Latest News
June 2010
LATE FILING OF ACCOUNTS AND ANNUAL RETURNS
It is just over 12 months since Companies House increased penalties for the late filing of accounts. However there are additional implications to consider when you don’t file your accounts on time.
For instance we are seeing Companies House taking additional action for the late
filing of accounts and the company annual shuttle return. These actions involve
advertising in the London Gazette that they are starting the process to have the
company struck off the register. Furthermore at a time when credit has been and
still is, hard to come by, credit reference agencies have been known to down
grade company’s credit ratings as a result of the non filing of accounts and
annual returns. Both actions can have serious implications for a company and
therefore we strongly advise you to ensure that accounts and returns are filed
on time.
June 2010
AMANDA’S BABY JOY!
Amanda and her partner Jon are now the proud parents of Ewan Lewis born on Wednesday 12 May (bang on time!!) at a very healthy weight of 8lb 11.5oz. The new family are doing great and all the Team send their best wishes and hope the sleepless nights aren’t taking their toll!!
June 2010
CREDIT CHECKING YOUR COMPANY
Stopfords are now able to provide clients with a credit checking service for their companies. If you are interested in obtaining a report, the charge will just be £12.50 for each report provided. Please contact Graham Richmond at the office who will be able to assist.
June 2010
Change of ‘Fuel Only’ rates where employees are provided with business fuel only for Company Cars
(Also used for VAT reclaim on mileage allowance paid)
When an employee is provided with a company car, to avoid a taxable car fuel benefit, fuel must only be provided for business travel.
To ensure this is the case, two methods are available, the first being preferable:
1. The employee initially pays for all fuel. The employee logs their business miles and makes a claim to the company at the correct rate per mile for these miles.
2. The company initially pays for fuel. The employee logs their business & private miles and repays the company at the correct rate per mile for the private miles.
Several years ago HMRC issues ‘Advisory fuel rates’, which they allow for the above calculations with any proof of the actual fuel cost per mile.
If fuel prices change significantly, the rates are adjusted each June and December. The new rates from 1 June 2010 are:
| Engine Size |
Petrol |
Diesel |
LPG |
| 140cc or less |
12p |
11p |
8p |
| 1401cc to 200cc |
15p |
11p |
10p |
| Over 2000cc |
21p |
16p |
14p |
Employers and employees need to revise their calculations accordingly.
Different rates can be used but these have to be specifically agreed with HMRC by providing documentation and calculations to show why the rate you wish to use is sensible.
These rates are also those used for reclaiming VAT on mileage allowances paid to employees for business mileage in their private cars.
June 2010
POTENTIAL FOR FREE TRAINING – FUNDED BY BUSINESS LINK (It covers sage training
too!!)
Could you benefit from training a key member of staff? If so then Business Link could help.
Criteria
You must be a Limited company.
- You must have 2 to 249 employees (remember Directors are employees).
- Must be a key decision matter.
- Cannot be used for courses required by legislation.
- No previous LSC funded clients can apply.
- Applicants must be made before the end of December 2010, (but remember the money may run out before then).
- Must commit to start the development within 75 days of meeting with an advisor.
How Much?
1st £500 – full funding towards the cost of development (i.e. they pay the first £500)
2nd – Will fund half of the next £1,000 of development. (50:50 with you).
So if you want to spend £1,500 on training they will fund £1,000, and you £500. But you don’t have to spend this much.
Interested?
If so contact Pat Stopford who will advise you and let you have the details.
June 2010
IMPORTANT NEWS FOR ALL SAGE USERS
PLEASE READ THIS
It is very important and may cause you problems in the future if you don’t act now.
Sage is changing the way they deal with the ongoing versions/upgrades that they bring out – and IT’S NOT TO YOUR ADVANTAGE!
So What’s Happening?
Sage are starting a ‘Lifecycle Policy’ – it means that the version number you are on – or the one you buy – has a set lifespan e.g. version 12 will stop being supported on 30 April 2012, version 13 – some time later etc.
So What Does It Mean?
It doesn’t mean that your Sage will stop working – (the only good news) – it
doesmean:-
- You won’t be able to buy Sage cover
- MORE IMPORTANTLY – You will not be able to upgrade to the latest version once support has been withdrawn automatically – YOU WILL HAVE TO TRANSFER YOUR DATA MANUALLY i.e. input all the sales/purchase ledger accounts etc. This could be a long frustrating job.
What Should You Do?
Contact Pat Stopford who can give you more information and maybe able to secure a 20% discount on an upgrade – but only to 31 July 2010.
May 2010
Budget Seminar Part 2!
As expected the new government will deliver an “Emergency” Budget on Tuesday 22 June 2010.
