Solid Accounting,Bookkeeping, Consultancy...

The importance of good bookkeeping in business

The announcement in January by HMRC that they intended to crack down on poor record keeping by SMEs was a wake up call to all businesses.  The original proposal, which went out to consultation, involved the proposed investigation of up to 50,000 SMEs each year. 

via news.solidlimited.co.uk

This week's round up of accountancy and business news

Joining NI and Income tax

As promised in the 2011 Budget the government has now started its consultation on the proposed merger of NI and tax.  It is inviting comments from business on the problems experienced in administering the PAYE system.

http://www.contractoraccountants.com/2011/07/14/income-tax-and-ni-merger-moves-a-step-closer/

 

Consultation on relief for income tax losses

The Chartered Institute of Tax has called for comments on the latest HMRC consultation on income tax losses incurred in business or employment – something which can affect all businesses from time to time.

http://www.tax.org.uk/media_centre/LatestNews-migrated/High-risk_code-relief_ITlosses

 

Guide to importing and exporting

HMRC have reissued their guide to importing and exporting covering basic procedures for those getting started in international trade.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&propertyType=document&id=HMCE_PROD_008051

 

PWC warns of company failure

Although corporate failures fell in the second quarter of 2011, PWC warns that with public spending cuts yet to kick in and consumer spending remaining weak we are not in the clear yet.

http://www.accountancyage.com/aa/news/2094258/company-collapses-rise

 

Cheques to stay

The announcement by the Payments Council that cheques are to stay for as long as customers need them is welcomed by business, and charities

http://www.fundraising.co.uk/news/2011/07/12/cheques-will-stay-says-payments-council

 

Beware of copycat websites

The Office of Fair Trading is warning us to be on the look out for copycat websites which charge for providing advice which is available for free on government sites.

http://www.moneysavingexpert.com/news/protect/2011/07/oft-targets-copycat-websites

 

Relying on credit

A survey by Moneysupermarket.com has revealed that a quarter of us rely on credit cards to tide us over from one pay day to the next with the majority doing so after 21 days.

http://www.totallymoney.com/news/index.php/2011/07/brits-fall-back-on-credit-cards-21-days-after-being-paid/

 

HMRC joins YouTube

HMRC have started posting videos on YouTube to help agents and tax payers in understanding matters of policy and procedures.

http://nds.coi.gov.uk/clientmicrosite/Content/Detail.aspx?ClientId=257&NewsAreaId=2&ReleaseID=420410&SubjectId=36

This week's round up of accountancy and business news

Nil-debt businesses receive threatening letters

HMRC have been sending out letters threatening bailiff visits to businesses which owe no tax.  The letters appear to be automatically generated and sent to firms which have failed to send a nin-payment submission to HMRC.

http://www.accountancyage.com/aa/news/2072385/businesses-receiving-threatening-hmrc-letters-nil-debts

 

ICAS calls for legislation to ring fence customer cash

The call to safeguard customer money in the event of a collapse has caused considerable discussion with some experts worried this could create cash flow problems and even precipitate collapse.

http://www.accountancyage.com/aa/analysis/2072390/ringfencing-customer-deposits-harm

 

HMRC looking at single compliance check process

From mid May HMRC are trialling a new compliance check process based on a 4 tier system.

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

 

Check if you should be registered for VAT

HMRC have announced a crackdown on businesses which trade above the VAT threshold but haven’t registered for VAT.  If you are unsure about VAT applying to your business contact your accountant for advice.

http://nds.coi.gov.uk/clientmicrosite/Content/Detail.aspx?ClientId=257&NewsAreaId=2&ReleaseID=419593&SubjectId=36

 

Warning to banks to treat small businesses equitably

As Bank of England figure show that loans of £20m attract average interest rates of 1.78% against a rate of 3.69% on a £1m loan, calls go out to banks to treat small business loans more fairly.

http://www.contractoraccountants.com/2011/05/19/banks-must-treat-small-businesses-fairly-says-oakeshott/

 

PAYE complexity puts businesses off hiring employees

Two thirds of SMEs are put off hiring employees by the perceived complexities of PAYE administration.  Passing the work to your accountant could be the answer.

http://www.smallbusiness.co.uk/homepage/1625043/business-startup-paye-puts-smes-off-hiring-employees.thtml

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

This week's round up of accountancy and business news – Budget Special

The Chancellor, George Osborne, outlined his budget as one which “encourages enterprise” and “supports exports, manufacturing and investment” with the aim of “reforming the nation’s economy, so that we have enduring growth and jobs in the future”. 

