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September 2008 NewsletterFOREWORDWELCOME TO PRIME CHARTERED ACCOUNTANTS SEPTEMBER E-NEWS. Finding more cost effective and efficient ways of doing things when businesses are feeling the squeeze financially seems commonplace, so it’s encouraging to see that even the likes of the HMRC are looking for ways to support tax payers through online filing of tax returns and making payments, instead of using the post. This issue of e-news looks at how employers can seek to reduce their amount of administration with the introduction of a free tool available from the Department for Business, Enterprise and Regulatory Reform (BERR), as well as highlight some of the changes to PAYE codes and new annual investment allowance considerations. Prime is able to provide you with a range of advice and support, particularly with running your business more efficiently and cost effectively. Simply contact us here and we’ll only be too happy to help. Laurence Moore ‘Paper’ tax return deadline loomingHMRC are reminding taxpayers who wish to complete paper self assessment tax returns that the new 31 October 2008 deadline is ‘only weeks away’. Previously, both paper and online self assessment tax returns had to be filed by 31 January following the end of the tax year. The 31 January 2009 deadline remains for online submission of 2007/08 self assessment tax returns. HMRC are reminding people who file paper returns to start thinking about the information they need now. This includes a completed P60, self-employment accounts, records of savings and investments, and details of any untaxed income. We file all our clients’ tax returns online so the 31 January deadline is still relevant. However, please do try and send us your information as soon as possible so we can give you as much notice as possible about your upcoming tax liabilities. If you have any queries regarding your personal tax affairs, please contact our Coventry Tax Manager Sarah Nickols on 024 7622 0208 or our Solihull Tax Manager Ian Frost on 0121 711 2468. Internet link: News release HMRC takes credit cardsIn an attempt to encourage us all to make tax returns and payments on line, HMRC will no longer, as of 1 October, send taxpayers a postage paid envelope to use when paying their tax or filing/paying their VAT returns. This, apparently, is a signal to us all to make returns and payments online. To ease the payment process, HMRC are also about to make it easier to pay our tax by allowing us to use our credit card. Legislation has just been passed that will allow them to recover the credit card charges. HMRC will charge you 0.91% for the privilege. To file/pay your tax return online click here. Salary sacrifice arrangementsSalary sacrifice is a complex area which should not be overlooked. HMRC have added some questions and answers on this difficult subject to their website. If you are planning any salary sacrifice arrangements, please contact the Partner that normally handles your affairs for further advice. Internet link: HMRC Q&A VAT treatment of charity challenge eventsHMRC have issued revised guidance on Charity Challenge Events, including those that qualify for the VAT Charity Fundraising Exemption. Many charities use Charity Challenge Events, for example running, walking and cycling events, to raise funds through sponsorship of the individuals who take part. Following representations from the charity sector, HMRC have been working with them to produce revised guidance to assist charities to determine the correct VAT liability of such events. If you are a charity, and would like further information as to how this affects you, please contact Colette White on 02476 220 208 in our Coventry office or John Osborne on 0121 711 2468 in our Solihull office. Internet link: VAT Business Brief 36/08 Reducing employers’ administrationThe Department for Business, Enterprise & Regulatory Reform (BERR), has launched a campaign advising employers on how they can reduce the amount of administration involved in dealing with their employment law obligations. The BERR believe that some employers are routinely over-complying or duplicating work. Employment Relations Minister Pat McFadden said: "Complying with legislation can be complex at times but employment law is often easier than business owners think. Instead of spending money on buying in professional advice on employment law, employers can get access to a range of easy-to-use, fully compliant documents that take only a few minutes to complete. In challenging economic times, it is all the more important that employers make full use of these free services. For example, producing written statements of employment is a significant burden for employers in both time and money, and many businesses are paying external advisers to draw these up for them. In the last year, however, over 40,000 firms have benefited from switching to the written statement tool we have provided - each of them saving around £120 every time that they do so." The link below will allow you to access tools which deal with such issues as Working Time Regulations, flexible working and statements of terms and conditions. Internet links: HMRC Employers Bulletin with links and Press release PAYE codesAs a reminder of the changes issued by HMRC relating to tax codes we have reproduced the information for you below. Please note these changes came into effect from 7 September 2008. The changes were introduced to soften the effects on some lower paid persons who were adversely affected by the scrapping of the 10% starting rate band for income tax on 6 April 2008. As well as changes to tax codes, you should also have received new tax tables or changes to your payroll software that accommodate the lowering of the basic rate band for income tax purposes; from £36,000 to £34,800. Changes to Tax Codes: L codes - Add 60 to the existing code. For example 543L becomes 603L. T codes - No change unless you receive a P6 from tax office. P, V or Y codes - No change unless you receive a P6 from tax office. A or H codes - These codes are no longer in use. We suggest you seek advice from HMRC immediately if you are still using codes with these suffixes. For further information, please contact Monima Simpson-Smith on 024 7622 0208. Careless driversUnder the new careless driving laws, which came into effect from 18 August 2008, motorists who kill whilst avoidably distracted at the wheel will face prison. The new offences will allow courts to imprison drivers for up to five years who cause deaths by not paying due care to the road, or to other road users. The type of ‘avoidable distractions’ covered by the new law include:
