November 2010Incorrect forms P45November 29, 2010 When the Tax Office receives a form P45 that indicates an employee has died, it will pass the date of death details on to the Tax Credits department and the DWP for State Pension purposes. This creates huge problems for the individual where the employer has entered a date of death on the P45 form in error. Please take extra care when completing forms P45, and remember all employers will have to file all their forms P45 and P46 online from 6 April 2011. Filing P45s online http://www.hmrc.gov.uk/paye/employees/start-leave/notify-online.htm Expenses when travelling overseasNovember 25, 2010 When you or your employees travel abroad on business, processing the resulting expense claims can be a real pain. Too ease this problem you can use the HMRC approved scale rates to reimburse costs of accommodation, meals, and local travel, which have been set for most countries and regions. If you pay expenses at or below these scale rates, the amounts paid are free of tax and NICs, and don’t have to be included on the employees’ forms P11D. New benchmark scale rates for travelling outside the UK CIS penalties for late returnsNovember 24, 2010 All contractors in the Construction Industry Scheme (CIS) must send a form CIS300 to the Tax Office by 19th of each month, to report payments made to subcontractors. If you haven’t paid subcontractors in a particular month you must still submit a form CIS300 showing nil payments, or ring the CIS helpline on 0845 366 7899. If you fail to submit the CIS300 on time you will get fined £100 for each and every month (or part month) the form is late. We can help you appeal against these fines if you had a reasonable excuse for being late. Guidance for contractors on monthly return penalties Employer CD-romNovember 23, 2010 If you use the Employer CD-rom to run your payroll you need to install the November 2010 update through the HMRC website. To avoid all this hassle ask us to run your payroll for you. November update for Employer CD-rom
CKLG staff help raise over £3000 at Handelsbanken Charity BowlNovember 19, 2010
The two CKLG teams were made up of Anne, Faye and Katie and Helen, Chloe and Hannah, both each won a game! With all 28 lanes taken up by attendees it was a competitive night and the overall winner was Handelsbanken St Albans. The bowling was followed by a hot and cold buffet and a raffle draw with fantastic prizes donated by Cambridge businesses. With a total raised of £3.040 this was a very successful evening! help@cklg Winter IssueNovember 18, 2010 help@cklg November 2010 This month’s newsletter looks at a variety of topics of interest to business owners and private individuals – be assured, it’s not all bad news. If you would like further information or advice on any aspect of your financial life, call us on 01223 810100 or email help@cklg.co.uk CLOUD COMPUTING Cloud computing seems to be a business buzzword at the moment. But what does it mean for businesses? Simply put, it helps save time and money while providing firms with greater flexibility. Cloud computing results in cost savings because it uses shared IT resources located in data centres to provide services. This means that users benefit from economies of scale since the service provider purchases servers and storage in bulk. These cost savings are then passed on to the end users. The biggest saving for businesses comes from the fact that they no longer need to invest as much capital in hugely expensive servers and storage as this is all provided by the cloud computing service provider. Most cloud computing service providers operate on a per-user per-month payment model which means that a business only pays for the resources it actually needs. This compares favourably to investing in servers where you generally buy a higher specification system than you need so that you have extra capacity for extra users in the future (at extra cost). Until you have the extra staff, this spare capacity is simply wasted. Another reason to consider the cloud is to reduce or remove the need to become caught up in operating and maintaining technology. The service provider maintains their servers (and looks after software upgrades) at their own cost. Cloud computing also makes working remotely easier. In this day and age where many of us work from home from time to time, we can now do so efficiently and effectively. ANTI-VIRUS FOR FREE! As business people, we are all aware of the threats posed by computer viruses. In order to avoid losing valuable data, businesses spend thousands each year on the latest and greatest anti virus software (usually supplied by one or two security software firms). However, most of us are also aware that installing these security programmes tends to slow our computers down. There is a solution to this problem and it’s free! Microsoft Security Essentials is free to download. It tends not to slow down you computers as it is designed to run very efficiently. Microsoft Security Essentials includes antivirus and antispyware, rootkit protection, and real-time detection courtesy of Microsoft SpyNet, the