May 2012 Tax Saving Tips Newsletter Published
We have now released this months Tax Savings and Tips Newsletter for May 2012. This months features include:
How Gift Aid works……after recent press coverage we have peened a brief explanation of how gift aid works and how the gift aid payments may benefit you and the recipient of the gift.
Pension Contributions… which is better for you?- employer or personal pension funding? Take a look at the newsletter to help make the right decision for you.
There are many other great tips and talking points on the newsletter this month click here to view.
You can subscribe to the monthly e-newsletter for free here
April 2012 Newsletter Published
We have now published April’s edition of our Tax tips and information newsletter. This month featured articles include the most tax efficient way for Directors to administer their payroll during 2012-2013. We also have features on the recent changes to the VAT charges applied to hot food consumed onsite at fast food retailers and cafes and recent changes to the VAT charges applied to energy drinks. VAT rules and regulations can be complex and sometimes confusing, if you have a VAT query why not give us a call - we may be able to help.
Recent changes to IR35 status for Limited companies is also highlighted and if you have a question or query with regards to the status of your Company or any other business or tax question you can send in a question to be answered by one of our team or even feature in a future edition of the newsletter.
Follow this link to read the April Newsletter
March 2012 Newsletter published
We have now published our March 2012 newsletter to keep you up to date with how to save money and tax. This months features include how to get the most from Tax Efficient investments, Capital expenditure gains and losses are explained and you can read about claims against your tax on working from home. Tou can read our newsletter by clicking here.
Also featured this month’s newsletter is a link to our updated “meet the team” page introducing Chloe and Marie.
If you have any questions about any of the items or any business or tax queries please do not hesitate to contact us
Now for the Electricians – new HMRC Tax initiative
John
After their success targeting plumbers, HMRC have decided that electricians and electrical contractors should be their new target. Known as the “Electricians Tax Safe Plan” (ETSP), HMRC will be writing to electricians asking them to regularise their tax affairs and declare any undisclosed income. In return HMRC will greatly reduce any penalties chargeable – but they will not be lenient if they subsequently find that an electrician has not taken the opportunity to make a full disclosure and has undeclared income.
In order to qualify, any electrician or electrical contractor wishing to take advantage of the reduced penalties must advise HMRC by 15 May 2012 of their intention to make a disclosure and then provide the information to HMRC by 14 August 2012.
Obviously we don’t recommend that anyone should not disclose all of their income, but are realistic enough to know that it does happen – either accidentally or deliberately. HMRC are getting better and better at identifying suspicious activities. They now have sophisticated software to analyse tax returns and will probably already have applied it to the submitted tax returns of electricians and electrical contractors so may know which ones they expect to take advantage of the ETSP. If you think you may be on that list, you should definitely consider taking advantage because, if you don’t and they select you for investigation later, it could become extremely expensive for you. They were very successful in collecting a lot of unpaid tax (and penalties) from plumbers in the similar scheme operated last year.
The first thing to do is speak to your adviser. If you don’t have one or would prefer to speak to someone who hasn’t been involved with your affairs, contact us. We are always prepared to listen and help where we can. If necessary we can call on our team of associated specialists to help and advise. Just don’t bury your head in the sand.
CBS February Newsletter Published
This months Newsletter features Clare and Anna in the “meet the team” section, and we have articles considering the processes you need to think about and follow when closing your business, including the submission of the C16 form.
Also included are tips on how to avoid costly PAYE fines by understanding deadlines and using the HMRC new faster payment facility.
HMRC are keen to track down instances of fraud and are offering business owners the opportunity to come forward and confess using their contractual disclosure facility (CDF). However there (as always) is small print and so if you think you may be affected or are thinking of making a disclosure; read the article and come and speak to us first, we may be able to help!
To access February Newsletter click here.
If you want to subscribe to the free monthly edition you can do so from here
Can I lay off employees if I have no work because of bad weather?
I have no work because of the bad weather so can I lay off my employees?
We’ve been asked this several times over the last few days, particularly from employers in the building trade and landscape gardeners.
The answer is that it depends on the employment contract you’ve given your employees. In general, you can lay off employees but they are still entitled to be paid, even if you don’t have any work for them.
However, if your contract contains a specific clause giving you the right to lay off without pay, you can do so. Check your contract.
Of course, if both parties (employer and employee) agree, the contract terms can be altered. You might have an understanding employee(s) who realise that a prolonged period of no work can put their long term income at risk and therefore be prepared to accept a period without pay.
If you want help and advice on drafting a contract with a general right of lay off, give us a call (01509 816150) or contact us by email. We have specialists able to help in preparing contracts.
Pension Changes Delayed
John
Good news for small businesses with employees is that the proposed introduction of a compulsory pension has been delayed for a year. We advised you of the proposals in a recent post. It is certain that the cost of employing anyone will increase as a result of the change – but in the last week it has been announced that the timetable will be changed to allow smaller businesses an extra year to prepare.