On Thursday 24 June at 8.30am Stopford Associates will be holding a Breakfast Briefing on its contents at Redbrick House, Peafield Lane, Warsop.
Arrival is at 8.15am (when bacon and sausage butties will be served up!!) for a prompt 8.30am start. The seminar should be finished by 10.00am.
If you would like to come and see how the Budget will affect you, please email us on theteam@stopfords.co.uk or telephone reception on 01623 420269 to book your free place.
Places are limited and will be allocated on a first come first served basis.
We would love to see you there as it could be an interesting budget this time!
May 2010
Young Enterprise – 2010 Innovation Awards
Mansfield’s Manor School’s Young Enterprise team “Scents of Heaven” achieved great success on Wednesday 14th April 2010 in the Ashfield & Mansfield Area Board of Young Enterprise Annual Innovation Awards evening at West Nott’s College.
They were awarded the Best Overall Team and most Innovative Product Award for their range of gifts to suit all occasions. The team finished ahead stiff competition from several schools within the area.
The Young Enterprise Project is aimed at 16 – 17 year olds and attempts to give them experience of running of a business, giving them invaluable experience and a head start when they leave school or further education.
The team were supported by their Link teachers Eileen Dunn and Chloe Bore with business advice from Phil Nicholson from Stopfords.
The event was one of the most successful held both for the standard of the teams and also the keynote speech given by Asha Khemka OBE, Principal and Chief Executive, of the College”.
The team went on to represent the Area at the County Finals on May 5th at Nottingham University’s Jubilee Campus, where they won an award for best presentation, a fantastic achievement.
Being only the second year of Stopfords involvement with Manor School, Phil commented, “It’s a fantastic result It’s great to see their hard work pay off, Stopfords will continue to be involved in the project, it’s great to be involved with projects like this and to be able to give something back to the local area”.
March 2010
Compulsory Online Filing of Returns & Electronic Payment of Taxes is on the Way
In 2006, a government report recommended online filing for businesses and IT literate individuals by 2012. Over recent years, HMRC have embarked on an ambitious programme of creating online filing facilities. HMRC will be changing the way businesses have to pay a number of taxes and, in addition, certain forms and returns will have to be filed online.
The taxes that are moving to compulsory online filing in the near future are:
- in-year and end of year PAYE forms for employers;
- VAT; and
- corporation tax
This article gives you a brief overview of the forthcoming changes and where appropriate the action you will need to take in order to be ready and able to comply with the new requirements, of course if we deal with any of these matters for you we will ensure that returns are submitted online, but you will need to ensure you are geared up for making any payments electronically.
PAYE
Employers with 50 employees or more already have to file their end of year forms (P14 and P35) online. From April 2009, they also have to file in-year forms (P45, P46 and the new forms P46 (Pen) and P46 (Expat)) online too. Although the filing of these in year forms is compulsory, HMRC have stated that the first penalties will not be issued until the quarter beginning 6 January 2010, but we recommend you start filing online as soon as you can.
Employers with less than 50 employees must file end of year forms online from April 2010 and file in-year forms online from April 2011 onwards.
If you deal with your own payroll, it is important to ensure that the payroll software you use has the necessary capabilities to file online and that relevant staff are aware of the requirements. Where your payroll is small it is also possible to file year end and in-year forms via HMRC online services.
If you would like help and advice in this area please do get in touch.
PAYE penalties for late payment
Provisions are being introduced to charge a penalty where tax is paid late. For PAYE and CIS payments, the liability to a penalty will be based on a totting up procedure depending on the number of defaults during a tax year. A penalty will not be levied for the first default and will then rise as follows:
- up to three defaults - 1% of total amount of those defaults;
- four, five or six defaults - 2% of the total;
- seven to nine defaults - 3% of the total; and
- ten or more defaults - 4% of the total.
If any tax is unpaid six months after the payment date, then a penalty of 5% will be levied and a further 5% can be levied after 12 months. This penalty regime is to be implemented with effect from 6 April 2010.
It is important that your business makes its payments on time. If you are having difficulties paying these liabilities you should contact HMRC Business Payment Support Team as soon as possible – 0845 302 1435.
VAT
For businesses whose turnover is more than £100,000 (excluding VAT) they will have to file their VAT return online for accounting periods that start on or after 1 April 2010. In addition, all businesses which register for VAT on or after 1 April 2010 will have to file online, regardless of turnover.
In order to be ready for this change it is important that you register with either the Government Gateway or HMRC Online Services, both of which can be accessed from www.hmrc.gov.uk .
Finally, electronic payment will also be compulsory from April 2010.
