	Chartered Certified Accountants And Registered Auditors

Useful Information

Tax Facts

The CIS Scheme

The CIS scheme came into effect 5 April 2007. The key change to the scheme is that there is now a verification process that each subcontractor must undergo in order to assess whether they are in the CIS scheme, and if so, what level of deduction should be made.

Each contractor should have received a list of subcontractors that they paid in the last year. If your subcontractor is not on the list then you still need to verify them, if they are, you are advised whether you should make deductions from them or not.

There are 3 different levels of payment.

1) 20% deduction (formerly 18%)
2) 30% deduction
3) Gross payment

If you subcontractor is verified and marked as net payment then you deduct 20% if they are marked for gross payment then no deduction is made and if your subcontractor is not verified then you should make the 30% deduction.

If you need to verify a new or existing subcontractor you should ring the CIS help line on 0845 366 7899 or you can do it online www.hmrc.gov.uk/new-cis.

!!! You must verify your subcontractor BEFORE you make any payments !!!

Please note that when completing the monthly return you will need to sign a declaration stating that all of your subcontractors are subcontractors and should not be employed by you. You must check the status of your subcontractors, please contact us for more information.

National Minimum Wage

The national minimum wage was increased again on 1st October 2008

22 and over from £5.52 to £5.73 per hour
18-21 year olds from £4.60 to £4.77 per hour
16-17 year olds from £3.40 to £3.53 per hour

The national minimum wage will increased again on 1st October 2009

22 and over from £5.73 to £5.80 per hour
18-21 year olds from £4.77 to £4.83 per hour
16-17 year olds from £3.53 to £3.57 per hour

Accommodation offset - £4.46 per day (£31.22 per week).

The annual leave entitlement is 28 days including bank holidays, as from 1st April 2009

HMRC ~ Extra Time To Pay

If you are struggling in the current economic climate and are having difficulties meeting your VAT and tax liabilities, why not contact the Revenue and organise a “time to pay” scheme.

Ideally you should contact them before the liability is due, this way they are more likely to agree to the scheme and you will not be charged any late payment penalties, unlike previously.

To do this you should contact the HMRC’s Business Payment Support Service on 0845 302 1435. Or have a look at http://www.hmrc.gov.uk/pbr2008/business-payment.htm for more information.

Please ensure that if you do give them a call you have details of all your incomings and outgoings so that you can agree on a timescale that you can afford.

Companies House Accounts Filing Penalties

Companies House have increased the penalties for late submissions of Accounts. The new penalty takes effect on accounting periods beginning on or after 6th April 2008. The new penalties are as follows.

Length of Delay (from when accounts were due)	Private Company	Public Company
Not more than 1 month	£150	£750
More than 1 month but less than 3	£375	£1,500
More than 3 months but less than 6	£750	£3,000
More than 6 months	£1,500	£7,500

Double Penalties

The amounts set out above will be doubled if both the current and previous accounts have been filed late. The penalties will only be doubled if the late accounting periods are successive.

Companies House Filing Deadlines

For accounting periods beginning 6th April 2008 onwards the filing deadlines have been reduced from 10 months after the year end to 9 months i.e. If the company’s accounting period ends 30th April 2008, it is due at Companies House no later than 31st January 2009.

Redunancy ~ The Facts

Unfortunately with the state of the economy the way it is at the moment, more and more people need to know the facts about redundancy.

Redundancy is when a job/role no longer exists. If a company closes down or the function of the business changes then the job has gone. If someone is sacked for misconduct etc, this is dismissal and is completely different.

Employers should consult with their staff from the early stages; it is very unlikely that circumstances would change overnight. All consultations should be minuted and copies distributed.

If there is to be only partial redundancies, I.e. the company has too little work for the number of staff, then the process of selection of staff to put forward for redundancy should be clear and fair. If possible the employer could try the employee in a new role (on a trial basis), if this option is available. It may be viable to ask if anyone would be willing to opt for voluntary redundancy, (usually for those close to retirement). When all else fails, specific guidelines must be drawn up and any employee that is made redundant is entitled to be given the reasons for their selection.

