Latest Updates

27 April 2010
Annual Investment Allowance Increased

Most businesses are able to claim an Annual Investment Allowance (AIA) on the first £50,000 spent on plant and machinery. This provides immediate 100% tax relief on qualifying expenditure.

The allowance has increased to £100,000 from 1 April 2010 for a business within the charge to corporation tax and from 6 April 2010 for a business within the charge to income tax.

As the chargeable accounting periods of many businesses will span the operative date of change, a pro rata calculation of their maximum entitlement will be required. For example, if a company has an accounting year end of 30 September 2010, its limit will be £75,000. However, not more than £50,000 of the expenditure must be incurred prior to 31 March 2010.

The allowance is only available for assets used within your business and not if you hire out or lease the asset.

Please do contact us if you would like advice on how this increased allowance will affect your business.

27 April 2010
Holiday Home Tax Rules Deferred

Good news for the Westcountry economy in that the tax rules on furnished holiday lets that were due to change in April 2010 have been deferred, albeit possibly only for a short period.

Following the election date announcement and opposition from both the Conservative and Liberal Democrat parties, the Government has agreed to defer the abolition of the rules until after the election... This was one of a number of more controversial measures dropped in order to get the Finance Bill through Parliament prior to the dissolution for the general election.

The beneficial tax reliefs reduce the tax burden of running furnished holiday let businesses, and enable owners to reinvest in their businesses, or pass the business on to their children tax efficiently. For the time being, capital allowance can be claimed, losses offset against other income and capital gains tax reliefs remain.

The issue now is one of uncertainty. Businesses need to make decisions based on the information they have to hand. Many furnished holiday let owners will be planning future capital investment, and the decision could depend on whether tax reliefs are available. Unfortunately until after the election we will be unsure whether furnished holiday let tax status will be protected, and owners will therefore need to keep an eye on the political situation when forming a view about whether to make the investment or not.

27 April 2010
New Late PAYE Payment Penalties

The late payment penalties apply to all employers, even if you only have one employee and apply to all payments due for the tax year commencing on 6 April 2010. Even if part of the payment is made, a penalty can still apply to the part that was paid late.

The penalties relate to all types of payments due, including:

• - monthly or quarterly PAYE (pay as you earn)
• - student loan deductions
• - Construction Industry Scheme (CIS) payments
• - Class 1 National Insurance contributions (NICs)
• - annual payments of employers' Class 1A NICs
• - annual PAYE Settlement Agreements (PSA) payments
• - PAYE determinations or charges raised

It is important to note that the penalties will not be issued immediately after a late payment has been made but will be sent out after the end of the tax year. HMRC has up to two years after the late payment occurred to issue a penalty letter.

Penalty rates and how they will apply

Penalties will be charged on each PAYE scheme independently. Therefore, if you operate more than one PAYE scheme you need to make sure that amounts due for each individual PAYE scheme reference is paid in full on time.

You will not be charged a penalty if only one PAYE amount is late in a tax year - unless that payment is over 6 months late.

If you have been in the habit of making monthly payments on account and making an annual adjustment at the end of the year, penalties will still be applied as there could be a part of each month’s payment that could be late. It is important to pay the correct amount every time.

The amount of the penalty will depend on how much is late and how many times your payments are late in a tax year. If you pay part of what is due on time then any penalty will only be charged on the part that is late. The table below (which has been taken from HMRC web site) shows how the penalties are calculated. The penalties apply to the total amount that is late in the tax year (ignoring the first late payment in that tax year).

Additional penalties for monthly and quarterly payments over six months late

If you have still not paid a monthly or quarterly amount in full, after six months you may have to pay a penalty of 5%. A further penalty of 5% may be charged if you have not paid after 12 months. These penalties apply even where only one payment in the tax year is late.

Penalty dates

The penalty date varies according to the type of payment.

For payments such as Class 1A NICs; HMRC determinations and assessments; and amendments or corrections to returns the ‘penalty date’ is 30 days after the due date. This means that for these payments you may have to pay a 5% penalty if you have not paid the full amount within 30 days of the due date an additional 5% penalty if you have not paid the full amount within 6 months of the due date a further 5% penalty if you have not paid the full amount within 12 months of the due date.

In most other cases, the penalty date is the day after the due date.

27 April 2010
Key PAYE Dates

19th or 22nd of every month: 19th is the deadline for payment of monthy PAYE and NIC by conventional means and 22nd if paying by electronic means.Where payment dates fall on a weekend or a Bank Holiday, you should ensure that the payment reaches the Revenue prior to the deadline date, you do not get an extra day or two because of weekends or Bank Holidays.

3rd May: Quarterly submission date of P46(CAR) (for employees whose car and/or fuel benefit has changed in quarter to 5 April).

19th May: Deadline date for employers to submit P35 and P14s to tax office. Must be submitted online. Minimum penalty for being late = £100 per month for up to 50 employees or the amount of tax still due at 19 April.

31st May: The deadline for employers to supply P60s to employees. Also applies to pension payers.

5th July: Last date for agreeing your PAYE Settlement Agreement for 2008-09 (if any).

5th July: Deadline for employers to submit P11Ds and P9Ds to the tax office and provide copies to employees. Penalties can start at £300 per form for being late. Deadline for submitting form 42 or other relevant form to report share-related benefits provided to employees.

19th July: Deadline for submission of Form P11d(b). Penalty for being late is £100 per month for up to 50 employees. Penalty cannot be more than the amount of Class 1A National Insurance payable.

19th or 22nd July: 19th is the deadline for payment of outstanding Class 1A NICs for tax year ended 5 April if paying conventially or 22nd if paying by approved electronic payment methods.

2nd August: Quarterly submission date of P46(CAR) (for employees whose car and/or fuel benefit has changed in quarter to 5 July).

19th or 22nd October: Deadline for payment of any PAYE Settlement Agreement for tax year ended 5 April by approved electronic methods (for non-electronic payments the deadline is 19 October).

2nd November: Quarterly submission date of P46(CAR) (for employees whose car and/or fuel benefit has changed in quarter to 5 October).

2nd February: Quarterly submission date of P46(CAR) (for employees whose car and/or fuel benefit has changed in quarter to 5 January).

22 Nov 2009
Tax Refunds And Emails

There has been some publicity about emails purporting to come from H M Revenue & Customs about tax refunds.  These emails are scams.  The Revenue will NEVER send you an email about a tax refund.  They will always write to you (or to us on your behalf). 

The Revenue are keen to follow up any example and if you should receive an email, please forward it to phishing@hmrc.gsi.gov.uk.  HMRC cannot reply to every email, but action is taken on each report received.

15 Nov 2009
Phil Is On Youtube!

One of our clients, Mark Story is planning to row the Atlantic Ocean (naked!) in the hope of raising £100,000 for Ellie’s Haven.  Sadly, his attempt has had to be postponed until December 2011 due to lack of major sponsors. 

We at Wills Accountants Limited are happy to support Mark in his challenge and you can see Phil being interviewed about this at:
http://video.aol.ca/video-detail/phil-soutter-from-sponsor-wills-accountants-is-interviewed/2345497543.

You can find out more about Mark’s project at http://www.atlanticfreedom.co.uk/blog/

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