 

The changes introduced in the budget will affect individuals and businesses according to their particular circumstances and as with any budget it is worth reviewing these changes with your accountant.  Aside from changes in rates such as personal allowances the key measures within the budget are set out below.

 

Individuals

• Mileage allowances for employees  - to be increased from 40p per mile to 45p per mile
• Fuel – duty falling immediately by 1p with the rise due in April being postponed for 1 year
• Non-domiciled tax – Charge to be raised for those living in the country more than 12 years.  Tax removed when monies are remitted to the UK for investing within a UK company
• Inheritance tax – those leaving 10% or more to charity will have 10% taken off the inheritance tax rate

 

Businesses

• Corporation tax – The rate of corporation tax was due to fall by 1% in April.  A reduction of 2% will now apply with further annual reductions of 1% for the following 3 years
• Business Rates – the small business rate relief scheme is to be extended to October 2012
• Business start ups and those employing less than 10 people – will be exempt from new domestic regulations for 3 years
• Enterprise Investment Scheme – business tax relief to increase from 20% to 30% with entrepreneurs’ relief increasing to £10million.
• Small company research & development tax credit – rises to 200% in April and to 225% in 2012
• Short Life assets – Time limit on capital allowances being doubled to 8 years
• Enterprise Zones – Among 21 new zones across the country, one is to be created in London bringing business rate discounts, superfast broadband and simpler planning.
• VAT – threshold increased to £73,000

 

Tax Simplification

• Tax & NI – a review is to take place with a view to combining these regimes at some stage in the future
• IR35  - to be retained
• Tax reliefs – 43 tax reliefs to be abolished

 

This week's round up of accountancy and business news

Office of Tax Simplification (OTS) outlines proposals

The Office of Tax Simplification has outlined its initial proposals including a merging of tax and NI systems, a review of IR35 and simplified procedures for small business.

http://www.tax-news.com/news/UK_Tax_Panel_For_Radical_Small_Business_Reforms____48203.html 

 

Missing petrol receipts leads to un-reclaimed VAT

A survey by Global Expense revealed that with 41% of mileage claims missing a valid VAT receipt, businesses were unable to reclaim more than £124m in VAT last year.

http://www.accountancyage.com/aa/news/2033426/businesses-fail-recover-gbp100m-vat

 

New tax year brings 45 tax and benefit changes

Over 29 million workers will be affected by the changes in tax and benefit coming in on 6 April with an average loss to families of £200 per year.

http://www.bbc.co.uk/news/business-12714407 

 

Millions face poverty in retirement

According to a Chatham House think tank millions of Britons face a severe drop in standard of living when they retire.

http://www.totallymoney.com/news/index.php/2011/03/squeezed-middle-face-retiring-in-poverty/ 

Drivers of large company cars face tax increase

From April the maximum list price for company cars, currently £80,000 will be abolished.  This will lead to a tax increase for those driving company supercars.

http://www.contractoraccountants.com/2011/03/14/drivers-of-supercars-set-to-pay-more-income-tax/ 

 

Base rate held at 0.5%

The Bank of England’s Monetary Policy Committee voted to hold base rate at 0.5%.  However, the majority experts are still predicting a rise shortly with May being the favourite.

http://www.moneysavingexpert.com/news/banking/2011/03/interest-rates-march-2011

 

This week's round up of accountancy and business news

Corporation Tax alert

HMRC have issued an alert about changes to company tax returns filed from April this year.  All organisations that file corporation tax returns will have to file on line. Read more...

 

How many free hours do you give to the Chancellor?

Research by Regus reports that small business can spend up to three days a month on VAT and payroll returns as well as bookkeeping. Read more...

 

New lease accounting proposals anger major supermarkets

New lease accounting proposals drawn up to force listed companies to recognise leases as assets or liabilities in their published statements have been criticised by supermarkets.  If adopted they could affect SMEs who lease premises from listed companies. Read more...