Corporation Tax
The main change to corporation tax will be that, for returns due after 31 March 2011, companies will need to send their tax return and supporting documentation (accounts & computations) in Extensible Business Reporting Language (XBRL). We will ensure that your accounts are produced in the correct format prior to the change.
Companies House has also announced that it will accept company accounts in XBRL, the same format in which all company tax returns must be submitted online to HMRC from April 2011.
What to do now
These new rules may need changes to your business systems. You can find more technical information about the changes and timescales at www.hmrc.gov.uk
Change is often difficult but we are here to help. Please do get in touch if you would like you discuss any of these changes in more detail.
March 2010
Update on Childcare Voucher Changes
In our Christmas Newsletter we pointed out the changes that were due to take place to the Childcare Voucher Scheme.
Following widespread protests to the Government, a statement was posted on the Prime Minister’s website which considerably watered down the original proposals by stating that:
- All families currently receiving childcare vouchers will continue to receive the same support, through tax relief, as they do at present,
- From April 2011, new recipients of childcare vouchers will be entitled to tax relief at basic rate only,
By implication there will be no April 2015 cut off as previously advised.
March 2010
Fit Note Coming into Force from April
While employers have long thought that the current medical certification process left a lot to be desired they may not welcome the new “fit note” initiative which is expected to come into force in April.
Under the new system the sick note will state either that the employee is “fit for work” or “may be fit for work taking into account the following advice. That advice may include a phased return to work, reduced hours, amended duties or workplace adjustments.
The aim is clear and laudable if it works, that there are a significant number of employees who could do work of some kind but are either signed off as “unfit for work”. There employees are a drain on the benefits system and in reality are headaches for their employers who are left with the task of managing their absence.
However, the smaller employers may find doctors advice difficult to take on board. For example, if the GP advises that the employee may be fit to return to work if they worked fewer hours, but the employer actually needs a full time person in the role, where will that leave the employer?
March 2010
Manor School - Young Entrepreneurs
For the second year running, Young entrepreneurs from the Manor School in Mansfield Woodhouse, have been given a helping hand, and some real-life business guidance, from Stopford Associates on the way to creating their own company and selling their first products at a recent Trade Fair in the Four Seasons Shopping Centre.
Stopford Associates Director, Phil Nicholson, has been working with the students for the past six months, helping them through the process of establishing their own company – Scents of Heaven. The project was part of the Young Enterprise programme, based on the principal of 'learning by doing', which brings volunteers from business into the classroom to work with students and teachers.
Commenting on his involvement in the project, Phil said: "It has been really enjoyable again, working through the many different challenges in setting up a business, and reaching a very tangible outcome - a stall in the Four Seasons selling the products. Some of the skills the students have acquired during the project will be extremely valuable once they begin their working careers."
March 2010
Companies House – Automated Striking Off
Clients sometimes confuse the annual return, which must be sent to Companies House each year and provides a ‘snapshot’ of a company, with the company’s annual tax return. They may, therefore, ignore the reminders they receive from Companies House about non-submission of the annual return, believing that their tax adviser will be dealing with everything. This could be an expensive mistake for them.
We know that Companies House has now automated its striking off procedures and it has confirmed to us that some companies are being struck off at an earlier stage than might previously have been the case. Having a company struck off unexpectedly can be very inconvenient and, as it may be a time-consuming and costly process to reinstate a company which has been struck off, it makes sense to avoid this happening.
Companies House tells us that it issues reminders about the annual return and sends copies of the final default letter to the directors’ addresses. If after sending these reminders Companies House hears nothing, it assumes that the company is defunct and will start striking off procedures. The Registrar will make certain enquiries at the registered office address before placing a notice in the relevant gazette, which gives three months’ notice before the company is struck from the company, this would apparently stop or suspend the strike-off action.
It is, therefore, important the directors ensure that:
- The address in Companies House records are correct for all directors and for the registered office;
- They file annual returns on time; and
- They respond to correspondence from Companies House
Practitioners might also like to remind their clients that tax agents do not receive copy correspondence from Companies House in the same way as they do from HMRC.
March 2010
Clients News - Spring FoodFest at Thorseby
Winter Foodfest 2009 organised by our clients Nottinghamshire Flavours drew in a crowd of around 2000 people at Thorseby Hall. They are currently looking for any local businesses who wish to sponsor their Spring Foodfest in return for a presence at the event on 10th-11th April at Thoresby
If you would like more details on the event, click on the link below.
www.adelanta.co.uk
March 2010
Investors in People
Stopford Associates have recently been awarded a certificate from the Chairman of Investors in People UK recognising the company as an Investors in People organisation for ten years.
December 2009
VAT is Going to 17.5%
The standard rate of VAT will return to 17.5% on 1 January 2010.
