Please note that the office will be closed on 6 May due to the Bank Holiday.
May 1, 2013
April 18, 2013
A recent survey suggests that more than 50% of SME’s have been refused funding by their bank over the last 6 months. We all hear people moaning that the banks aren’t lending, but the truth is, whilst it is not as easy to get funding as it once was, the banks are still lending. Their criteria may have changed slightly, and rightly so, it was reckless lending that got us into this mess in the first place.
The local corporate bank managers that we work closely with keep telling us they are still lending, but they are not getting as many people applying. They are telling us to tell our clients they are still open for business. I therefore suspect that the ones being turned down are turned down because they have not done their homework and have gone in poorly prepared.
If you have a good business idea, a good business plan and financial forecast, show you have the necessary skills and expertise to pull it off then you are likely to be successful. Banks are also now looking for entrepreneurs to risk some of their own capital too. For example if your forecast shows you need £10,000 to start the business the bank like to see you put in say £2,000 of your own money before they will lend the remaining £8,000 you need.
We can prepare business plans and financial forecasts for you before putting you in touch with those local bank mangers who are looking to lend to businesses. Get in touch for more details in the contact us box on the right.
April 3, 2013
I just want to clarify what the relaxation of the RTI rules recently announced by HMRC actually means for employers. Some of the press coverage of this is slightly misleading and this has left some employers believing they do not have to make any RTI submissions until October. This is not the case and RTI will still start as planned for most employers on 6 April 2013.
The only relaxation relates to the timing of the RTI submissions for some employers under certain circumstances. Under RTI the Full Payments Submission (FPS) was due to be submitted to HMRC on or before the payment is made to the employee. It is the “on or before payment” rule that has been relaxed for those employers that process their payroll monthly but pay employees more frequently. RTI submissions are still required but are now only required monthly (by the 5th of the month) rather than each time an employee is paid.
Here is what HMRC said:
“HM Revenue & Customs (HMRC) recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time. HMRC have therefore agreed a relaxation of reporting arrangements for small businesses.
Until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th).”
HMRC have realised some employers may struggle with the “on or before payment” rule and will be consulting on how they might make this easier for those employers over the next six months. Its worth noting that it is the Department for Work and Pensions (DWP) who are pushing for the information to be submitted “on or before payment” in order to assist them with the new Universal Tax Credits which are being introduced in October 2013. It is therefore not a coincidence that this is also the date the relaxation ends.
If you are an employer that falls within this category I would spend the next 6 months adjusting the timing of and the way in which you process your payroll to make sure that you will be able to comply with the rules when the relaxation finishes. However no penalties will be charged in either case until 2014.
If you have any RTI related questions please do not hesitate to get in touch.
March 27, 2013
If you have still not filed your 2011/12 Tax Return that was due by 31 January 2013 then daily penalties will start to accrue from 1 April 2013. The penalty is £10 per day up to a maximum of £900. If the return is more than 6 months late the penalty is £300 or 5% of the tax due whichever is higher.
If you have yet to complete your return, don’t delay do it today.
The new tax year will shortly be here. Now is the time to take the opportunity to review our income and assets to make sure we are best utilising the allowances and reliefs available to us. Here are a few quick tips that can be done before the tax year ends.
Individual Savings Accounts (ISA)
Have you and your partner made use of your allowances for the year? For 2012/13 the annual allowance is £11,280 of which £5,640 can be in cash.
Consider paying more into your pension before the year ends to make the most of the reliefs available. If you are a 50% taxpayer this is being reduced to 45% next year. Consider paying more into your pension now in order to obtain relief at the higher rate. The amount that you can get relief on is also being reduced next year, you therefore may want to make the most of your allowance this year.
If you do not want to have to pay the High Rate Child Benefit charge, now is the time to opt out. More details on this are available on our website here.
Dividends – timing is important
Depending on your circumstances you may want to pay a dividend now to make the most of your basic rate allowance this year. If you have already used your basic rate allowance for this year then you may want to defer the dividend payment until 6 April.
Again you may want to consider making these before the end of the tax year. This may be particularly important for those who want to increase their basic rate bands or to bring them out of another tax bracket.
Annual Investment Allowance (AIA)
This increased from £25,000 to £250,000 back in January. There are special rules relating to accounting periods that span that date. To make sure you make the full use of the allowance, careful consideration is needed on the timing of large purchases of plant. If you are considering such a purchase let us calculate the optimum timing for you.
Now is the time to review ownership of property. Making sure you make the most of partners allowances and reliefs. (see below).
Capital Gains Tax
If you are planning to dispose of assets that would be chargeable to capital gains consider selling now to make the most of this years annual exemption which is currently £10,600. For example if you were planning on selling two rental properties and you sold them both in the same tax year you would only get one exemption of £10,600. If however you sold one on 5 April and the other on 6 April they would be in different tax years and would each get an annual exemption. Now this is easier said than done, but if you have already utilised your annual exemption this year you could try and defer any other gains until after 6 April.
Personal Allowance and Basic Rate Bands
Make sure your partner has utilised their personal allowance. Consider transferring savings income to the partner that pays the lowest rate of tax.
If you have any questions regarding the above or want us to review your tax affairs and offer you individual tax planning advice then please get in touch through the contact box opposite.
