From 1st April 2012, online filing will become compulsory for all VAT registered businesses, and all payments will need to be paid electronically (direct debit, BACS, debit/credit card or at a bank counter). To ensure you are geared up in time to submit and pay online, make sure you have your unique user ID from HMRC in good time, as this can take several weeks to arrive. For further advice, or to ask us to submit your returns on your behalf, contact the office.

A reminder that the deadline for Self Assessment tax returns is fast approaching - returns relating to the tax year 2010/11 need to be filed online - and any tax due must be paid - by 31st January 2012. Late filing will incur an automatic £100 penalty. If you need assistance with your return, please contact us as soon as possible.

The Government has announced today that the National minimum wage will increase on October the 1st 2011, as follows: The adult rate will increase by 15p to £6.08 an hour; The rate for 18-20 year olds will increase by 6p to £4.98 an hour; The rate for 16-17 year olds will increase by 4p to £3.68 an hour; and The rate for apprentices will increase by 10p to £2.60 an hour.

HMRC have warned that individuals who have been evading taxes and concealing money offshore could face new penalties of up to 200%. Commencing on the 6th of April 2011 the new penalties for offshore non compliance for income tax and capital gains tax will be linked to the tax transparency of the country involved. For nations which do not automatically disclose tax information with the UK, HMRC advises that there will be increased penalties in place for under-declared income and gains.

A new EU ruling has meant that it is likely that fast food retailers will be exempt from VAT providing that the operation is not classed as catering – examples include popcorn, salami and nachos.

In 2010, £124 million went un-recovered by businesses as a result of businesses not keeping or obtaining valid expense receipts. This figure could rise to £140 million in 2011 due to the rise in VAT rate. We’re urging clients to improve and enhance policies, ensuring receipts are obtained from employees to support claims.Please contact the office for a handy guide on best practice in record keeping.

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