So what should you be doing?
The correct rate of VAT to apply is that applicable on the day the customer receives the goods or services. This means that invoices raised before 31.12.09 should charge VAT at 15%; invoices raised on or after 1.1.10, 17.5%. However, if you raise an invoice in January 2010 for goods etc delivered in December 2009, you can charge 15%.
If you charge a VAT inclusive sum, the fraction to use is 47/46ths.
If you take a deposit on goods on a service before 31 December but deliver after the 1 January then the deposit is subject to 15% and the balance at 17.5%. If you raise the full invoice before 31 December then the VAT rate is 15%.
If you provide work on a continuous basis, once you pass 31 December 2009, you can either charge VAT at 17.5% on the entire bill, including the work done when the rate was 15%, or so long as you can prove that this is fair, you can charge 15% on the work done before 31st December 2009 and 17.5% on the rest.
You could also raise a bill before 31 December on the whole job and, even though the job is finished after 1 January 2010. It can all be charged at 15% provided your bill has been paid for by the 31 December 2009.
If you raise a credit note after the 31 December against a 2009 invoice you should use the same VAT rate on the credit note as per the original invoice.
If you want to talk any of these changes through please contact us and we will be delighted to assist.
December 2009
Taxman’s powers of entry
We have heard of a street in the North East of England where several businesses received a surprise visit from someone claiming to be an HMRC officer, in the same afternoon. This is very strange, as HMRC has stated that its officers will only make unannounced visits to businesses where they suspect serious non-compliance. This is not likely to be the case for every business on one street.
Where a visit has not been arranged in advance with the business owner, the HMRC officer must bring a notice stating that the visit has been authorised by either the First-Tier Tax Tribunal or by an authorised officer within HMRC. The officer should also present the business owner with compliance factsheet (CC/FS4).
Be aware of anyone claiming to be an HMRC officer, who turns up without an appointment. HMRC officers always carry identification documents and should be happy for the business owner to check their ID by a phone-call to their base office. The HMRC officer has no power to force entry to the premises.
December 2009
Change of ‘Fuel Only’ rates where employees are provided with business fuel only for Company Cars
(also used for VAT reclaim on mileage allowance paid)
When an employee is provided with a company car, to avoid a taxable car fuel benefit, fuel must only be provided for business travel.
To ensure this is the case, two methods are available:
- 1. The company initially pays for all fuel. The employee logs their business & private miles and repays the company at the correct rate per mile for the private miles.
- The employee initially pays for all fuel. The employee logs their business miles and makes a claim to the company at the correct rate per mile for these miles.
A few years ago HMRC issued ‘Advisory Fuel Rates’, which they allow for the above calculations without any proof of the actual fuel cost per mile.
If fuel prices change significantly, the rates are adjusted each June and December.
The new rates from 1 December 2009 are:
| Engine Size |
Petrol |
Diesel |
LPG |
| 1400cc or less |
11p |
11p |
7p |
| 1401cc to 2000cc |
14p |
11p |
8p |
| Over 2000cc |
20p |
14p |
12p |
Employers and employees need to revise their calculations accordingly.
Different rates can be used but these have to be specifically agreed with HMRC by providing documentation and calculations to show why the rate you wish to use is sensible.
These rates are also those used for reclaiming VAT on mileage allowances paid to employees for business mileage in their private cars.
Remember that the VAT fraction when reclaiming VAT is currently 3/23 but will revert to 7/47 on 1 January 2010
December 2009
Pre-Budget News
Please click on the link below to download our Pre-Budget News PDF.
click here to download.
December 2009
Stopfords Clients have another successful night at the recent Newark Advertiser 2009 Business Awards held at Kelham Hall.
Newark Advertiser 2009 Business Awards Evening was a great evening for one of our clients, Wilson Energy as they scooped the prize for “Most Successful New Business”.
The company have become the region’s first call for a complete energy management service. From hardware supply to a full commissioned web based system, they have helped hundreds of firms up and down the country to reduced their carbon footprint which is a great achievement for the Directors Andy Wilkinson and Stuart O’Neil who launched Wilson Energy back in September 2007.
December 2009
Employment Law Information
Please click on the link below to download our PDF containing some of the main Employment Law questions that are currently being asked. All Employers will find this useful.
click here to download.
December 2009
Client Achievements - See Tech Ltd
We are always proud to share our clients achievements and this is no exception. David Lilley of See Tech Ltd based in Alfreton jetted to the other side of the world for the World Transplant Games in Brisbane, Australia at the end of the Summer and came home with an impressive Bronze medal for the Golf Pairs. Well Done David!
