Financial Store

Paying a Value Added Tax (VAT) liability can be a large burden for small businesses. This article is aimed at owners of small businesses in the UK and focuses upon how their VAT burden can be successfully managed.

Ten tips on managing your VAT liability:

1.If you do not need to compulsory register for VAT, calculate if it would be worthwhile to de-register for VAT.

2.If you are not registered ensure that you review your requirement to register on a monthly basis, as there are financial penalties for late registration.

3.Make sure that you are calculating your VAT liability correctly. Many business pay VAT on items they shouldn’t and don’t reclaim all the VAT that they are entitled to.

4.Keep up to date with VAT legislation changes that effect your business. It may be worth considering retaining an accountant to keep an eye on this for you.

5.File all VAT returns on time and make sure that VAT payments are made prior to deadlines. There are financial penalties for not meeting VAT deadlines.

6.If you are experiencing cash flow difficulties and can not make your VAT payment on time, then contact HMRC to negotiate payment terms.

7.Calculate if using the flat rate VAT scheme would save you money. This is for businesses with a turnover under £150,000. It saves administration and could be financially beneficial.

8.Consider if you would benefit from cash accounting for VAT purposes. If your taxable turnover is under £1,350,000 a year this method allows you to account for VAT on the basis of cash received and paid, rather than the invoice date or time of supply.

9.Would you benefit from using the annual accounting method. If your turnover is under £1,350,000 under this scheme you make only one VAT return per year.

10.Should you be using a retail scheme. These schemes are for retailers and they are an alternative if it’s not practical to issue invoices for a large number of supplies direct to the public.

VAT is a complex and specialist area of taxation if you are in any doubt over how it applies to you or your business then it is recommended that you contact an accountant or VAT specialist with expertise in this area. You can also contact HMRC direct for advice.

This article is an introduction to certain aspects of VAT legislation only and it is not intended to be comprehensive.

The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and the rates and legislation associated with VAT will change.

It is an unfortunate fact of life that you may find yourself or business under enquiry by HM Revenue and Customs (HMRC), through no fault of your own or your accountant.  HMRC enquiries can be random of for various reasons.  HMRC normally don’t have to give a reason as to why they are enquiring into your tax affairs.
HMRC can make enquiries into many taxation areas including:

Self Assessment tax returns
Corporation tax returns
Payroll compliance
VAT compliance
National insurance payments

The whole process can often be very worrying and confusing for the taxpayer. Often, even if HMRC do not find any errors amongst your books and/or records you may find yourself paying high professional costs to defend your position.   There are differing types of enquiry including aspect enquiries, where only part of a self assessment tax return is looked at, to full enquiries where your whole tax return is reviewed. 

The process should begin with a formal letter from HMRC stating that they are making an enquiry.  This is normally accompanied with, or shortly followed with a request for information.  Having reviewed this information it is normal that the investigating HMRC officer will have a long list of questions. This can further lead to discussions about potential tax adjustments and penalties. If there are any errors or adjustments to be made these a normally dealt with under civil law. If fraud or tax evasion is suspected it is possible, under extreme circumstances, that criminal proceedings can occur.

It is highly recommended that you have a Chartered Accountant who is experienced in HMRC procedures and tax law to represent you if you find yourself under enquiry by HMRC. A good tax accountant will be able to advice you of your legal position, the likely outcome and deal with most matters on your behalf.

Whilst no one can guarantee that you wouldn’t be subject to a HMRC enquiry, some accountants offer peace of mind to their clients by providing a fee protection service.
The service works on the basis that you pay a modest annual subscription, in the event of a HMRC  enquiry the accountant then makes a claim on their firms fee protection insurance policy, which is normally underwritten by a national insurance company.  As such all of their fees may be met by the insurance company.
Nobody can prevent you from being investigated by the Taxman, but a good accountant can help to ensure that you get the best possible support and advice without having to worry about the cost. Please note that you should check with the accountant what the actual terms and conditions are that relate to the services that they offer.

The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice.

It’s that time of year when staff parties abound, and you may be thinking of handing out small seasonal gifts to employees, customers or suppliers. Before you get too generous, make sure you know the tax implications.

Entertaining your staff is tax allowable as long as the entertaining is not part of an event aimed primarily at your customers. The cost of entertaining customers or potential customers or suppliers is not tax allowable for income tax or corporation tax. Your accounting records need to distinguish between the cost of hospitality such as the provision of food or drink, and significant gifts to customers, from your other marketing expenditure. The amount classified as non-allowable entertaining is added back to your profits to calculate the total tax due.

You can reclaim the VAT on the cost of entertaining your staff, but a proportion of the costs must be disallowed for VAT purposes where non-staff, such as family members, customers or suppliers also attend the event. However, where customers from overseas are present the VAT can be reclaimed on their portion of the costs. This is because the Tax Office recently removed the block on reclaiming VAT on entertaining overseas customers. Note the VAT block is only lifted for overseas customers, not suppliers, or UK customers, or other third-parties.