This is good news for businesses, already struggling because of the recession, but please note that the plans haven’t been abandoned – just delayed.
If you need help and advice on employing people, give us a call on 01509 816150 or contact us via our website. We provide a range of payroll linked services. We can run your payroll for you, including CIS. We can provide you with a full support service to produce contracts and employee handbooks and can offer ongoing support to answer any queries you may have. And, should the worst happen, we can help with employee disputes – right up to tribunals.
November 2011 Newsletter
Self employment status is a hot topic at HMRC and this months focus in our November 2011 newsletter, which has now been published. You can read about that and other tax saving tips and ideas by clicking on the link.
If you would like to sign up to our regular free monthly newsletter with new tax saving tips and ideas each month, then you can simply- subscribe here
HMRC investigators are on the look out for self employed contractors who they can assess as “employed” persons rather than subcontractors to enforce payments of PAYE that would have been incurred if they had been employed in the first instance. If you are unsure of your status as a bonefide subcontracor or you are a contractor who is unsure how assess your workfore, contact us and we will be happy to discuss your requirements further.
Want to complain to HMRC?
Taxpayers may find themselves in a position where they need to make a complaint to HMRC. Complaints can relate to many different issues such as unreasonable delays, mistakes and poor treatment by HMRC’s staff. There is a factsheet published by HMRC entitled ‘Complaints’ that has recently been updated and which provides further details.
Taxpayers that wish to make a complaint should in the first instance write or speak to the person or office they have been dealing with. If the issue is not resolved or the taxpayer would prefer not to discuss the matter with the person or office they have been dealing with a complaint can be made directly to a complaints handler by phone or by mail.
If the response is unsatisfactory a further request can be made for the complaint to be looked at again by a different complaints handler who will take a second look at the evidence and then provide a final response. Taxpayers that are still unhappy with the response can ask the Adjudicator to look into the matter. If they are unhappy with the Adjudicator’s decision it is possible to contact an MP to ask for the matter to be referred to the Parliamentary Ombudsman.
There is a separate procedure to be followed by taxpayers that disagree with a decision of HMRC. In such cases the review and appeals process should be followed.
If you would like assistance in making a complaint to HMRC or some advice on your current situation then we may be able to help. You can contact one of our team on 01509 816150 or email us.
VAT-separating your business.
Now that the standard rate of VAT has been raised to 20%, some business owners are increasingly tempted to split their businesses into different entities, so the part with non-business customers or both parts falls under the compulsory VAT registration threshold when split. This enables them not to register to have to charge VAT to those customers. The Taxman is watchful of this type of tax planning and where he believes they have been artificially separated to avoid VAT, he will direct that the businesses should be re-aggregated.
A frequent target of the Taxman on business-splitting grounds are VAT-registered farms, where a member of the family runs a bed & breakfast business which is not VAT registered, from the same location. He will argue that because some buildings have both a farm use and a B&B function, the two businesses are part of a whole and should come under one VAT registration.
Although the use of the same building can be a factor that indicates two businesses are connected, the Taxman is required to consider a range of factors to determine whether the businesses are genuine separate entities. He must judge whether each factor points towards one business, two separate businesses, or is neutral. If the majority of the factors are either neutral or point towards separate businesses, the Taxman should not direct that the businesses be combined for VAT purposes. If you are not happy with the Taxman’s decision you can appeal to the Tax Tribunal.
Where you operate two or more businesses within your family, the following questions can help you decide whether the Taxman will challenge your businesses as being artificially split:
1. Is the business designed to operate as an individual business, despite utilising central resources, for example a franchised business?
2. Is the business so intrinsically linked with other ‘connected’ businesses that it can only be considered to be one indivisible business, for example wet sales and catering in public houses and restaurants?
3. Is the business carried on in separate departments or divisions, but is in reality one legal entity, for example a quasi partnership?
4. How much independence does the business have from any other ‘connected’ businesses by way of legal and technical resources?
5. Does the business owner have autonomy in the way he/she operates the business, for example access to premises, opening times, recording sales, purchase of stock and materials, bank accounts and annual accounts?
6. What would happen if the business owner was unable to operate their business personally?
7. Has the business owner registered the business with HMRC for corporation tax or income tax separately from those businesses that are ‘connected’?
8. Is the business owner working together with their partner/spouse in his/her business as a quasi co-owner or just assisting them as a family member in their business?
There are some businesses which may look like a potential separation of entities which if the proper contactual procedures have been followed will be accepted by the HMRC as individual businesses. An example of this would be a “rent a chair” hairdressing business and self employed taxi drivers.
The Taxman has the power to direct that two or more businesses should be treated as one business for VAT purposes, even where those businesses are contained within separate legal entities, such as limited companies. Please discuss your business structure with us if you think it could be challenged by the Taxman.
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