Calculating Redundancy Pay

There is a statutory minimum that must be paid to employees that are subject to redundancy if they have worked for the business continuously for more than 2 years. For an employee under the age of 22 this is half a weeks pay for each year of service, rising to one weeks pay for employees between 22 and 40, and then one and a half weeks pay for those 41 and over. However, redundancy pay can be paid at a greater level than that of the statutory entitlement and is drawn up in the employment contract.

There are no exceptions to this rule apart from those who have not been continuously employed for the 2 year entitlement period. Employees are covered if there was any stipulation in their contract with regards to redundancy pay. It is no longer possible for an employer to sign away the rights of redundancy in the employment contract.

Failure to follow the correct procedures in redundancy could result in an employment tribunal, ultimately costing the company financially and creating bad publicity.
If redundancy is caused by a business going bankrupt, then the state picks up the bill for the statutory entitlement.

Notice periods

For each year that an employee has worked for the business they are entitled to one weeks notice up to a maximum of 12 weeks. Even if the employee leaves, or is allowed to leave before the end of their notice entitlement they are still entitled to full pay for the remaining period.

For further information and advice please contact us or refer to ACAS (Advisory, conciliation and Arbitration Service). Who offer free help and advice in employment issues.

http://www.acas.org.uk/index.aspx?articleid=1365

Also refer to direct gov http://www.direct.gov.uk

VAT ~ Fuel Scale Charges

Any businesses which recover input VAT on motoring and has an element of private use must apply the Fuel Scale charges set out below.

The charge for each vehicle is determined by the CO₂ emissions, if the emissions of the vehicle are not shown on the table you would need to round down the emissions figure to the next bracket i.e. Emissions of 163 g/km would round down to 160g/km, or 148g/km would be 145g/km and so on.

For a bi-fuel vehicle with two CO₂readings the lower of the two should be applied.

The fuel scale charges listed below are inclusive of VAT, so you would need to apply the VAT fraction applicable at the time i.e. (15% = 3/23) 1^st December 2008 to 31^st December 2009, or (17.5% 7/47) from 1^st January 2010. E.g. If your car had CO₂ emissions of 148 g/km and you did quarterly VAT returns you would need to do the following calculation: 214*3/23=27.91 is the VAT amount you would need to enter in box 1 (for a quarter ended 31^st Oct 2009, vat @ 15%).

Please also ensure that you refer to the correct table. There are 3 tables below, the first is for a 12 month VAT period, the second for 3 month return (most businesses), and the last for monthly returns.

12 month returns		3 month returns		monthly returns
Co2 bracket	Fuel scale	Co2 bracket	Fuel scale	Co2 bracket	Fuel scale
g/km	charge (£)	g/km	charge (£)	g/km	charge (£)

120	505	120	126	120	42
125	755	125	189	125	63
130	755	130	189	130	63
135	755	135	189	135	63
140	805	140	201	140	67
145	855	145	214	145	71
150	905	150	226	150	75
155	960	155	239	155	79
160	1,010	160	251	160	83
165	1,060	165	264	165	88
170	1,110	170	276	170	92
175	1,160	175	289	175	96
180	1,210	180	302	180	100
185	1,260	185	314	185	104
190	1,310	190	327	190	109
195	1,360	195	339	195	113
200	1,410	200	352	200	117
205	1,465	205	365	205	121
210	1,515	210	378	210	126
215	1,565	215	390	215	130
220	1,615	220	403	220	134
225	1,665	225	416	225	138
230	1,715	230	428	230	142
235 or more	1,765	235 or more	441	235 or more	147

For vehicles that do not have a CO2 emissions figure, you should identify the CO2 band based on engine size, as follows:

·         If its cylinder capacity is 1,400 cubic centimetres or less, use CO2 band 140 or below

·         If its cylinder capacity exceeds 1,400 cubic centimetres but does not exceed 2,000 cubic centimetres, use CO2 band 175

·         If its cylinder capacity exceeds 2,000 cubic centimetres, use CO2 band 235 or above.

