Tax

Fifth of Small Business Owners Still Use ‘Shoebox Method’ to Manage Accounts

Fifth of Small Business Owners Still Use ‘Shoebox Method’ to Manage Accounts

16% of UK small businesses still use a ‘shoebox method’ to manage their accounts despite the fact all taxes will be managed online by 2020. According to research by UK200Group, just 35% of smaller firms use online accounting software to manage their accounts while nearly a fifth make no effort whatsoever to record any information prior to submitting tax returns. 23% of those surveyed hold all relevant info in manually complied reports with 27% opting for spreadsheets on their computer. Making Tax Digital Explained Worryingly for businesses still opting for the pen and paper or nothing all, government initiative Making Tax Digital will see the tax system being full digitalised. Richard McNeilly, chair of the UK200Group Digitalisation Taskforce and managing partner of Dains said: “The ‘shoeb... »

A Guide to Tax and National Insurance for Small Businesses

A Guide to Tax and National Insurance for Small Businesses

If you’re starting a business, it is essential that you at least know the basics of tax and national insurance and your tax obligations. Tax inspectors will pay just as much attention to the profits and accounts of a small business or sole-trader as they would a large firm. What are the different taxes businesses should be aware of? There are a range of different taxes which depend on the type of business, business formation and how your business operates. Income tax and corporation tax: Income tax applies if you are self-employed or an employee of a business. If you are a limited company then you must pay corporation tax. National Insurance: National Insurance (NI) is a form of tax paid by both employers and individuals. Value Added Tax: Value Added Tax (VAT) is tax on the supplies and sa... »

Government clarifies what VAT MOSS ruling will mean for small businesses

HMRC confirms small firms will not be forced to charge UK VAT on domestic sales but will still need to register for “Mini One Stop Shop” from January 1 The government has confirmed that the controversial VAT “Mini One Stop Shop” (VAT MOSS) EU ruling, to be introduced on January 1 2015, will not force sole traders and small businesses to charge UK VAT on domestic sales. The clarification from HM Revenue and Customs (HMRC) follows several recent lobbying campaigns by organisations and entrepreneurs calling for exemptions to be made for the country’s small firms after issues were raised about the ruling penalising digital businesses selling in Europe. From January 1, the new EU regulation would have required all UK firms selling digital services and products in Europe, including e... »

Small Business Survival Rates Reach 10 Year Low

Majority of small businesses fail to survive over five years with 55% stating it has never been more difficult to grow in the UK New research has declared 55% of small and mid-sized businesses are failing to reach the five year mark; with 68% finding it difficult to grow their business due to bank lending, tax breaks and business rates barriers. The research, released by insurance broker RSA, revealed that despite an overall improvement in the economy, business survival rates have decreased since 2004 with the construction industry performing the worst (survival rate of 44%) followed by the health sector (56%). The report, titled Growing Pains, also looked at business growth potential and identified the leading barriers to it. 61% of small and medium-sized firms lack confidence in their bu... »

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... »

Small Businesses Go Green to Boost their Bottom Line

…but see tax and red tape as barriers to environmentalism Small businesses believe going green can boost their bottom line – but see tax and red tape as major barriers to becoming more environmentally friendly, according to Forum of Private Business research. Just 10% of business owners responding to the Forum’s latest environmental panel survey have done nothing to reduce steep utilities costs while 41% have streamlined business processes, 28% have reduced energy usage and the same number have embraced more energy efficient equipment. While 77% of respondents disagree that being green is impossible in the present economic climate 52% argue that green taxes inhibit their ability to invest in reducing energy use and 75% believe that environmental legislation focuses on the... »

Cash-strapped Britain Gifts £13.5bn to the Taxman

The South East is the most tax inefficient region – wasting £1.8 billion Failure to claim tax credits accounts for £8.5 billion of wastage 91% of women suffer from ‘tax apathy’ – failing to take any steps to reduce the amount of tax they paid in the last 12 months Of those who haven’t taken any steps to be more tax efficient, nearly half (45%) think they are already being as tax efficient as possible Cash-strapped Brits are set to unnecessarily hand over a massive £13.5 billion to the taxman this year, according to unbiased.co.uk’s 19th annual Tax Action Report. This is a huge amount in a year where cuts to public spending and benefits will put even more pressure on our already tight purse strings. The Tax Action Report calculates how much money is wasted as a result of people making... »

£90m Fines and Record Use for Tax Self-Assessment

As football’s transfer window "slammed shut" last night so too did the window for Britain’s self-employed to file their tax returns. The HM Revenue & Customs‘ online self-assessment service saw a record number of submissions this year as entrepreneurs and self-employed workers filed their tax returns before the midnight deadline on the 31st January. Last year the HMRC had a total of 6.42 million tax returns submitted and by midday on Monday 31st January 2011, a clear 12 hours before "close of play", they had already received 6.45 million submissions, some 30,000 greater than the previous year; and that was with an estimated 300,000 additional returns expected later in the day. By this morning the official figure was 6.9 million people, or 6,907,410... »

Tax Doesn’t Have to be Taxing; But it is…

Low corporate tax knowledge is making the tax system inefficient, says new ACCA research Her Majesty’s Revenue and Customs (HMRC) spends a lot of time telling us that ‘tax doesn’t have to be taxing’. However, a three-year research project carried out for ACCA (the Association of Chartered Certified Accountants) by the Universities of Nottingham and Southampton – called The Management of Tax Knowledge – shows that there is a serious lack of understanding of the tax system amongst those in the corporate world responsible for making tax-decisions for their company. “There is little point in a tax code if key decision-makers aren’t sure how it works”, said ACCA’s Head of Taxation, Chas Roy-Chowdhury. “Tax knowledge and its shari... »

Avoid Fines for Late Self-assessment

The January 31st tax deadline for online self-assessment forms is only weeks away Taxpayers could be fined £24 million more than they were last year for late returns and wrongly filled in forms Over 1 million forms were submitted late in 2008 (14,600 more than in 2007)  Taxpayers are set to gift the taxman an unnecessary £503 million this year in fines generated by late returns, miscalculations and surcharges on unpaid tax, according to research by Unbiased.co.uk, the professional advice website. The research also reveals this amount has increased by £24 million on estimations for last year. Failure to get forms to Her Majesty’s Revenue & Customs (HMRC) by the fast-approaching 31st January deadline will incur an initial £100 late payment charge. ... »

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