The taxman has now deferred £3.17bn in tax under arrangements announced in April's Budget - around 177,000 separate deferral agreements- to ease the burden on business in the recession.
The latest statistics from HM Revenue and Customs show that while the sum deferred is still climbing it is not all outstanding - around £2bn has been paid back. That leaves a sum of £1.14bn still in the process of being repaid.
According to a statement from HMRC around 90% of what was expected to be repaid has been received.
Of the £3bn deferred £320m forms repeat deferrals. Around 60% of deferrals are for three months or less.
The payment service arranges deferrals of PAYE, VAT, national insurance and corporation tax.
Businesses are able to use the service if they are 'genuinely unable to pay' and if the tax they owe is on the previous year's profits or if a trading loss in the current year is a high probability.
www.ukba.co.uk
Showing posts with label vat. Show all posts
Showing posts with label vat. Show all posts
Saturday, 8 August 2009
Thursday, 30 July 2009
Small firms warned over VAT change
Millions of small businesses face a potentially crippling tax bill because of confusion about changes in VAT, according to the Federation of Small Businesses (FSB).
The FSB claim that many small companies are confused about how much tax they should be paying from next year, when VAT reverts to 15% from 17.5% on the 1st of January 2010.
"Companies will be suffocated by further red tape as a result of the change and will face crippling tax fines if they get their tax wrong." Said Stephen Alambritis of the FSB.
In April this year the government doubled the standard penalty for companies that make an error on VAT payments
www.ukba.co.uk
The FSB claim that many small companies are confused about how much tax they should be paying from next year, when VAT reverts to 15% from 17.5% on the 1st of January 2010.
"Companies will be suffocated by further red tape as a result of the change and will face crippling tax fines if they get their tax wrong." Said Stephen Alambritis of the FSB.
In April this year the government doubled the standard penalty for companies that make an error on VAT payments
www.ukba.co.uk
Thursday, 9 July 2009
Claim back taxes by loss planning
Maximising the amount and speed of reclaiming cash does involve knowing the rules, they aren't as wide as MPs' expense rules, but they do have some flexibility which can be missed.
Individuals
Let's start with the rules for individuals in business trading personally, or in partnership but not through a company.
1.You can take £50,000 of losses back up to three years. This is a temporary measure with strict time limits.
2.You can offset losses against other types of income and gains in the year the loss happened, or the prior year.
3.If your business does cease to trade, losses in the twelve months before ceasing can be carried back up to three years.
4. Losses can also be carried forward against future trading profits.
If, for example, a business incurring losses of £70,000 in 2009 after several successful years, that loss could be carried back to 2008 in full, or to 2008, 2007 or 2006 capped at £50,000. It can be offset in full against other income or gains (say on a second home) received in 2009.
There is also the option to carry forward against future trading losses. Which will depend on two things:
- how desperate the business is for cash
- which year has the highest tax rate (it might be 41 pence in the pound for losses, or take 30 pence to get the cash now).
It is also often forgotten that if you carry back a trading loss or use it against other income, you can ALSO use it against future profits for Class 4 National Insurance purposes. A £20,000 loss could mean up to £1,600 off class 4 NI payments in the following period. Something definitely worth having!
Read more about Company and Group tax planning by clicking here.
Author: Duncan Montgomery is a tax partner at Whittingham Ridell, Shrewsbury, Shropshire and a member of the UK200Group tax panel.
Source: Forum for Private Business - www.fpb.org
www.ukba.co.uk
Individuals
Let's start with the rules for individuals in business trading personally, or in partnership but not through a company.
1.You can take £50,000 of losses back up to three years. This is a temporary measure with strict time limits.
2.You can offset losses against other types of income and gains in the year the loss happened, or the prior year.
3.If your business does cease to trade, losses in the twelve months before ceasing can be carried back up to three years.
4. Losses can also be carried forward against future trading profits.
If, for example, a business incurring losses of £70,000 in 2009 after several successful years, that loss could be carried back to 2008 in full, or to 2008, 2007 or 2006 capped at £50,000. It can be offset in full against other income or gains (say on a second home) received in 2009.
There is also the option to carry forward against future trading losses. Which will depend on two things:
- how desperate the business is for cash
- which year has the highest tax rate (it might be 41 pence in the pound for losses, or take 30 pence to get the cash now).
It is also often forgotten that if you carry back a trading loss or use it against other income, you can ALSO use it against future profits for Class 4 National Insurance purposes. A £20,000 loss could mean up to £1,600 off class 4 NI payments in the following period. Something definitely worth having!
Read more about Company and Group tax planning by clicking here.
Author: Duncan Montgomery is a tax partner at Whittingham Ridell, Shrewsbury, Shropshire and a member of the UK200Group tax panel.
Source: Forum for Private Business - www.fpb.org
www.ukba.co.uk
Thursday, 30 April 2009
The registration threshold for VAT will rise to £68,000 from 1 May 2009
2009-10 rates and allowances for VAT, Income tax, Capital Gains tax, Inheritance tax, Corporation tax on profits, National Insurance Contributions, the Working and Child Tax Credit, Guardian’s Allowance, stamp taxes and duties, transfers of shares and stocks, tobacco and alcohol duties, gambling tax, fuel duties, vehicle excise duties and tax relief for business expenditure on cars can be found by following the link below:
http://www.hm-treasury.gov.uk/bud_bud09_press02.htm
www.ukba.co.uk
http://www.hm-treasury.gov.uk/bud_bud09_press02.htm
www.ukba.co.uk
Thursday, 23 April 2009
Budget Summary - Alistair Darling presented his second Budget on Wednesday 22 April 2009.
