Wildaxe Bullets

Life is great - the tax return season is now over and we can breathe again - at least for a little while. In the meantime, you might be interested in the following:


NEWS UPDATE

Changes to Fuel Rates from 1 January 2008

A reminder that from 1 January 2008 the Revenue have published new mileage rates that company car users can use to calculate the fuel cost of running their vehicles for private purposes. If this private element is repaid to employers the employees will avoid the penal car fuel benefit charge.

The new rates are:

Engine size:

1400cc or less: petrol 11p, diesel 11p, LPG 7p.
1401cc to 2000cc: petrol 13p, diesel 11p, LPG 8p.
Over 2000cc: petrol 19p, diesel 14p, LPG 11p.

VAT

Employers can also use these rates to calculate the VAT input tax on fuel included in staff mileage claims - employers will need to retain fuel receipts from staff to prove the fuel was purchased. (Remember: it is unlikely that staff will have receipts that exactly match the fuel element on their claim forms. Receipts should cover the same time period and be sufficient to cover the VAT claimed.)


VAT invoicing changes from 1 October 2007

If you are in business and registered for VAT, then from 1 October 2007 you became required to add certain information to your sales invoices. However in the first year of the new requirements HMRC will issue penalties for non compliance with the new requirements in exceptional cases only.

Who does this affect?

While the new regulations apply to the whole of the VAT population, most businesses will already comply. Those most likely to be affected are:

businesses who do not presently operate a sequential sales invoice number system

businesses using the margin scheme for second-hand goods, works of art, antiques and collectors items

businesses involved in making travel related supplies that fall within the scope of the Tour Operators Margin Scheme

businesses involved in intra EC supplies of goods and services, and e.. businesses making supplies where the customer accounts for the VAT

What is required?

Invoice numbering - all VAT registered businesses should now sequentially number their sales invoices.

Second hand margin scheme - if you use this VAT scheme you should note this fact on your sales invoice. We suggest you add the following line to your invoice: "This invoice is for a supply covered by the VAT second-hand margin scheme."

Tour operators margin scheme - if you use this VAT scheme you should note this fact on your sales invoice. We suggest you add the following line to your invoice: "This invoice is for a supply covered by the VAT tour operators margin scheme."

Cross border EC supplies - if you make such a supply, which would be exempt if supplied in the UK or subject to the reverse charge provisions, you will need to make an appropriate note on your invoice. As this is a more complex area we suggest you call if you would like our help with the compliance aspects of the relevant invoicing changes.

Intra EC supplies of goods - these supplies tend to be zero rated for VAT in the UK. A simple statement to include on your invoices could read: "Intra-community supply, subject to VAT in the country of acquisition.

Tax Diary Dates

19th of each month - CIS tax deducted for the month ending on the 5th is payable by today (ie two weeks time)

19th of each month - PAYE and NIC deductions due for the month ending on the 5th is payable by today (Or if you pay your tax electronically the due date is the 22nd of each month)

19th of each month - Filing deadline for the CIS300 monthly return for the month ending just two weeks earlier ie on the 5th.

28th February 2008 – automatic 5% surcharge for 2006/07 tax not fully paid.

6th April 2008 – new tax year starts and 2008 tax returns are issued.

19th May 2008 – deadline for submitting the employers annual returns (P35 forms etc.)

6th July 2008 – deadline for submission of P11d (B) forms – relating to taxable benefits paid to employees during 2007/08. The payment of any associated class 1A National Insurance is due by the 19th.

31st October 2008 – deadline for 2008 tax returns filed on paper.

31 January 2009 - Filing deadline for all individual, partnership, and trust self assessment tax returns for the year ending 5 April 2008 which are to be filed on line.

31 January 2009 - Due date for payment of any balancing self assessment tax and/or NIC class 4 contributions due for the year ending 5 April 2008, together with the payment of any first payment on account of self assessment liabilities for 2007-2008.

