Shaun's Tax Tips

Christmas Tax Tips

noreply@blogger.com (Shaun's tax tips) — Tue, 07 Dec 2010 15:12:00 +0000

Christmas is a time for… parties
You can lay on a party or social function for your employees tax-free provided that the cost does not exceed £150 per head, per year. The event must be held for the main purpose of entertaining staff - the cost will become a taxable benefit if it is designed to entertain only directors or management, or if some members of staff are excluded.

In order to work out the cost per head you need to add together the VAT inclusive cost of the event together with any costs of transport and accommodation. You then divide this by the number of people attending.

The £150 is not an allowance, so if the cost is £151, the whole benefit is treated as a taxable benefit for your higher paid employees. For lower paid employees (those earning less than £8,500 per year) this benefit is tax free.

The cost to you the employer of laying on the event is deductible for tax in your business’ accounts. However, if you are using the event for entertaining customers or clients too, then you must remember to disallow a proportion of the cost for tax. You can claim back input VAT but only a proportion if the event is also to entertain customers.

Christmas is a time for…giving

You can give an employee a gift at Christmas, or on a special occasion such as marriage or a birthday and there will be no taxable employment benefit providing the gift is trivial.

The sort of gifts that are treated as “trivial” by HM Revenue & Customs (HMRC) are:
• A box of chocolates
• A bottle of ordinary wine
• A turkey
• Flowers
The cost is tax deductible in your business accounts too.

If a gift is not trivial there will generally be a tax charge on the employee. This will need to be reported on form P11D at the end of the year. You can alternatively settle up with HMRC by using a PAYE settlement agreement.

If you make a gift to a customer the cost may be deductible in your accounts providing it is not alcohol and that it advertises your business. If you make gifts to customers consider the tax treatment very carefully. If you are VAT registered you can reclaim VAT on the cost of the gift. If you make a gift in excess of £50 or makes a series of gifts to one person exceeding £50 you should account for output VAT on the value of the gifts.

The European court recently ruled that when a business makes gifts of its own products as samples it does not need to account for VAT.

VAT: the rate change

The standard rate of VAT increases from 17.5% to 20% on 4 January 2011. This means that businesses will need to adjust their bookkeeping methods as well as their software and it will make reconciliation of VAT more complicated in the quarter in which the change takes place.

The VAT fraction changes to 1/6.
• So, if a supplier charges you a VAT inclusive price of £120 multiply by 1/6 to calculate the VAT of £20, or by 4/5 to calculate the net price of £100.

There are special rules for sales that span the change in rate:

• If you sell goods or services before 4 January 2011 and do not raise a VAT invoice until after that date: you can choose to account for VAT at 17.5% (all of your non-VAT registered customers will appreciate this).

• If you started work for a customer before 4 January 2011 but did not finish it until afterwards you may account for the work done up to 4 January 2011 at 17.5% and the remainder at 20%. If you choose to do this you will have to be able to demonstrate that the apportionment is fair.

• If you provide a continuous supply of services, such as leasing of equipment you account for the VAT due whenever you issue a VAT invoice or receive payment, whichever is the earlier. So, you must charge 20% on invoices you issue and payments you receive on or after 4 January 2011. You may, if you wish, charge 17.5% on the services you've provided in the period up to 4 January 2011 and 20% on the remainder. If you choose to do this you will have to be able to demonstrate that the apportionment is fair.

• If you issued a VAT invoice or received prepayment before 4 January 2011 for goods or services which you provided on or after that date VAT will normally be due at 17.5%.

Problem areas
If you use bookkeeping software you will need to ensure that you have set up the correct VAT codes so that you can post transactions against the right rate. This can be a problem if you are Cash Accounting; you will need to be able to identify payments received after 4 January 2011 that relate to supplies made before that date.

The Flat Rate Scheme percentages have also been re-calculated to reflect a standard rate of VAT of 20%.

VAT and tax penalties: HMRC may change tax penalties on any taxpayer who makes an error in a return of document. It will operate a “light touch” on taxpayers who take reasonable care to account for VAT correctly as a result of the VAT change.
“Reasonable care” means “asking if you think there is a problem”. If you have any queries about VAT, the change in rate, or any other taxing matter, please give us a call on 0800 63 444 76.

Hampshire Accountants
Basingstoke Accountants
Winchester Accountants

Tax Investigations - Be Afraid!

noreply@blogger.com (Shaun's tax tips) — Tue, 03 Nov 2009 15:47:00 +0000

This is just the first of many steps to increase the amount of tax from investigations.

Watch the video here

If you want to find out how you can help protect yourself from a tax investigation please call us on 0800 63 444 76 or email taxsorted(at)googlemail.com for a free report on what you can do to help protect yourself.

You have been warned!

Hampshire Accountants
Basingstoke Accountants
Winchester Accountants

Are you ready for online VAT filing?

noreply@blogger.com (Shaun's tax tips) — Tue, 20 Oct 2009 17:38:00 +0000

You may be aware that the Government is moving forward with the plan to implement online filing for most business tax returns. The next phase of this it to require businesses to file their VAT returns online from April next year. This requirement will apply to all businesses with annual turnover of more than £100,000, which means that your business will be affected by this change.

Your first return which will be affected by the new rules must be filed online and paid by electronic payment, which includes BACS,Billpay and Direct Debit. It would be wise to start thinking about how you intend to move to online filing for VAT in the run up to that date.

Read more........

Hampshire Accountants
Basingstoke Accountants
Winchester Accountants

Are you completing your dividend paperwork?

noreply@blogger.com (Shaun's tax tips) — Thu, 15 Oct 2009 15:04:00 +0000

Did you know that if you don't complete the proper paperwork each time you vote a dividend the taxman can argue it was actually a bonus and NIC's are payable on the amount?

If your limited company has made a profit, you are entitled to distribute these profits to shareholders as dividends.

When you do decide to declare a dividend, you must not only record the event in Company minutes, but also create a dividend voucher for each shareholder.

The voucher is a "receipt" of sorts, and is kept by the recipient for self assessment purposes.

For more details about what dividends are, how to account for them, and for template vouchers and meeting minutes please send an email to taxsorted(at)googlemail.com and we will be happy to send you the templates you need.

Post 101! Tax-efficient employment benefits-in-kind

noreply@blogger.com (Shaun's tax tips) — Wed, 29 Jul 2009 08:11:00 +0000

Wow! I just realised I have made over 100 posts!

On to the next one..................................