 

Credit Card repayments – new rules on applying repayments

This month will see the final few credit card companies fall into line on how your repayments are applied to outstanding credit card balances ending the method which saw balances carrying the highest interest rates paid off last. Read more...

 

Are your savings covered?

According to research by the Financial Services Compensation Scheme (FSCS) only  47% of people are aware that a compensation scheme exists to help them if their bank goes bust. Read more...

 

NSI has no plans to bring back index linked bonds

National Savings & Investments (NSI) closed Index Linked bonds to new customers last year.  They have recently confirmed that they have no plans t reintroduce the bonds during this financial year. Read more...

This week's round up of accountancy and business news

A timely reminder on VAT payments

With many banks now offering same day faster payments, HMRC has issued a reminder that their banking system does not allow receipt of faster payments.  It is therefore important to allow sufficient time for payments to be processed. Read more...

Tax revenues hit 20 year low

The Organisation of Economic Cooperation and Development has raised concerns on whether tax rates will need to rise still further to cover the fall in revenues. Read more...

Government clamps down on Inheritance tax avoidance

From April 2011 families who try and place property in trust to avoid inheritance tax charges will have to declare the scheme and are likely to be told that inheritance tax will still be payable. Read more...

Concern over disguised remuneration crackdown

Concern has been raised over the implications of the disguised remuneration section of the proposed Finance Bill and whether it will catch approved schemes as well as avoidance ones. Read more...

Inflation continues to drift upward

Inflation as measured by the Consumer Prices Index drifted up to 3.3% in November, up 0.1% from October whilst RPI rose to 4.7%.  Food, clothing and furniture all rose. Read more...

Tax reliefs on pensions and venture capital trusts under threat

The Office of Tax Simplification has released an interim report listing the tax reliefs that they may recommend are scrapped as part of their mission to simplify tax.  These include Venture Capital trusts and pension contributions. Read more...

A timely reminder on VAT payments

With many banks now offering same day faster payments, HMRC has issued a reminder that their banking system does not allow receipt of faster payments.  It is therefore important to allow sufficient time for payments to be processed.

http://www.hmrc.gov.uk/payinghmrc/news-fps.htm

 

 

Tax revenues hit 20 year low

The Organisation of Economic Cooperation and Development has raised concerns on whether tax rates will need to rise still further to cover the fall in revenues.

http://www.telegraph.co.uk/finance/economics/8204522/Fears-of-tax-rises-as-government-revenues-near-20-year-low-says-OECD.html

 

 

Government clamps down on Inheritance tax avoidance

From April 2011 families who try and place property in trust to avoid inheritance tax charges will have to declare the scheme and are likely to be told that inheritance tax will still be payable.

http://www.contractoraccountants.com/2010/12/15/government-clamps-down-on-inheritance-tax-avoidance/

 

 

Concern over disguised remuneration crackdown

Concern has been raised over the implications of the disguised remuneration section of the proposed Finance Bill and whether it will catch approved schemes as well as avoidance ones.

http://www.accountingweb.co.uk/topic/tax/disguised-pay-crackdown-could-backfire/468549

 

 

Inflation continues to drift upward

Inflation as measured by the Consumer Prices Index drifted up to 3.3% in November, up 0.1% from October whilst RPI rose to 4.7%.  Food, clothing and furniture all rose.

http://www.statistics.gov.uk/cci/nugget.asp?id=19

 

 

Tax reliefs on pensions and venture capital trusts under threat

The Office of Tax Simplification has released an interim report listing the tax reliefs that they may recommend are scrapped as part of their mission to simplify tax.  These include Venture Capital trusts and pension contributions.

http://www.citywire.co.uk/money/tax-relief-on-pensions-and-venture-capital-trusts-under-threat/a457686?re=12187&ea=210234

A look back at 2010

There are very few years where we can say that they seem to exist as a coherent period of time, a single unit that is distinguishable from other time periods.  The year 2010 seems to be one of those years.  Whether it is because we are heading for the end of the year as we started with bad weather and snow disrupting large areas of the country, or that we are facing a VAT rise to 20% at the beginning of 2011 as we faced a rise to 17.5% at the beginning of 2010, this year has seemed to be one of completeness.