Jump in, take risks, challenge yourself, trust your instincts, and learn from both experience and the experienced.

Anon, but wise with it!

“If you’re not a risk taker, you should get the hell out of business.”

– Ray Kroc, McDonald’s founder

We are all in the same boat. We have watched interest rates rise - some pundits are threatening a fall in house prices - cheap money is not as available as it once was. The times are a little uncertain.

A recent article in the Daily Telegraph included a list of things that we might want to consider to help us to "batten down the hatches" and deal with issues of the day. As a service to you, the list is as follows:

1. Try to overpay the mortgage to cut interest costs and reduce the overall term, but check if there are penaties first.
2. Remortgage if you are on the standard variable rate - to reduce monthly payments.
3. Do not take on more debt. (Cash is cheaper).
4. If you really do need more money - make sure your credit rating isd the best it can be, so you will be offered competitve rates.
5. Check your credit record regularly (it might not be right).
6. Take advantage of high savings rates and build up a rainy day fund.
7. Insure your income - in case you are unable to work.
8. Don't bury your head in the sand - get help as soon as possible.

As accountants, we are not qualified in this area - but we thought we should draw it to your attention that the Enduring Power of Attorney is to be replaced with effect from 1 October 2007. The replacement is called a Lasting Power of Attorney (LPA).

There are differences between the two "products". The main feature of the LPA is that it comes in two parts - one to cover the financial affairs of the donor, and the other to cover health issues. So the donor can agree to an LPA covering health or finanance issues, or both. It follows that differing responsibilities could be undertaken by different people.

The LPA must be registered before it can be used, and a Certificate of Capacity is also required. This is an independant opinion that the donor was mentally capable at the time of signing the LPA and was not under any undue influence.

The LPA is more complex than its predecessor - if the time comes when either you or a loved one is unable to continue managing your (their) own affairs, then having an LPA in place is probably a good thing. It sounds like it's cheaper than the alternative which would applying to the Court of Protection to achieve the same result.

As I've said, Holmes Wild are accountants, not legal advisors; the above is a general narrative only and cannot constitute personal advice. If the issue concerns you, you should seek legal advice (from a solicitor) that is relevant to you. Whatever your present age, or state of health, your personal circumstances can change, so this is something to consider.

The start of October (again 2007) sees a change to the minimum amount of statutory holiday that employers are obliged to pay their staff.

From the start of next month, employers are obliged to pay their staff a minimum of 24 days paid annual holiday leave. This is inclusive of bank holidays. There is no qualifying period, and as previously, the increase will be calculated on a pro rata basis for part-time workers whether they usually wok on bank holidays or not.

The increase will be calculated from the start of October and should be calculated in proportion to the individual company's holiday year. The DTI will be setting up an oline calculator to help employers work things out.

There is a second planned increase in holiday pay entitlement ( a further four days ) but this will not be implemented for a little while - possibly 1st April 2009.

So, it's good news for employees, and more cost for employers. Hopefully the extra break will mean that staff return to work raring to go, and increased productivity will be the order of the day.

If you've got any questions about this - contact Holmes Wild. Tel: 01582 482700 - sorry, it's Uk contacts only.

With effect from 1st October 2007, the National Minimum Wage (NMW) will change as follows:

Adults over 21 to £5.52/hr
18 - 21 to £4.60/hr
16 - 17 to £3.40/hr

Don't forget to implement these changes when you get to the start of October.

If you have any questions about the implications, you can contact us on 01582 482700

Sorry if you are reading this overseas - but this is only relevant to the UK.

Does your business handle personal information? This may be a database of potential customers or a list of suppliers. If you do, it is important that you are registered with the the Information commissioners office. The annual fee is modest - but it is a legal requirement, and as with most things, there are fines in place for those who handle personal data without being registered under the Data Protection Acts.

Those who want to know more should check out the Commissioners Website. Visit www.ico.gov.uk for more details.

Don't forget to delete personal information as soon as you no longer have a need for it.