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We'd cut Business Link website costs from £35m to zero, entrepreneurs tell government

Interesting article in Business Zone about the cost of Business Link.

 

The founders of an online start-up have said if they were put in charge of the Business Link website they would remove all costs by turning it into a social community. 

Following figures released last year revealing that BusinessLink.gov.uk, the website for the government's flagship business support service, costs £35m a year to run, the founders of group buying company Huddlebuy said their idea could mean that the site costs the government nothing to maintain.

Taking part in the Innovation Launch Pad, an initiative allowing SMEs to suggest products and services to deliver better value for money for government, co-founder Saurav Chopra said: "We envision Business Link to be transformed into an online small business community run by the community and for the community, where the community benefits from its collective wisdom and buying power."

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This week's round up of accountancy and business news

Tax tolerances back to original levels

HMRC’s backlog is largely clear.  They are therefore reverting from a temporary tolerance of £300 for the 3 years starting 2007/8 to the more normal tolerance of £50 for the tax year 2010/11.  This means that where tax has been under paid by more than £49.99 a calculation will be sent out.

http://www.tax.org.uk/media_centre/LatestNews-migrated/PAYEtolerances2010-11EoYreconciliations

 

HMRC applies new default tax code

HMRC have brought in a new default tax code, 0T, for new employees without P45 or P46s, ex employees who have already had a P45 and pension income for those still in receipt of employment income.

http://www.hmrc.gov.uk/budget-updates/march2011/paye-code.pdf

 

Banks lose PPI case – could this affect you

The decision in the High Court on mis-selling of payment protection insurance could lead to £3billion of compensation. 

http://www.moneysavingexpert.com/news/reclaim/2011/04/banks-lose-ppi-case-what-it-means-for-you

 

Begbies Traynor red flag firms up 61%

The Begbies Traynor red flag report shows an increase of 61% in professional service firms at risk of default in the past 12 months.  If you have potential difficulties or are experiencing slow payers the sooner you consult your accountant the better.

http://www.contractoraccountants.com/2011/04/21/certain-sectors-see-a-rise-in-financially-distressed-firms/

 

80% of SMEs worry about employee expenses

A new report shows that on average SMEs spend 13 days a year dealing with expenses although with 20% of employees not bothering to claim up to £270 pa and 31% of employers not even checking expenses the picture is confusing.

http://www.contractoraccountants.com/2011/04/26/do-employees-really-show-dishonesty-with-their-expenses/

 

Taxman denies profiting from tax refund delays

An accusation by the Telegraph that HMRC are holding back tax refunds with some being delayed by up to 10 weeks has been denied by HMRC,

http://www.accountancyage.com/aa/news/2045783/taxman-denies-profiting-tax-refund-delays

HMRC are not issuing a paper Budget Pack

Instead HMRC have published important information on their website which includes:

• Information from the Budget on 23 March 2011
• P7X (2011) - Tax codes to use following the Budget
• the latest edition of the Employer Bulletin (issue 38) April 2011
• the Basic PAYE Tools (formerly the Employer CD-ROM), and
• how to start your payroll for 2011 -12 by using our helpsheet P9X (2011) Tax codes to use from 6 April 2011.

To find out more go to http://www.businesslink.gov.uk/employerpackandbulletins

This week's round up of accountancy and business news

HMRC publishes VAT changes document following Budget

HMRC have published a document summarising changes to VAT following the recent Budget.  If in doubt then contact your accountant for clarification on how these changes may affect you. 

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&propertyType=document&id=HMCE_PROD1_031225

 

Treasury Select Committee to reopen Cheques enquiry

Amid concern from small businesses and the public on the phasing out of cheques by 2018, the Treasury Select Committee has reopened its enquiry on the feasibility of the plan.

http://www.moneysavingexpert.com/news/banking/2011/04/treasury-committee-to-reopen-cheques-enquiry

 

Credit control still challenging

Figures from Experian show that businesses are still experiencing delays in receipt of payments, albeit down to an average of 25.2 days late against 25.7 days late the previous quarter.

http://www.smallbusiness.co.uk/channels/small-business-finance/news/1618488/no-rest-for-credit-control-.thtml

 