cloud-based service that compares file behaviour across computers. According to various industry reviews, the software offers good virus detection and is light on system resources. The fact that it is available free of charge makes it irresistible to businesses and we recommend a look. REDUCING STRESS IN THE WORKPLACE As everyone in business knows, work is a source of stress. A certain amount of stress is a good thing. It encourages staff to get to work on time, to deliver projects within deadlines and act in a professional manner. However, beyond a certain level, stress can become counter productive – for example if a business is under staffed and over worked, the staff will be under huge pressure and will suffer the negative effects of too much stress. Fortunately there are many ways to mitigate stress levels in a business. Communicate with your staff CAPITAL ALLOWANCES ON PLANT AND MACHINERY Whilst the current annual investment allowance of £100,000 (applying from 1 April 2010) may not be reached in your business, when this reduces dramatically to £25,000 from 1 April 2012 the position could be a lot different. We will be pleased to advise on timing issues for future capital expenditure plans, and where the £25,000 limit for a 100% tax write-off is likely to be reached we will look at the separate 100% first year allowances regime covering unlimited expenditure on investment in energy-saving plant or machinery and investment in designated plant or machinery to reduce water use and improve water quality CGT ON SALE OF YOUR BUSINESS The dramatic increase in the level of entrepreneurs’ relief (now a £5 million lifetime limit) whereby tax is at 10%, plus the fact that if you do not qualify for the relief you will now pay CGT at 28%, means that is has never been so important to protect your entitlement to the relief on a business sale. Essentially you could sell your business and receive the proceeds in one of several ways:
There may also be a combination offered from the above, but whatever may be on the table it is vital that the sale is structured from your viewpoint to get the best tax treatment as that can vary significantly. Not that tax should be the prime motivation, as you should never let the tax tail wag the commercial dog. There are several ways of ensuring that the complete package on a sale of your business qualifies you for entrepreneurs’ relief and we are ready to advise by reference to your particular circumstances. YET ANOTHER FINANCE ACT! The third Finance Bill of 2010 was published on 30 September and is set to become the Finance (No. 3) Act 2010 – something, which has rarely if ever, happened before. But no need to fret as it only covers issues which for one reason or another did not get into either of the previous two Bills! Perhaps the only point worth bringing to your attention is that, as already known would happen, the legislation allows for a 100% tax write-off on purchasing a business van with zero-emissions and that has been backdated to 1 April 2010. HMRC TOOLKITS It is not just taxpayers that HMRC likes to refer to as “customers”. We as tax agents also come into that category and as a result we do occasionally receive what they perceive as help in meeting our obligations when acting for you. As an example HMRC publish an ever-growing set of toolkits on various tax topics which aim to highlight common errors found by HMRC in a variety of taxpayer circumstances. They are aimed at tax agents but anyone can download them from HMRC’s website. Most of the common errors pointed out in the toolkits are obvious and we do not expect them to cause any problems. Nevertheless we will try and use them to your advantage. Specifically, HMRC state that the toolkits should help us to demonstrate that on behalf of the client we have taken reasonable care in completing a tax return, which may be an extremely useful form of protection. Consequently we will be ready to show that we have used a toolkit where we consider that it will provide comfort to HMRC. The toolkits published or soon to be published cover the following topics:
THE GOVERNMENT’S ATTACK ON TAX EVASION Further measures to combat tax evasion announced by the Treasury are estimated to bring in around £7 billion per annum by 2014/15 in additional tax revenues. That seems over-optimistic even though they plan to spend £900 million on increasing criminal prosecutions fivefold plus a further crackdown on offshore evasion, with the creation of a new dedicated team of investigators. As a separate issue, HMRC are reported as having sent hundreds of letters to high net worth taxpayers who are clients of HSBC's Swiss bank. A former employee of the bank stole client information from the bank and passed it to the French tax authorities, who have passed it to HMRC who now say that the data shows that the taxpayers in question have undeclared sources of income and gains. The only advice we can really give as professional advisers is that any taxpayer with undisclosed liabilities should act promptly to come forward and we will make sure that the tax, interest and penalties are kept