Tax-efficient employment benefits-in-kind

There are still some tax free perks available to employees and if you really DO care about your staff take a look at these:-

· Childcare vouchers. Provided the benefit is made available to all employees, vouchers to a value up to £55 per week can be provided to pay for (non-family provided) childcare for employees. This benefit is free of tax and national insurance, and thus provides a significant saving for employer and employee if it is given on a salary sacrifice basis. Care is required in respect of the impact of vouchers on tax credit claims and their continued availability during maternity leave.

· Mobile phones. These can be provided free of tax and national insurance to selected employees, although it may be advisable to cap the level of bills that the employer will meet!

· Medical check-ups. These can again be provided tax and national insurance-free to selected employees.

· The cycle to work scheme allows the tax-free provision of cycles and cycle safety equipment by employers to employees – the facility must be made available to all employees. In theory the bicycle must be mainly for home to work use, but given that employers are not required to monitor the use of bicycles it is difficult to see how this can be enforced in practice.

· The alternative to the above approach is for the employee to provide his or her own bicycle, for which they can be paid a tax and NI-free mileage rate of 20p per mile for business mileage, on a similar basis to the fixed profit car scheme rates of 40p and 25p per mile.

· Before leaving the subject of bicycles, employers can also provide tax-free cyclists’ breakfasts to employees who cycle to work. We have so far waited in vain for the introduction of joggers’ breakfasts and walkers’ breakfasts!

· Pension contributions by employers are in general a tax-free benefit for employees, although the above regime for those with income in excess of £150,000 must now be taken into account in this respect, as well as the annual pensions allowance (currently £245,000).

· Outplacement counselling provided to help employees to adjust to cessation of employment or to find a new job is a tax-free benefit. It is important to note that this can be provided on retirement as well as on redundancy etc.

· Loans of up to £5,000 can be made tax and NI free to employees. This is a de minimis relief, so if the loan exceeds £5,000 the whole loan is subject to an income tax (and employers’ NI) charge, currently based on 4.75% per year of the amount lent. Care also needs to be taken about making loans to shareholders, as these can give rise to a different tax charge under the corporation tax regime.

Are you getting the BEST deal from your accountant? For a FREE report on this subject click here

Hampshire Accountants

Basingstoke Accountants

Is your accountant too big for you?

noreply@blogger.com (Shaun's tax tips) — Wed, 15 Jul 2009 16:14:00 +0000

I was getting some new tyres fitted the other day and the garage owner was complaining his accountant never called him and service standards seem to have fallen

When I asked who they were I was surprised to hear the were a big name firm - Tenon! Tenon are a good reputable firm but in my opinion they are too big for him and not geared up to serve the smaller client. The result? I walked out with four new tyres and one new client!

So next time you are waiting for a call back from your accountant ask yourself the question "Are they too big for me?" And then speak to an accountant who suits your business size and really does care!

Accountant Hampshire

Hampshire Accountants

A very worrying article!

noreply@blogger.com (Shaun's tax tips) — Fri, 26 Jun 2009 06:44:00 +0000

I was reading a blog today written by Ken Frost and found it extremely worrying!

In a few weeks time HMRC will have new powers to be able to access individuals salaries and be able to deduct up to £2k per annum in order to collect underpaid tax.
Until now HMRC had to get the taxpayers consent or a court order to do this.

But the rules have changed so watch out!

You can read the full blog here

Tax breaks for those letting a furnished holiday home act before 31st July

noreply@blogger.com (Shaun's tax tips) — Wed, 17 Jun 2009 15:36:00 +0000

From April 2010, those letting a furnished holiday property will see it being taxed in a different way.

Changes announced in the 2009 Budget mean that UK residents who let (or have previously let) a furnished holiday home in Europe need to act quickly to secure a short term tax break.

At the moment, those who let out a holiday home can offset any losses from the rental against other income. There are also more beneficial capital gains tax reliefs when selling such property. From April 2010, these tax advantages will be withdrawn.

However, until then, the current rules are being extended to apply to qualifying property in the European Economic Area (EEA). The particular qualifying conditions are extremely specific so you would need to speak with us to get more details.

Losses can be set against other income as far back as the 2006/7 tax year, but claims must be made before 31st July 2009. Individuals who may have sold such property in the tax years 2003/4 onwards should also undertake a review.

If you own such a property, or indeed if you previously owned such property, it would be wise to seek professional advice. In these difficult times there is real potential for tax savings through this change in legislation.

So long between posts!

noreply@blogger.com (Shaun's tax tips) — Tue, 16 Jun 2009 11:37:00 +0000

Wow! I just realised how long it has been since I posted anythng here and do apologise! But if I have nothing sensible to say whats the point of posting a nonsense blog?

Anyway - I was about to write a blog about tax investigations (again!) but Ray Stewart has beaten me to it

"I know I have mentioned this a couple of times before but it still annoys me the number of clients that either refuse to pay out the £100 per year or so for the cover, or justify their non-action by thinking “it will never happen to me”.

Since April 2009 the investigation regime has changed. There were few trumpets and dancing girls to announce the change and consquently, 99% of business people have no idea things have changed and what it might mean for them.

HM Revenue & Customs are catching up to the 21st century. Instead of the old fashioned “lets ask some questions and if we like the answers, we will go away for another 10 years or so”, now they start with an innocent letter asking to see the books and records. They make it clear an investigation isn’t starting – yet – as long as they don’t find anything awry with the records. But…I can almost guaranteee you that they will find something, no mater how trivial, and a full blown investigation commences.

We still have the “old” aspect enquiries. Where three or four items are looked at in detail, but these are now in the minority.

I think the changes have come about because the government is short of money because the approach is more direct and aggressive than it was. The problem is that although the government is short of money, in the depths of a recession, most businesses are feeling cashflow tighten as well. As it tightens, HMRC knows, as do we all, that people will do what they need to do to allow their business to survive, including cutting corners and dumping established proceedures.

In a recession it is easy then for HMRC to find fault with records and as soon as they do, your business is in trouble. All your records become meaningless and the declared results based on them, entirely questionable. They may only find one mistake, but that one will cause the mindset of HMRC to assume that one will be simply one of many and they will look hard and long for evidence to corroborate their assumption.

This is why the fee insurance is so important. An investigation may be over really quickly and only cost you around 2 times your normal accounts fee. However, even if your books are good, fighting a long and determined HMRC driven assault will cost you dear just to eventually prove your innocence. By dear I mean anything up to 10 times or more of your normal accounts fee. If more professional help is needed to fight technical points such as a tax barrister, the sky is no limit to what costs could be incurred.