Apart from the VAT rises, what do we have to look back on this year?  The General Election in May reshaped the political map with a coalition Government for the first time since the Second World War.  Since then we have seen the start of a promised big shake up with a hard hitting budget and intentions to cut the number of quangos and slash public sector jobs.

The budget brought in a number of measures designed to help business and boost trade.  Top of the list was the decision to reduce corporation tax with the main tax being reduced from 28% by 1% per year for the next four years and small business corporation tax also being reduced by 1% to 20%.  Although an increase in capital gains tax to 28% for higher rate tax payers was announced, this was less than feared.

Small businesses did particularly well out of the budget with the cutting of business rates so that 345,000 businesses would pay no rates at all and incentives for businesses setting up outside London and the South. Businesses looking to invest and grow also benefited from the doubling of the annual investment allowance to £100,000.

Lending to business was given a boost in the Budget with Lloyds and the Royal Bank of Scotland agreeing to increase lending to small businesses.  However, businesses continued to report difficulties in obtaining loans and the latest figures show continuing reductions in net lending to business.

Business stability has been helped by the retention of interest rates at 0.5% throughout the year and expectations that the rate will remain unchanged well into 2011.  This base rate stability is despite the level of inflation which remains consistently over the 2% target and is expected to stay high until at least the end of 2011.

The new Government also brought in the Office of Tax Simplification with a mandate to review and simplify our current tax systems.  So far they have come up with over 1,000 different tax reliefs and allowances and are consulting on how many of these can be cut.  Part of their remit is to include a review of IR35, the regulations governing whether a worker can be treated as self-employed or an employee.

Elsewhere, the signing of the European Parliament Late Payment Directive forces public and private organisations to pay invoices within 30 days or face penalties and surcharges.  Although this is weaker than current UK regulations which oblige public bodies to pay within 10 days, the current regulations aren’t always observed.

In other moves to cut down on the burden of paperwork faced by businesses, HMRC & Companies’ House have brought in a combined filing platform for small companies.  The drive for online filing continues with online VAT filing to be compulsory from 2012.  HMRC are also in consultation about ways of simplifying payroll calculations.  Hopefully this will save the need for a repeat of the tax exercise seen this year when HMRC wrote to thousands of individuals requesting payment of back taxes.

October saw an announcement on the increase in the national minimum wage and the introduction of the new equality act affecting a range of employment issues.  The spending review in the same month announced cuts in welfare and government budgets and bringing forward the rise in the retirement age.

For business 2010 has been all about the recovery from recession.  Confidence was boosted in January with the news that Britain had come out of recession in the last quarter of 2009.  Since then, mixed news on housing, loans to business and uncertainty over the election has caused confidence to judder on a number of occasions.  With economists now agreeing that there is no prospect of a slide back into recession and the Office of Budget Responsibility forecasting greater growth rates than previously expected we can look forward to 2011 with greater hope.

This week's round up of accountancy and business news

Corporation tax reforms

Speaking in his Autumn statement the Chancellor outlined the Government’s commitment to Corporation tax reforms. Read more...

 

Early access to pension monies proposal

According to a leading pensions’ expert, the government is considering allowing early access to the lump sum amount that can be withdrawn from pensions on retirement.  However, it is likely there will be restrictions on how the funds are spent. Read more... 

 

HMRC rethink on copying forms to agents

In October HMRC announced that it was to stop sending copies of forms to agents.  Following representations it has modified its decision with some forms being copied, others modified and an IT solution being sought. Read more...

 

Getting tough on time to pay requests

HMRC appear to be extending their get tough stance on time to pay requests, asking to see details of credit card bills and other credit arrangements and checking that there is no leeway to borrow from these avenues before agreeing to allow time for payment of tax bills. Read more...

 

Software bug in HMRC online filing system

The HMRC online filing system should allow users to make as many amendments as they wish prior to the 31 January deadline.  However, those attempting to log in and make a second amendment are receiving an error message. Read more...

 

Nine out of ten 18-35 year olds will always be in debt

Findings from a recent survey say that 9 out of 10 people in the under 35 category have built up unsecured debt that they see no hope of repaying. Read more...