For convenience, we now blog on FB too. Link: https://www.facebook.com/pg/Albasas.org/posts/
Keep up-to-date with relevant tax & accounting news there too.
For convenience, we now blog on FB too. Link: https://www.facebook.com/pg/Albasas.org/posts/
Keep up-to-date with relevant tax & accounting news there too.
Poor management and a lack of financial information are 2 of the biggest threats to the well being of your business.
If you’re decision making is based on no numbers or numbers that are out of date then your business is in danger.
Entrepreneurs know that cash flow is king…you can be really profitable on paper but unless you get those invoices paid promptly..you’ll get into serious trouble
Accurate and correct external and internal financial controls and accounts give you the tools to manage your cash flow bottlenecks as they will also allow you to ask some probing questions like:
Do you have too much money tied up in stock?
How much are you losing through wastage of resources?
Who precisely is habitually owing you money ?
And how long are they taking to pay? And;
Having the means to cut out on all the uneconomical factors of your business; where are the known areas of growth and or profitability?
Robert Mitchell, the Principal here at technology accountants Albasas says: “number crunching js essential to the lifeblood and so the health of any business. Late payers and bad debts will just eventually cripple your businesses cash-flow and so blunt your ambitions. Keeping a tight rein on that money overdue, and a robust credit control policy will ensure that lifeblood of any enterprise, the cash-flow, does just that, and keeps flowing.
We at Albasas know how important your book-keeping processes and systems that deliver such vital business statistics are.
Financial information delivered and driven by digital technology creates the necessary synergy with real time information which will make all our jobs as professionals much easier, cheaper and profitable; delivering to us the critical numbers we need to make decisions.
If you need a well thought out business plan Albasas can help there too.
One of the first jobs you should consider delegating is book keeping, otherwise you may have no control over costs and no spare time to do anything about it. A vital but time consuming activity we can run the book-keeping for you, help you understand the books, and find a cost effective solution, or a book-keeper to help.
We deal with many local businesses and have built up both a great contact data base of local suppliers and an envied reputation. So when you’re looking for local services, we can usually help here too by recommending or introducing you to someone who may assist..
At Albasas you can rest easy knowing that all your UK regulatory paperwork is complied with too. Things like preparing and filing annual accounts, tax returns, and all other deadlines your business has like PAYE & VAT and so forth. Services offered are reliably taking care of to ensure that you pay only the tax that is due- and not a penny more. By taking time to get to know you and your business, and with due diligence, ,Albasas will identify all your legitimate expenses, and defend your position with the tax man, should some predictable situation arise at some future date.
So if you want to take your book keeping, accounts, tax, business planning or entrepreneurial knowledge up a level or two.Just pick up the phone now and call, Robert Mitchell at Albasas. The technology Accountants. You’ll be glad you asked! Call 0141– 404- 6115 for an informal chat to discuss your needs. Now! Or contact us via the website at http://www.albasas.org. We’re waiting for that request, now!
To help you save for your retirement, you’ll be automatically enrolled into a workplace pension by your employer sometime between now and February 2018, if:
You’ll pay in and your employer will pay in.
You’ll also get a contribution from the government in the form of tax relief.
You can opt out if you want to but you’ll be missing out on the contribution from your employer, and the tax relief.
Under the new RTI payroll system employers will send information about the tax and national insurance that they deduct from employees’ wages to HMRC at the time when they are deducted – rather than at the end
All accredited Payroll software is being updated with all of the relevant functions and features to allow you to send your RTI returns efficiently and on time. These features will be added as part of the normal updating process, so there will be no additional software costs in order for you to be able to operate RTI.
Presently the penalties are unknown for non-compliance.The new Universal Credit is due for introduction next year for Tax Credits / Welfare Payments/ Housing Benefits etc. This system is supposed to complement the implementation of the latter.The payroll department of all businesses will be rather busy places in 2013. More HMRC admin then…lets see how it all goes.
HM Revenue & Customs (HMRC) issued a consultation document this summer that examined whether the self-employed might be offered an alternative accounting system for tax. The move followed a review by the Office of Tax Simplification on small business taxation. HMRC’s proposed system is designed to make accounting easier and features round sum allowances. Currently, the type of round sum allowances that the self-employed may claim are very restricted as HMRC requires taxpayers to retain evidence of each item of expenditure. However, HMRC does allow some leeway on this:
Use of home as office: HMRC provides examples in its manuals of expense claims covering the costs of running a business at home, such as light and heat, council tax and repairs. While the size of any expense claim will vary depending on your business activity, HMRC indicates that it does not regard a round sum deduction as unreasonable when there is minor use of the home. The manual gives an example of £2 per week, however, this figure has not been updated for several years. HMRC allows employees a deduction of £4 per week from 6 April 2012, or £18 per month, and so we suggest that the self-employed can rely on these higher figures as being reasonable. The alternative is to claim the actual expense incurred.
Mileage allowances: self-employed drivers may claim 45p per mile for the first 10,000 miles travelled on business in a tax year and 25p per mile thereafter. There is no difference in rates between petrol and diesel, and whilst it is not necessary to keep receipts it is necessary to keep a mileage log.