December 2009
Winter Synergy Newletter
Please follow the link below to view our Winter Synergy Newsletter. With up to date news on the government scrappage scheme, childcare voucher changes and our clients recent good news stories.
click here to download.
October 2009
Double Success for Stopfords Clients
Stopfords clients beat off the competition to win the awards for “Excellence in People Development” and “Most Promising New Business” at the Nottinghamshire’s Best Business Awards 2009 organised by Nottinghamshire and Derbyshire Chamber.
Stopfords are proud to announce that two of their clients had success at this year’s Nottinghamshire’s Best Business Awards, held on 25th September at the Belfry Hotel, Nottingham.
Hall-Fast Industrial Supplies Limited were crowned “Most Promising New Business”, this award is presented to recognise entrepreneurs that have set up their own business and successfully grown over the last three years.
Hall-Fast Industrial Supplies Limited
In August 2006 The Boughton based business predominately supplied specialist fasteners into the UK automotive industry but now boasts the supply of over 48,000 standard products including workwear, tools, PPE and access and handling equipment in the UK and to overseas markets.
Our second winner was Rumbles @ The Lawn based at Sutton Lawns. The claimed the prize of “Excellence in People Development” awarded for investing in their most valuable resource, their workforce.
Rumbles @ The Lawn
Rumbles @ The Lawn supports persons with learning disabilities in becoming gainfully employed in a fully operational workplace. The business provides a service both to the local community and business community through availability of a cafe/restaurant with venue hire alongside an outside catering facility.
We are also proud that a third client, Wilson Energy Ltd, came runners up on the evening, with nominations for two separate awards “The Green Award” and “Most Promising New Business”.
All in all Stopfords Clients had a great night!
October 2009
Take Advantage of Increased ISA Limits
In the 2009 Budget Report published in April this year, the Chancellor announced plans to increase the annual Cash ISA allowance from £3,600 to £5,100. This increase will apply to all ISA account holders from the beginning of next tax year, 6 April 2010, however the change will be implemented in two stages:-
- If you aged 50 or over in this tax year (6 April 2009 to 5 April 2010) then you will be eligible to place up to £5,100 into a cash ISA with effect from 6 October 2009.
- For all other savers, the new limit will become effective at the start of the next tax year, which begins on 6 April 2010.
October 2009
National Minimum Wage Increase
The National Minimum Wage rates will increase with effect from 1 October 2009.
The rates are:
- aged 22 and over £5.80 per hour
- 18 – 21 year olds £4.83 per hour
- 16 and 17 year olds £3.57 per hour
September 2009
Enterprise Loans East Midlands
We reported last year that the aforementioned scheme had been set up by the East Midland Development Agency (EMDA) to support fledgling businesses struggling to raise finance. We learn that in the first nine months of the scheme, 38 East Midlands businesses has benefitted from the scheme raising between them £535k of loans. Enterprise Loans East Midlands aims to help 1,000 businesses over the next 10 years offering loans between £3,000 and £20,000.
There is of course conditions to fulfill in obtaining such loans, details of which can be sourced on the website
www.enterpriseloanseastmidlands.co.uk
September 2009
Pension Changes –The Clock is ticking
New laws come into force in 2012 which will require employers to enroll their employees into a workplace pension scheme, where no current scheme exists. Whereas under the scheme currently in force –Stakeholder – the employer is not obliged to contribute, the new regulations will mean that this all changes in 2012 when the employer has to contribute 3% of salary for employees over the age of 22 and earning more than £5,035 pa. The employee will have to also make a contribution or opt out of the scheme in which case the employer is not obliged to contribute.
The new legislation is designed to get people thinking about making a provision for when they retire as the state pension will not nearly be enough for them to enjoy the standard of living that they have be accustomed to. Clearly stakeholder has had the best of intentions but not enough employees have opted to join. Hence the government has been forced to change their thinking and introduce a scheme which includes an inducement to join in the form of the compulsory employer contribution.
The concerns from the government’s point of view is that if employees opt out in joining the new scheme then the scheme will be no better than stakeholder. It may therefore mean further legislation along the line but we will have to wait and see.
From an employers point of view it is important to assess the impact of the new legislation and what the additional cost could mean to them in 2012.
September 2009
Fixing - the price is right
There is no doubt that the last 18 months has seen entrepreneurs facing the most difficult business conditions that we have experienced. There has quite frankly been very little to get excited about and we have almost become punch drunk with all the bad news that has been coming our way.
One crumb of comfort has been the fall in base rate to 0.5% which occurred in March of this year. Those business and individuals that have received the benefit of the reduction in rates (not everybody has) will have no doubt breathed a sign of relief and allowed them to either reduce the payments on their loans or pay off their loans faster than anticipated.