Electronic Payments

There are a few methods of electronic payment but I have identified the most common, those being by Telephone/Internet banking, and via debit/credit cards (Billpay).

Please note that HMRC do not accept American Express or Diners club cards.
Should you wish to pay by another method you can visit the HMRC website for information http://www.hmrc.gov.uk/payinghmrc/

Online/telephone banking

HM Revenue & Customs have 2 accounts offices, most of our clients will be processed by Cumbernauld, so these are the details you will need. It doesn’t matter if you want to pay Self Assessment, PAYE or Corporation Tax, the bank details are always the same, you must make sure that the reference that you use is correct:

Sort code: 08-32-10
Account number: 12001039
Account name: HMRC Cumbernauld
References:

For Self Assessment the reference you should use is your UTR number (the 10 digit reference on your Tax Return) followed by the letter K. Do not leave any spaces in your reference!

For PAYE you should use your Accounts Office reference, this should be on the front of your yellow remittance book. Please note that this is not the same as your PAYE reference. It will look like this 582PH00123456, do not use this reference, it is an example only!

For Corporation Tax you should use the reference given on the tax payslip . But it does incorporate the company 10 digit reference. However the reference you will need for this has 17 digits and will look something like 1234005678A00101A.

To pay your VAT liability using this method you need the following bank details

Sort code: 08-32-00
Account number: 11963155
Account name: HMRC VAT
Reference: Your VAT registration number.

Billpay

If you intend on using this service regularly it would be easier for you to register, however you do not need to register to be able to use it.

Click on the link below to access the billpay service.

https://www.billpayment.co.uk/hmrc/scripts/nrpaynow.asp

The New Vat System

From 1st April 2010 all businesses with an annual turnover (excluding VAT) of over £100,000 must file their VAT returns online and pay any VAT due electronically.

The first thing you will need to do is enrol for the online filing service. If we currently prepare your VAT returns we will have done this automatically, regardless of turnover. If you calculate your own VAT you will need to go to www.hmrc.gov.uk/vat/start/register/signup-online.htm

The online VAT form will have the same format as the paper returns, and it will check your arithmetic for you before you submit it.

If you need any further information on this matter please do not hesitate to contact us.

Please refer to the electronic payments section for details on how to pay your VAT electronically.

Tax Enquiry Fee Protection Service

As you may be aware HM Revenue and Customs have been putting more resources into pursuing more tax enquiries over the past few years.

Enquiries can be complex and therefore responding to HMRC can be time consuming and consequently expensive to you. We now offer an insurance policy which covers our fees should you be unfortunate enough to be subject to a Tax Enquiry by HMRC.

The policy does not cover any tax liability that may arise as a result of a Tax Enquiry!

This service is only available to clients of Geoffrey Beech & Co.

P.A.Y.E. ~ New Penalty Regime

H.M. Revenue & Customs are introducing late payment penalties for P.A.Y.E. due from May 2010.

The penalties are a percentage of the amount you pay late. This percentage will increase during the year dependent on the number of late payments.

Your payment record for 2010-11 tax year will be reviewed after the end of the tax year and the first penalties will be issued from April 2011.

To avoid these penalties the Revenue has to receive the payment by their deadlines which are, for normal cheque payments, the 19th of the month or if this is a bank holiday or weekend them it becomes the last bank working day before the 19th of the month.

Alternatively, you may wish to pay the Revenue electronically which will extend this date to the 22nd of the month. You can pay electronically by Direct Debit, internet, telephone banking, BACS Direct Credit, debit or credit card, or CHAPS. You can find out more information on paying electronically on the Revenue website www.hmrc.gov.uk/payinghmrc

If you are having difficulty in paying or can’t pay you need to contact the Business Payment Support Service on 0845 302 1435 as soon as possible.

Should you have any queries regarding the above please do not hesitate to contact us or for more information on the late payment scheme please visit the Revenue website www.hmrc.gov.uk