 |
|||||||||||||||||||||||||||||||||||||||||||
|
July 2010 NewsletterFOREWORDWELCOME TO PRIME CHARTERED ACCOUNTANTS JULY E-NEWS. If you’re like me you will have already started the countdown until your summer holiday, or you may now be experiencing the holiday blues, wishing you are back on that beach and still away from work. Irrespective of holidays there are always important deadlines not to be missed in our home and working lives. I therefore wanted to draw your attention to two articles - the deadline in respect of self assessment tax payments and an amendment by HMRC to the late PAYE payment penalties guidance.
We’ve also highlighted possible changes ahead in respect of the threatened withdrawal of tax benefits for owners of furnished holiday letters and pension annuities no longer compulsory. Watch this space for updates on the consultations for each.
This month’s e-news also includes useful articles including possible resolutions for viewing VAT return PDF files and the risks involved of dealing with International VAT correctly.
As always, if there is anything included that you would like to discuss in more detail, please do not hesitate to contact us.
Laurence Moore, Chairman, Prime Group Self assessment tax date loomingTaxpayers are being reminded that the date for making the next set of self assessment tax payments is 31 July.
Tax bills for 2008/09 should have been paid by 31 January. Those that were not will have collected a 5 per cent surcharge as of 28 February. Failure to settle any remaining payments on the tax due for 2008/09 will mean a second 5 per cent surcharge, as well as interest charges.
The tax bills cover income tax, capital gains tax and class 4 national insurance contributions.
The 31 July deadline also applies to those taxpayers who have still to submit their self assessment returns for 2008/09. Otherwise they will incur another £100 late filing penalty.
If you have any queries about your payments please contact Sarah Nickols on 024 7622 0208 or Ian Frost on 0121 711 2468.
HMRC amend PAYE penalties guidanceAt the start of the tax year new late payment penalties were introduced for PAYE and other payments due from employers. The new rules apply to almost all employers and contractors, whether they employ one or a hundred employees. The rules apply to monthly, quarterly and annual periods of PAYE starting on or after 6 April 2010. HMRC can impose late payment penalties on PAYE amounts due that are not paid in full on time, including: monthly, quarterly or annual PAYE; student loan deductions; Construction Industry Scheme deductions; Class 1 NIC; and annual payments of employers' Class 1A and Class 1B NIC. HMRC have now amended their guidance to include comments on so-called ‘warning letters’. HMRC state: ‘The letter is only to let you know that HMRC think you have made a PAYE payment late and that a penalty could be charged. It is not a penalty notice and you can’t appeal against it’. Importantly, it does not mean a penalty will definitely be charged, and you may get a penalty even if you do not get a letter. If you agree that you have made a late payment, you should make sure you pay on time and in full in future. The next time you pay late you may become liable to a penalty. HMRC will contact you before a penalty is charged. If they charge a penalty they will send you a penalty notice. If you believe you have received a letter in error, perhaps because you have already paid, have a time to pay agreement or have a ‘reasonable excuse’ you don’t need to contact HMRC yet. But you may find it helpful make a note of why you don’t think a penalty is chargeable in case HMRC contact you about penalty action in future.’ If you receive a letter but have paid on time, it may be worth telling HMRC that their records are currently wrong to avoid problems later on. If you are experiencing problems with paying PAYE or any other tax on time, HMRC may be prepared to defer payment and this, in turn, may avoid penalties. As an accredited BACS bureau, we already process PAYE payments on behalf of most payroll clients to give them peace of mind the payments have been made in advance of the 19th monthly deadline. If you are a payroll client and we currently do not do this for you, we would be pleased to discuss this further. Please contact Monima Simpson-Smith on 024 7622 0208. Internet link: HMRC guidance VAT Return PDF files not downloading from HMRC Online Services – Fixes?On 15 July 2010 HMRC provided an update on the continuing issue concerning blank pdf versions of VAT return acknowledgments.
The issue seems mainly to affect users of Microsoft Internet Explorer. HMRC’s suggested fixes can be found by clicking here.