Whilst base rates at 0.5% has been good for borrowers, savers have suffered but the tide will turn when inflation reappears and perhaps this anticipation is now beginning to reflect what is happening within the money markets. Building Society fixed rate bond rates are slowly on the increase as is fixed rate lending rates. According to ‘the experts’ base rate is anticipated to remain at 0.5% until well into the new year but the aforementioned bonds and fixed rate loans are already beginning to anticipate future base rate increases.
We have recently seen one client being offered a 15 year fixed rate of 6.81%. This might sound expensive against the current base related rate. However when you think that the same client was paying 7.5% less than 18 months ago, and accepting that base rates will have to move upwards, then the 15 year deal could appear to be a tempting offer. Having the peace of mind in knowing what you have to pay over the next 15 years or so is something worth considering.
By fixing the interest rate applied to your debt then you do not become exposed to the unknown course of interest rates over the period of the loan. With knowing the repayments you can budget more effectively. Conversely, the risk you take by fixing could incur breakage costs should you wish to repay the loan early.
The average base rate from the January 2000 to 31 December 2008 was 4.74%, which is 0,38% above the recent offer of 15 year money to the client.
So if you are looking at fixed rate options for your loans, then now is the time to act. It may be hard to take the plunge when base rates are at 0.5% but guaranteeing the future will give you the peace of mind and the protection from the uplift in base rate which are sure to come at some stage in the future.
September 2009
Fraud and scams
HMRC website page -
www.hmrc.gov.uk/security/fraud-scams
If you have received an email that you consider to be fraudulent, please forward it to HMRC at
phishing@hmrc.gsi.gov.uk. HMRC cannot reply to every email, but it does investigate and take Online Security very seriously.
To help you spot a scam email HMRC has compiled a list of key points to look out for:
- Disclosing personal information - HMRC will never ask you to disclose personal information such as your PIN or your passwords, or your bank details. Never disclose this information to anyone.
- The padlock - when you log in to HMRC Online Services you are always in a 'secure session' - which is shown by the padlock or an unbroken key in the bottom right hand corner of your web browser. The beginning of HMRC's address will change from 'http' to 'https' when a secure connection is made.
- Your name - fraudulent emails are not normally addressed to you personally; they can have missing addressee details or contain something vague such as 'Dear valued customer'.
- The sender - HM Revenue & Customs (HMRC) was formed on the 18 April 2005 following the merger of Inland Revenue and HM Customs and Excise departments. Those former departmental names no longer exist. Recent fraud attempts have used fake departmental names, and purporting to be sent from HMRC Board Members.
- Links within the email - the email may include a link that you are asked to follow to take you to a website. Following the link takes you to a site that may look genuine, but it is most probably a fake. Always access the HMRC website by typing HMRC's address in the address bar of your web browser.
What to do if you receive a scam email
HMRC would never contact you asking you to disclose personal information. If you have received an email requesting personal information, payment of tax or suggests you are due a tax rebate, please take the following action:
- do not click on any links included in the email
- check for HMRC related scam examples
- send it to phishing@hmrc.gsi.gov.uk then delete it
- if you have anti-virus software on your computer - run it to check for infections
- review the advice featured on Get Safe Online (opens new window) on rectifying common online security problems
September 2009
The VAT Package – Cross Border Supplies of Services
Do you supply services to customers in other countries?
If so, changes in the VAT rules on 1 January 2010 could affect you.
All businesses that supply, or receive, cross border services will need to assess how the new rules will impact on them. At the very least they will need to ensure they charge VAT at the correct rate, apply the reverse charge to receipts of services if necessary, and are able to comply with the new reporting requirements.
Overview of Changes
Place of Supply
A series of changes to the ‘place of supply’ rules (which determine the country in which, for VAT purposes, a supply of services takes place) is to be phased in from 1 January 2010, to ensure compliance with Directive 2008/08/EC (the ‘EC VAT Package’).
At present the basic rule for intra-EC or international supplies of services is that, for VAT purposes, the supply is treated as taking place in the Member State in which the supplier’s business is established. The basic rule applies both to business-to-business (B2B) supplies and to business-to-consumer (B2C) sales, but is subject to a large number of exceptions.
From 1 January 2010, the basic rule for business-to-business supplies of services will be that such supplies take place in the country in which the customer’s business is established. However, this rule too will be subject to a number of exceptions.
Some of the important changes effective from 1 January 2010 are that:
- B2B supplies of the service of transporting goods, and of ‘ancillary services’ (such as loading and unloading goods) will be treated as supplied in the country in which the customer established.