An event laid on free or below cost for employees would normally be a taxable benefit for those staff who attend, but it is tax free if it is designated as an ‘annual event’. The other requirements are that the event is open to all staff and the cost does not exceed £150 per head, including VAT. If the cost exceeds this threshold, your employees will be taxed on the total cost of the event as a benefit in kind. You can pay this tax and NI on behalf of your employees using a payroll settlement agreement (PSA), which you need to agree with the Tax Office. So to avoid this hassle, keep the cost of the event, including all free transport and accommodation, below £150.01 per head.

Small seasonal gifts to staff, such as a bottle of plonk or a turkey, can be treated as ‘trivial benefits’. These trivial benefits can be excluded from the report of benefits and expenses (form P11D) provided to staff, if you agree a dispensation for these gifts with the Tax Office. Don’t push it with the Tax Inspector by trying to pass off expensive hampers or cases of champagne as trivial benefits.

This article is from Bridgend accountants and is based on the UK tax system. For further advice speak to a Chartered Accountant.

The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.

Are you thinking about buying real estate in Columbia, but can’t choose if this is the best choice for you? Then you need to learn the reasons this real estate is so popular with numerous people.

Once you learn the reasons why it is so popular with others, you will have a much easier time of making the best choice for you and your family. The following are the main reasons you need to keep in your mind.

1. Houses available for everyone’s price range – Do you have a price range that you can’t go above if you want to afford to live in an area this beautiful? Of course you do, everyone one does especially these days, but you can easily locate a home that is for sale in your price range without a lot of problems.

You need to take your search on the internet to look at a good real estate agents website for the listings that are current and the prices for them. This will give you an idea of what you will find before you actually visit the area to look at different homes.

It is important to make note of the homes that you find online that interest you so you can be sure and speak to the real estate agent that can help you buy it. That way you don’t end up looking at houses that are out of your cost range.

2. 200 years of history – Purchasing a home in Columbia means that you will be living in an area that has over 200 years of history. That can’t be said about every city you can choose to live in.

Around this area you will find Lake Murray, Fort Jackson, which is the Army’s largest training base, the University of South Carolina, recreational opportunities and even many different festivals. That makes means that living in this area is going to provide you with things that you can enjoy as you live in the area on a daily basis, which is a big plus for many people.

3. Best investment houses in the state – The homes in Columbia are some of the best investment properties in the state. You can easily find homes for sale that you can live in, but if you are purchasing a vacation home or a home you can put up for rent, then you will not find any better properties in the state, especially with all of the history behind the city.

These are the main reasons that real estate in Columbia is so popular with so many people. You need to decide now if you are ready to buy a home in this area so you can enjoy living in a city that is beautiful and that offers you many benefits. Just make sure you are wise and use a good real estate agent to help you locate the best home for you when you do purchase so you end up with exactly what you want.

If you enjoyed this article by Jeff Schuman please visit our real estate in Columbia website today. Where you will locate Columbia, SC homes and houses for sale in many other areas like, Camden, Elgin, Forest Acres, Fort Jackson – SE Columbia and a variety of other locations so you can find the perfect home for you. http://www.realestateincolumbia.com/

What are Self-assessment tax returns?
These are tax returns issued by HM Revenue & Customs (HMRC) for completion by UK tax payers. The regime was introduced in 1997, with the idea of simplifying the UK tax system and it is certainly debatable if this has been achieved!

Who needs to file a Self-assessment Tax Return?
For the majority of UK individuals their income is taxed at source, such as employment income which is taxed under the PAYE system. Therefore, most people will not normally need to file a Self-assessment tax return. However, if there is any income or gains that is either untaxed or there is additional tax due, then it is the individuals responsibility to notify HMRC. Usually in all circumstances if HMRC issue a Self-assessment tax return then it must be completed and filed. Below are a number of examples where there is normally a requirement to file a tax return (please note that this list is not intended to be comprehensive):

Self-employed individuals;
Individuals who are members of partnerships;
Company Directors;
Trustees;
Individuals who have sold assets that are subject to capital gains tax;
Members of parliament;
Ministers of religion;
Pensioners with an annual income of £100,000 or more;
Employees or pensioners with an annual income from savings or investments of £10,000 or more;
An employee or pensioner with untaxed annual income of £2,500 or more;

An individual who receives rental income.
If you are in any doubt over you requirement to complete a tax return, it is recommended that you seek professional advice from a Chartered Accountant or contact HMRC. In addition a Self-assessment tax return may also be filed in order to reclaim over paid tax.

When do Self-assessment tax returns need to be filed?
Tax returns cover all income and gains for the fiscal year, that is from the 6th April in one year to 5th April in the next. There are additional rules if tax returns are issued late by HMRC, but normally if you wish HMRC to calculate the tax for you or if you wish to file a paper tax return then the filing deadline is 31st October following the end of the tax year, else it is 31st January following the end of the tax year. For example, the tax return filing deadline for the year ended 5th April 2010, if you require HMRC to calculate the tax due for you (or if you wish to file a paper return) is 31st October 2010, else the filing deadline is 31st January 2011. There are penalties for the late submission of tax returns.

When does the tax liability need to be paid?
In most circumstances, the outstanding tax due is payable by the 31st January following the end of the tax year. There are penalties and interest chargeable for late payments. In certain circumstances tax payers are required to make payments on account these are payable bi-yearly on 31st July and 31st January.

The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.