A trap to watch out for concerns subsistence expenses: when a self-employed person is travelling on business the cost of subsistence is allowable as a business expense. Whilst HMRC agrees a table of fixed rate deductions that may be claimed if you are an employee, the self-employed do not get the same treatment: you may only make claims based on actual expenses.
Finance Act 2009- Penalties
Forget the previous rules on disclosure and cooperation (size & gravity) after 1 April 2009.
Covers income, corporation and capital gains tax. All other taxes from 1 April 2010.
Documents delivered that contain careless or deliberate inaccuracies or would have been
relied upon by the Revenue. In each case a penalty will be levied. Therefore, each ‘inaccuracy’ attracts its
own penalty. Different penalties are defined as either:
‘Careless or deliberate’ unless YOU brought it to the attention to the Revenue before then, (amended the
return/innocent error no penalty).
4 types of ‘penalty’ Behaviour:
1. Reasonable Care ( Expect a 0% Potential Lost Revenue penalty)
(need ‘adequate records’ took a reasonable view of the law which turns out to be
wrong,intention not relevant you either did it or not, and basic systems in place to
demonstrate that there was no significant negligence);
2. Carelessness (Expect a max 30% PLR penalty)
(Failure to take care, bad internal controls, not taking proper advice, incomplete
records, misclassification, breach of duties, absence of skill- generally negligence);
3. Deliberate understatement (Expect a 20% min – max 70% PLR penalty)
(Not acting properly just omitting facts when you know its not the right thing to do,
deliberately misleading arguing and misinterpreting the law, i.e. not recording sales,
not declaring private use, inappropriate accounting treatment, basically deliberately
misinterpretation of the law. Border line prosecution case.)
4. Carelessness with concealment (Expect a 30% min – max 100% PLR penalty)
(False accounting, invoicing, destroying records, misleading agents or Revenue,
fictitious records, to conceal. Likely prosecution cases)
Prompted and unprompted Disclosure
Penalty ranges for unprompted and prompted disclosure
Type of error
Penalty range for prompted disclosure Penalty range for unprompted disclosure
Careless 0%-30% 15%-30%
Deliberate but not concealed 20%-70% 35%-70%
Deliberate and concealed 30%-100% 50%-100%
Remember, if you took ‘reasonable care’ but still made a mistake, HMRC will not charge
What’s more, HMRC now have the power to levy some of these penalties on culpable company directors, or the specific director, in their personal legal capacity as an individual. A culpable director will have no limited liability when prompted or unprompted disclosure is proven against them, and so will be charged a suitable penalty just as if they were self employed. For example, circumstances, such as a company officer, perhaps having neglected their stewardship, or having been negligent as to their basic duty of reasonable care, as is required of them, in the day-to-day running of a company, under the Companies Act, will find that reasonable care is not a defence available to them against these new prompted and unprompted disclosure penalties. Of course, all other relevant facts need to be taken into consideration here before the directors culpability to a personal penalty is proven.
Contact me on 0141 404 6115 for any advice.
New tax changes announced in Budget 2012 for Finance Bill 2012 (or to otherwise be legislated for the 2012/13 tax year)
Previously announced tax measures for Finance Bill 2012 (or to otherwise be legislated for the 2012/13 tax year)
New tax changes announced in Budget 2012 but planned for Finance Bill 2013 or beyond
|Basic rate band||£34,370|
|Basic tax rate||20%|
|Dividend ordinary rate||10%|
|Savings rate band||£2,710|
|Higher rate band||£34,371 – £150,000|
|Higher rate tax||40%|
|Dividend higher rate tax||32.50%|
|Additional rate band||Over £150,000|
|Additional rate tax||50%|
|Dividend additional rate tax||42.50%|
|Allowances that reduce taxable income:|
|Age under 65*||£8,105|
|Age 75 and over**||£10,660|
|Blind person’s allowance||£2,100|
|Allowances that reduce tax:|
|Married couple’s allowance (MCA)***:|
|Age 78 and over||£7,705|
|Tax reduction at 10%||£770.50|
*The minimum personal allowance is reduced, by £1 for each £2 of income from £100,000 to £116,210, irrespective of age.
**Age related allowances are reduced by £1 for each £2 of income above £25,400 until the non-age related personal allowance of £8,105 is reached.
***The age for MCA is of the elder spouse or civil partner. The loss of tax reduction is 10p for each £2 of income above £25,400 until the minimum of £296 is reached.
|Earnings per week:||Employee NIC rate (primary):|
|Below £107 (lower earnings limit LEL)||0%|
|£107 to £146 (primary threshold PT)*||0%|
|£146 to £817 (upper earnings limit UEL)||12%|
|Employees’ contracted out rate rebate||1.40%|
|Earnings per week:||Employer NIC rate (secondary)|
* No NICs are actually payable but a notional Class 1 NIC is deemed to have been paid in respect of earnings between LEL and PT to protect contributory benefit entitlement.
|Annual profits (£) a year*:||Class 2**:||Class 4:|
|Below £5,595 (SEE)***||£0pw||0%|
|£5,595 to £7,605 (LPL)||£2.65pw||0%|
|£7,605 to £42,475 (UPL)||£2.65pw||9%|
* The limits are defined as SEE – small earnings exception; LPL – lower profits limit and UPL – upper profits limit.