- The ‘place of supply’ of B2B supplies consisting of valuing or working on goods will be the place where the customer is established (but services relating to land will continue to be ‘supplied’ where the land is situated).
- B2B supplies of the services of intermediaries will follow the new general rule and so take place in the country in which the customer is established (at present, they usually follow the treatment of the principal supply).
However, we must emphasise that the above is a very short summary of some very complicated changes, so all those affected need to study the guidance Cross-Border Changes 2010: Changes to the Place of Supply of Services Rules and Time of Supply Rules in relation to cross-border supplies of services, posted at
www.hmrc.gov.uk/place-supply-services.pdf
Entertainers, athletes, musicians, etc
From 1 January 2011, most B2B supplies of cultural, artistic, sporting, scientific, educational, entertainment and similar services will be treated as taking place where the customer is established. However, the place of supplies of admission to cultural, artistic, sporting, etc, events will continue to be the place at which the event takes place.
Hire of means of transport
At present, both B2B and B2C hiring of means of transport (for example, self-drive car hire) is treated as taking place where the supplier is established.
From 1 January 2010, for short-term hire (no more than 30 days, or 90 days for vessels), the place of supply will be the place where the vehicles, etc, is put at the disposal of the hirer.
Long-term hire will take place where the customer is established, in the case of B2B hires, and where the supplier is established, in the case of B2C hires.
However,
from 1 January 2013, long-term B2C hires will be treated as taking place where the customer is established (except for the long-term hire of pleasure boats, which will be treated as taking place where the boat is put at the customer’s disposal, providing the supplier has an establishment there).
Time of Supply
At present, cross-border supplies of services are generally treated as taking place when they are paid for.
From 1 January 2010, the tax point for a single supply will be the date the service is completed or, if earlier, the date it is paid for. For continuous services, the tax point will be the end of each billing period or, the date payment is actually made, if earlier. If there are no fixed billing periods, the tax point will be 31 December each year, or the date payment is actually made, if earlier.
EC Sales List
From January 2010, the requirement to submit EC Sales Lists, which at present is limited to intra-EU sales of goods, will be extended to intra-EU supplies of taxable services which are subject to reserve charge arrangements in the customer’s Member State. From the same date, the time to submit EC Sales Lists will be reduced from six weeks to 14 days (extended to 21 days for electronic submission). ‘As an anti-fraud measure’, monthly EC Sales Lists will be required where the (VAT-exclusive) value of intra-EU supplies of goods exceeds £70,000 reduced to £35,000 with effect
from 1 January 2012. Further guidance is posted at
www.hmrc.gov.uk/vat/ec-sales-lists.pdf.
Reclaiming VAT paid on other EC member States
Finally, the present system, under which a trader based in the United Kingdom who incurs hotel, etc, expenses in other EC Member States has to submit paper VAT repayment claims to the tax authorities in each country will,
from 1 January 2010, be replaced by one under which he will submit such claims electronically via an HMRC ‘portal’. Certificates of status as a VAT-registered trader (Form VAT 66) will no longer be required and the claim procedure will be simplified by the use of standard fields and coding.
Repayment should then be made, by the tax authority of the relevant European country, within four and a half months. Detailed information has been published in Changes to the VAT Refund Procedure, posted at
www.hmrc.gov.uk/vat/refund-procedure.pdf.
June 2009
Minimum Wage Rates
Rates are to increase from 1 October 2009 as follows:-
- Over 21s – to £5.80 from £5.73
- 18-21s – to £4.83 from £4.77
- 16-17s – to £3.57 from £3.53
Note that from October 2010 the main rate will apply from the age of 21 not 22 as now.
June 2009
Employment Tax
Day subsistence: Benchmark Scale Rates
HMRC have introduced an advisory system of benchmark scale rates which employers can use to make subsistence payments to employees who incur allowable business travel expenses free of tax and National Insurance contributions (NICs). The new advisory system was implemented from 6 April 2009.
The advisory system only covers day subsistence payments. If an employer wishes to pay subsistence to employees who have to stay overnight, they can either reimburse the actual cost incurred by the employee or agree a tailored scale rate to cover meals and other expenses in a dispensation with HMRC.
Employers wishing to use these scale rates will simply need to notify HMRC of their intention by ticking the appropriate statement/box on form P11DX before starting to use the system. The rates that can be used will be:-
- Breakfast rate (irregular early starters only): up to £5.00 may be paid where a worked leaves home earlier than usual and before 6am and buys breakfast taken away from his or her home;
- One meal rate (five hour rate): up to £5.00 may be paid where the worker is away from his or her normal place of work for at least five hours and buys a meal;
- Two meal rate (ten hour rate): up to £10.00 may be paid where the worker is away from his or her normal place of work for at least ten hours and buys a meal or meals, and
- Late evening meal rate (irregular late finishers only): up to £15.00 may be paid where the employee has to work later than usual, finishes work after 8pm having worked his or her normal day and has to buy a meal which he or she would usually have at home.