International VATExporters of goods and services are at risk of assessment and penalties if they are unaware of the rules regarding international transactions. Most are unaware of the risks they face.
For example, typical issues seen and their potential consequences include: -
Company selling goods to customer in France for £100,000.
Invoice fails to show customer VAT number. Conditions for zero-rating have not been met. VAT liability £14,893. Penalty liability £4,468 (30% penalty). Company selling goods ex-works to customer in Germany for £75,000.
Customer fails to provide company with details of ferry tickets – evidence requirements not met. VAT liability £11,170. Penalty liability £3,351 (30% penalty). Company selling professional services to customer in the Netherlands for £15,000.
Customer VAT number and country prefix shown on invoice, but legend as to the nature of the transaction (for example “Article 44 EC Directive 2006/112 Reverse charge”) has been omitted. VAT liability £2234. Penalty liability £670 (30% penalty). If you wish to manage such risks before the VAT man finds them, we work with specialist advisors who offer reviews and training as well as answering queries in-house. Please contact Sarah Hartland on 024 7622 0208 who will be happy to refer you to a specialist advisor.
One of the many international trade VAT traps is caused by the distance selling rules. Under this legislation, if your turnover in goods with customers in a particular country exceeds a specific threshold, then the business is required to register for VAT there and account for VAT in that country at the local rate (i.e. instead of charging UK VAT).
A few examples of recent rate hikes, as well as distance selling thresholds for the countries concerned, are set out below:-
Furnished Holiday LettingsIt would appear that the threatened withdrawal of the tax benefits for owners of Furnished Holiday Lettings has been cancelled!
For the tax year 2010-11 it is back to business as usual - letting activity is treated as a trade, CGT rollover and Entrepreneurs' Relief is available, rental losses can be set off against other income and so on.
However, later this Summer the Government will be publishing a public consultation with a view to changing the tax treatment of Furnished Holiday Let property from 6 April 2011.
Changes may include an increase in the number of days qualifying properties have to be made available for letting and actually let. Also a change in the way loss relief is given.
We will advise when as and when the results of the consultation are published.
Keep proper records!HMRC have recently issued a reminder about the various 'toolkits' that they have developed to assist agents when preparing returns. Although the toolkits are aimed at tax professionals, they highlight common errors and the steps that can be taken to reduce those errors. The intriguing thing about all of the toolkits is that the main area of risk for all the above areas is record keeping or the lack of it! For private and personal expenditure, the main areas of risk are: Record keeping e.g. non-business expenses being incorrectly recorded or mis-posted in the business records and claimed in error as allowable expenses; Personal bills being paid by the business; travel and subsistence; entertaining, gifts, subscriptions and sponsorship; and drawings and capital account. So the moral is clear – good records today keep the taxman at bay. If you would like to discuss this area in more detail, please do contact Steve Moorcroft or Colette White on 024 7622 0208. Internet link: HMRC website Pension annuities no longer to be compulsoryThe government has announced that people will no longer be obliged to buy an annuity with their pensions.
Under the present rules, anyone with a personal or company pension reaching the age of 75 must purchase an annuity. The annuity would then provide the fund member with a guaranteed pension income.
Although it is possible to take 25 per cent of a pension pot as a lump sum, the remainder must go towards funding the annuity.
The Government is currently consulting with regard to the detail of the changes. If you want more advice with regard to this please contact Sarah Hartland on 024 7622 0208 who will be happy to arrange an appointment for you with Prime Financial Advisers.
Maternity rights for the self employedIt appears as though the self employed will become entitled to maternity leave for the first time under new laws introduced by the European Union (EU).
The new rules provide equivalent access to maternity leave as for employees but on a voluntary basis. The EU is expected to adopt the legislation at the end of June and then EU countries will have two years to introduce it into national law. So…watch this space.
Internet link: EU release
Disclaimer
|
||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||
|
Privacy Statement
©2010 Prime Chartered Accountants |
|||||||||||||||||||||||||||||||||||||||||||