Members of the ICAEW Business Advice Service offer a free initial consultation to new clients.
Archives for September 2011
HMRC are of the opinion that there are a number of businesses that should be registered for VAT, and so far, they have not registered. They are in the process of sending out 40,000 letters to traders who they believe may be in this category.
HMRC are offering businesses that “come clean” and notify HMRC of an intention to register before the end of September 2011, reduced or nil penalties. Subsequently formal applications have to be submitted on VAT form 1 before 31 December 2011.
The current VAT registration threshold is £73,000. If you have already passed this annual limit in the last twelve months, are about to, or expect to in the next 30 days, you might like to respond to this offer.
Penalties for late registration can be up to 100% of additional VAT due.
Fast Food Outlets
HMRC believes that there are a number of fast food outlets that are deliberately falsifying their records and miss-declaring their true sales levels in order to avoid paying their correct taxes.
They have set up yet another specialist task force to tackle this avoidance.
Penalties will be levied in addition to recovery of unpaid taxes. Those businesses discovered may also face criminal prosecution.
With effect from 1st October 2011 the following changes will be made to the National Minimum wage:
Adult Rate for Workers age 21 and over £6.08 per hour
Development rate for workers aged 18 – 20 inclusive £4.98 per hour
Young Workers Rate for workers aged 16 – 17 years old £3.68 per hour
Apprentice Minimum Wage £2.60 per hour
The apprentice rate applies to apprentices under 19 or 19 and or over and in the first year of their apprenticeship.
If you charge a customer VAT and subsequently discover that the supply of goods or services was exempt, zero rated or outside the scope of VAT you can make a claim to HMRC to refund the VAT overcharged.
The phrase “unjust enrichment” means that you are required by HMRC to refund any VAT repaid to you in this way to your customers, you cannot keep the refund for yourself!
HMRC have a special reimbursement scheme that deals with claims for repayment. When making a claim you will have to agree to:
- Sign a formal undertaking that you will comply with the terms of the reimbursement.
- Make all refunds to your customers within 90 days.
- Repay any residual amounts not returned to customers within 14 days of the 90 day time limit.
- Pass on any statutory interest paid with the refunds to your customers.
Additionally you will have to keep the following records:
- Names and addresses of the customers you intend to reimburse.
- Total amount paid to each customer.
- Amount of interest paid to each customer.
- Date you refunded the money.
HMRC will also seek to reduce refunds due if the supply resulted in a claim for associated VAT input tax. For example if you supplied services at standard rate and there were associated costs where you recovered input tax, and then you discovered that the supply should have been an exempt supply, then HMRC would reduce the refund of over-declared output tax by the over-claimed, associated, input tax.
If you need to make a claim under the reimbursement scheme you will need to submit a formal undertaking in writing. Please contact us and we will organise this for you.
Partner, Karen Whitehead, advises SMEs to be be aware of HMRCs power to penalise companies for “inadequate” accounting records.
Partner, Sam Jones, explains how clients can use our secure portal to exchange confidential accounts information.
Partner, Karen Whitehead, explains how small business owners can reduce onerous tasks by outsourcing their payroll.
Partner, Sam Jones, explains the HMRC penalties for late tax return filing.