If a higher amount is paid without agreeing a tailored scale rate with HMRC, the excess should be subject to tax and NICs.
Friends and Family allowance
Some existing dispensations also include a tax free scale rate for staying with family and friends when employees are required to stay overnight on business. HMRC have concluded that there is no legal basis for tax relief because it is not linked to any specific underlying expense. Therefore, such a scale rate will not be included within the advisory system or given in any new dispensations. All agreed tax and NIC-free scale rates in existing dispensations covering such an allowance will be withdrawn when the dispensation comes up for review.
June 2009
Protect Your Entitlement
If you are self-employed, a combination of factors may mean that, possibly for the first time, you are eligible to claim Tax Credits.
Firstly your profits may have been adversely affected by the economic downturn. Secondly, if you have been buying vans, equipment or plant, the availability of the new 100% Annual Investment Allowance on this expenditure may mean that your taxable profits are substantially reduced.
However, your ability to claim your full entitlement to Tax Credits may be restricted if you fail to submit a claim early enough. Once submitted, a claim can only be backdated for a maximum of three months.
So for example, suppose you have never made a claim before. On 1 December this year you realise that your income for the current tax year is going to be much lower than last year. You immediately submit a claim and backdate it the maximum three months. You will be entitled to tax credits from September onwards. However, Tax Credits for April to August will be lost.
Tricia Cutts – Tax Manager at Stopford Associates suggests
“To avoid any possible loss of Tax Credits an individual should consider making a ‘Protective Claim’ by 5 July (three months into the tax year)”.
For information on how to do this visit HM Revenue & Customs website:
www.hmrc.gov.uk/taxcredits/claiming-early.htm
Using this process although you might not be currently eligible for Tax Credits, if your income falls during the tax year, your claim may be adjusted retrospectively and your tax credits will be backdated to 6 April.
June 2009
Credit Ratings
Supplying goods and services on credit terms can be a worry at the best of times but particularly so in the current difficult conditions we are experiencing. Not only do we suggest you obtain credit ratings for new customers but it is also not a bad idea to obtain updated reports on your existing customers even those you have supplied for years.
It is already difficult enough to trade in the current conditions without having to suffer a bad debt and therefore keeping on top of your debtor book in terms of collection and the monitoring of customers credit ratings is essential.
Keeping abreast of credit ratings is being made easy by a product by the name of Creditfocus. Creditfocus allows you not only to credit rate your customers but to monitor ratings on an ongoing basis and furthermore allows you to generate Solicitors letters to customers that are slow in paying you.
The are two Creditfocus options, a Creditfocus Classic version allowing UK business to check and monitor up to 5 customers free until 31 December 2009. Secondly there is the Creditfocus PRO which allows you to credit check as many customers as you like for £15 per month plus VAT (£10 per month is you are a customer of Barclays bank.)
There are of course conditions with this offer but it is certainly a product worthwhile looking at.
For further information please see
www.creditfocus.co.uk
June 2009
Pension Plans for All Employees
Since October 2001, employers have been obliged to offer their employees the opportunity to join a ‘workplace personal pension scheme’ - known as a Stakeholder Pension Scheme, that is unless the employer has less than 5 employees or alternative pension arrangements are in place.
Figures have shown that less than 40% of eligible employees have chosen not to avail themselves to this opportunity and many employers have had to set up a scheme just to remain within the law.
The Government is very keen to encourage employees to join a private pension scheme as the alternative to date has been that the employees become reliant on state benefits and potentially this presents underfunding problems in an aging population.
In order to try and arrest the potential benefits problem, the Government has introduced regulations that from 2012 require employers to enrol all employees (aged between 22 and state pension age in a pension scheme, to which the employee will contribute at least 4% of his earning per year between £5,035 and £33,540 (to be up rated annually) and the employer contributing a sum to at least 3% of those earnings. For both employers and employees, minimum contributions will be phased in over 3 years.
The contributions payable will be calculated on the employee’s full earnings (including overtime, commission payments etc). The Government will also contribute a further 1% (in the form of tax relief on the employee’s contribution) .
There will be no minimum length of service for qualification and part time and temporary staff will also be entitled to join the same scheme as permanent staff.
Employees will have the option of opting out if they wish but will lose the benefit of the employer contribution.
Employers with current pension schemes may have to reconsider their arrangements before 2012 as membership may have to be opened to individuals currently excluded, and the definition of earnings for contributions purposes may have to be extended.