Please don’t think you are immune from investigation. HMRC have sophisticated ways to look at the figures you submit on your self assessment or corporation tax return each year. If they think you are running your business slightly differently from others in your industry, they will investigate; if they think your figures are too perfect, they will investigate; if you have not been looked at for many years, they will investigate; if you buy any large equipment which distorts your VAT return, they will investigate; if you consistently declare profits they deem too low for you to live on, they will investigate; if a friend/foe tells them you are up to no good, they will investigate; if you make losses over several years, they will investigate…

Basically you can expect an investigation at any point for any reason.

Why then do businesses think it will never happen to them – it will at some point.
Look at the costs of proving yourself to be innocent – much more than an average yearly accountant’s bill – and the costs will be more if HMRC find faults and ommissions in your records because you will be trying to limit the damage of additions that will be added to your profits and consequently your tax bill.

Why not just insure against this inevitable event for £100 per year or so.

You can get professional fee insurance from membership of the Federation of Small Business (along with a host of other benefits), from your local insurance broker, even from some household policies. It doesn’t cost much but the peace of mind is more than worth it when HMRC come calling.

And don’t forget, the premiums are tax deductible from your profits – so it’s even cheaper than you thought.

Finally, if you are not insured and run up a huge bill in defending yourself from the attentions of HMRC – if they find any faults in your information that mean you pay some extra tax as a result - NONE of the fees you pay will be allowed for tax purposes. Not a penny. Doesn’t that make the insurance option look a little more appealing?

Go and get the insurance. I will shortly be rejecting clients that do not have this insurance in place for 2 reasons. Firstly, trying to get money out of someone who has been hit by a large additional tax bill for defending them and limiting the damage is REALLY difficult. Secondly, if a business person doesn’t appreciate the impact that the inevitable investigation can have on their nerves, their wallet, their reputation and the survival of their business, I don’t think they are the type of client I want to work with.

Go check your policies now and make sure you are covered. Your own accountant may be contacting you soon asking for evidence that you are covered – so be prepared. It is the responsible thing to do. "

Thanks to Ray Stewart for writing this article!

Cashflow causing you a problem? Don’t go to the bank, go to the VATman!

noreply@blogger.com (Shaun's tax tips) — Fri, 17 Apr 2009 06:53:00 +0000

Here are some timely tips for traders to ease cashflow difficulties

Delay and speed up!
Every 3 months, the VAT return falls due for payment, and when money is tight, this can cause great difficulty. Do you go to your bank and ask for an extension to your overdraft, (optimistic in these difficult times), or are there any other things you can do to improve your cashflow?

Sounds simple: The are 2 basic things you can do to improve your cashflow when accounting for VAT;

1.delay the payment of output VAT, and

2.speed up the reclaiming of input VAT.

Sounds simple, but how exactly can you do this?
Delay paying output VAT:

There are a number of things you can quite legally do to delay the payment of output VAT:

The first, and most important, is that businesses with a turnover under £1,350,000 per annum can go onto the Cash Accounting Scheme. You do not have to apply to use the scheme - if you are eligible you can just start using it. Using this scheme, you only need to account for output VAT after you have been paid. On the down side, you can only reclaim the VAT on purchases when you have paid for them. You can stay on cash accounting until your turnover goes over £1,600,000.

If you make continuous supplies of services (accountants, lawyers etc.) instead of issuing a tax invoice you can issue a request for payment. This does not create a tax point and you will only need to account for VAT when you are paid. Don’t forget to issue a proper tax invoice when you are paid. This gives you the cash flow advantage of Cash Accounting even if your turnover is above the limits.

You only have to account for VAT when a sales invoice is issued, not when it is produced. So, if you produce tax invoices on the last day of your VAT period and don’t post them until the next day, you can overstamp them with the correct issue date, and delay payment of the VAT by three months.

Under the tax point rules, you have to issue your invoice within 14 days of the basic tax point (date of supply). This creates an actual tax point on the date the invoice is issued, so if the 14 day period spans the end of a VAT quarter, you can defer paying the output tax by three months.

If you import goods, you could consider setting up a duty deferment account with HMRC. This could delay paying import VAT by up to 45 days.

Speed up input VAT repayment: How can I get back that VAT more quickly?

Input tax accruals - the right to claim back input VAT arises when the VAT was charged, the tax point. The vast majority of businesses post purchase invoices onto their accounting systems only once they have been approved for payment. Therefore, at the end a VAT period, there can be a number of invoices dated within the period which are not yet entered into the accounting system and the VAT not yet claimed. You can make a manual accrual of this input VAT without asking HMRC’s permission, but don’t forget to adjust it on your computer system at the end of the next period, or you’ll claim it twice!

Monitor aged debtors so that you can make a bad debt relief claim once a debt is six months past its due date for payment.

If you have a company that receives property rental income, you will normally bill it at the end of each calendar quarter. If this is the case, make sure your VAT returns end February, May, August and November as this will gain two months' use of the VAT before paying it to HMRC.

If you have a number of associated companies which make supplies to each other, or you have a parent company making management charges to its subsidiary, you could take a look at your VAT return staggers to make sure that you can claim back the input VAT in one company before you have to account for the output VAT in the other. If not, change your VAT return stagger.

Make sure you have claimed back all the VAT you possibly can - check that VAT has been claimed on petty cash, staff expenses, mileage allowances etc. If you have not, you can go back over the last three years and claim it all back.

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Thanks to Andrew Needham of VAT Solutions (UK) Ltd for this article

Annual investment allowance and tax credits

noreply@blogger.com (Shaun's tax tips) — Tue, 07 Apr 2009 10:54:00 +0000

Business is poor, money is tight and even worse the firm’s van is on its last legs and without it you can’t trade. But is there a way you can afford a new van with some help from the Taxman?

Nothing for free
It’s an old adage that there’s no such thing as a free lunch. That may be so but you might be able to get a free van or other equipment for your business at the Taxman’s expense. Here’s how.

Case study
Miss X is a single mother who owns and operates a sandwich delivery business. The van she uses has become unreliable but she can’t afford to replace it. If the van completely fails, so will her business. How does she escape this dilemma?

Annual investment allowance
The new capital allowances rules, that came into effect in April 2008, allow a 100% deduction for the cost of plant and equipment used in a business on expenditure of up to £50,000 in one year. This is called the annual investment allowance (AIA).

Miss X’s van qualifies as equipment and is therefore subject to the usual rules: expenditure on a replacement would qualify

The full cost of the new van will be allowable as a deduction from Miss X’s taxable profit. Thus, if her profit ignoring the cost of the new van would have been £27,000, and the new van cost £18,000, her revised profit is £9,000.

Tip. If you can’t afford to buy the equipment outright, a hire purchase agreement could still allow a deduction from your taxable profit of the full value of the asset under the AIA rules.

