Do you want a proactive accountant?

One that not only looks after your accounting needs but who also helps you to achieve your business goals - one who listens and gives you the support you need?

Yes, that is exactly what we offer all our clients. Whether you are a personal tax client, starting up or running an existing business we emphasise the importance of working together. We take the time to listen to you, to understand your business, and your business needs.

Explore our website and see how we can work for you then click on the link to book your free no obligation meeting.

 
10 days to go

Deadline for filing 2012 Self Assessment personal, partnership and trust Tax Returns is the 31st January 2013.

Be aware of the following:

• £100 first penalty for late filing even if no tax is due or tax due is paid on time
• Balancing self assessment payment due for 2011/12
• Capital gains tax payment due for 2011/12
• First self assessment payment on account due for 2012/13
• Interest accrues on all late payments
• Half yearly Class 2 NIC payment due
• Further penalty of 5% of tax due or £300, whichever is greater for personal tax returns still not filed for 2010/11
• 5% penalty for late payment of tax unpaid for 2010/11 self assessment

It is not too late if you haven't looked at your tax return yet, or are having problems filling out your self assessment form - give us a ring and we can help.

As long as you provide us with all the relevant information in a timely manner we will be able to get your tax return in on time avoiding any late submission penalties.

Remember; a penalty applies for late filing even if there is no tax due!

Personal Tax Return Prize Draw Winner

THE WINNER OF THE PERSONAL TAX RETURN DRAW IS...

...IAN THOMPSON.

Congratulations to Ian who got his tax return information into us within the competition deadline, Ian has been a client with us for 8 years and is delighted to have won a case of Champagne!

A big ‘THANK YOU’ to all our clients who entered the draw and got their tax return information in early - for a chance to win next year’s prize keep a look out on our website for details.

Workplace Pension Changes – October 2012

People are living longer and the aging population is now in retirement for twenty +years. Because of this the government has to find ways of getting people to plan how they are going to fund their retirement. The basic state pension in 2012/13 is £107.45 per week for a single person, therefore, if you want more money when you retire you need to start thinking about other pension schemes.

The workplace pensions have been introduced by the government to make it easier for people to start saving for their retirement. Employers are to enrol their workers automatically into a workplace pension. Large employers are rolling out the workplace pension scheme between October 2012 and early 2013 with smaller company's following sometime after.

This means that if the employee meets the criteria they will automatically be entered into a pension scheme in which the employee, the employer, and the government pay into.

In order to qualify for the scheme the employee needs to meet the following criteria:

     1.They are aged 22 or over
     2.They are not already in a pension scheme at work
     3.They are under state pension age
     4.They earn more than £8,105 a year
     5.They work in the UK

The workplace pension is hassle free for the employee and they benefit from a contribution from their employer and tax relief from the government.

As an employer you will need to inform all employees in writing whether or not they are eligible for a workplace pension. All eligible employees must then be written to with the following information:

     1.The date of enrolment
     2.The pension scheme they will be entered into
     3.How much will go into their pension scheme
     4.How they can opt out of the scheme if they wish

Employers are not allowed to encourage/force workers to opt out of their workplace pension. Nor are they allowed to imply during the interview process that workers will only be employed if they opt out. No pressure should be put on workers to opt out, if you as an employee have any concerns about how the automatic enrolment into the workplace pension scheme is being handled in your company then you should report it to The Pensions Regulator www.tpr.gov.uk

For more information on workplace pensions for either employers or employees go to www.direct.gov.uk/workplacepension

 

 

Business Types Explained

Wanting to set up your own business but not sure what type of company to set up? Here is a quick guide to the different types of business structures for you to consider.

Private Limited Company – A private limited company exists in its own right, this means that the company finances and personal finances of the owners are separate giving the owners greater security. The company must have at least one shareholder and one director. The shareholders do not have to be directors. The directors are treated as employees but do not have to be paid a salary from the company. If you are the only shareholder then you are likely to be the director of the company.

Sole Trader – Being a sole trader is the simplest way to start up your own business as there are no registration fees and you get to keep all the profits. However there is a downside to being a sole trader and that is that you are personally liable for any debts that the business occurs.  If your business needs a lot of investment then this is not the best option for you as you will be liable - putting your home and other assets at risk.

