Sunday, 28 September 2008

New Self Assessment Deadline for Manual Returns Is Just Weeks Away

HM Revenue and Customs (HMRC) has issued a reminder to anyone filing a Self Assessment tax return this year - there's now a new 31 October deadline for paper returns, and it's only weeks away.

Previously, both paper and online Self Assessment tax returns had to be filed by 31 January. But from this year, paper returns must be with HMRC by 31 October, or you could face a £100 penalty. The deadline for filing online returns remains 31 January.

If you file a paper tax return, you therefore need to get organised now. For example, start thinking about what information you need to complete your return, such as your P60, self employment accounts, records of your savings and investments, and details of any untaxed income.

Alternatively, you could switch to online filing. It's easy to register. Filing your tax return online has a number of advantages - your tax is calculated automatically, you get an immediate online acknowledgement once you've filed, and it's processed faster, so any money you are owed by HMRC is repaid more quickly.

Once you've filed your return, any tax due has to be paid by 31 January, whether you file on paper or online.

Buy-To-Let Landlords Beware

HM Revenue & Customs have cottoned on to the substantial buy-to-let market out there, and are now targeting landlords who have failed to declare, and pay tax on, this income.

As agents, we are starting to receive letters stating; "I have information that suggests your client has received rental income from property that has not been included on their Tax Return. I need to verify if my information is correct, and, if they have received rents, to work out any tax that may be due."

Anyone receiving these letters should act immediately, as failure to do so could could incur additional financial penalties, and, ultimately, criminal prosecution.

An Inland Revenue spokesman said; "We are not planning a crackdown, or to otherwise target landlords. These letters are about helping customers with their tax affairs and answering common questions put to us by our landlord customers. It has got nothing to do with revenue raising. (Yeah, right, and and speed cameras are all about helping drivers with their driving skills).

The other impact of this strategy is that HMRC are seeking to gather information on buy-to-let properties, so that they can ensure these properties don't slip through the Capital Gains Tax net, when they are ultimately sold.

Thursday, 25 September 2008

8 Keys To Recession Proof Your Business

Have you noticed how often the words 'recession', 'economic downturn' and 'the credit crunch' are mentioned in the media these days?

Is your business starting to feel the pinch?

With businesses large and small downsizing and closing down, what are you doing to make sure your business isn't next?

Peter Lisney is a business development and copywriting specialist. He developed his first commercial website in 1998 and has been integrating online and offline marketing ever since.

He has produced a comprehensive 8 step guide to recession proofing your business.

We feel it's definately worth a look:

Why not check it out.

Sunday, 7 September 2008

Estate Planning & The Seven Year Rule

The Seven Year Rule allows us to gift an asset or some money to loved ones, whilst reducing your inheritance tax (IHT) bill. There is, however, a catch (isn't there always?) In order for the gift to be fully IHT exempt, you will need to survive for seven years after making the gift.

There is, currently, a £312,000 IHT threshold in place. This means that, on death, the first £312,000 of our estate will not be subject to IHT. Any amounts gifted above this amout will be subject to the Seven Year Rule, so we need to make sure that the receipients can afford to pay the bill.

There are other ways of making IHT exempt gifts. For example, you can give away an annual, tax free, allowance of up to £3,000 to family or friends. If this is not used in the first year, it can be carried forward to the next year only. So, if you've not done this before, you can gift up to £6,000 (bringing forward last year's allowance) in the first year. This means that a couple can gift £12,000 in the first year, and £6,000 per year thereafter.

Putting this money in trust for your children or grandchildren could give them a head start on the property ladder or pay for their education.

Elderly parents should review their estate as soon as possible, making sure they have an up to date will, and that loved ones know where it is.

Whether you provide care for them or not, they could look to make regular gifts from income to you (provided that, in doing so, they are not reducing the quality of their lifestyle).

These gifts (which can be for any amount) can fall outside their estate for IHT purposes. If they move into your home and contribute to running costs and bills, make sure a record is kept of all expenses, so you don't incur an unwelcome income tax or IHT bill.

As with all legislation, IHT law is subject to change, so always check out the current position when looking to make a gift of this nature.

Tuesday, 2 September 2008

National Minimum Wage Increases Next Month

From 1 October, the national minimum wage (NMW) hourly rates will be increased to the following rates:
  • Adult rate (workers aged 22 and over) will increase to £5.73.

  • Development rate for 18-21 year olds will increase to £4.77

  • Development rate for 16-17 year olds will increase to £3.53

The rate for accomodation offset will increase to £4.46 per day (weekly maximum £31.22).

For more information about the changes, or for general advice, call the NMW Helpline on 08456 000 678, or visit

Stakeholder Pension Schemes

Stakeholder pension schemes were introduced on 6 April 2001, and are aimed at individuals on low earnings, with no pension provision.

Employers with five or more employees who do not provide access to a personal or occupational pension scheme, may be required by law to offer their employees access to a stakeholder pension scheme.

An employer can select a scheme by seeking the advice of an independent financial advisor, or by making their own enquiries. Having identified a scheme, the employer must ensure that the scheme is on the Pensions Regulator's register of stakeholder pensions, and consult with employees and their representatives about the choice of scheme.

Providing access to a stakeholder pension scheme does not mean the employer has to set it up and run it. It is up to the individual employee whether or not they decide to join a stakeholder pension scheme.

Employees who are members of stakeholder pension schemes pay National Insurance contributions at the standard not contracted-out rate, ie contribution Table letter A. Do not use any other Table letter. If an individual contracts-out of the State Second Pension using a stakeholder pension plan, HMRC will pay a rebate of National Insurance contributions into their stakeholder plan.

Information on stakeholder pensions can be found on the following sites:

Article reproduced from HM Revenue & Customs Employer Bulletin, Issue 30.