December 2009 Newsletter published
Our December 2009 Newsletter has been published and is available to view on the website. This month there is information on the tax treatment of franchise fees and Christmas gifts plus info on the tax treatment of accountant’s fees.
Why not sign up for a copy to be delivered by email? We don’t inundate you with unwanted emails, just a monthly newsletter and an odd email if we think there is something important to tell you.
VAT Flat Rate changes January 2010
Many people seem to be assuming that when the VAT rate reverts to 17.5% on 1st January 2010, the VAT Flat Rates will also revert back to their pre December 2008 rates. HMRC have said this is not the case and a number of changes to the rates. An announcement will be made during December, probably at the time of the pre budget review.
The Flat Rate Scheme is supposed to be revenue neutral. Essentially winners and losers should cancel each other out. It was felt that for some trades the rates were a little generous so the opportunity will be taken to bring those in line.
For cash businesses, such as shops, the Flat Rate Scheme will remain pretty straightforward but for businesses which issue invoices and operate the Flat Rate scheme life could be a little more complicated, particularly if they also use cash accounting for VAT.
We aren’t great fans of the Flat Rate Scheme. It was helpful when most businesses used a book to record their transactions but bookkeeping software makes it so much easier to calculate VAT and there isn’t often any substantial advantage in using the Flat Rate Scheme.
Microsoft Office Accounting – goodbye
Microsoft Office Accounting, launched a couple of years ago with great promises, has ceased to be distributed by Microsoft. Whilst never a leader, MOA did have a fairly large user base. Mamut are taking over support in the UK but this may only be for a short period while they try to persuade users to switch to their bookkeeping software.
Users have to make a choice of continuing with Office Accounting and hoping that Mamut support will be sufficient for their needs or switching to some other software. There’s a lot out there, ranging from “cloud” applications such as KashFlow, Liquid Accounts, Liberty Accounts, FreeAgent etc to more traditional software such as Quickbooks and Sage.
Maybe the demise of MOA is the time to properly and fully review your bookkeeping needs and requirements. We have experience of many of the offerings either directly or via clients which use them and can help you arrive at an informed choice. Why not contact us?
HMRC extended powers to inspect
Recent massive extensions to HMRC’s powers means that businesses need to be much more aware of dangers they run by not keeping accurate and up to date records.
Emphasis is very much on business records. HMRC now have the power to enter premises and inspect records if “the inspection is reasonably required for the purpose of checking that person’s tax position.” That pretty well means that they can turn up if they want to and insist on seeing your records which includes invoices, bills, bank statements etc.
HMRC have said that all such compliance checks will be undertaken for a reason – so, if they appear on your doorstep, they think they have a reason to be there. They have a right to inspect records, which you must show them, but you do not have to answer any questions. If they do turn up, let them in, be polite – and ring your accountant straightaway.
Often accountants do not even know what transactions are taking place until well after the event. In view of the new powers, it is prudent to keep your accountant informed of anything you are considering doing which is even slightly out of the ordinary. We also suggest that you undertake a review of current practices to make them fully compliant.
National Minimum Wage – October 2009 increase
We’d like to remind employers that the National Minimum Wage will increase from 1st October 2009. The new rates will be:
- For workers aged 22 and over the new minimum rate will be £5.80 per hour
- For workers aged 18 to 21 the new minimum rate will be £4.83 per hour
- For workers aged 16 and 17 the new minimum rate will be £3.57 per hour
The minimum wage has to be calculated on all hours worked by the employee so you must pay for time spent setting up before starting or clearing up when finished. There are severe penalties for employers found to be in breach of the National Minimum Wage regulations – so don’t take the risk.
Paying workers a fair rate for a job results in better employees with more commitment who stay longer. Saving a few pence per hour can often cost much more in the long run.
For more information or to discuss your payroll requirements, contact us.
September 2009 Tax Tips newsletter published
Our September 2009 Tax Tips newsletter has been published and is available to view.
It contains articles on the recently announced amnesty for taxpayers with overseas bank accounts, paying dividends, correcting VAT errors and giving shares to employees.
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ISC – Scam
We have discovered what looks like a scam and want to warn people about it.
Someone is using the name and company registration number of one of our clients, ISC Ltd, to carry out a scam. People are being contacted by email and through recruitment adverts to act as an “independent customer service evaluation/mystery shopper” for ISC.
This is not genuine and will, at some stage, involve either sending money or divulging bank account details. If you have been contacted by, or been tempted to respond to an advert supposedly placed by, ISC Ltd – do not respond to it. It is a scam. If you are already in the process of carrying out an assignment, stop and do not spend any money or give your bank details. You may wish to report it to the police.
The name David Peters has been used and we know that there has been some activity in west London and that adverts have been placed in the West Midlands but suspect that it could be much wider than this.
ISC Ltd are a genuine company but have nothing to do with the scam. Their directors are horrified at the thought of their name being used in this way.
Loads of people told us we should have a page on Facebook – so we’ve set one up.
Not sure how useful it is going to be, but we’ll see. We’ll put on some pictures of staff and outside activities.
Many thanks to Nathan, here on work experience, for doing this for us. Not sure that he expected to work in an accountant’s office for a week and end up playing around with Facebook.
