
be removed.
Car
scrappage scheme starts 18 May 2009
17 May 2009
In
exchange for scrapping your old vehicle and buying a new one the Government
and most car manufacturers will contribute a total of £2,000 towards
the purchase of a new vehicle - the scheme will run from 18 May 2009
The scheme
will be available to the first 300,000 eligible claimants or until 28
February 2010, whichever is sooner.
To qualify
the vehicle you are trading in must:
1.)Be
a car or small van weighing up to 3,500 kilograms (kg)
2.)Have
been first registered in the UK on or before 31 August 1999
3.)Either have a current tax disc, or have a current tax disc and a
current Hackney Carriage Licence, or an MOT certificate which expired
no earlier than 14 days before the date of the contract between the
Purchaser and the 4.)Have been registered to you continuously for 12
calendar months before the order date of the new vehicle
5.)Have a UK address on the registration certificate (V5C) in the same
name as the new vehicle
6.)Have a current MOT test certificate before date of order for the
new vehicle
The new
vehicle you want to buy must be:
. A car
or small van weighing up to 3,500 kg
. First registered in the UK on or after 18 May 2009
. Declared new at first registration in the UK with no former keepers
The allowance
is funded by a £1,000 subsidy from the Department for Business,
Enterprise and Regulatory Reform (BERR) and a further £1,000 discount
paid for by the manufacturer.
In most
cases, VAT cannot be reclaimed on a car purchase even by VAT registered
businesses so the discount will only have the effect of reducing the
car's purchase price. However, certain VAT registered customers may
have to reduce their input tax in respect of the manufacturers' discount.
This will only be the case where VAT can be reclaimed on the purchase
of a car such as for the purchase of a taxi or a driving instructor's
car.
If you
are buying a business vehicle under this scheme please note the following
points regarding a future claim for capital allowances.
. The
£2000 discount reduces the capital cost of the vehicle.
. The vehicle you part exchange, or scrap, is considered to be written
off for tax purposes and the £2000 discount will not be treated
as taxable proceeds of sale.
Updates
from HMRC
01 Jun 2009
Tax Amnesty
HMRC
have announced a second offshore tax amnesty for holders of overseas
bank accounts. It will be referred to as the New Disclosure Opportunity
and will close March 2010.
Text messages from HMRC
HMRC
are currently exploring new ways of making contact with taxpayers. This
includes HMRC leaving an automated voicemail or sending a text message.
Both of these methods are currently only being used to ask taxpayers
to call HMRC rather than to provide any other specific advice or information.
If you
receive an automated voicemail message or a text message claiming to
be from HMRC asking you to contact them use the number for your local
office or the telephone numbers on the official HMRC web site at www.hmrc.gov.uk
HMRC Penalty Regime
22 Apr 2009
To all
our clients,with effect from the 6 April 2009 HMRC have introduced a
new penalty regime, whereby the penalty charged for under declared income
is determined by whether "reasonable care" has been taken
to keep sufficient records, from which to provide a complete and accurate
tax return.
We wish
to advise you that if your records are provided to us at such a late
stage that we are unable to ensure your accounts and tax return are
correct, a penalty may indeed be charged by HMRC if your return is selected
for enquiry.
May we
therefore ask for your assistance in this matter by provided your books
and records to us as quickly as possible after your year end.
Please contact us for further information.
Bank
of England Reduces Bank Rate by 0.5 Percentage Points to 1.0%
05 Feb 2009
The
Bank of England’s Monetary Policy Committee today voted to reduce
the official Bank Rate paid on commercial bank reserves by 0.5 percentage
points to 1.0%.
Planning
for the tax year end 5 April 2009
03 Feb 2009
If
you are self employed, either a sole trader or in partnership, you are
approaching a key date - the end of yet another tax year.
Due
to the current economic downturn you may recently have experienced a
drop in your profitability, indeed you may be trading at a loss.
If
this is the case please read the check list that follows:
If you are trading at a loss you may be eligible to carry up to £50,000
of the loss back for an extended period under new rules applying to
the current year only. To maximise the losses claimed it may be beneficial
to change your accounting date to 31 March 2009, if it is not already
this date.
Timing of capital purchases or disposals, either before or after the
end of the tax year, can be organised to maximise claims under the new
Annual Investment Allowance of £50,000
If
your profits have decreased this year, to 31 March 2009, compared to
the previous year (31 March 2008), this may reduce the tax payments
on account you offer in January and July 2009.
If you are forced to layoff staff and have some flexibility when you
make redundancy payments, is this best charged in this current year,
or the decision deferred to the next trading year?
What is your bad debt situation. Have you made adequate provision in
your accounts. Has any VAT on bad debts over 6 months old been claimed
back? Please note that if you use Cash Accounting for VAT you only pay
VAT added to your invoices when you are paid - so you don't need to
worry about claiming for bad debts.
If
you have made a loss in this current year does this affect the tax relief
you may have received on pension contributions? Will the tax have to
be repaid or contributions recovered?
This
is a year when careful consideration of your current trading position
is paramount. There is no point in ducking this issue. If you do, you
may end up paying more tax than is necessary. Paying less tax, or winning
repayments of tax will only be one aspect of your fight to sustain a
healthy cash flow - nevertheless it is not one you should ignore.
For more
advice please call on 0161 655 200o
Update
from HMRC on advisory fuel rates
03 Feb 2009
From 1
January 2009 HMRC have issued revised fuel rates for car users. These
rates apply when:
employees
are reimbursed for business travel in their company cars; or
employers
require that employees repay the fuel element of private motoring.
The rates
can also be applied to calculate the deemed VAT input tax (included
in the fuel element), in mileage rates paid to employees for the business
use of their own cars.
The new
rates per mile are:
1400cc
or less: Petrol 10p, Diesel 11p, LPG 7p.
1401cc
to 2000cc: Petrol 12p, Diesel 11p, LPG 9p.
Over
2000cc: Petrol 17p, Diesel 14p, LPG 12p.
Buy
or lease to equip your business?
26 Jan
2009
Should
you buy or lease the major items of equipment and vehicles your require
for your business? There are pros & cons to both. This year’s
reform of capital allowances, which give tax relief for equipment purchases,
may alter your decision. For full
article, see our advice page.
UK economy in recession
23 Jan 2009
Official
figures have confirmed that Britain is in the grip of recession, with
the worst economic output figures since 1980.
Gross
Domestic Product shrank by 1.5% in the last quarter of 2008 on top of
a 0.6% fall the previous quarter, according to figures from the Office
of National Statistics. For
full article, click here
Taxman
stops interest on tax refunds
23 Jan 2009
Rate cut
forces HMRC to stop paying interest on money owed to taxpayers who have
overpaid. From January 27, HMRC will no longer pay interest to taxpayers
who overpay income tax, capital gains, tax, stamp duty or national insurance
while they wait for the money to be refunded.
Taxpayers
used to receive 0.75% on monies held, but the rate has been reduced
following the recent Bank of England rate cut.
The new 0% rate is already in force for companies overpaying corporation
tax. HMRC has confirmed it will never charge negative interest.
"Unfair
Dismissal - Don't Get it Wrong"
06 Jan 2009
Advice for employers - read our recently published article
.
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