Tax credits
Miss X’s profit for income tax has been radically reduced by the AIA on the new van. This has a dramatic effect on her eligibility for tax credits.

Miss X’s income has been more or less stable for a couple of years, around £27,000, and her accounting year ends on March 31. If she bought the new van for £18,000 in March 2009, she could claim the AIA deduction against her 2008/9 profit.

Miss X notifies the tax credits people by July 31 2009 of her much lower profit for 2008/9. As her tax credits award for that year was originally based on an income of around £27,000, she will now be owed a lump sum award of around £7,000

Disregarded income
The tax credit rules disregard an increase in income of up to £25,000, so Miss X’s 2009/10 tax credits will be based on the much lower 2008/9 profit figure, providing her profits don’t exceed £34,000 (£9,000 profit plus £25,000) for that year.

The final result
The cost of her new van (£18,000) has been paid for as follows:

• AIA relief on cost of new van - £5,040
• extra tax credits for 2008/9 - £7,000
• extra tax credits for 2009/10 - £7,000
• a total tax benefi ts package of £19,040.

Tip. The AIA applies to all equipment, not just vans. So if your profit is reduced as a result of an AIA claim, tell the tax credits people.

The next step
The annual investment allowance provides a 100% tax deduction for the cost of equipment. It will also reduce your profit for tax credit purposes and could increase your claim, so notify the tax credits people of your reduced income.

If you would like any help to see if you could benefit please contact me.

http://www.tax-sorted.biz
http://shaunstaxtips.blogspot.com
http://www.welovebookkeeping.co.uk

How to claim tax credits

noreply@blogger.com (Shaun's tax tips) — Mon, 30 Mar 2009 08:15:00 +0000

Tax credits are available if you are a low earner, are disabled or have children and many more people are eligible than they think. We guide you through what you need to know

Who qualifies?
If you are responsible for at least one child or young person who normally lives with you, you may qualify for the Child Tax Credit.
But you don't need to have children to qualify. For example if you are employed but are on low wages, you could be eligible for the Working Tax Credit.
For those who are married, or living with a partner, they are required to make a joint claim for tax credits, single claims can only be made if you don't have a spouse.

The easiest and quickest way to find out if you are eligible is to go to HM Revenue & Custom's website and complete its online questionnaire.
If you think you qualify for tax credits, make the claim immediately. If you hang on you could end up losing money because tax credits typically can only be backdated up to three months from the date HMRC receives your claim form.

How is it paid?
If you qualify the government will pay into your bank, building society, Post Office or National Savings account, if it accepts Direct Payment.
This will happen either weekly or every four weeks. In terms of who gets the credits, if you are both working and both qualify, for the Working Tax Credit, you can decide whose account they should be paid into. In regards to the Child Tax Credit the payment is will be credited to the account of the primary carer.
…and remember!

It might be worth making a claim, even if you think your income is too high. You may want to consider it, especially if you expect your income to go reduce – such as in the case of redundancy.

So which children can I claim for?
HMRC states: 'If you look after any children under the age of 16 - or under 20 if they're in full-time education or approved training - you may be able to claim Child Tax Credit to help with the cost of looking after them.'
You can claim for a child who lives with you, up to August 31 after their 16th birthday. If your child is between 16 and 19, you can still claim tax credits for them if they are still in full-time education, up to and including 'A' levels, NVQ level 3 or Scottish Highers or in approved training like Entry to Employment, Skillbuild and Get Ready for Work.

If your child is between 16 and 17, and they're not in full-time education or approved training, you can still claim tax credits for them for up to 20 weeks if they have signed up with the Careers Service, Connexions Service or Training and Employment Agency.

What happens to your tax credits when your child reaches 16?
What about those who have adopted or fostered?
You can claim once you are not getting any money from your local authority or Health and Social Services Board. If you are unsure about your situation, call the Tax Credit helpline on 0845 300 3900.

My child sometimes lives with me but sometimes lives with my former partner? Can I claim?
In such cases, just one of you can claim tax credits for them. Child Tax Credit is usually paid directly to the person who is the child's main carer.

If I qualify, how much should I expect to receive?
The major issue to be considered is your income. The basic rule of thumb is the lower your income, the more tax credit you are likely to receive.

Here are two examples from HMRC:

Example 1
Mr and Mrs Smith both employed full-time have a combined income of circa £25,000 per annum and they have three children. They get about £55 a week in tax credits. If their income was higher, and they earned about £50,000 a year, they'd get about £10 a week instead.

Example 2
Jon Barry is aged 30, not married and lives alone. He works full-time and earns £10,000 a year. He gets about £12 a week in tax credits.

Check out HMRC's Tax Credits Calculator to see how much you could get
How are they worked out?

Every year between April and June, HMRC, will contact you via post to help you renew your claim. It asks you to double check the information it has about your personal circumstances, such as confirming the amount of income you received in the latest tax year. HMRC will then ensure that the payments are made to you, and those due are correct.

Any tax credit you receive will be based on your present circumstances and currently on your income from the tax year that ended April 5 2008.
And for individuals making a new claim, payments will typically run from the date of the claim to the end of the tax year. For example, if an individual made a claim on November 10 2008, the payments will be worked out from that date until 5 April 2009.
But there are a number of other factors to be considered, when deciphering how much tax credits you should be paid.

These include:
•How many children you have living with you
•Whether you work - and how many hours you work for
•If you pay for childcare
•If you or any child living with you has a disability
•If you are aged 50 or more and are coming off benefits

How can I claim tax credits?
You need to complete a claim form. You can get hold of a tax credits claim pack from the Tax Credit Helpline on 0845 300 3900, or textphone 0845 300 3909. The helpline is open from 8.00am to 8.00pm seven days a week except Christmas Day, Boxing Day and New Year's Day.

Helpful forms and further information
You can fill the form in yourself and send it back by post. If you need any help completing it, contact the Tax Credit Helpline. And if you claim other benefits, such as Income Support, Employment and Support Allowance or Jobseekers Allowance, your Jobcentre Plus - or in Northern Ireland, a Social Security office - will help you with your tax credits claim form.

What if I am paid too little or even too much?
This can, and does happen. In such cases the Government, will make an adjustment to make sure your payments are correct. Any payments, that the Government makes from April 6 2009 to the date on which you renew your claim, are temporary or provisional. And if you do not renew it, you could be asked to pay them back.

I am disabled, what can I do?
The basic rule is - if you have a disability and usually work at least 16 hours a week, you may be able to get extra tax credits. In order to be eligible, you must usually work for 16 hours or more a week and you must have a disability that makes it hard for you to get a job and you must be receiving, or have recently received, a qualifying sickness or disability-related benefit. If you're not sure whether you qualify, you can, check the Disability Help Sheet found here or call the Tax Credit Helpline on Tel 0845 300 3900 or textphone 0845 300 3909.