Partnership – There are three types of partnership, 'Ordinary' Partnership, Limited Partnership, and Limited Liability Partnership (LLPs). A partnership is made up of two or more people and all partners share the risk, costs and responsibilities of the business. A partner can be an individual or another business.  Each individual partner is equally responsible for the business and any debts owed.

'Ordinary' Partnerships – An 'ordinary' partnership can only exist with all the partners if one dies, resigns or goes bankrupt then the partnership must be dissolved however the business can still continue to run. The partners in an 'ordinary' partnership are jointly liable for any debts the business may occur making them all equally responsible to clear the debt. Creditors are able to claim partner's personal assets to pay off debt even for debts incurred by other partners. If a partner leaves then the remaining partners could be liable for any debt the partnership has, therefore, partners do not receive any protection if the business fails. 'Ordinary' partnerships have to register with HMRC for tax purposes and each individual is responsible for their own tax return.

Limited Partnership – A limited partnership is made up of limited partners and 'ordinary' partners.  The limited partners need to be registered with Companies House although they don't necessarily have to make an annual return or file accounts. Once set up with Companies House they then inform HMRC who set up the partnership tax records so the partnership does not have to contact them.  'Ordinary' partners are equally responsible for any debt and are therefore equally responsible for paying off the whole debt, a limited partner however only has limited liability for the amount invested into the business.

Limited Liability Partnership – An LLP is made up of at least two designated members who the law places extra responsibility on.  If the number of designated members falls to one then every member is deemed by the law to be a designated member and therefore responsible.  The LLP must be registered with Companies House sending them an annual return and accounts.  As with the limited partnership when the LLP registers with Companies House they then go on to set the LLP up with HMRC.  The partners in an LLP have limited liability for the amount they invested into the business meaning that if the business runs into trouble the members have some protection.

This information was sourced from the Business Link website for more information go to www.businesslink.gov.uk

 

Small business rate relief

The closing date for small business rate relief for 2011/2012 in England is 30 September 2012. If you think you are eligible but are not receiving the relief then contact your local billing authority. The small business rate relief is managed by your local authority and systems vary between England and Wales.  In England you are entitled to relief if your rateable value is below £12,000.

This rate of £12,000 is a temporary rate until 31 March 2013. According to the Business Link website during the period of 1 October 2010 to 31 March 2013 eligible ratepayers will receive small business rate relief at 100 per cent on properties up to £6,000 (rather than 50 per cent), and a tapering relief from 100 per cent to 0 per cent for properties up to £12,000 in rateable value.  If you have more than one business property, the discount is only available if the rateable value of each of the other properties is below £2,600. If this is the case, the rateable values of all the properties will be combined and the relief is applied to the main property based on the total rateable value. However, if you occupy a property with a rateable value below £18,000 (£25,500 in London) and you are not receiving a different mandatory relief, you will be eligible to have your bill calculated using the small business multiplier, regardless of the number of properties you occupy.

For more information on business rate relief visit www.businesslink.gov.uk

 

HMRC Taskforce

HMRC have set up specialist taskforces to carry out tax investigations on specific high risk trade sectors and locations in the UK in order to crack down on tax avoidance and evasion. HMRC launched 12 taskforces in 2011/12 with thirty to follow in 2012/13. The teams are visiting traders to examine their records and carry out other investigations. They have been set up to ensure businesses are paying the correct taxes looking closely at VAT, PAYE and Corporation tax.

Areas and trades targeted
London: Markets, property rentals, property transactions, restaurants, fraudulent repayments
South West/South Wales: Restaurants, motor trade, fast food outlets
South East: Overdue tax returns
Midlands: Taxi firms, restaurants
East Anglia: Property rentals
North East: Property rentals, motor trade
North West: Restaurants, construction, landlords
Yorkshire: Taxi firms, motor trade
Nottinghamshire: Motor trade
Northern Ireland: Hair and beauty
Scotland: Pubs & nightclubs, fast food outlets, restaurants, scrap metal dealers, landlords
North Wales: Restaurants, construction, landlords

If you pay all your taxes then you have nothing to worry about just ensure that all your bookkeeping and records are up to date. Any queries give us a call on 01275 851353.

