The taxman has been looking into allegations the company wrongly charged VAT on children's clothing which is usually exempt, dating back as far as 2006 Read more:
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London lawyers have become the latest target in HMRC’s taskforce initiative as the Revenue widens its net to tackle tax dodgers from hair and beauty businesses to the motor trade in Scotland. HMRC has called the latest campaign an “intensive burst” of activity in specific high-risk trade sectors and locations, and is expected to bring in £19.5m. Read the full article here Choosing an accountant can be a daunting task which is why we have set out below some guidance to help you make the right decision for your business whether its a simple tax return or a prospering limited company/LLP Should I pick the cheapest? Unfortunately a number of accountants choose to compete on price rather than service, you want an accountant that will help your business grow not just compliance, see what services are being offered and always get fees agreed in advance. We are not the cheapest as we offer a 5* service to our clients however our fees are competitive. Will the most expensive accountant provide the best service? This is not the case in our experience, the larger firms tend to charge more than the smaller firms but the work is actually delegated to a junior member of staff, therefore you may find yourself paying a premium for a service which is not the best. Smaller firms (such as ourselves) offer a much more personal contact with a dedicated accountant which you can contact immediately who knows your business intimiately, all for a competitive fee, which can be paid monthly (in our case anway) Do I need a local accountant? Its helpful for meetings but not essential, the specialist service they provide is far more important, we look after clients in the surrounding area i.e Brighton, Hove, Portslade, Eastbourne, Shoreham etc however technology has enabled us to also look after clients all over the UK by liasing via telephone/email & skype etc What else should I consider?
Once you have found your accountant treat him/her with courtesy i.e don't ignore them or send them your figures at the last minute and also make sure their fees are paid on time, this will ensure a mutually beneficial working relationship If you would like us to provide a no obligation quotation or free consultation please don't hesitate to get in touch using the contact us link. _The Self Assessment deadline is fast approaching for for the tax year ending 5th April 2012 and you need to make sure that you meet the following deadlines or you will receive a penalty from HMRC. Deadline for Paper Returns All paper returns must be received by HMRC by midnight on 31 October 2012. The only exception to this is if HMRC have written to you after 31 July 2012 asking you to make a self assessment return. Then you have three months after the date on your letter to submit the return. All self assessment notifications are usually sent out by HMRC during April. Deadline for Online Returns All online returns must reach HMRC by midnight on 31 January 2012. Again you will only have an extension on this date if HMRC write to you requesting a self assessment return after 31 October and you will have three months from the date on the letter to submit the return. If you want HMRC to collect any tax due through your tax code then you must submit your return before 30 December 2012. This is only an option if the tax owed is less than £3,000 Penalties Length of delay Penalty you will have to pay 1 day late A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe. 3 months late £10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above. 6 months late £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above. 12 months late £300 or 5% of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100% of the tax due instead. These are as well as the penalties above. _ A scheme which encouraged higher rate taxpayers to sort out their accounting at a reduced cost is set to end early next month. HM Revenue & Customs (HMRC) sent out more than 7,000 letters offering people who are yet to file their accounts or pay tax for 2009-10 the option of lower costs if they sorted out their affairs ASAP. They have until October 2 to respond, after which fines and charges will revert back to their normal levels. The tax authority has not confirmed what those who do come forward before the deadline will be charged but it has said that it will be significantly lower than the costs taxpayers will be hit by if HMRC has to track to them down. Marian Wilson, head of HMRC campaigns, said: “This campaign offers you a quick and straightforward way to bring your tax affairs up to date, but time is running out - you have until 2 October to submit your tax returns and pay the tax you owe.” If you need help with getting your tax affairs up to date or need an accountant in Brighton get in touch with us to see if we can help A taxpayer who incorrectly claimed tax relief in his tax return has overturned a £14,000 penalty after a tribunal ruled his accountant was to blame for the careless error.
See Link below from accounting web for the full story http://www.accountingweb.co.uk/article/judge-cancels-penalty-hanson-tribunal/531024 Clients often ask about dividends issued to the owner of a limited company and what rate of tax such dividends attract. This article has been written to illustrate the tax implications of paying yourself dividends from your limited company without going into too much detail the postion is as follows Let’s take the example of a company director paying himself a dividend from his limited company of £18,000 and this is the only income he has earned during the tax year. The dividend issued by the Limited Company will be £18,000 and this will be the total sum received by the company director. However, the dividend certificate will state £18,000 dividend plus £2,000 dividend tax credit, giving total dividend income of £20,000. Here the dividend tax credit is simply a notional value and is not paid to the company director and will not be paid to HMRC. The company director will not pay income tax on the dividend he has received above of £18,000 and the amount that should be stated on his Self-Assessment Tax Return is £20,000. In effect the 10% tax credit cancels out the tax due on the dividend at 10%. In essence, if you are a basic rate tax payer (income up to £34,370 for the tax year 2012/13) then you will not pay any tax on dividends you issue to yourself from your limited company. If you are a higher rate tax payer then income tax will be due on the gross amount exceeding £34,370. (assuming a directors salary below or equal to the tax free allowance) Whatever your business sector you must prepare annual accounts which report on business performance and activities during the financial year. What you may be unaware of, is that businesses are allowed a free choice of when to end an accounting year. So, for 2012/13 tax, accounting dates can vary between 6 April 2012 and 5 April 2013. The date that you choose may be dictated by commercial reasons, but also by external factors such as interest rate movements, inflation, changes in rates of tax and changes to the tax system. Generally speaking, using a date towards the end of the tax year leads to the simplest application of a current year basis of assessment, although this leaves very little time before tax is payable. Alternatively, businesses expecting an upward trend in profits may benefit from cashflow advantages if their accounting date is set on or shortly after the beginning of the tax year, although this also has its disadvantages including increased liability should the business cease less any applicable overlap relief. Do you need us to review your accounting date? HMRC have rules regarding what constitues proof of expenditure including VAT that you can reclaim. The proof required for purchases over £250 are more strict than those for purchases under £250. For purchases above £250 the VAT invoice must show:
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AuthorLicenced Accountant in Brighton Archives
May 2020
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