to the minimum. It is quite conceivable that the total tax, interest and penalties due as a result of this procedure could exceed the amount in the offshore account! Our role is to present the facts in the best light and negotiate an acceptable settlement. TAX SNIPPETS Penalties for VAT errors If you make a mistake in your VAT records, so your VAT return is wrong, you can correct the mistake on your next VAT return, where the total error is less than £10,000. However, HMRC expect you to explain your mistake in a separate letter. If you don’t do this and HMRC discover your error you are likely to get a penalty of 30% of the underpaid VAT. We can help you get your VAT returns right first time. Penalties for VAT errors http://www.hmrc.gov.uk/vat/managing/problems/penalties.htm#2 How to appeal against a decision on VAT http://www.hmrc.gov.uk/complaints-appeals/indirect-tax-appeal.htm Tax relief for pensions From 6 April 2011 the amount you and your employer can pay into your pension fund will be capped at £50,000 per year. However, if the total contributions to your pension scheme were been less than £50,000 in each of the last three years, you can carry forward the used cap to add to the £50,000 cap for the fourth year. The calculations are a little more complicated if your pension scheme did not start at the beginning of the tax year, ask us to explain. HMRC guidance on new pension scheme cap http://www.hmrc.gov.uk/pensionschemes/annual-allowance/index.htm Are you ready for iXBRL? From 1 April 2011 all tax returns for companies and the accompanying accounts must be submitted online to HMRC using the special iXBRL programming language. You may receive a penalty if you submit a paper corporate tax return, or paper or PDF copies of company accounts to HMRC after that date. HMRC have provided some free software that small companies with simple tax affairs can use to submit their tax return and accounts using the iXBRL standard, but it is quite difficult and time-consuming to use. We can submit your company’s tax return and accounts for you using commercial iXBRL software. iXBRL guide for UK businesses http://www.hmrc.gov.uk/ct/ct-online/file-return/xbrl-guide.pdf Swiss bank accounts You may have been alarmed by reports of HMRC writing to holders of Swiss bank accounts accusing them of fraud. The account details concerned were stolen from a private Swiss bank in 2006, and that data is now in the hands of HMRC. The Tax Inspector is sending out copies of Code of Practice 9 (COP 9), with letters opening investigations into these accounts. If you receive such a letter please ask us for advice on how to respond to HMRC. Code of Practice 9 http://www.hmrc.gov.uk/leaflets/cop9-2005.htm Will the flat rate scheme suit you in January 2011? If you use the flat rate scheme for small businesses you should check out the new flat rates that will apply when the standard rate of VAT increases to 20% on 4 January 2011. From that date you could be worse off than operating outside the flat rate scheme, it depends on the flat rate that applies to your business sector. If you want to stop using the flat rate scheme you need to inform the VAT office in writing. It’s easiest if you leave the scheme from the start of your next VAT quarter. Once you leave the flat rate scheme you can’t rejoin for at least 12 months. New flat rates from 4 January 2011 http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#5a
Reclaim VAT on entertainingNovember 18, 2010 Since 1988 UK businesses have been prevented from reclaiming VAT on the cost of entertaining overseas customers. That policy has now been reversed, so you can now submit refund claims for VAT paid on the cost of entertaining overseas customers (not suppliers). However, there is a catch; you need to know who the customers were and have all the paperwork. Also claims will only be accepted for VAT periods ending in the last four years. We can help you with these claims. Change to treatment of VAT on entertaining CKLG staff attend Companies House updateNovember 16, 2010 Margaret Docwra from CKLG attended the bi-annual Cambridge area Companies House Focus Group meeting at The Holiday Inn, Impington. Companies House was represented by Ian Smith and Anne Dart Customer Care Managers alongside the Customer Liaison Manager Marie Connors, all are based at Companies House in Cardiff. At this informal meeting Ian Smith and Marie Connors provided updates on the company register, current services and enhancements and future developments. Three of the main points raised were: 1 - As of January 2011, any accounts filed late for a second consecutive time will be subject to a double filing penalty. 2 - iXBRL - this began in October 2010 and is a convenient method for companies and their agents to produce and submit the different sets of company accounts they need to send to HMRC and Companies House from a single set of data. Audit exempt full and small abbreviated accounts can be filed via this method. 3 - Companies House will soon start sending email reminders to companies, for accounts and annual returns instead of paper reminder letters.
