Archive for February, 2013

Outstanding VAT Returns Campaign

HMRC is to launch a new campaign targeting businesses with one or more outstanding VAT returns.

The campaign will start on 28 February 2013. HMRC have stated that they will be looking closely at the VAT affairs of such businesses, which could involve a VAT inspection being triggered. 

Where outstanding VAT returns are submitted before 28 February 2013, it may be possible to agree better terms with HMRC in respect of penalties, time to pay arrangements etc.

Businesses should therefore ensure that all outstanding VAT returns and payments are brought up-to-date as soon as possible.

Please contact us if you require further information.

Capital Allowances – The Annual Investment Allowance

The Annual Investment Allowance (AIA) provides 100% relief up to a fixed annual limit for most expenditure on plant and machinery, instead of the normal capital allowance of 8% or 18% on a reducing balance basis.

The limit has varied a number of times considerably since the allowance was introduced in April 2008. It was initially £50,000, but was increased to £100,000 from April 2010.

From 1 April 2012 (for corporation tax purposes) or 6 April 2012 (for income tax purposes) it fell to £25,000.

However in the 2012 Autumn statement the Chancellor announced that it would be increased to £250,000 for expenditure incurred in the two-year period beginning on 1 January 2013 and ending on 31 December 2014.

This gives a significant incentive to bring forward expenditure that might otherwise have been incurred on or after 1 January 2015.

Please contact us if you require further information.

Countdown to RTI

Time is running out for businesses that still need to prepare for the introduction of Real Time Information (RTI).

From April 2013, employers must report to HM Revenue & Customs on their employees’ tax, national insurance contributions and other deductions when or before their wages and salaries are paid. Employers will need to send their first return – called a Full Payment Submission (FPS) – for salary or wage payments made to employees on or after 6 April 2013. Employers with 250 or more employees will also have to have to send an Employer Alignment Submission before their first FPS.

Providing this Real Time Information requires the use of specific software and relies on employers having accurate employee data.

Employers should act now.

Being able to comply with the RTI requirements takes preparation. Employers cannot leave this to the last minute.

  • They must gain an understanding of what, when and how data must be filed.
  • Data must be accurate and complete. Any gaps, such as dates of birth or full first names, must be filled in. RTI data will be required even for employees being paid below the national insurance lower earnings limit.
  • Employers need to consider the technical implications, including whether their existing payroll software will be RTI-compliant.

Software

The software implications of RTI compliance are significant. If their existing software is not being updated, employers need to choose their new, RTI-enabled payroll software carefully to make sure it is appropriate for business as well as RTI needs, as well as being cost-effective.

Some employers may decide that this could be an appropriate time to switch to using a payroll service. Again, thought should be given to the choice and cost of service provider.

Training

Payroll staff will need specific training on new processes and software. Demands on payroll staff will increase substantially under RTI, due to strict filing deadlines. Understanding how to deal with specific issues, such as reporting of cash payments to staff working in the hospitality sector will be important.

All employees will need to be made aware of the introduction of RTI, the potential impact on their pay (as PAYE adjustments may be made during the year), and the importance of keeping their employer and HMRC up-to-date with any relevant changes in circumstances.

HMRC View

HMRC recognises the challenge for businesses gearing up for RTI. They have warned: “There is more to it than simply buying or updating software – although this is key. Employers may need to add employees such as casuals or those below the lower earnings limit to their payroll system and must think about their payroll practices to make sure that they work for real-time reporting.”

Penalties

HMRC has announced that there will be no penalties for late FPSs this year, nor will there be automated late payment penalties until April 2014. However, penalties may apply for the tax year 2013/14 if HMRC discovers inaccuracies on FPSs.

Preparing well before April 2013 is the best way for employers to minimise their risks of incurring any RTI-related penalties.

We can help

If you have any queries or concerns, please contact us. We can guide you through the preparations you need to make, to ensure you are well placed to cope with the changes.

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HM Revenue & Customs scam emails

For your information,

We have recently become aware that some clients have received emails that purport to be from HM Revenue & Customs stating that they are due a tax refund.

The email requests that you register with “Tax Gateway” and asks for your bank account details so that the refund can be paid into your account.

This email is a scam and you should delete it from your inbox

You should also note that HM Revenue & Customs do not contact you about your tax affairs by email. They will only write to you or telephone you.

If you have any concerns regarding the above or any other matter please contact Kerry Coyle at our office.

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