How to Complete an Income Tax Self-Assessment

How to Complete an Income Tax Self-Assessment

Completing a self-assessment can be a daunting prospect for many, especially if you lack a natural aptitude for numbers. Unfortunately, for the majority of people working in business, it is a prospect you are likely to face. However, provided you keep comprehensive and relevant records, and meet your deadlines, it doesn’t have to be something to fear. This guide will help you both recognise your obligations as a small business as well as teach you how to keep detailed records to ensure you submit your return without any problems. Am I affected by self-assessment? You are responsible for performing your own self-assessment if: You are a sole trader You are in partnership You are a company director who receives benefits or remunerations You are a higher rate tax payer with a higher-rate taxa... »

Company Directors: Why You Should be Making the Most of Tax Relief Allowances

Company Directors: Why You Should be Making the Most of Tax Relief Allowances

As a company director, you’ve already got your head round all the legally enforceable regulations that govern your role. You have taken on the responsibilities directorship entails and kept the interests of the company at the heart of your decision making. Your record keeping and company accounts are maintained through clear, scrupulous systems; and a crucial part of your financial management is the administration and payment of relevant taxation. As unpopular as it is inevitable, there is one upside to the tax system – allowances! Nobody wants to miss out on their entitlement so here we look at what you need to pay and what you can claim back… The main business taxes: What you need to be aware of Her Majesty’s Revenue and Customs (HMRC) establishes the rules and you are legally responsibl... »

A Third of Micro Businesses Risk Penalties Due to Unpaid VAT

A Third of Micro Businesses Risk Penalties Due to Unpaid VAT

Over a third (36%) of micro businesses are unaware of the VAT threshold which could mean they have unintentionally not been paying their VAT bills to HM Revenue & Customs (HMRC), according to research by small business insurer Direct Line for Business. Of the micro companies (less than 10 employees) surveyed that are conscious of the threshold, one in 10 have purposely limited sales to avoid paying VAT – with 27% ceasing trading for a period in order to do so. According to the report, many small businesses choose to remain within the VAT limit in order to compete with other companies so as to keep their goods and services at a lower rate. The VAT threshold currently stands at £82,000. If a business’ turnover of VAT taxable goods and services (supplied within the UK) for the year prior ... »

UK Businesses Owe £2.6bn in Overdue VAT

The HMRC are owed £100m more in arrears this year as UK businesses struggle to pay their taxes UK businesses owe the HMRC £2.6bn in overdue VAT, according to figures released by specialist finance provider LDF. The deficit has increased by £100m in comparison with last year, causing concern for UK businesses struggling to fund tax payments. For companies with a turnover in excess of £1.35m, VAT bills are issued on a quarterly basis and calculated on a company’s invoices, not the amount that has actually been received from customers over that period. Businesses are therefore often unable to keep up with their taxes as they are still awaiting payment from customers. This struggle to meet VAT payments could especially be an issue for small and mid-sized businesses as a recent report by the As... »

HMRC Targets Tax Avoiding eBay Entrepreneurs

HMRC is offering people who earn a living from selling items through the likes of eBay and Amazon, and have not ensured their tax affairs are in order, an option to ‘Buy it Now’. Online resellers have until the 14th of June to own up to any money they owe after the taxman wrote to 32,000 traders it has in its sights earlier this month. Those who come forward now will have to pay a reduced penalty of 20 per cent on the tax they haven’t paid. Increasing the pressure over the weekend, hugely popular eBay confirmed it is handing over the names and full contact details of large numbers of traders to comply with an end of May deadline set by HMRC. Stephen Barratt, private client director at accountants and business advisers James Cowper said: “Most occasional buyers and sellers... »

HMRC Extends Crackdown on Poor Record-keepers

Small bsuinesses should check their books are in order — that’s the warning from HM Revenue & Customs (HMRC) after it announced it is extending the crackdown on poor record-keeping nationwide. HMRC’s Business Record Checks programme was piloted in eight cities across the UK earlier this year — from which the tax body has discovered that 44 per cent of businesses had issues with their records and 12 per cent had seriously inadequate ones. An additional 12,000 business record checks are now due to be carried out before the end of the year, before the programme is rolled out nationwide in 2012. Small businesses not keeping tax records up to date risk paying a penalty of up to £3,000. “Good record-keeping helps businesses pay the right amount of tax at t... »

No Tax Reminder for Thousands as HMRC Runs Out of Paper

With self-assessment payment deadline of 31 July fast approaching, tax expert Andrew Shaw explains the options for taxpayers worried about missing the deadline HM Revenue & Customs (HMRC) has admitted this week that it failed to issue reminder letters to thousands of taxpayers who complete a self-assessment form – because it ran out of paper! The mistake, which comes at a time when the country is seeking to collect as much tax as it possibly can, is believed to have affected hundreds of thousands of taxpayers due to pay the second instalment of their 2010/11 tax – specifically those with a Unique Taxpayer Reference (UTR) number in the range 70-99. The error reportedly occurred due to a four-fold increase in the number of payments on account, which was evidently not communic... »

HMRC Targets VAT Dodgers with Summer Amnesty

Over 40,000 businesses will be contacted through July and August as HM Revenue & Customs (HMRC) ask sole traders and small firms trading above the VAT threshold to register and pay their dues. Known as the VAT Initiative, the latest campaign by HMRC allows businesses to make a voluntary disclosure of their VAT and pay back any tax owed with only a small penalty until 30 September. After this date, HMRC will launch their own investigations into any firms that have not come forward, with full penalties and charges in force. Mike Wells, HMRC director of risk and intelligence, said: “The aim is to make it easy for individuals and businesses to contact us, make a full disclosure of their income and face a reduced penalty.” By law, businesses that turn over £73,000 (the cur... »

Tax Cheats to be Targeted by New HMRC Software

Businesses and individuals avoiding tax payments are to be targeted by new software launched by HM Revenue & Customs (HMRC). The software, set to be launched later this year, will work by searching the internet to identify small businesses and personal ventures, such as private tutors and eBay traders, who may be operating a business and not declaring their income. HMRC said that websites including Amazon, Gumtree and eBay would be looked at and that any discrepancies, such as traders not being registered for self-assessment, would help the tax body identify those who have failed to pay the correct amount of tax. Mike Wells, HMRC’s director of risk and intelligence, said the purpose of the software was to “reduce the tax gap and help customers pay what they owe”. “We will use the... »

HMRC Investigators Target Restaurant Tax Dodgers

Small businesses are being investigated in the first of a series of HM Revenue & Customs (HMRC) taskforces aimed at tackling tax avoidance and fraud. Independent restaurants in London are being investigated first with those in the North West and Scotland soon to follow. Nine other taskforces will start work investigating small businesses in the coming weeks as HMRC seeks to recoup an extra £7 billion each year from 2011/12 to 2014/15. Targeted businesses may find all their records, including PAYE, corporation tax, VAT and income tax records, subject to scrutiny. Personal bank records and other personal records of business owners may also be demanded. An HMRC spokesman refused to identify which sectors and regions were next, but said businesses which use transient or flexible empl... »

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