March 25, 2013
Due to the Easter Bank Holidays the office will be closed on Friday 29 March and Monday 1 April. If we normally run your payroll on a Friday or Monday then please get in contact to make arrangements for this week’s payroll run.
May I take this opportunity to wish all our clients a very happy easter.
March 21, 2013
The Chancellor delivered his budget speech yesterday. To save you having to trawl through hundreds of pages of Treasury and HMRC documents we have prepared a summary of the main highlights. The summary is written in plain english and is broken down into the different areas of tax. There are always fundamental changes that affect both business and taxpayers for the year ahead. We therefore strongly recommend you read the summary. If you have any questions on any of the points raised then please do not hesitate to contact us.
Please click the link below to read the summary. It is available in PDF format.
March 20, 2013
Here is a quick summary of the main highlights from the budget that may affect small businesses. Our full budget summary will be available on our website tomorrow morning.
As widely predicted the main rate of Corporation Tax will be further reduced by 1% to 20% from 1 April 2015. This will bring with it some simplification regarding associated company rules and remove the need for marginal rate relief. The main rate has reduced significantly in recent years from 30% in 2007.
The fuel duty increase that was due to take place on 1 September 2013 has been cancelled, the rates have currently been frozen.
The duty on beer has been reduced. This effectively reduces the price of an average strength pint of beer by 1p. An unusual move since the government were recently talking about setting minimum prices for alcohol.
Again as widely predicted the personal allowance for income tax purposes will be £10,000 for 2014/15.
As an incentive to cut the cost of employing people, the Chancellor announced an employment allowance of £2,000 to be offset against Employers NIC. This may have some interesting tax planning opportunities. Expect more to follow on this in the next few days.
Benefits in Kind for loans to participators
The threshold for the tax charge for beneficial loans will increase to £10,000 from £5,000.
Self employed NIC
The government will consult on how self employed people pay their Class 2 NIC, usually paid monthly by Direct Debit. They will be consulting on bringing this into the self assessment system.
The VAT threshold will be increased to £79,000 from £77,000
Help to Buy
The Chancellor announced a number of measures aimed at helping people move up the housing ladder. In the past such schemes were only available to first time buyers. This has now been extended to existing homeowners. This includes a shared equity scheme where the government will lend you 20% of the value and a mortgage guarantee scheme where the government will encourage the lender by offering a guarantee.
More details to Come
After we have had chance to read through all the details we will offer more detail on some of the above anything we may have missed. Our full budget summary will be available tomorrow.
HMRC have announced that they recognise that some small businesses who may pay their employees weekly or more frequently but only process their payroll monthly may need longer to adapt to the reporting requirements of RTI (Real Time Information). HMRC have therefore agreed a relaxation of the reporting requirements for small businesses.
Under RTI employers are required to send information to HMRC on or before payment to their employees. Employers with fewer than 50 employees who may find this difficult are being given a six month period of grace (5 October 2013) to get used to the new requirements. Those employers will be allowed to send information to HMRC once per month but no later than the end of the tax month (5th).
HMRC have said they will continue to access the impact of RTI on small businesses and will consider if they can make any improvements.
Our assessment of RTI is that for the majority of employers there will be little impact once the initial changeover has taken place. In fact we believe the benefits will eventually outway the time taken for the extra button press. Where the difficulty lies is the on or before payment requirement. Incidentally HMRC are happy to receive the information monthly as they always have done, its Universal Credit which is driving the requirement for “on or before payment”.
Although HMRC have allowed exceptions to the on or before rules, for certain employees such as casual bar staff and fruit pickers the employer is still required to file that information within 7 days. For the rest of us the process should be relatively simple but in practice, from experience and the questions we have been asked so far, its not that straightforward in reality. There are some weird, wonderful and strange systems in place by many employers for how and when they pay their staff. Some of these have only come to light once we start talking about the RTI requirements. For example some of our clients for whom we run a monthly payroll actually pay different staff at different times of the month. It would seem that certain employees have negotiated an earlier pay date with their employers. Under RTI this would mean more than one submission per month. A number of employers are going to have to change the way they pay their employees.
Taylor Roberts therefore appreciate the extra time HMRC have allowed small businesses to get used to the new reporting requirements. It also gives us 6 months to iron out any teething problems and time for some employers to change the way they pay their staff.
What we need from this years budget is something radical, something brave, something different to turn the economy around. Will we get it? Not likely. What will we get instead? Probably more of the same. More support and reduced taxes for big businesses, more talk on anti avoidance with very little substance to actually back it up.
What we need is to encourage more spending. If the government, businesses and individuals are all not spending where does the growth come from? We need to encourage the banks to support small businesses, we need to encourage small businesses to invest in growth, invest in new equipment, invest in expansion plans and employ new people. We need to make it easier for small businesses to do this, with less red tape. We need to turn the current pessimistic view of the economy into optimism.
We need to encourage big businesses to pay their fair share of their taxes. We need to encourage them to pump their stock pile of cash back into the economy. We need to bring some of that “offshore” money back home where it is needed.
It will take a brave chancellor to admit that spending cuts haven’t worked and to come up with something radical to turn it around. Thats why I don’t expect anything of the above from this week’s budget. I would like to be proven wrong.
We will be providing live commentary and updates during the budget on our Twitter and Facebook feeds. Drop us an email if you would like to receive our budget report as soon as it is available.