In regards to those with severe disabilities, if you and/or your partner, receive the Highest Rate Care Component of Disability Living Allowance or the Higher Rate of Attendance Allowance, you may also qualify for extra tax credit as a result. And for couples, it does not have to be the person with the disability who is working, as long as one of you usually works at least 16 hours each week.

How much could you receive?
In this tax year, ending April 5 2009, alongside the Working Tax Credit you could get £2,405 a year if you are disabled or £3,425 a year if you are severely disabled. But the actual amount will depend on other money you have coming in.
In addition, you should inform HMRC if you make a claim for a sickness or disability benefit that would mean you get extra tax credits payments. If you are later told that you are entitled to the benefit, your extra tax credits payments will be backdated to the earliest possible date.

Are you paying Too Much Tax? Contact the Tax Reduction Specialists now!

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http://www.welovebookkeeping.co.uk
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How to make the most of your child’s savings

noreply@blogger.com (Shaun's tax tips) — Wed, 25 Mar 2009 07:58:00 +0000

Ask not what you can do for your child but what your child can do for you.

Gone are the days when you could send your child down a mine or up a chimney to help the family finances, but that doesn’t mean they can’t contribute.

In the past, children’s savings accounts have offered fairly poor interest rates. But base rate cuts have whittled away the interest rates on ordinary savings accounts leaving children’s accounts looking very attractive. The average instant-access rate for adults is now 0.97% compared to 1.3% on children’s accounts, according to Moneyfacts.co.uk, while the average rate for children’s regular savings accounts is 2.9% compared to 2% for adults.

When you consider that the interest is usually tax-free, the deal gets better and better.

How does it work?
A children’s savings account works just like an ordinary savings account, except that it is opened for a child. If the child is under seven, then a nominated adult (parent, guardian or grandparent) will have to act as signatory on the account. If the child is over seven, then they can open an account all by themselves. But don’t panic – rather than handing over cash for them to blow on High School Musical memorabilia, you can still set up an account that you are a signatory on until they are 16.

If you are a signatory on an account, then you can withdraw and manage the money. So while it’s their name on the account, you still control it.

What are the tax implications?
These accounts aren’t tax-free as such. Children pay income tax just like adults. But unless you have found a legal form of work for your pint-sized workforce then children will rarely use up their Personal Allowance – the amount they can earn before they have to pay tax – which is currently £6,035, rising to £6,475 on 6th April.

However, if you open an account for your child or step-child and that account earns more than £100 interest a year, then income tax at your own rate will be payable upon it. But this only applies to parents – it doesn’t apply to grandparents or anyone else who wants to put money into a child savings account.

In order to prevent tax being paid on interest payments to a children’s savings account, you will need to fill out an R85 form, which the bank should give you when the account is opened.

Which account should you open?
The best children’s savings account available at the moment is Halifax’s Children’s Regular Saver. This account pays 8% AER fixed for 12 months. As the interest is tax free this equates to a 13.28% return for a higher-rate taxpayer. Such a good deal does come with a couple of catches though.

The maximum deposit is £100 a month and if you miss a monthly payment or withdraw any of the cash before the end of the 12 months, then the account is closed and the money is transferred to a Halifax Save4it account. The interest is then paid entirely based on that account’s rate, which is currently 1.55%.

This account has another significant attraction though. Five adults can open the Halifax account for every child. And you don’t have to be related to the child. So Grandma, Auntie Val, Mum, Dad and even Bob from next door can earn 8% interest tax-free on a proportion of their savings.

If you want an account with fewer restrictions, then Ali Hussain in The Sunday Times suggests the Yorkshire Building Society’s One Day Account. This has the best easy-access rate at the moment, 2.25% on savings above £10. With this account you can make unlimited withdrawals without incurring any penalties. And as long as you stay beneath the limits the money is tax-free. So parents can put up to £4,400 into the account before it starts getting taxed (as that would generate about £99 in interest payments) – just below the £100 limit.

However, you can easily get cash Isas that beat this rate, so unless you’ve already filled up your Isa for this year (and the next tax year is coming up in just a couple of weeks – April 5th is the deadline), this isn’t worth considering.

So put your child to work – march him or her to the nearest bank right now!

Five ways to slash your rental profits and reduce your tax bill

noreply@blogger.com (Shaun's tax tips) — Tue, 17 Mar 2009 06:53:00 +0000

With interest rates having fallen again last week to 0.5%, landlords with discounted, variable or tracker rates will be benefiting from lower interest charges on their loans. This, of course, means more positive cash flow, but it also means much higher taxes in the future. Here are five ways to slash your landlord taxes:

1) Claim tax relief on ALL revenue expenditures Remember - If you have incurred a revenue expense for the purpose of your property, then you can offset it against the rental income. Most landlords remember to offset the mortgage interest against their rental income but they fail to offset other costs, such as insurance, utilities supplies, decorating/repairs and advertisement costs, along with letting agent fees and the cost of telephone calls etc.

2) Make sure you register any rental losses If you have made losses in the previous tax years then by registering these losses with HMRC you will be able to carry them forward and offset them against future profits. Given that interest rates have fallen significantly since October 2008, if you have registered your losses then you could be making very good cash flow on your property now and still avoiding taxes in the future.

3) Switch property ownership with your spouse if they are lower rate taxpayers If you have a spouse who is a lower rate (or even nil rate) taxpayer and you are a higher rate taxpayer, consider moving the greater portion of the property ownership into their name. This means that a greater part of the profit will be attributed to the lower (or nil rate) taxpayer, resulting in both your income and capital gains tax liability being significantly reduced.

4) Mix and match the 10% wear and tear allowance If you are offering a fully furnished property then it may be tax beneficial to use the 10% wear and tear allowance. This is because you can start to claim the relief as soon as you start to receive income from the property.

5) Look to claim costs as 'Revenue' costs If you can claim large costs as ‘revenue’ costs rather than ‘capital’ costs then you can reduce your annual property income tax bill in a big way. For example, the cost of replacing single glazed windows with double glazed windows can be claimed as a revenue expense.

Are HMRC watching you?

noreply@blogger.com (Shaun's tax tips) — Tue, 10 Mar 2009 11:12:00 +0000

Mark Lee, Chairman of the Tax Advice Network, has issued a warning that HMRC are cracking down on businesses that use the internet to trade. As part of this they are monitoring social media and blogging sites in the same way that they monitor small ads in local papers and more recently Ebay and other online ‘auction’ sites. There are two things taxpayers need to remember. First, any information about their business that gets published on the web may be looked at by HMRC. Second, any income earned online – even relatively small sums, perhaps earned as an affiliate – must be declared.

