Archive for August, 2012

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Can I amend my personal tax return after it’s been submitted?

The deadline for personal self assessment annual tax returns to be submitted is 31st January. But what if you realise that you made a mistake or omitted something after the 31 st January deadline?

HMRC allow 12 months for making alterations on line to a submitted self assessment tax return.

They will not apply any penalties for late filing (assuming that you made your original submission before 31st January), but if the amendments result in additional tax being due, then you will be charged interest from the due date of the payment until you settle the unpaid tax.

Brentwood AccountantsTransform Accounting Essex Chartered Management Accountants

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If you had a request from HMRC to file a self assessment tax return for the 2010/11 tax year and haven’t got round to filing it yet, then here is some bad news. HMRC are starting to send out penalty notices this week.

The minimum fine is made up of two elements.

Firstly a daily penalty which is calculated at £10 per day, and which started to build up 90 days after the missed deadline. This penalty is capped at £900.

Then there is the second penalty of 5 percent of the tax due, or £300 – whichever is the larger.

If you receive a late filing penalty, but think that you shouldn’t be in the self assessment system at all, then you can apply to be taken out of the system. If HMRC agree, then both the tax return and penalty will be cancelled. So far, HMRC have agreed to take 273,000 out of the self assessment system this year.

An HMRC spokesman stated that half a million people have filed their self assessment returns this year and this means that HMRC are issuing 44 percent fewer penalties than recent years. However, 6 percent of people who are required to file self assessment for the 2010/11 tax year have still failed to do so and will be receiving penalty notices.

Tax ReturnsTransform AccountingEssex Accountants

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Essex Chartered Management Accountants – Transform Accounting

Thinking of changing Accountants ? – Talk To Us – We can help you and its easier than you think – Our Web site tells you how

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What exactly is a dispensation?

A dispensation is a written agreement between a company and HMRC that relieves you from having to report expenses payments and benefits in kind on the annual form P11D, where HMRC are satisfied that no tax should be payable on them.

Why would I want a dispensation?

From the perspective of a small business owner, there are two reasons why you would want a dispensation.
Firstly – you will not have to go to the trouble of reporting staff expenses on a P11D
Secondly – you will not have to pay employers National insurance on these expense items, saving you money.

What expense items are included in a dispensation?

Expenses typically included in a dispensation are travel, hotel, subsistence expenses, stationery and other sundry items.
These items must be expenses that are incurred “wholly, exclusively and necessarily” in the employees work for the business.
In all cases, you should only reimburse legitimate business expenses for which you have receipts.
Note that a dispensation does not cover business mileage payments.

How do I apply for a dispensation?

To apply for a dispensation, either discuss with your accountant, or see the HMRC website – www.hmrc.gov.uk/forms/p11dx.pdf

The above is just a rough guide intended for education purposes – If you want to provide a perk to a member of staff, please seek professional advice from your accountant or see the HMRC web site for detailed guidance.

Tax Returns EppingTransform AccountingTax Return Essex

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Data recently released as a result of the freedom of information act, has shown that callers to HMRC have to wait longer each year before getting to speak to anyone.

HMRC received 76,000 complaints last year, up from the previous years 73,000 but down from their peak of 84,500 in 2009.

HMRC are targeting a benchmark of 90% of customers being able to get through to an operator on their first attempt by 2014. At the moment they are achieving less than half this figure leading to claims that the HMRC call centres are understaffed, and leaving taxpayers increasingly frustrated.

Chartered Management Accountants ChelmsfordTransform Accounting

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HMRC’s attempts to support smaller businesses have recently taken another step forward by supporting software developers to produce smartphone apps for small business.

The idea is that these apps help the self-employed small business owner to capture data on the go, helping them to keep accurate records that will both save time, and enable accurate tax reporting.

Software houses such as Sage and Intuit (Quickbooks) offer applications that can use the camera on a smartphone to immediately scan a receipt, which can then later be used in their bookkeeping software, negating the requirement to keep paper receipts.

For clients of accounting practices that make the most of modern technology, this can make life much easier.

The tools are suitable for small businesses who fall under the £77,000 VAT threshold.

The first batch of approved apps are for iPhone and Android with expectation that apps for Blackberry will follow.

A full list of approved HMRC apps can be found at http://www.tinyurl.com/clsuqmf

Transform Accounting use and recommend Quickbooks, including the iphone application for our clients as a modern and cost efficient bookkeeping solution.

Romford Tax TechniciansTransform AccountingEssex Tax Technicians

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It is a normal part of business to give business gifts to either customers or suppliers.

But there are some important things to consider making sure that these gifts are tax efficient, so they will save you money.

Firstly – the gift (or any gifts given to the same person over a 12 month period) must not exceed £50

Secondly – the gift may not be alcoholic drink, food, or tobacco and cannot be vouchers

Thirdly – the gift should carry an advert for the business who is giving – eg – a branded calendar, diary or clothing.

If all of the above criteria are satisfied, then the cost of the gifts are allowed to be offset (ie – treated as an expense) when calculating taxable profits, and you can treat the VAT as per any other business expense.

However, gifts that do not satisfy these criteria such as food hampers or bottles of whisky cannot be treated as allowable business expenses.

Taxation Technicians Brentwood – Transform Accounting – Taxation Technicians Essex

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