Financial Directors are more concerned about fuel rises than they are the VAT rise. A recent survey showed that 53% of respondents are concerned with this matter as the rise could affect their businesses significantly. If fuel were to rise above £1.70 per litre one in ten are predicted to make redundancies. At present within Europe, the UK is the 8th most expensive country for unleaded petrol and 2nd most expensive country for diesel.

A HMRC proposal indicates that 50,000 SMEs could be investigated during the second half of 2011 under its “Business Records Checks” initiative, which will target organisations who hold poor trading records, dating back over the past six years. The investigations will focus on organisations with fewer than 250 employees and a turnover of less than €50 million. It will typically take half a day to complete the review of company records which will include cheque stubs, till rolls/sales records, plus bank and credit card statements. Penalties will be imposed for significant record keeping failures which could see fines up to £3,000; SMEs may also be exposed to formal tax enquiries as a result. The scheme aims to raise £600 million in additional revenue over the next four years for the taxman. There are a number of records you need to keep, dependent on your business size, sector and the different taxes that you have to pay, collect or charge.Contact the iC accountancy team

A record number of people filed their self-assessment tax returns online this year. HMRC have confirmed that 6.9 million used this platform, representing 78% of the total number of tax returns. The busiest day was deadline day January 31st, which saw 572,455 people submit their form and avoid a £100 fine. The Independent newspaper reports that every year around 10% of people fail to get their form in on time and are fined the penalty. If those who have missed the deadline do not submit their returns by July 31st a further £100 penalty will be incurred.

HMRC propose new penalty regime for contractors As announced in November HMRC have published a report outlining a more favourable penalty regime for contractors. Under the proposed rules, which will come into effect in October 2011 CIS members could pay less in penalties for late monthly returns. However until the new penalties are launched any contractor who has been charged for late filing may ask HMRC to calculate how much the penalties would be under the new rules (if less than the amount already charged) and request that the penalties be reduced to the lesser amount. For more information visit: www.hmrc.gov.uk/cis/penalties-late returns.htm

Added on 02 Nov 10 Off shore tax haven no more? Dave Harnett, Permanent Secretary of HM Revenue & Customs has revealed that the Government Agency has been in discussions with several countries seen as “tax havens” on the advantages of disclosing regimes. This could lead to the countries signing amnesties similar to the deal with Lichtenstein which unveiled secret bank accounts potentially holding untaxed assets.

Holidays come early for new businesses As announced by Chancellor George Osbourne in the budget a Holiday for New Business scheme has been launched. From the 6th of September 2010 until the 6th of September 2013, businesses outside of London, the South East and East of England can claim a payment holiday from NIC contributions. The scheme is available for the first 10 employees who started after the 22nd of June Budget statement. Certain criteria apply to qualify for the payment holiday.

PAYE error affects almost 6 million taxpayers HMRC ’s post-bag will be brimming up to Christmas, as they contact around 5.7 million taxpayers who have under or overpaid PAYE. This latest round of errors dates back to April 2008, and was reportedly identified by a new computer system which uncovered discrepancies in the PAYE system totalling £2bn. Circa 4.3 million people have overpaid and are due a rebate, whilst 1.4 million have underpaid and will be required to hand back an average of £1,428 each. Those most likely to be affected are individuals who have changed jobs, gained additional income streams, received new employee benefits such as a company car or have retired. Where individuals have informed HMRC of changes in their circumstances (which impacts their tax code) and HMRC has failed to use that information within 12 months of the end of the tax year in which it was received, then taxpayers, in accordance with the Revenue’s rules, are entitled to

Top rate income tax raised to 50%! From the 6th of April 2010, those earning above £150,000 per annum will be subject to a 50% rate of income tax. Individuals can receive tax relief through making pension contributions at their highest marginal rate. However, after the 6th of April 2011 for those earning in excess of £180,000 only the basic tax relief will apply. No breaks on holiday lets! Commencing on the 5th April 2010 will be the reclassification of furnished holiday lettings as “any other property investment”. This will prevent owners of such properties from claiming losses created by the property lettings business against other income. Additionally when the property is sold gains can no longer be rolled-over into another business.

HM Revenue and Customs has announced new interest rates to be charged for late and overpaid taxes from 29th September 2009. (Note that Corporation Tax quarterly instalment payments apply from 21st September 2009). For income tax, NICs, capital gains tax, stamp duties, VAT, excise duties, environmental taxes, insurance premium tax and custom duty the rate for late payments is to be 3% (previously 2.5%) and over payments rates are to be 0.5% (previously 0%) Corporation tax quarterly installment late payment rates are to remain at 1.5% and the over payments rate is to be 0.5% (previously 0.25%) For accounting periods ending on or after 01/10/93 corporation tax late payment rates are to be 3% (previously 1.75%) and over payment rates are to be 0.5% (previously 0%). For accounting periods ending on or after 01/08/99, the rate for late payments is to be 3% (previously 2.5%) and for over payments the rate is to be 0.5% (previously 0%) For income tax on company payments that

iC Accountancy is pleased to offer accountancy support services to contractors, including stat accounts, monthly payroll, corporation and personal tax returns and unlimited telephone advice – all at competitive monthly fee rates.