There are literally hundreds of online social media websites and facilities available to those wishing to do business and many have a big focus on business as distinct from, or in addition to the ‘social’ aspect of the site. The most common business focused sites include Ecademy, LinkedIn, BT Tradespace and UK Business Forums. In each case forum comments, member profiles and blogs effectively remain in the public domain forever, even after someone thinks they have deleted it. The same is true of personal websites and blogs, which appear to be promoting a business, or through Google Adsense campaigns or through affiliate sales.

Are you paying Too Much Tax? Contact the Tax Reduction Specialists now!

http://www.tax-sorted.biz
http://www.welovebookkeeping.co.uk
http://www.stinkybooks.co.uk

March Tax Tips

noreply@blogger.com (Shaun's tax tips) — Tue, 03 Mar 2009 14:45:00 +0000

To read March Tax Tips and find out ways to save tax before the end of this tax year click HERE

Are you paying Too Much Tax? Contact the Tax Reduction Specialists now!
http://www.tax-sorted.biz
http://www.welovebookkeeping.co.uk
http://shaunstaxtips.blogspot.com
http://www.stinkybooks.co.uk

Can I rent a room in my house and not pay any tax?

noreply@blogger.com (Shaun's tax tips) — Wed, 25 Feb 2009 16:26:00 +0000

A question I get asked quite often is "Do I have to pay tax on income I get for renting a room in my property?"

Under the rent-a-room scheme, you can rent out a room in your home and provided you earn no more than £4,250 from this, then the income is tax-free.

To claim the relief, you must occupy your home during the period that the room is let and the room must be an integral part of your home, not a separate dwelling.

If the rent exceeds the £4,250 annual limit, you can either pay tax on the excess, or prepare a detailed statement of rent received less relevant expenses (such as the extra costs of heat, light and shared facilities) and pay tax on that excess.

If you would like more information on this please contact me.

Are you paying Too Much Tax? Contact the Tax Reduction Specialists now!

http://www.tax-sorted.biz
http://www.welovebookkeeping.co.uk
http://www.stinkybooks.co.uk

Who is your accountant working for? You or the taxman?

noreply@blogger.com (Shaun's tax tips) — Tue, 24 Feb 2009 10:58:00 +0000

I wrote a magazine article recently for Million Impossible.
You can read it here

I just wanted to demonstrate the number of ways you can reduce your tax bill. Some are basic tax planning but others need a bit more thought!

Do you know who your accountant is working for? My clients do!

Valentines Good Tax Guide 2008-09

noreply@blogger.com (Shaun's tax tips) — Wed, 11 Feb 2009 14:11:00 +0000

Valentines Day…a time for couples to show each other how much they care. And if it can be done in a tax-efficient manner, then so much the better! Here are ten top 'tax tips for a twosome'.

A romantic dinner for two
Remember that this is supposed to be pleasure, not business, so don't try to claim the cost of your dinner or hotel stay as a business expense!

On the other hand, staff entertaining can be claimed, so if your loved one is your only employee, why not have a Valentine's Day party? Bear in mind the £150 per head limit for benefit-in-kind purposes, to avoid any unexpected tax bills. This exemption only applies to annual events – but you might want to keep that to yourself, so as not to spoil next year's surprise..!

Tax relief for your Valentines Day gift?
Looking for that special gift idea? Not excited by flowers or chocolates? Spoil your loved one with a gift of something (other than food, drink, tobacco or a gift voucher) bearing a conspicuous advertisement for your business.

A tax deduction may be claimed, but don't get too carried away - the cost of the gift must be no more than £50.

What's mine is yours
Consider transferring assets to your spouse (or civil partner). Gifts between spouses living together are normally made on a 'no gain, no loss' basis for capital gains tax purposes, and are completely exempt from inheritance tax between United Kingdom domiciled spouses. Such gifts can assist in utilising unused capital gains tax losses and annual exemptions, and to allow for lifetime planning for inheritance tax purposes, such as using the nil rate bands of both spouses every seven years.

Outright gifts of income producing assets can also take advantage of income tax allowances and rates. However, don't get caught by the 'settlements' anti-avoidance rules.

Be generous…but don't get carried away!
Before you get too misty-eyed and make any inter-spouse transfers of business assets, aside from the settlements anti-avoidance rules mentioned above consider the implications for capital gains tax entrepreneurs' relief purposes. Would your gift be a qualifying business asset in the hands of your loved one?

Planning a rosy future together
Consider giving a romantic stakeholder pension to your partner. Even if your beloved has no earnings it may be possible to contribute up to £3,600 per annum into a stakeholder pension. And don't forget a stakeholder pension for the kids!

Keep it in the family
Why not employ your loved one?
Make sure the salary is a commercially justifiable reward for the work, is recorded in the books and records, and is physically paid.

Beware the national minimum wage rules (unless your spouse works in the family business and shares the matrimonial home, or is a director of the family company and does not have an employment contract), especially if you don't end up walking hand in hand into the sunset!

Wedding bells
Getting married? Does your beloved have wealthy parents?
What about dropping a subtle hint about the £5,000 inheritance tax exemption for gifts in consideration of marriage (or registration of a civil partnership) by each parent?

Diamonds are forever
Are you still waiting to receive that diamond ring? Remember that there is no capital gains tax charge on the disposal of certain 'wasting' chattels, i.e. assets with a predictable useful life of 50 years or less. As 'a diamond is forever' trying to classify it as a wasting asset is likely to be problematic. However, if its value is less than £6,000 the gift will in any event be subject to exemption from capital gains tax.

Share and share alike
Wishing to make an extravagant gesture? Why not gift your spouse between £500 and £500,000? They could use this money to invest in the shares of an enterprise investment scheme company, and potentially obtain income tax relief on 20% of the investment. Husband and wife (or civil partners) may each subscribe up to £500,000 and claim the relief. Alternatively, a transfer of enterprise investment scheme shares to your spouse partner should not result in any withdrawal of relief, if you are both living together.

An investment in a venture capital trust of up to £200,000 each could also be considered. The rate of income tax relief available on such investments is 30%.

Are you lonesome tonight?
Have you been working abroad for 60 days or more? Missing your loved one?
Why not arrange for your spouse (or civil partner) to visit you? A deduction from taxable earnings may be claimed for certain travelling expenses of the spouse, which are paid or reimbursed by your employer. This includes up to two outward and two return journeys in the same tax year.