International accounting standards for SMEs consultation

The consultation period on a potential change in international accounting standards for SMEs finishes at the end of April

http://www.accountancyage.com/aa/news/2043640/sme-accounting-standards-poised-international-revamp

 

HMRC sending out threatening letters

HMRC have started to send out letters demanding payment of unpaid taxes under threat of bailiffs.  If you receive a letter contact your accountant immediately.

http://www.thisismoney.co.uk/tax/article.html?in_article_id=530715&in_page_id=11

 

Businesses now have right of appeal to banks if refused loans

The business finance taskforce has brought in procedures to allow an appeal if a request for finance has been turned down by one of the big 5 banks.

http://www.contractoraccountants.com/2011/04/14/business-finance-taskforce-appeal-system-set-to-benefit-smes/

 

Inflation falls for first time in 7 months

The fall in CPI inflation to 4.0% and RPI inflation to 5.3% was good news for the markets and may help to stave off interest rate rises.

http://www.citywire.co.uk/money/falling-inflation-will-it-last/a486122

Negotiating the complexities of payroll

Whilst the announcement by the Chancellor, George Osborne, that he intends to investigate the merging of regulations for tax and national insurance (NI) is welcome, any likely improvements in this area will take some time come into effect.  In the meantime with a new tax year upon us bringing with it a raft of regulation changes, accounting for payroll still takes up a sizeable amount of administration time.

 

One of the quickest ways to create employee dissatisfaction is to incorrectly calculate their payroll and tax rates.  Not only will this involve employees in potentially protracted correspondence with HMRC, a cumulative error could leave them with a sudden tax bill and no means of paying.  Although there are a number of payroll calculation programmes available, some still require manual amendments when regulations change and even those with automated updates still require a measure of payroll knowledge to make sure that errors don’t creep in.  Even the online payroll calculation software available from HMRC is not foolproof and in fact is generally not rated as among the better payroll programmes.

 

Keeping up with HR and payroll issues can be a full time job.  The recent spring pay alert issued to employers includes reminders that from now on employers with fewer than 50 employees have to send starter and leaver forms (P45s, P46s etc) online to HMRC.  Add in the fact that annual returns have to be filed online or face a fine and good payroll software becomes vital for the business.  Of course, payroll software costs money and the total cost of the software and employee time taken in calculating payroll can be a drain on a business.

  One answer is to hand over the administration of your payroll to your accountant or a specialist payroll bureau leaving you free to concentrate on building your business.  Payroll specialists not only have IT systems which are geared up to tax and NI calculation, they keep up to date with legislation changes as a matter of course.  Outsourcing payroll is not expensive, for example outsourcing to Solid Limited will cost just £20 per month for up to seven monthly paid employees.

 

The other benefit of outsourcing is that along with the basic payroll you also hand over all the statutory returns that go with it.  Late and incorrect returns will result in your being fined by HMRC and could also lead to your business facing a tax audit.  Outsourcing specialists are geared up to making sure you submit your returns on time.

 

In addition to current reporting requirements HMRC have recently announced that they are to go ahead with a real time information pilot starting in 2012 and with the aim of being rolled out to all employers by October 2013.  This will involve on line reporting at the same time as employees are paid, potentially leading to 52 returns each year for weekly paid employees.  Apart from basic reporting, those involved in payroll at present have to deal with end of financial reporting with HMRC deadlines for the end of the 2010/11 tax year as follows:

• 19 April – Final PAYE and NI payments to reach your HMRC tax office with electronic payments to be cleared into the HMRC account by 21 April.
• 19 May - Employer Annual Return – P35 & P14.  These give details of pay and deductions for the year and are generally submitted on line.  You do need to notify HMRC even if you have no P35 or P14 return to make.
• 31 May – Each employee must be given a P60 which is a summary of earnings and deductions.  For the first time this year as an alternative employers can give employees on line access to electronic P60s
• 6 July – Expenses and benefits forms P11D, P9 have to be filed with HMRC and given to employees.

