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| Which Tax Office deals with my Income Tax affairs? |
If you are self employed you will be dealt with by a Tax Office locally.
Employed persons and persons receiving pensions from former employers are dealt with by the Tax Office dealing with the employer's Head Office. Your local Tax Office will be able to tell you which Tax Office deals with your affairs, or, if you are employed, your employer will also know. |
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| What are the rates of tax for this tax year? |
Click Here to view the Tax rate for this year |
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| What is Self Assessment? |
Under Self Assessment it is clearer what you have to do to get your tax right first time, when you have to do it, and what happens if you don't meet the deadlines.
It applies to everyone who gets a tax return. However most people do not get a tax return and pay through PAYE or other deduction at source arrangements.
The first Self Assessment tax return was issued in April 1997.
The Self Assessment tax return is made up of a basic core return together with separate supplementary pages - which ones you get will depend on your circumstances and the type of income you receive.
One of the biggest changes is that your tax bill will be based on the figures that you provide on your tax return without us first checking them in detail and agreeing them. We will check them later, within a year of the final deadline for sending the return back to us (31 January).
You need to fill in your return giving full details of all taxable income and gains you received in the year, and claim any allowances as well. This means that you are responsible for ensuring that you pay the right amount of tax, even if you do not actually work out the tax yourself.
We will work out your tax bill for you, (in fact, we'd prefer to do this) but you can work it out yourself if you wish.
We will send you a statement showing what you owe and what you've paid.
There will be one tax bill and one set of payment dates. |
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| What are the important dates under Self Assessment? |
Click Here for important dates that you need to know for Self Assessment |
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| I am taking someone on - what do I have to do? |
Click Here to view the Inland Revenue guide for taking on employees |
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| What is Construction Industry Scheme (CIS)? |
Businesses operating in the construction industry are known as contractors
and subcontractors and they may be companies, partnerships or self-employed
individuals.
Contractors pay subcontractors for construction operations and subcontractors
are those businesses that carry out building work for contractors.
The Construction Industry Scheme sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry and certain other businesses.
Under the Scheme, all payments made from contractors to subcontractors must take account of the subcontractor’s tax status as determined by HM Revenue & Customs. This may require the contractor to make a deduction, which they then pay to HM Revenue & Customs, from that part of the payment that does not represent the cost of materials incurred by the subcontractor.
As of 6 April 2007 a New Construction Industry Scheme started. Its aims are:
- to reduce the regulatory burden of the Scheme on construction businesses
- to improve the level of compliance by construction businesses with their tax obligations
- to help construction businesses to get the employment status of their workers right.
Click Here for more information. |
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| Should I Be Registered for VAT? |
Value Added Tax (VAT) is a tax charged on the sale of most goods and services.
Examples of taxable supplies include sale of goods, hire purchase, rental, exchange,
and gifts in kind. These are charged at one of three rates:
Zero rate - has nil percentage rates applied to goods such as books & newspapers,
children's clothing and new house construction.
Reduced rate - a 5% rate is charged on domestic fuel and power.
Standard rate - currently 17.5%, which is applied to goods and services that
are not exempt, zero or reduced, rated.
Services that are exempt include insurance, education and some sales &
leases of property.
If your sales reach, or are likely to reach the current VAT threshold of £67,000
per year, then you must register for VAT. There is also an option to register
for VAT even if your sales have not reached the current threshold allowing you
to claim back VAT on purchases if:
• you make zero rated supplies - because your customers will not have
to pay VAT
• your customers are themselves VAT registered - because they may be able
to claim back VAT you charge them.
VAT is a very important part of business and cannot be ignored. It can be very
confusing and you may wish to seek expert help from a local accountant or a
business adviser. You should be aware that the VAT threshold and rates may change
from time to time and are the responsibility of the Chancellor of the Exchequer. |
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| What is the cash accounting scheme? |
The cash accounting scheme allows you to account for VAT (output tax)
on your sales on the basis of payments you receive, rather than on tax invoices
you issue. This is different from the normal rules that require you to account
for VAT on your sales as they take place or as soon as you issue a VAT invoice,
even if your customer has not paid you.
However, if you choose to use the scheme, you can only reclaim the VAT incurred on your purchases (input tax) once you pay your supplier. Under the normal method of accounting for VAT you can reclaim VAT on purchases you make as soon as you
receive a VAT invoice even if you have not paid your supplier. |
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| When might I face a VAT penalty? |
We may issue a penalty whenever there has been a significant or repeated lack
of care in preparing VAT returns, leading to errors in the true amount of tax
payable or repayable.
Where you submit an inaccurate VAT return which:
- shows too little tax due; or
- claims a repayment which is too large;
- you may be liable to MP or MP(R).
Where:
- you have not submitted a return; and
- we assess you for the tax due for the period; and
- you fail to tell us within 30 days that the assessed amount is too low;
- you may be liable to MP (but not MP(R)).