Happy Valentines Day!
One final thought. If the big day does not go according to plan and your Valentine's Day tax planning activities are not well received, don't worry. The inter-spouse (or civil partner) exemption for capital gains tax purposes applies throughout the tax year of separation!

Mark McLaughlin CTA (Fellow) ATT TEP
This article has been adapted and updated from an article by the author, which was first published in Tolley's Practical Tax in 2001.

February Tax Tips

noreply@blogger.com (Shaun's tax tips) — Tue, 03 Feb 2009 17:18:00 +0000

To read this months tax tips click here

Are You a Recession Anarchist?

noreply@blogger.com (Shaun's tax tips) — Mon, 19 Jan 2009 09:30:00 +0000

A few words of inspiration from Alan Forrest Smith - A great copywriter and owner of a chain of successful hairdressing salons.

Read on............................................

This is a true story of an entrepreneur hairdresser that beat the last recession!

You know what...?

The bank manager wouldn't lend me a penny despite the fact I had a plan!

Okay it wasn't quite a plan, in fact it was a fill-in-the-blanks 'thing' that I bought from a business consulting company. I simply got it, filled in the blanks and walked into the bank. What else would you expect from a school-drop out with no qualifications?

The guy was an total idiot. He told me how good his son was at fishing and how he had caught one of the biggest Carps in the local Bridge water canal. He then talked to me about how his other son was going to university to advance his teaching career. He told me some others stuff until finally he said to me ...

"what is it you want?" in an elevated, you're not as good as me voice.

I said to him...

"can I have £25,000 please, I have a plan to grow and move my hairdressing salon"

He slowly slid his cheap glasses down his oily nose, looked over the top of them with a slightly frowned look and asked for my business plan.

I nervously handed the plan over to him that I had filled out just hours before over breakfast!

He looked, he asked and he finally said ...

"are you kidding, you'll be B.U.S.T in no time!

And with that response I walked away from my bank feeling totally deflated and beat.

Around 2 hours later I decided to sign for the lease on the new building anyway. I had no cash. I really wanted it. I knew in my heart I could really make it happen.

After just 18 months I had the number one hair and beauty salon in a town saturated with another 35 salons!

And here's a point worth considering ... it was in the thick of the last recession in the UK. I proudly I moved my salon from 250 square feet to 2,000 square feet.

I made it happen.

HOW?

By becoming a recession Anarchist, a dissenter, a rebel, a mutineer, a nonconformist - call it as you want - I simply created my own rules and played by them, not theirs (the media and system)

So let me explain.

I was reading just yesterday in the news paper how one of the UKs biggest stores are now slashing their marketing budget. In fact it gave a huge list of stores doing something very similar.

And that is something most will do during a recession. It's what I call 'subservient-sheep-thinking' or in others words, do-as-your-told, believe what we say, follow and say nothing mindset.

So because the 'system' the media, the shop next door, the financial times, the wall street journal say ...

"tighten your belts, recession is coming" ... THEY DO AS they are told!

And what is really interesting is who gives the reports of coming doom and gloom?

Is it twenty something reporters that have only ever worked in and office and have zero experience in real business?

Is it hardened wall street people that act almost like lemmings in any situation?

Is it a news guy looking for a headline to sell his/her newspaper or magazine?

Is it people that have never in their life taken a risk, run a business, put their life on the line for a business, risked everything to make business work?

The answer is simple most of the people that are feeding you endless crap of approaching apocalyptic downturn have no idea when it comes to being in business so my question is this ...

"why do we hold on to almost everything the report?"

So back to my recession beating salon.
Although we grew a massive amount during this recession we hardly spent a bean on adverting and marketing.

Here's just a few things we did.

~ discovered guerrilla marketing by Jay Conrad Levinson and used almost every page in his book to create zero cost advertising.

~ kept busy and focused on the job in hand.

~ ignored external reports from everyone that had nothing to do with my business about how crazy I was and how it'll fail.

~ never once gave in (although I had moments) until the business was flying.

~ we had a list of at least 5 marketing strategies that cost almost nothing we would carry out 6 days a week!

So here's what I think.

You need to be a media Anarchist, a recession anarchist to survive. Throw away the rule book, create your own success and remember what the guys that give all this news and bad reports usually have zero experience with what you are doing.

I believe 2009 will be one of my best years ever, do you?

It can be.

Take control of your own life. make your own decisions.

Become a...

Recession Anarchist!

I'd love your comment on this.

Go to my blog right now and let me know.

It's here...

www.AlanForrestSmith.com/blog

Don't forget to add your website to the comment. This blog gets a lot of traffic. I'd love to send some your way.

Regards,

Alan Forrest Smith

http://www.OrangeBeetle.com
http://www.OrangeBeetleFamily.com
http://www.BecomeaCopywriter.co.uk
http://www.AlanForrestSmith.com/blog
http://www.OrangeBeetle.com/blog
http://www.SalonPunk.com

http://www.tax-sorted.biz

HMRC reported to ASA!

noreply@blogger.com (Shaun's tax tips) — Thu, 15 Jan 2009 09:48:00 +0000

Peter Clare, an ex tax inspector, has lodged an official complaint to the Advertising Standards Authority about HMRC's TV advert featuring Moira Stuart and the Jan 31st Self Assessment deadline.

He is quoted:

"We are told in deadpan tone to complete our tax return AND pay our tax by this date or we will get a £100 fine. This is absolutely not true.

The £100 fine is for not sending in a tax return when requested, and even then this should be rescinded if there is no tax to pay.

It has nothing to do with the tax due, although of course, this has to be paid."

http://www.tax-sorted.biz

Cut The Guff!

noreply@blogger.com (Shaun's tax tips) — Tue, 06 Jan 2009 07:28:00 +0000

I was reading a blog by Emily Coltman today and have just signed up for her "Cut The Guff" ezine. You can read more about this here.

Anyway, M is a big fan of the plain English campaign and I have been a supporter for many years and have helped some accountancy firms retrain their staff and rewrite their standard letters and helped them learn to speak plain English.

I wanted to join the plain English Campaign and be a full member but was really disappointed to find out it would cost me over £1,000 for the benefit! I contacted them and explained my position (small, broke, humble sole trader!) and asked if they could discount the fee but the answer was ..................NO!

Come on guys, can't you see I really want to help? How about a reduced membership fee for us here who are REALLY passionate about plain English and want to spread the word.