This week's round up of accountancy and business news

Spring pay alert issued to employers

HMRC have issued its spring pay alert to employers reminding them of key regulation and procedural changes from April.

http://nds.coi.gov.uk/clientmicrosite/Content/Detail.aspx?ClientId=257&NewsAreaId=2&ReleaseID=419047&SubjectId=36

 

Will HMRC be lenient on iXBRL failings

HMRC has said that it will be lenient on software such as that provided by Sage which is still not ready for iXBRL but businesses are playing a wait and see game on what approact the revenue will actually take.

http://www.contractoraccountants.com/2011/04/06/will-hmrc-really-show-leniency-towards-ixbrl-failings/

 

HMRC delays Real Time Information (RTI) launch

Following consultations with industry bodies, HMRC has decided to delay the introduction of RTI with the new timetable bringing testing in 2012 and introduction in 2013.

http://www.accountingweb.co.uk/topic/tax/hmrc-takes-pressure-rti-launch/491484

 

HMRC starts Business records check

Although the main drive by HMRC to start checking business records is not due to start until the autumn, some businesses have already been selected to take part in a trial run and letters have started to arrive.  If a letter arrives the best advice is to contact your accountant.

http://www.tax.org.uk/media_centre/LatestNews-migrated/CIOTraiseconcernsoverprematureBRC

 

Middle class insolvencies on rise

Last year saw a huge rise in the number of middle class and skilled workers who turned to insolvency.  If you have financial problems, the sooner you contact your accountant or other specialist the better.

http://www.totallymoney.com/news/index.php/2011/04/middle-class-insolvencies-on-the-rise/

 

British Retail Consortium raises doubts on minimum wage hike

The BRC has warned that the rise in minimum wages due in October could hit retailers hard following on from VAT, NI and other rises this year.

http://www.smallbusiness.co.uk/channels/employing-staff/news/1617338/brc-minimum-wage-change-will-squeeze-retailers.thtml

 

Banks urged to offer more services via the Post office

With RBS/Natwest looking to provide access to basic account balances and cash via Post Office counters later next year, the Post Office is urging banks to consider providing more banking services via post office counters.

http://www.moneysavingexpert.com/news/banking/2011/04/banks-urged-to-provide-more-services-at-the-post-office

 

Base rates remain unchanged

Base rates remained unchanged at 0.5% this week.  However with European rates rising to 1.25%, the jury is out for next month.

This week's round up of accountancy and business news

This week's round up of accountancy and business news

HMRC misses effects of new pensions in PAYE codes

Nearly 150,000 pensioners face requests for unpaid tax thanks to HMRC ignoring new pensions when sending out tax codes for the 2010/11 tax year.

http://www.accountingweb.co.uk/topic/paye-codes-missed-out-pensions/490150

 

Planned downtime could affect submission of VAT returns

With planned downtime in the HMRC VAT system from 1-6 April and in particular with the VAT return portal being completely unavailable on 4-5April businesses should plan their submission carefully.

http://www.tax.org.uk/media_centre/LatestNews-migrated/VATonlineservicedowntime%e2%80%93update

 

ISA deadline is Midnight 5 April

The deadline for applying for an ISA for the tax year 2010/11 is midnight on 5 April.  While some institutions are staying open and will accept payments by debit card up to that time the earlier you can invest the better to avoid IT and phone glitches.

http://www.thisismoney.co.uk/savings-and-banking/ask-an-expert/article.html?in_article_id=500847&in_page_id=111

 

Paying HMRC changes

From 1 April there are a number of changes to the way in which HMRC payments are made including Corporation Tax, VAT, Class 2 NI contributions and PAYE.

http://www.hmrc.gov.uk/news/pay-hmrc-april11.htm

 

Cost of Banking needs clarification

The Treasury select committee recommends that the cost of operating a bank account is made clearer to encourage banking competition.  This should run alongside a simpler process for transferring bank accounts.

http://www.moneysavingexpert.com/news/banking/2011/04/banking-system-isnt-working-says-treasury-committee

 

Proposed payroll reforms summarised

With the Government determined to simplify the payroll system this article contains an overview of the key proposals currently under consideration.

http://www.accountingweb.co.uk/topic/tax/proposed-payroll-reforms-overview/488662

 

Budget decision to retain IR35

The decision in the budget to retain IR35, the measure of whether someone is a freelancer or worker, has disappointed those looking for clarification but may help to encourage the entrepreneurial Britain aspired to by the Government.

http://www.citywire.co.uk/money/tax-decision-to-keep-ir35-rules-disappoints-freelancers/a482348