Self Assessment Deadlines

                          
As most people are now aware, the deadline for filing a Self Assessment Tax Return is 31 January. Therefore for the April 2010 Return, the deadline was 31 January 2011. If it is filed after this date, you may be liable to a penalty. This penalty will be either £100 or a sum equal to the tax charge if it is less than £100.                                                                                                                                                                                                       
It should be noted that there is no penalty charged if there was no tax payable. So even if a Return is filed late, there may well be no penalty.

Probably of more relevance is the 5% surcharge, if the tax owing is not paid by the 28 February. So given the current low interest rates paid & charged, this could prove to be very expensive.

For those taxpayers with a reasonably large tax bill, the 28 February is probably more important a date than the 31 January.

All the best.
Richard Stilwell

VAT Changes

 Please note that all invoices that charge VAT, raised on or after 4 January 2011, should be charged at the new rate of 20%.

 Under the usual tax point rules, businesses should use the 20% rate where you supply goods or services on or before 3 January 2011 and then issue an invoice on or after 4 January 2011.

 If you use the Flat Rate VAT scheme, the percentage will increase by 1.5%.  Therefore, if you are using the "Computer and IT consultancy" rate of 13%, from 4 January 2011, you should use the rate of 14.5%.

If the VAT quarter covers both VAT rates, it will need a bit more attention, as you will need to apply 13% to those invoices raised at 17.5% and 14.5% on those raised at 20%.

The VAT paid under the Flat Rate Scheme is always calculated on the VAT inclusive sales figure.

Also, if you are still in the first year of registration, then a 1% reduction applies to those FRS rates.

If you have any queries in connection with VAT, please contact Michael Kitchen on: michael@stilwellgray.co.uk

All the best.
Richard Stilwell

May we all at Stilwell Gray wish you a Merry Christmas and a Happy New Year.

IR35

After over 10 years of IR35, HMRC have finally decided that enough is enough and they are now looking to re-vamp the legislation.  No actual details are available but there are now working parties looking at a way forward.

This time they appear to be taking their time and thinking about it's impact and implementation.

IR35 was a "knee jerk" piece of legislation brought in by someone at HMRC who appeared to have their "bee in a bonnet" about Contractors.  It assumed that all Contractors are just disguised employees.  We all know that is not the case.  Contractors do take risks.  Most have relatively short contracts, and coupled together with no annual leave, sick pay and employee rights, they are clearly not disguised employees.  Contractors offer companies a flexible option in terms of dealing with specific projects and as such are a key part of our Economy.

Let us just hope that their worth is appreciated and any new legislation now reflects their importance.  We do not want any more uncertainty.

I will keep you posted on any new developments.

All the best.
Richard

Tax Relief on Life Insurance

I am afraid this is not a very interesting subject, even by accountancy standards!!

Normal Life Insurance on behalf of a Director/Employee of a company is not tax deductible against company profits.  However, if this policy is a "Death in Service Policy", it can be tax deductible.  These are normally set up as 4 times salary (this can be set to include dividends, if required)

If you are considering Life Insurance, you may want to consider this option.

If you want more details, please contact me at richard@stilwellgray.co.uk and I can let you have more details.

Regards.
Richard Stilwell

HMRC Penalties

What a busy week so far!!   HMRC have gone mad and are issuing PAYE penalties on companies that have ceased to trade and those that have only recently started to trade.

They are saying a 2009-2010 PAYE end of year return has not been filed, when clearly one is not due.

These demands are generated at the push of a button, without any thought.  We now have to appeal against all these penalty demands.  To make matters worse, HMRC are working on an 8-10 week delay in dealing with post, so these appeals will not be processed before the reminders are sent.  Also, there is no way they can stop reminders being sent, until that appeal has been processed.

If you have received one of these demands, send it on to us and we will sort it out.

Thanks HMRC!!