Allchurch Bailey Tax News

Here's our current summary of some of the more important recent tax news:

Buy To Let Properties

Making a Will

VAT Flat rate scheme

Becoming Self-employed

New Rules For Furnished Holiday Lets

VAT Rate Changes

The Apprentice - You're Fired!

Gain a Cashflow Advantage Courtesy of the VAT Man

December 2009 Pre - Budget Report - All Gloom?

Statutory Maternity Pay - New Rules From October 2008

Buy To Let Properties

The so-called credit crunch is rapidly hitting the buy-to-let market, especially with many fixed rate mortgages reaching the end of their term.  If you are about to restructure the borrowing on your buy-to-let give us a call because there may be a way to release some of the equity in a most tax efficient way.

The other area that can benefit from a little thought are the expenses that can be set against the rents and the capital gain on the eventual sale.  If you are unsure of how the tax liabilities are calculated, what expenses you can claim or what records you need to keep, then talk to Vaughan Blake.

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Making a Will

A recent survey showed that only a small percentage of the UK population have actually made a will.  Of those who have, many are invalid or simply out of date.

Those who die without making a will die "intestate" and their estates are distributed on a statutory basis.  We would wager that 99.9% of the population have no idea of the rules of intestacy and therefore, could not say with any certainty who will ultimately inherit their assets.

If you would like advice on Inheritance Tax or simply are curious about  who will inherit your hard earned wealth, give us a call.  It is all too easy to make the tax man the largest beneficiary on your death. 

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VAT Flat rate scheme

The scheme enables small businesses with a turnover under £150,000 to account for VAT on the basis of a set percentage of turnover regardless of inputs. The new rates range from 2% to 13.5% (1% to 12.5% for newly-registered businesses).

Each type of business is allocated a rate within the above range. This means any business could be better or worse off by adopting the scheme.

The flat rate scheme can be combined with the annual accounting scheme reducing compliance costs to a minimum.

If you would like to see if your business could be onto a winner by using either the flat rate or the annual accounting scheme, please call us.

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Becoming Self-employed

One of the important features of becoming self-employed is to register with HMRC within three months of the end of the month in which you start your trade. The penalty for late registration is currently just £100. However, as long as the taxpayer has registered by 5 October following the end of the tax year in which he started to trade, and he pays any tax due by 31 January, there should be no further penalties for late paid tax.

There are also a number of other important considerations such as VAT registration, public liability insurance, if you are daunted by these and need both tax and general advice, please give Vaughan Blake a call. Becoming an entrepreneur may not be as daunting as you think.

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New Rules For Furnished Holiday Lets

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VAT Rate Changes

As you will have have read the rate of VAT is to return to 17.5% on 1 January 2010.  There are a number of points to bear in mind for this switch.

For example, if you are on the flat rate scheme new rates apply from 1 January 2010.  These are NOT the same as the old rates when VAT was previously set at 17.5%.

If you would like a copy of our Topic Sheet please contact Vaughan Blake on 01386 553745. 

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The Apprentice - You're Fired!

Whilst I am sure most businessmen and women do not fire staff with the relish of Sir Alan Sugar, most businesses will face the prospect of having to dismiss an employee through either redundancy or poor performance occassionally. Consideration must be given to the financial package given to the departing employee since if this is structured correctly a considerable tax saving can be made benefiting both parties.

If you are about to call an employee into the boardroom and utter the immortal line “You’re fired”, perhaps you should give Vaughan a call.

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Gain a Cashflow Advantage Courtesy of the VAT Man

Businesses with a turnover of less than £1.35m can join the Cash Accounting scheme for VAT.

The scheme allows traders to defer the payment of output tax to Customs until they receive the payment from the customer.  It also, however, defers the reclaim of input VAT until payment is made to the supplier. Therefore, if your debtors are more than your creditors or you offer extended credit periods, it could give you a welcome immediate cashflow boost.

As VAT is only paid over to Customs when the customer pays you, it also has the benefit of creating automatic bad debt relief.

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December 2009 Pre - Budget Report - All Gloom?

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Statutory Maternity Pay - New Rules From October 2008

There are some new regulations concerning what benefits employers must provide to employees during the additional maternity leave (AML) period, where the baby is due on or after 5 October 2008, regardless of when the baby is actually born.

Maternity leave can now last for up to 52 weeks. The first 26 weeks is referred to as ordinary maternity leave (OML) and weeks 27 to 52 are called additional maternity leave (AML). Statutory maternity pay (SMP) is payable for 39 weeks, so covers the OLM and part of the AML period, so for the last 13 weeks of the maternity leave period the employee is not entitled to any pay for days on which they do not work. However, contractual non-cash benefits must provided to the employee throughout the maternity leave period.

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