Register for VAT on timeNovember 15, 2010 It can be tricky to work out when your business should become registered for VAT. You need to keep a rolling tally of the turnover for the last 12 months and as soon as that total tops £70,000, apply to register for VAT. However, if there is a blip in turnover, that only temporary takes the total over the £70,000 threshold, you can apply for an exception to VAT registration. But you must inform the VAT registration office of your current turnover level and ask for the exception to VAT registration to be granted. We can help you deal with the VAT Office for registration and all other VAT matters. When to register for VAT http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm Will the flat rate scheme suit you in January 2011?November 12, 2010 If you use the flat rate scheme for small businesses you should check-out the new flat rates that will apply when the standard rate of VAT increases to 20% on 4 January 2011. From that date you could be worse off than operating outside the flat rate scheme, it depends on the flat rate that applies to your business sector. If you want to stop using the flat rate scheme you need to inform the VAT office in writing. It’s easiest if you leave the scheme from the start of your next VAT quarter. Once you leave the flat rate scheme you can’t rejoin for at least 12 months. New flat rates from 4 January 2011 Swiss bank accountsNovember 10, 2010 You may have been alarmed by reports of HMRC writing to holders of Swiss bank accounts accusing them of fraud. The account details concerned were stolen from a private Swiss bank in 2006, and that data is now in the hands of HMRC. The Tax Inspector is sending out copies of Code of Practice 9 (COP 9), with letters opening investigations into these accounts. If you receive such a letter please ask us for advice on how to respond to HMRC. Code of Practice 9 CKLG Directors attend 12th Annual 2020 ConferenceNovember 4, 2010
Are you ready for iXBRL?November 4, 2010 From 1 April 2011 all tax returns for companies and the accompanying accounts must be submitted online to HMRC using the special iXBRL programming language. You may receive a penalty if you submit a paper corporate tax return, or paper or PDF copies of company accounts to HMRC after that date. HMRC have provided some free software that small companies with simple tax affairs can use to submit their tax return and accounts using the iXBRL standard, but it is quite difficult and time-consuming to use. We can submit your company’s tax return and accounts for you using commercial iXBRL software. iXBRL guide for UK businesses http://www.hmrc.gov.uk/ct/ct-online/file-return/xbrl-guide.pdf
CKLG Accountants support trainees in professional exams.November 3, 2010
PRESS RELEASE - NOVEMBER 2010 CKLG Accountants are delighted to announce that two of their young trainee accountants Helen Carder and Chloe Saberton have successfully completed their accountancy exams. Helen Carder (left) joined as an AAT apprentice in 2004 and has now gained the ACCA (Association of Chartered Certified Accountants) qualification. Helen has her own portfolio of clients and manages the juniors studying for the AAT qualification. Chloe Saberton (right) joined CKLG straight from Hills Road Sixth Form College in 2007 and has successfully completed her AAT (Association of Accounting Technicians) qualification in June this year. Chloe works in the accounts department putting together unincorporated and small incorporated accounts as well as doing bookkeeping for clients, completing VAT returns and assisting on audits. Janet Cronk CEO of CKLG commented, “We are delighted that both Helen and Chloe have been successful in their exams. At CKLG we are always on the look out for dynamic young people who are keen to enter the profession. We look to support and encourage all our trainees and graduates of whatever age to achieve to the highest level. Tax relief for pensionsNovember 3, 2010 From 6 April 2011 the amount you and your employer can pay into your pension fund will be capped at £50,000 per year. However, if the total contributions to your pension scheme were been less than £50,000 in each of the last three years, you can carry forward the unused cap to add to the £50,000 cap for the fourth year. The calculations are a little more complicated if your pension scheme did not start at the beginning of the tax year, ask us to explain. HMRC guidance on new pension scheme cap http://www.hmrc.gov.uk/pensionschemes/annual-allowance/index.htm
Penalties for VAT errorsNovember 1, 2010 If you make a mistake in your VAT records, so your VAT return is wrong, you can correct the mistake on your next VAT return, where the total error is less than £10,000. However, HMRC expect you to explain your mistake in a separate letter. If you don’t do this and HMRC discover your error you are likely to get a penalty of 30% of the underpaid VAT. We can help you get your VAT returns right first time. Penalties for VAT errors http://www.hmrc.gov.uk/vat/managing/problems/penalties.htm#2 How to appeal against a decision on VAT http://www.hmrc.gov.uk/complaints-appeals/indirect-tax-appeal.htm |
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Two teams from CKLG attended the fourth Handelsbanken Charity Bowl in aid of their chosen charities magpas and Macmillan Cancer Support. Magpas runs the Emergency Medical Team (EMT) made up of doctors and paramedics who volunteer to deliver A&E standard treatment to patients at the scenes of very serious medical emergencies. Macmillan Cancer Support improves the lives of people affected by cancer, providing practical, medical, emotional and financial support.
On 14th and 15th October Janet Cronk, Lisa Burdett and Lawrence Golding attended the premier conference for successful practising accountants and tax professionals run by the 2020 Group. Key topics under discussion were key predictions for the future with speakers discussing the trends, issues and challenges for the accounting profession and offering solutions. 2020 resident consultants also gave an insight into the latest practice management and marketing techniques that are currently being adopted by the most profitable accountancy firms in the UK. All in all a very interesting and worthwhile conference to attend ensuring that CKLG offer best practice to all corporate and private clients.