Businesses would do well to remind their company car drivers, in particular, about the ramifications of careless driving. Internet link: News release Health and Safety MythsThe useful Government Health & Safety Executive website publishes a monthly myth which is worth a quick glance over a cup of coffee – have a look here. New Annual Investment Allowance considerationsFrom the 6 April 2008 sole traders and partners have been able to claim up to £50,000 a year as a direct write off against their profits, if they invest in certain qualifying assets; plant and equipment, vans and so on. Small and medium sized companies are also entitled to claim. Should you wish to make a claim, there are two other matters to consider before doing so. First the good news! Tax credits If the claim you make reduces your income sufficiently you may be eligible for tax credits. The problem is that, until the current tax year's earnings are quantified, you will not know for certain that you are eligible to claim - a pity as you can only back date claims for three months! A possible solution may be to make a protective tax credit claim now. Your initial claim may show £nil but, when adjusted for your actual post, AIA claim the actual claim achieved may be much higher. And now the bad news! Mortgage applications Many lenders now ask for taxable income rather than trading profits when they consider if you are eligible for a loan. If your trading profits of £50,000 are covered by an AIA claim of £50,000, zero income is not going to qualify for much of a loan. Hopefully, lenders will take into account the reason for the dip in your taxable income - but some may not! If you would like to discuss this in more detail, please contact the Partner who normally handles your affairs. VAT UpdateIf you book hotel rooms online for business you need to beware. A number of these companies, including Expedia and Hotels.com, operate the Tour Operator's Margin Scheme (TOMS) for hotel room bookings. Clearly, whilst such services are useful for business travellers, and in some instances undoubtedly come up with a good overall price, the impact is to deny the taxpayer any right to deduction of input tax on the hotel room booking. In practice, this could well mean that the room will cost the business more due to the blocked VAT. HMRC are actively checking for this treatment and issuing assessments. The answer seems to lie in either booking direct with the hotel chain or finding an online booking service that has opted for the B2B exception (i.e. the transaction is not covered by TOMS). If you require any further information please contact Colette White in our Coventry office on 024 7622 0208 or John Osborne in our Solihull office on 0121 711 2468. Small Business Rate Relief campaign450,000 businesses across the UK are entitled to, but are not claiming, their share of £260 million pounds as small business rate relief. If your business’ rateable value is less than £15,000, then you should make an application before 30 September. Further information is available by clicking here. Have you booked your place?The second Solihull & South Birmingham Business Academy event takes place on 2 October at Cranmore Park. Speaker and business coach Chris Hughes will present on how to seize opportunities and maximise their potential to get greater satisfaction and better results, not only in the workplace but also from a personal perspective. If you would like to attend this FREE event, simply complete the booking form and fax it to Wendy Tipler on 0121 711 1701, or alternatively email Wendy here. Bringing local business leaders togetherBusiness leaders from Coventry and the surrounding area gathered together to listen to key note speaker Bernie de Souza, at the recent Coventry & Warwickshire Business Academy networking event. Bernie gave an enlightening presentation on how to connect with people to get the best out of them and win more business. If you would be interested in attending future events, please email us here. New Minimum Wage rates from 1 October 2008Employers are reminded that from 1 October 2008, the new minimum wage rates come into effect and employees are entitled to receive an additional 21p per hour*. Details of the new rates are available below:
* Workers aged 22 and over Further information is available from:
Staff newsExam success We are delighted to announce that several staff members have recently passed their accountancy exams. As an organisation we are committed to supporting and developing our staff to provide you with the best possible service when handling your affairs. Our congratulations go to Toby Williams, Naomi Hobday, Chris Holywell, Mark Gormley, Scott Jones, Tejal Patel, Demsey Slater, Michelle Linthwaite and Bekki Partridge. Jane Canavan, Partner Secretary, also sat an Institute of Chartered Secretaries and Administrators exam and passed. Jamie triumphs as Golf Champion! Coventry office Partner Jamie Skelding was crowned Champion at the Accountants Golf Challenge 2008, held at Manor House in Wiltshire earlier this month. The event, organised jointly by Finance Week and accountingweb.co.uk, in association with Blackberry, saw 16 teams battle it out on the award winning course. New recruits for Prime We would like to welcome Graeme Tees, Chloe Waight and Sameer Ibrahim as graduate recruits, Rebecca Parker as Apprentice Administrator and Sarah Hartland as Group Marketing Manager. Do you have a colleague, supplier or customer you feel would benefit from receiving this e-newsletter? If so, please feel free to forward this email, or send them a link to our subscription page here. Disclaimer
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