However, both of these penalties are subject to objective tests. |
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| What is the VAT penalty rate? |
For both penalties the rate is 15% of the amount of the misdeclaration for the period in question. However, we may reduce the penalty if there are mitigating factors. |
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| What are the Working Time Regulations? |
The basic rights and protections that the Regulations provide are:
- a limit of an average of 48 hours a week which a worker can be required
to work (though workers can choose to work more if they want to).
- a limit of an average of 8 hours work in 24 which nightworkers can be required
to work.
- a right for night workers to receive free health assessments.
- a right to 11 hours rest a day.
- a right to a day off each week.
- a right to an in-work rest break if the working day is longer than six hours.
- a right to four weeks paid leave per year.
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| What are the National Minimum wage amounts? |
The rates set are based on the recommendations of the independent Low Pay Commission.
Main (adult) rate for workers aged 22 and over
£5.52 per hour
Rate for workers aged 18-21 inclusive
£4.60 per hour
Rate for workers aged 16-17 inclusive
£3.40 per hour
Changes to the National Minimum Wage
The Government has announced an increase to the National Minimum Wage rates,
which will take place on 1 October 2008.
Main (adult) rate for workers aged 22 and over
£5.73 per hour from 1 October 2008
Rate for workers aged 18-21 inclusive
£4.77 per hour from 1 October 2008
Rate for workers aged 16-17 inclusive
£3.53 per hour from 1 October 2008
Some workers do not qualify for the minimum wage or only qualify after a set period of time, eg. apprentices under the age of 19 or over the age of 19 but in their first year of apprenticeship and students on a work placement forming part of a UK higher or further education course if the work placement is for less than one year. There may also be other reasons why individuals are not entitled to the minimum wage. |
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| How does the Data Protection Act (DPA) affect my business? |
Click Here to view and download the DPA guide for Small Businesses |
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| I am a company director, what are my responsibilities? |
Every company director has a personal responsibility to ensure that statutory
documents are delivered to the Registrar as and when required by the Act. In
particular:
- accounts (only for limited companies);
- annual returns;
- notice of change of directors or secretaries or in their particulars; and
- notice of change of registered office.
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| What details are required on a company's letterhead? |
The full company name, registered number, registered office address and place of registration (e.g. registered in England and Wales) must be shown on all business letters and order forms. |
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| I would like to know when purchasing goods and services, which have VAT added and which don't. |
If VAT has been added, traders are obliged by law to show this on your receipt.
The exact method varies - if you have your car serviced, you would expect to see the amount of VAT set out separately and the rate shown. If you go to a supermarket, they may just indicate by putting a star against the VAT registered items.
A Valid VAT receipt must show the VAT registration number, which is nine digits long.
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| What is the best way to plan for my Retirement? |
Everyone hopes to maintain the same standard of living in retirement as
they presently enjoy while working, but to achieve this requires considerable
forward planning. Here are some important questions you need to ask yourself:
Exit strategies
If you are in business, the first thing you need to consider is your exit
strategy. Will you withdraw from the business, leaving it for the next generation,
or will you hope to sell the business? If you intend to hand the business over,
do you have a workable succession plan? If you intend to sell, how will you
value the business, find a suitable buyer, etc.? Are you aware of all the tax
implications of the timing of disposals?
Savings and investments
Do you have the right balance between savings and investments, and between
high and low risk exposures?
Life assurance and long-term care
Do you have adequate life assurance, and have you made provision for long-term
care and medical insurance for you and your spouse in your later years.
We can help you answer all these questions and recommend solutions tailored
to your particular needs.
Pension provision
Have you made adequate pension provision, and do you have the right type
of pension? Are you aware of all the pension possibilities open to business
owners and directors? Are you making full use of all your allowances?
Estate planning
Not a pleasant thought, but we must make adequate
provision for family and friends who survive us. The legislation that governs
passing on your estate to your chosen beneficiaries requires you to plan well
in advance.
Since none of us knows when we shall die, this means making the necessary
provisions now. The earlier you make the arrangements, the greater your chance
of taking full advantage of the tax opportunities available and thereby maximizing
the amount that goes to your beneficiaries. After all, the thought that a substantial
slice of the wealth you have worked so hard to accumulate will end up in the
Government's coffers is quite demoralizing!
It is equally important when planning to transfer your estate that you make
adequate provision for yourself and your spouse in your later years. Striking
this balance calls for considerable skill and foresight - and a detailed knowledge
of the tax regime.
We provide a discrete estate planning service that includes:
- Help with drafting and reviewing your will
- Making full use of exemptions and lower tax rates on lifetime transfers
- Optimising lifetime transfers between spouses
- Transferring business property
- Transferring assets into trust
- Arranging adequate life assurance to cover potential inheritance tax liabilities
We strongly advise you to begin your estate planning right away |
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