New Digital Tax Regulations

WELSH ACCOUNTANTS READY TO ASSIST SMALL BUSINESSES OVER NEW DIGITAL TAX REGULATIONS

Leading Welsh accountancy firm Bevan & Buckland is warning of new legislation which will transform the way companies submit their tax returns.

By 2020 businesses will be required to move from annual to quarterly online tax reporting.

“This is going to be a culture shock and something of a sea change in the way companies operate their tax accounting,” said Bevan & Buckland’s Tax Director Lee Bradley.

“But we at Bevan & Buckland are there to help firms negotiate their way around the changes before they happen so they are fully versed with the incoming system.”

Added Lee: “There are fears out there especially with regards small business that because of the new digital system it will lead to previously compliant individuals becoming non-compliant.”

The Low Incomes Tax Group (LITRG) has already flagged up its concerns that smaller businesses run by non-digital literate owners or those who do not keep up to date with their tax records may face sanctions from HMRC due to not meeting the new quarterly requirements.

The most at risk from failing the new system include older and disabled people, and those living in remote areas.

There are so many concerns that Andrew Tyrie, chairman of the Treasury Select Committee, has written to the Treasury seeking assurance that businesses will not be compelled to pay tax any earlier than they do now, and that adequate arrangements will be made for businesses that do not use computers.

The proposals require businesses and individual taxpayers to move from annual to quarterly online tax reporting by 2020. The proposals will also include plans for all taxpayers to be using digital accounts, with HMRC information automatically upload.

Anthony Thomas, LITRG chairman, said: “It is very harsh that small businesses with the lowest profit margins may be required to undertake significant investment and training in computer technology simply in order to comply with HMRC’s reporting requirements, and for no other purpose.”

John Allan, national chairman for the Federation of Small Businesses, added: “The UK’s self-employed will particularly struggle with this change. We therefore want to see proper consultation with business groups and professional bodies, a clear statement of benefits to the business community and a package of support to help offset this new burden on business.”

For further information about how Bevan and Buckland can help your company with tax issues contact Lee Bradley on 01792 410100 or by email at help@bevanbuckland.co.uk.

 

Lee Bradley
Tax Director
01792 410119

email: lee@bevanbuckland.co.uk

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

 

Warning to online traders

WARNING TO ONLINE TRADERS TO GET THEIR TAXES IN ORDER

 People trading on online sites such as eBay, Gumtree and Etsy need to get their tax affairs in order as the HMRC wields extended legal powers giving it access to customer account details. The powers, which enable the HMRC to track down individuals who are not declaring their earnings, are an extension of the HMRC’s e-marketplace campaign of 2012.

Lee Bradley, Tax Director at Swansea accountancy firm Bevan & Buckland, said a significant number of the firm’s clients now sell through online marketplaces.

“We have seen a large increase in new businesses selling online via platforms such as eBay and Amazon” he said.

“The VAT/tax rules can get quite complicated especially when you start to sell to the EU or further afield (for example, in the USA). We have been dealing with a lot of queries from online clients and have become very knowledgeable in this area.”

The new powers are not aimed at penalising occasional online sellers, but set out to make sure online business traders pay their taxes. However, HMRC has not stated at what point a casual seller becomes a trader liable to pay tax. It has been reported that 14,000 online traders have received tax demands – some, according to The Telegraph, with profits of just £100.

Others have made a substantial profit online. One of the most high profile convictions so far was online trader John Woolfenden, who was jailed for two years late last year. He sold DVDs, CDs and games through sites including eBay, with nearly £1.4 million passing through his online bank accounts over a six-year period.

When completing your own accounts, it is worth remembering that any earnings exceeding the annual personal allowance of £10,600 are taxable, as long as they are regarded as profit from a business.

Above all, it is important to speak to an accountant and make sure you are well informed. “As with any law, not knowing is not a defence,” said Lee.

Please get in touch if you would like to discuss any aspect of tax and online trading.

If this applies to you please contact Bevan & Buckland, or Lee directly using the details below, as soon as possible.

Lee Bradley
Tax Director
01792 410119

email: lee@bevanbuckland.co.uk

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

Bevan & Buckland welcome four new team members

Everyone at Bevan & Buckland is very pleased to welcome the arrival of four new team members. They are vital additions to the continued expansion of the firm in Swansea.

Bethan, Chris, Caroline, Kayleigh

Bethan Murphy joins our Business Services Department “I studied A-level Maths, Business Studies, Physics and WBQ in St. Joseph’s Comprehensive & Sixth Form Centre Port Talbot. While at Bevan & Buckland I intend to complete the AAT course and gain the qualification”.

We are very pleased to welcome back Christopher McCarley. He worked with us last year on a temporary contract in our Tax Department and now joins our Audit Department to further progress with his qualifications and experience. “I went to school at Bishop Vaughan and then to Swansea University where I graduated with a BA 1st class Hons in Geography. I’ve been studying the ACCA books independently since finishing university. I plan to qualify as a chartered/certified accountant (not sure which exams I’m going to sit yet) within the next 4 years.

Caroline Hopkins is the newest member of the Audit Team “After completing my A levels, I attended Polytechnic of Wales and gained a HND in Business and Finance. I then started working in a Chartered Accountants in Neath, where I stayed for 22 years until joining Bevan and Buckland. During which time I studied for my ACCA qualification, I qualified 8 years ago and I’m now a FCCA”.

Kayleigh Howells joins our Tax Department. “I have recently graduated with a first at Swansea University where I studied Accounting & Finance. My contract here is 6 months in tax with a view to move to Audit in February 2013. In 2013 I would like to start my professional exams but still undecided whether to do ACA or ACCA”.