** Class 2 NICs are paid at a weekly flat rate of £2.65 by all self employed persons unless they have applied for a small earnings exception.
*** The self-employed may apply for exception from paying Class 2 contributions if their earnings are less than, or expected to be less than, the level of the small earnings exception.
|Married women’s reduced rate*||5.85%|
|Special Class 2 rate for share fishermen||£3.30pw|
|Special Class 2 rate for volunteer development workers||£5.35pw|
|Class 3 rate**||£13.25pw|
*Married women’s reduced rate is paid only by maried women and certain widows with valid reduced rate elections.
**Class 3 NICs are paid by contributors to make the year a qualifying year for basic State Pension and Bereavement Benefit purposes.
|Working Tax Credit*:|
|Couple and lone parent element||£1,950|
|30 hour element||£790|
|Disabled worker element||£2,790|
|Severe disability element||£1,190|
|maximum eligible cost for one child||£175pw|
|maximum eligible cost two or more children||£300pw|
|per cent of eligible costs covered||70%|
|Child Tax Credit:|
|Disabled child element||£2,950|
|Severely disabled child element||£1,190|
|Income thresholds and withdrawal rates**:|
|Withdrawal rate (per cent)||41%|
|First threshold for those entitled to Child Tax Credit only||£15,860|
|Income rise disregard||£10,000|
|Income fall disregard||£2,500|
* As announced in the June Budget 2010, the 50 plus element of the Working Tax Credit will be removed from April 2012.
** As announced in the June Budget 2010, the family element of the Child Tax Credit will taper immediately after the child element from April 2012.
|First child rate||£20.30|
|Rate for additional children||£13.40|
|Individual Savings Account (ISA) subscription limit:|
|of which cash||£5,640|
|of which stocks & shares||£11,280|
|Junior ISA subcription limit:||£3,600|
|Child Trust Fund (CTF) subscription limit:||£3,600|
|APD distance bands||APD rates (£ per passenger from 1 April 2012)|
|Miles from UK||Reduced rate*||Standard rate**|
|Band A (0-2000)||£13||£26|
|Band B (2001-4000)||£65||£130|
|Band C (4001-6000)||£81||£162|
|Band D (over 6000)||£92||£184|
* In lowest class of travel
** In other than lowest class of travel
The Plumbers Tax Safe Plan (PTSP) is now closed and we would like to thank all those who have come forward with unpaid tax.
For those who did not take advantage of the disclosure opportunity, we will be using our tracing technology, together with intelligence gathered from many different sources to find them. Since June 2011 we have been able find hundreds of people, within the trade, who failed to notify their businesses and have opened enquiries into their affairs. In addition to unpaid tax and interest, they potentially face penalties of up to 100 per cent. Where we have firm evidence of tax evasion, we have already arrested a number of traders who now face criminal prosecution.
We do believe that our customers want to get things right, and want to help them. Many customers will have paid the right amount of tax but some will not. We want to make it easy for those not paying the correct amount to put that right and seriously follow up those who choose not to. If you’ve not yet told us that you have started working for yourself or not declared all your income, you probably won’t have paid the right amount of tax.
It is now too late to obtain the PTSP terms, but if you have unpaid tax to disclose it will still be beneficial for you to tell us as the penalty you will pay will still be lower than it would be if we come to you first.
Self-employment hit record levels in the autumn of 2011, accounting for 14.2 per cent of total employment, the Chartered Institute of Personnel and Development (CIPD) has revealed.
But those that have turned to self-employment since the financial crisis began in 2008, are unlike the typical demographic in terms of gender, hours of work, occupation or sector, that normally set up alone.
The CIPD claims that the latest round of self-employed people are that way through necessity, as opposed to enterprise, as more and more jobs are cut in both the private and public sectors.
According to its Work Audit report, a typical self-employed person is a skilled tradesman, professional or manager working full time hours. But the recession has seen a rise in those less skilled, including ‘odd jobbers’, who are working part-time, and have set up alone through necessity.
Nevertheless, the numbers are helping to ‘keep a lid’ on rising unemployment figures. This week saw the latest statistics released, revealing that 8.4 per cent of the population is out of work, and this is forecast to rise further.
Commenting, Dr John Philpott, Chief Economic Adviser at the CIPD, said: “The typical self-employed person in Britain today remains a skilled tradesman, manager or professional working long hours on the job, but since the start of the recession the ranks of the self-employed have been swelled by people from a much wider array of backgrounds and occupations, including many ‘handy-men’ without skills, picking-up whatever bits and pieces of work are available. It’s good that these self-employed ‘odd jobbers’ are helping to keep the lid on unemployment in a very weak labour market but their emergence hardly suggests a surge in genuine entrepreneurial zeal. While some of these newly self-employed may make a long-term commitment to being their own boss, or at least gain the necessary experience to do so, it’s likely that most would take a job with an employer if only they could find one.”