Taxpayers who have not yet filed their 2011/12 self assessment tax return are being urged to do so before 1 May as from this date,  HMRC will charge a £10 daily penalty for late online returns, up to a maximum of 90 days (total £900). This is in addition to the initial late filing penalty of £100, which applies automatically even where there is no tax due, or where the tax due is paid on time. Further penalties of at least £300, or 5% of the tax due if this is greater, will apply for tax returns that are 6 and 12 months late - all of which could add up to a sizeable and very unwelcome bill.  Penalties do not just apply for late filing - they also apply to the late payment of tax, amounting to 5% of the unpaid tax,  payable at 30 days, 6 months and 12 months after the due date of 31st Jan 2013. If you haven't yet filed your 2011/12 return, please contact the office on 02920 713 800 to see how we can help - in certain circumstances, we may be able to appeal penalties alre

Despite the last minute temporary relaxation to RTI requirements until 5th Oct 2013 for businesses with fewer than 50 employees, its still worth getting ready for Real Time Information (RTI) now. RTI is the new method of reporting PAYE from 6th April where employers tell HMRC at the time payments are made in place of the former annual disclosure. A reported saving of £300 million will be made by businesses due to a reduction in administration costs and HMRC with receive more accurate and up to date records reducing the number of cases where people have under or over paid tax during the year. You can download HMRC's RTI readiness guide here  or for more information on payroll and RTI click here

Under new measures launched in April by HMRC’s Managing Serious Defaulters programme tax dodgers will now be closely monitored for up to 5 years. Evaders targeted consist of those who have received a civil evasion penalty for dishonestly evading VAT; or are required to give a security deposit for VAT, Environmental Taxes, PAYE or NICs; or become deliberately insolvent as a way of dodging their business taxation obligations. Managing Serious Defaulters monitoring activities can include unannounced visits by HMRC, asking for records so they can be checked, carrying out in-depth compliance checks into personal tax affairs, observing and recording business activities and cross-checking details in accounts. HMRC has warned that defaulters who fail to comply with their tax obligations may face criminal proceedings.

With little over a month to go to 5th April, now is the time to focus on maximising tax reliefs and allowances... Individuals Higher rate taxpayers should maximise tax reliefs which are given in full against income such as loss reliefs (including losses incurred on shares in some private companies), pension contributions (up to £200,00, including any unused relief brought forward) and Gift Aid contributions. Other sensible tax planning opportunities include tax efficient investments making best use of reliefs which would otherwise be lost (annual limits are refreshed into new tax year) There are many schemes, many of which offer generous relief, including  Enterprise Investment, Seed EIS investment, Venture Capital Trusts and ISAs. For more information on these, read page 7 of the latest issue of iNsight, our practice magazine. It’s also worth considering deferring income payments such as bonus payments and dividends from companies where possible, especially for those p

The Spring 2013 edition of iC's iNsight magazine is out now, packed with business advice, tax tips, and consultancy news. This issue, we look at registering as an employer for the first time, tax efficient investing,  the importance of internal communications plus client deal news. If you would like to feature or advertise in the next issue, which is out in April 2013, please contact the office.

Cash is King! Collecting cash can be one of the biggest headaches for small business owners - here are 6 tips to shorten the cycle: 1. Send your invoices pronto– after a project is completed, it’s all too easy to move on to the next one and forget to invoice, but a customer has no obligation to pay until the invoice is received. 2. Spell it out – explain all the elements of the product or service require so the client fully understands what they are paying for and there is less opportunity for payment delaying queries. 3. Split the difference – consider splitting a large bill into a number of smaller invoices – a client with cash flow issues is more likely to perceive a large balance as a problem and therefore sit on it, whereas smaller more manageable amounts are likely to be paid more quickly. 4. Highlight terms – confirm terms upon engagement but also reiterate them on your invoice so that the payment deadline is clear, also pointing out an

HMRC are looking to achieve a 2010 spending review target of raising an extra £7bn in tax by 2015. This inevitably means that they are turning their attention to investigations, undertaking detailed reviews, either on a random basis, or because they have reason to believe that the taxpayer has underpaid. Investigations can be intrusive, time-consuming and stressful, and if it is discovered that tax has been underpaid, the taxpayer will have to pay what is due plus any penalty or interest accrued. If you have received notification that your affairs are to be investigated, here are some top tips to help you survive the experience with sanity intact. • It sounds obvious, but tell the taxman the truth – investigators have huge resources at their disposal, and have the powers to scrutinize numerous aspects of an individual’s affairs, as well as the authority to speak to third parties. The best advice is to disclose everything, and this will be seen far more favourably

The flat rate VAT scheme is an incentive set up by HMRC to help simplify VAT accounting for certain organisations. Essentially, you charge VAT on your invoices at the current rate of 20% but only repay HM Revenue and Customs at an agreed lower rate - rates vary depending on your profession/trade, and there is currently a 1% discount in your first year of VAT registration. As an example, an IT contractor will pay VAT at the rate in the first year of just 13.5% of the gross amount and 14.5% in subsequent years.  To be eligible, your expected first year ex VAT turnover must not exceed £150k, and once you join the scheme you can remain in it until your total business income is more than £230k. Generally you cannot reclaim any of the VAT that you pay on purchases, although you may be able to claim back the VAT on capital assets worth more than £2k. Visit the VAT section of iC’s website for more.

The iC office is having a makeover for 2013! Check out our inspiring new meeting room artwork courtesy of local artist Dean Christopher...

At the time of writing, I’m confined to the house on the second snow day of 2013. Not that my path to the office is impassable due to glacial conditions, more the fact that our local school takes H&S exceedingly seriously and has closed at the first flake – and so my 3 young sons are cosily sofa bound watching Toy Story 3 for the umpteenth time (I fear my patience has also gone “to infinity and beyond…”) Like mine, I’m sure every child sprints to the windowsill on a frosty morning, hoping to see the blanket of white that signifies no maths lessons today; and likewise every parent dreads checking the school’s website for fear of an impromptu chance to catch up on the ironing. I’m in the fortunate position (I think) of being self-employed and hence answerable only to myself if I can’t manage to meet my deadlines via laptop on the kitchen table (albeit hampered somewhat by cries of “Mum, can I have some more hot chocolate?”)  But it’s a different story for