Here at Bevan & Buckland we are always on the lookout for new staff. Please feel free to send us your CV even if there are no vacancies advertised, we do look through all applications and keep copies on our jobs database for possible use in the future.

Simply email jobs@bevanbuckland.co.uk to apply.   

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

HMRC now target electricians

HMRC is continuing its targeted campaigns into tradespeople with vigour with the announcement of the Electricians Tax Safe Plan (ETSP).

 The ETSP will begin in February 2012 and builds on HMRC’s plumbers’ campaign and gives an opportunity for electricians to come forward and declare unpaid tax. Considering that the Tax Safe Plan has so far generated an additional £1.98million, with more expected once the final disclosures are made, it is no surprise that HMRC are utilising similar tactics for their latest campaigns. The HMRC website defines an electrician or electrical fitter quite widely as ‘anyone who installs, maintains and tests electrical systems, equipment and appliances under stringent safety regulations.’

It remains to be seen if the Revenue holds information relating to these tradespeople as they did in the case of the Plumbers Tax Safe Plan where HMRC acquired information from Corgi and Gas Safe in order to identify potential unpaid tax liability. In addition, no further details have yet been confirmed as to any reduced penalty opportunities available. However, if you have clients that may fall into HMRC’s definition of an electrician or electrical fitter, then we would strongly recommend that you ensure they are aware of this latest campaign.

Bevan & Buckland will continue to monitor developments and will update our clients with any new information as it becomes available.
If you would like to discuss these latest developments then why not call Lee Bradley on 01792 410119 or email lee.bradley@bevanbuckland.co.uk

http://www.bevanbuckland.co.uk

HMRC are extending their record checks!

HMRC have issued an extension on their record checking programme after 44% of businesses were found to have errors in their record keeping.

HMRC’s Director of Local Compliance believes ‘the exercise was intended to support businesses and reduce the tax gap’ after a £35 billion tax gap was found from 2009-10 figures. The programme was piloted throughout small and medium sized businesses across eight cities this year, where HMRC found 12% of companies had ‘seriously inadequate’ records.

Lee Bradley- Tax Manager

They plan to do 12,000 checks by the end of the current financial year and 20,000 are planned for 2012/13. When these results come back, a decision will be made whether to extend the programme out nationally. However, there is speculation that the Business Records Checks programme may be coming to South Wales sometime this month- so be aware!!

At the moment, penalties for inadequate records will only be issued in the most serious of cases until the process is refined but full guidance will be issued before penalties are charged.

If you would like some more advice on record keeping or have any tax queries, why not email me today at lee.bradley@bevanbuckland.co.uk or call 01792 410119.

You can also get more advice by following @bevanbuckland on twitter or get the latest tax news by registering for our free email newsletter

It’s time to review your capital allowance claims or you may miss out…

Jeannette McLellan

Around 96 per cent of commercial properties in Wales qualify for capital allowances under the current criteria but if new reforms that are being proposed are brought in the window for claiming the tax allowance will be significantly reduced. Currently businesses that own or have refurbished a property, have been able to claim for their capital allowances – significantly assisting to recoup the cost of the initial payment of the purchase value.

But if new HMRC consultations are agreed which could take effect from April 2012 – the window in which to claim for capital allowances will significantly reduce from the current unspecified period down to less than two years from the date of purchase.

I would urge all businesses who own their own property, or who have carried out work to refurbish their premises, to take a close look at what they can recover under the capital allowances process. In many instances businesses have been able to recoup between 25 and 50 per cent of the initial purchase cost, which is a substantial assistance in running any business. Here’s an example of how one of our clients maximised their capital allowances.

At the moment HMRC guidelines allow businesses to reclaim costs at any time, as long as the business still owns and is using the asset. Under the new recommendations a one to two year window to claim will be introduced, along with more stringent recommendations on how plant and machinery transactions can be claimed.

Essentially, businesses need to act now to ensure that any relevant claims can be lodged before the proposed changes drastically reduce the availability of this claim procedure. I would strongly advise that businesses contact a qualified capital allowance claim expert to enquire about their eligibility.

You can also get more advice by following @bevanbuckland on twitter or register for our email newsletter

Tax codes error

Another HMRC Fiasco  – this time its pensions

Following on from last year’s fiasco with incorrect tax codes, HMRC again face an error with tax codes. It seems that they have failed to take account of the state pensions when they sent out the tax codes to people who started to claim their pensions this year.  This has resulted in nearly 150,000 pensioners receiving a demand for underpaid tax.

What happens to affected tax payers?

The same mistake was made in the two previous tax years and many of those affected were able to have their underpayments waived due to Extra Statutory Concessions.  However in this case as the underpayments are for current tax HMRC will not be able to write off these payments. Instead affected tax payers will be given three years in which to settle the outstanding sums.

How has the HMRC responded?

HMRC says it would be working with the Department of work and Pensions at options to improve the exchange of information so that tax codes can be revised to include the state pension when it is first paid.

It seems they have included the state pension in the tax codes for 2011/12 issued recently.  This means that taxpayers should be on the right footing for the future and paying the correct amount of tax from April 2011.

Warnings of tax scams

Issues like these are the perfect breeding ground for fraud and scams. Pensioners are urged to be careful as they may well be targeted by these people claiming to be from tax authorities. 

Why not let us help, our tax team can offer advice on your tax codings just call them on 01792 410100 or email tax@bevanbuckland.co.uk or tweet us a message @bevanbuckland.
Web site http://www.bevanbuckland.co.uk