January Tax Tips

noreply@blogger.com (Shaun's tax tips) — Sat, 03 Jan 2009 06:38:00 +0000

Happy New Year and Welcome...To January's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Corner.We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

January 2009

Overdrawn Directors Loan Account Issues
Being Taxed on your Keyman Policy?
Tax Help for Losses and Falling Sales
Planning January 31 Tax Payments
Question and Answer Corner
Key Tax Dates for January 2009

Overdrawn Directors Loan Account Issues

If you borrow funds from your own company or get it to pay personal bills on your behalf, there could be additional tax bills for both you and the company unless you repay that money to the company quickly.Personal TaxWhere the amount you owe to the company exceeds £5,000 at any time in the tax year, and you have paid interest at less than the official rate on this loan there will be an income tax charge on you personally.

The official rate has been set at 6.25% since 6 April 2007 in spite of the massive cuts in the Bank of England interest rates since then.Corporate TaxWhere the loan is still outstanding nine months after the company's year end the company has to pay a tax charge equivalent to 25% of the loan, known as a 'section 419' charge. When the loan is eventually cleared this section 419 charge can be reclaimed by the company, but only when its next corporation tax bill is due.

What to do if you do owe your company a significant amount you could either:
1. Use other personal funds to reimburse the amount you owe; or
2. Get the company to pay you a dividend or a bonus that is set again the loan to bring the amount you owe back to zero; or
3. Ask the company to write-off the loan.

Implications
Option 1 creates no further tax charges for you or the company, so it's the best in that respect.
Option 2 generates more tax for you, particularly if you already pay higher rate tax. In that case you will have to pay 25% of the net dividend in tax but you won't have received a cash dividend to give you the funds to pay that tax. The company may have to pay you a higher dividend to give you enough cash to pay the higher rate tax due. The company must deduct PAYE and NICs from any bonus it pays, so can often be more expensive and it must have the cash to pay that tax and NI to the Taxman.
Option 3 the loan write-off, is treated as a distribution by the company at the date of the write-off. This is taxed as a dividend in your hands, complete with the 10% tax credit, but it is not actually a dividend.

The company cannot claim a deduction against corporation tax for the amount of the loan written-off. The Taxman may also argue that NI contributions are due on the amount of the released loan, as if it was a payment of salary.If you owe your company money please discuss the situation with us as soon as possible as the most tax efficient solution will vary depending on your circumstances.

Being Taxed on your Keyman Policy?

Many small businesses take out keyman policies designed to pay out on the death or incapacity of a key person, such as a lead director. The premiums paid for such policies are only tax allowable as a business expense if all of the following conditions apply:- the purpose of taking out the policy is to cover the drop in profits that would arise from the loss of the key person;- the policy only applies for the time that the employee is useful to the company; and- the policy does not have an investment element such as a surrender value.If the purpose of the policy is to pay off a business loan, like an endowment policy, then that would be a capital related purpose, and the premiums would not be tax allowable. Endowment policies also tend to have an investment element.

Generally where the premiums paid for a keyman policy have been correctly deducted as a business expense, if that policy pays out the proceeds are treated as part of the trading income of the business. The converse also generally applies that if the premiums paid were not tax allowable, the receipts from that policy are not treated as trading income of the business.
Unfortunately there is no law that lays down this clear principle, and there have been several cases that have been decided either way. Even where the premiums have not been deducted from profits, the Taxman may argue that the receipt of the policy allows the business to continue, and the proceeds should be taxed as business profits.Whether there is tax on the receipt may affect the amount you need to be insured for, so please contact us if you need advice on whether the receipt would be taxable.

Tax Help for Losses and Falling Sales

If your sales have dropped and costs have risen, you may be making a loss. This is not a disaster, but you should take action soon to get the best out of the tax system at this difficult time.

VAT
Where your turnover for the last 12 months has dropped below £65,000 you could deregister for VAT. This will not suit all businesses, but if you sell to the public you may gain a competitive advantage by being outside the VAT net.

Loss Claims
Once you have a definite loss figure from your accounts you can set this against your profits for the previous year to generate a tax repayment or tax reduction. If the current loss exceeds the previous year's profits you may be able to carry the excess back a further two years, but this depends on when your loss making period ended. You may need to change your accounting period slightly to accelerate the loss relief available. Ask us to help you get your accounts finalised as soon as possible.

Tax and Pension Credits
If your business is your main source of income, a loss means you may be eligible to receive Tax Credits. Tax credits are particularly valuable for families with children under the age of 16 or who are in full-time education, but single individuals can also claim. Your claim can only be backdated up to three months, so don't delay making your claim. If you are aged 60 or over you may be able to claim Pension Credit. You don't have to be retired to claim this support and it is a much simpler system than Tax Credits.However your trading loss arose, the best policy is to act quickly to reduce the business tax payments and generate tax refunds. The worst thing you can do is put your head in the sand!

Planning January 31 Tax Payments

Remember remember 31 January, because that's when your biggest tax payment is due, particularly if you are self-employed. You will need to pay any balance of tax due for 2007/08 by that date, and at the same time make the first payment on account for the tax due for 2008/09.If your business is not run through a company, your profits are taxed in the tax year in which your accounting period ends.

Say your accounting period ends on 30 June 2008, the profits for that period are taxed in 2008/09, and the first instalment of that tax is due on 31 January 2009. Where this accounting period has produced much lower profits than the previous year, or even a loss, you can elect to reduce your 2008/09 tax payment on account. But please ask us to check your figures first as you will be charged interest on any tax that is later found to be underpaid.It is very important to plan for this big tax payment, and if you think you won't have the funds to pay the full amount due, you should contact the Tax Office as soon as possible.

There is now a new helpline number devoted to these sorts of problems: the Business Payment Support Service on 0845 302 1435, which is open every day from 8am. This service is staffed by tax officers who can arrange to spread your tax payments over a reasonable period. They can also deal with payments of VAT, PAYE, NI and corporation tax.

Tax Credit Overpayments - Are you a victim in need of advice and support?

noreply@blogger.com (Shaun's tax tips) — Mon, 15 Dec 2008 07:43:00 +0000

Each year, due to the way in which tax credits are assessed and awarded, many people find themselves having been overpaid; with subsequent demands from HMRC to recover the money, sometimes in the thousands which undoubtedly causes stress.

Not all instances are correct, miscalculations do occur, so, before you make a payment it would be wise to seek independent advice from those that have been in the same situation before.

The Tax Credit Casualties are a voluntary organisation run by and for victims of tax credit overpayments and subsequent unfair recovery.

They offer support to people receiving overpayment demands, to enable them to know their rights and dispute automatic recovery. They also campaign and lobby cross-party MPs to support a full write-off of all non-fraudulent overpayments.

The website offers a wide range of information, from how to make calculations, understanding all the jargon, how to dispute a claim and even how to stop a court case. There is also a forum for you to share your views.

http://www.tax-sorted.biz/
http://www.stinkybooks.co.uk/

Thanks to Phil Richards for this one