Lightning strikes – An Act of God or will the insurers pay out?

As I sat in a friend’s garden in Essex last Saturday I was blissfully unaware of the damage being done to my house back in North Somerset.  If you were looking out at the storm over Nailsea and Backwell you might have seen an orange flash of light as lightning struck the side of my house.   That night 80 emergency calls were logged in the Nailsea area, one of them by my daughters who were panic-stricken as lightning flashed and the Olympics literally exploded on the TV screen.   The fire brigade, I am told, was brilliant and secured the house for my return.

The following day I found pieces of chimney scattered around the garden, five holes in the roof, windows and electrics blown, appliances destroyed, and craters blasted in the decking not to mention any, as yet to be determined, unseen structural damage. The strike took out power to our neighbouring houses and the traffic lights at the end of the road.  Good job I’ve got insurance.  

I understand that some insurers claim lightning strikes to be an act of God and won’t pay out - luckily mine cover all freak weather conditions, including earthquakes.  

For years I have used Medical Money Management (MMM) to manage my insurance. It may seem lazy getting someone else to sort it all out and the constant barrage of insurance advertisements suggests that you’re better off online. However, my insurance brokers know what they are doing and in the long run have saved me a small fortune.

Check your insurance today as you never know when lightning may strike. Are you aware of whether your own household insurance policy covers lightning strikes and other unimaginable events? It’s worth taking the time to find out. And if you want expert advice check out MMM’s website.  

Finally, I’d like to thank Nailsea Fire Brigade, and all the men and women that helped to secure my home. Also, a big ‘Thank You’ to Miles Brown at MMM for managing the insurance, helping to deal with my claim, and relieving much of the stress. 

 

Sports drinks to lose zero VAT rating status.

Case law established that for a drink to be classified as a beverage it must be designed to rehydrate, slake thirst and give pleasure.

Some sports drinks enjoyed zero rated status as being consumed for nutritional purposes and were therefore not beverages. Group 1 of Schedule 8 VATA 1994 is to be amended to ensure that in future all sports drinks are standard rated.

Meal replacement drinks for slimmers and invalids will remain zero rated. 

Personal Service Companies

There has been a lot of coverage in the media lately regarding Personal Service Companies and IR35, the Government is bringing forward measures to tighten up on tax avoidance through the use of such companies.

HMRC has set out a list of 12 'risk factors' that will be taken into account and have allocated points to each. Depending on the score such companies will fall into High, Medium or Low risk categories.  Response from the profession is not positive, it is felt that some of the tests are arbitrary and do not allow for borderline issues.

HMRC stress that such tests will be considered as risk assessments and not used to define whether IR35 will actually apply.

Take advantage of your child’s private residence allowance

Bristol and University towns across the country have been bustling with proud parents snapping photos of their sons and daughters in cap and gown graduating from University. I wonder how many of them took advantage of the main private residence exemption.

At age 18 you become entitled to your own private residence for capital gains tax purposes which gives parents and their adult children great opportunity for some interesting tax planning. The best time to take advantage of this is if and when your child goes to University.

By investing in a property for your child to live in during his/her University years you could save a lot of money on taxes giving you and your child a nice little nest egg, perhaps to fund future property investments. If you buy a property in your child's name making them the owner of the property then whilst they are living in the property they can claim it as their principal private residence making the property exempt from CGT. If the property is subsequently let the last three years of ownership are also exempt. Plus if the property is lived in by the owner but also rented out as private residential accommodation you are also eligible for private letting relief of up to £40,000. Therefore whilst your child is at University they can rent out rooms to other students and use the rental income to pay off any mortgage payments. Another advantage is that the rent-a-room scheme will also apply as your child and their tenant(s) will be living as a single household, sharing common areas (kitchen, bathroom and living room). This entitles your child to claim tax relief on the first £4,250 of the rental income each year.

Of course this applies to all unmarried 18 year olds whether they are at University or in employment but implications to be aware of may include;

• Income Tax charges if you and your spouse make use of the house
• Inheritance tax if you pass on within seven years of investing in the property
• If renting rooms your child must move bedrooms each year to ensure they have had full use of the house

Make sure you talk to your tax advisor/accountant before going ahead to ensure you are making the most of this opportunity.

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