E-news: January 2007

Contents

New prime website launched

The Coventry Telegraph ask the Prime Group for their economic predictions for 2007

Your accounts – a necessary evil or something without which you cannot run your business?

How to avoid self-assessment errors

Coventry & Warwickshire Business Academy Attracts Top Speaker

Payroll – P35 penalties

HMRC email scam

Husband and Wife shares - update

New prime website launched

Following the merger of Pilley & Florsham and Raftery and Co to form Prime Chartered Accountants, we have launched our new website at www.primeaccountants.co.uk

Please have a look and let us have your comments.

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The Coventry Telegraph ask the Prime Group for their economic predictions for 2007

Laurence Moore commented:

"The good news is that output is at one of its highest points since April 2004.

It suggests that next quarter the economy will grow at a rate which outstrips even Gordon Brown’s famously optimistic predictions.

Why is demand so strong? Consumer demand has been driven by the rise in house prices and the feel good factor this generates. When debt is cheap, people are more inclined to increase their borrowing and spend more than they save.

Based on current trends, in March 2007, inflation will be running at 2.5 per cent, 0.5 per cent ahead of government targets,

However because the Bank of England view is that we’ve had too much of a good thing, interest levels were recently raised to 5 per cent.

I predict that it will take a further quarter point rise in interest rates, probably around February, before we start to see inflation levelling off, growth slowing to more sustainable levels and optimism returning to the highs of Summer 2006. This will keep the Chancellor happy and reduce the pressure for tax increases, a move which would make a new Prime Minister popular with consumers and businesses alike."

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Your accounts – a necessary evil or something without which you cannot run your business?

Keeping accounting records is not just to keep the Inland Revenue happy or fulfil your legal obligations. It is the only way to see where your business currently stands and to achieve peace of mind that there is method behind the day-to-day madness of running a small business.

You should ask your self various questions to decide whether you are getting what you should out of this necessity.
• Does the management information you receive enable you to make informed decisions or do you find yourself second-guessing?
• Are you able to identify niggles like bad debts on your weekly or monthly reports before they become a real concern?
• Do you receive regular financial information in a format that you fully understand and trust?


If your answer to these questions is in the negative, you are managing your business in the dark and are also restricting the chance of successful growth.

So, where do you start if you do not think that your regular accounting is enabling you and your business to succeed?

Every business needs regular accounts. Professional help may be required to undertake an initial assessment of your business so that you can implement systems that allow you to stay in control of your finances. Once the systems are up and running, regular checks on profits and losses and the cashflow of the business will help you maintain a clear picture of how your business is doing.

Accounting can seem like an overwhelming task for a small business and it can distract great minds from the kind of work at which they are best. One option that has benefited a lot of businesses in the UK is outsourcing their finance function.
Delegating functions to a professional team of accountants with more resources and increased support allows business owners to focus on their core business, resting assured that their back office is running smoothly.

It also allows you to move more comfortably through peaks and troughs. If your business has seasonal surges, then the resource is always available when things get busy without you having to employ more staff.

Outsourcing to a suitable provider gives you access to the most up-to-date technology and best practice advice. There are a number of software packages that can help you keep track of your accounts. The scale of your business and the speed at which your business is growing will dictate whether you just need a health check or if you need more permanent solution. Once you‘re on top, it‘s much less difficult to stay there but, if you are buried beneath accounting madness, you need to ask for some help.
Outsourcing does not mean that you haven’t got up to date information at your fingertips, technology now lets you access your information securely from your office or your home, whilst mundane but important tasks like backing up are carried out automatically without your input.

If you are interested in exploring what the options and costs are, contact Prime Partner Jamie Skelding in Coventry or Prime Partner John Osborne in Solihull.

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How to avoid self-assessment errors

Tax is a complicated and stressful thing to deal with, it’s no wonder then that three-quarters of us pay too much tax every year.

The great majority of self-assessment errors are basic. Here’s the list of most common errors:
• Failing to sign the form. It’s your responsibility
• Failing to tick all the mandatory boxes
• Failing to provide complete information about any repayment due to you
• Failing to tick your choice of repayment. You can opt to have repayments sent by cheque or repaid through PAYE (if you’re an employee). And if you’re feeling generous, you can have a refund sent directly to a charity
• Failing to tell the taxman where any repayment should go. You have to remember to put in details such as bank account numbers
• Failing to tell the tax authorities to whom any repayment is to go
• Failing to complete or to attach all the supplementary pages
• Entering weekly or monthly amounts in an annual box. This applies especially to pension payments
• Recording the capital in your savings account as well as the interest in the interest box on the form
• Entering non-taxable state benefits as taxable and vice-versa
• Failing to enter state pension
• Entering pension contributions incorrectly
• Failing to enter tax-deductible contributions to trade union and friendly society sickness and funeral plans. You cannot claim for standard trade union membership fees
• Failing to enter gifts to charities
• Failing to include miscellaneous taxable income

For help with your self assessment form contact Sarah Nickols on 02476 554310 or Jan Hornby on 0121 711 2468.

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Coventry & Warwickshire Business Academy Attracts Top Speaker

Prime Chartered Accountants are joint sponsors of the Coventry and Warwickshire Business Academy. This network of owner managed businesses and clients of the sponsors Prime and Barclays Bank Plc brings top class speakers and an opportunities to network with owner managed businesses.

Coventry and Warwickshire Business Academy
28th February 2007
Damian Hughes

Damian is a former Manchester United football coach and has used the Liquid thinking approach with great success at Unilever’s historical Port Sunlight factories and has reduced absence by 5%, tripled training attendance, reduced employee relations issues by 70% and helped the factory performance increase by 10%.

His approach has been lauded by Sir Richard Branson, Muhammad Ai and Jonny Wilkinson amongst others. On 28th February 2007 Damian will share with you the secrets of how to start a revolution in your own life, your own career and your own workplace by becoming a fellow Liquid thinker.

Future Academy events will take place on 14 June 2007 and 18 October 2007 add these dates to your diary now and if you don’t already receive an invitation to the events contact Wendy Tipler at Prime Chartered Accountants on 024 7622 0208 or download a booking form here.

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Payroll – P35 penalties

These are now being issued by the Inland Revenue where they believe that year end payroll returns were filed late last May. They are not always right however, if you receive one and believe it to be incorrect, contact Monima Das in our Payroll Bureau on 02476 554321.

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HMRC email scam

HMRC have fallen victim to an email scam similar to those that purport to come from the High Street Banks. It is aimed at persuading taxpayers to complete a form with their bank details, on the pretext of receiving a large payment of tax to be made directly into their bank account.

The form, showing a potential tax rebate from HMRC Premier Services - with the name 'Premier Services' in a green box, is not a legitimate HMRC message and should be disregarded. It is a 'phishing exercise' and uses bogus e-mails and websites to trick people into supplying confidential or personal information.

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Husband and Wife shares - update

Husband and wives holding shares in their limited company will probably be aware of the long running tax case known as Arctic Systems.

The tax man said that dividends paid to the wife who did not have day to day involvement in the business should be treated as her husband’s dividends making more higher rate tax payable.

This has been appealed through the courts and the next hearing has now been announced to be held in June 2007. Guidance as to how spouse dividends should be treated in the meantime is on the Inland Revenue website. If you want more information or guidance about this contact Sarah Nickols in Coventry or Jan Hornby in Solihull.

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Prime Chartered Accountants 29 Warwick Road, Coventry, CV1 2ES
Tel. 024 7622 0208
www.primeaccountants.co.uk

Disclaimer - for information of users
This newsletter is published for the information of clients and other recipients of our email newsletters. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this newsletter can be accepted by the firm.