Read a summary report here.
Having acknowledged the depth of the recession, he hinted that the Budget measures would enable the UK economy to begin to grow 'by the end of the year'.
As always the timing of the changes needs to be carefully watched – some are immediate but some are delayed to 2010 and beyond.
Our summary focuses on the issues likely to affect you, your family and your business.
Main Budget proposals
:: Introduction of a 50% top rate of tax for those with income over £150,000 from 2010 and phased reduction of personal allowances for those with income over £100,000.
:: Increases in ISA limits from October this year for those aged over 50 and for everyone from April 2010.
:: Enhanced relief for trading losses extended by a further year.
:: Short term increase in capital allowances on most plant and machinery.
:: Extension of the furnished holiday lettings scheme to properties in the EEA but then the removal of the scheme completely from April 2010.
:: Names of deliberate tax defaulters to be published where default was tax in excess of £25,000.
Previous announcements
Many of the changes detailed in this summary have been the subject of earlier announcements. Here is a reminder of some of the more important ones:
:: removal of the £12,000 'expensive car' limit for capital allowance purposes
:: availability of non-repayable tax credit on overseas dividends received by any individual
:: removal of tax charge for companies on overseas dividends
:: extension of HMRC compliance powers across all the taxes dealt with by HMRC.
For more details in the different areas the budget covered - click on the relevant link below:
Introduction
Alistair Darling presented his second Budget on Wednesday 22 April 2009.
Personal Tax
Details of the changes to personal tax.
Corporate and Business Tax
Details of the changes to corporate and business tax.
Employment Issues
Details of the changes to employment issues.
Capital Taxes
Details of the changes to capital taxes.
VAT
Details of the changes to VAT.
HMRC Powers
Details of the changes to HMRC powers.
Other Matters
Details of Child Trust Fund, Charities: substantial donors, Landfill tax and the Business Payment Support Service.
Source: Faust Loveday Bell
www.ukba.co.uk
Having acknowledged the depth of the recession, he hinted that the Budget measures would enable the UK economy to begin to grow 'by the end of the year'.
As always the timing of the changes needs to be carefully watched – some are immediate but some are delayed to 2010 and beyond.
Our summary focuses on the issues likely to affect you, your family and your business.
Main Budget proposals
:: Introduction of a 50% top rate of tax for those with income over £150,000 from 2010 and phased reduction of personal allowances for those with income over £100,000.
:: Increases in ISA limits from October this year for those aged over 50 and for everyone from April 2010.
:: Enhanced relief for trading losses extended by a further year.
:: Short term increase in capital allowances on most plant and machinery.
:: Extension of the furnished holiday lettings scheme to properties in the EEA but then the removal of the scheme completely from April 2010.
:: Names of deliberate tax defaulters to be published where default was tax in excess of £25,000.
Previous announcements
Many of the changes detailed in this summary have been the subject of earlier announcements. Here is a reminder of some of the more important ones:
:: removal of the £12,000 'expensive car' limit for capital allowance purposes
:: availability of non-repayable tax credit on overseas dividends received by any individual
:: removal of tax charge for companies on overseas dividends
:: extension of HMRC compliance powers across all the taxes dealt with by HMRC.
For more details in the different areas the budget covered - click on the relevant link below:
Introduction
Alistair Darling presented his second Budget on Wednesday 22 April 2009.
Personal Tax
Details of the changes to personal tax.
Corporate and Business Tax
Details of the changes to corporate and business tax.
Employment Issues
Details of the changes to employment issues.
Capital Taxes
Details of the changes to capital taxes.
VAT
Details of the changes to VAT.
HMRC Powers
Details of the changes to HMRC powers.
Other Matters
Details of Child Trust Fund, Charities: substantial donors, Landfill tax and the Business Payment Support Service.
Source: Faust Loveday Bell
www.ukba.co.uk
Sunday, 19 April 2009
VAT cut boosted consumer spending by £2bn
The government's cut in VAT is working and has led to an increase in consumer spending, according to research by economic consultancy The Centre for Economics and Business Research (CEBR).
The CEBR have said that the cut - which was introduced on 1st December 2008 - has led to an extra £2bn worth of sales and that the cut, which expires in January 2010 should be extended for another six months.
"The figures are clear; the VAT cut is working. There was an immediate boost to the volume of retail sales after the cut was introduced," the CEBR said.
"Annual growth in retail sales accelerated from 1.6% in November 2008 to 2.6% in December. Sales growth accelerated further in January to 3.2%, and registered a marginal decline in February to 3%."
The government's VAT has faced heavy criticism, with a recent poll by the Federation of Small Businesses finding that that 97% of firms polled said the VAT cut had "no impact at all," on their business.
Source: www.newbusiness.co.uk
www.ukba.co.uk
The CEBR have said that the cut - which was introduced on 1st December 2008 - has led to an extra £2bn worth of sales and that the cut, which expires in January 2010 should be extended for another six months.
"The figures are clear; the VAT cut is working. There was an immediate boost to the volume of retail sales after the cut was introduced," the CEBR said.
"Annual growth in retail sales accelerated from 1.6% in November 2008 to 2.6% in December. Sales growth accelerated further in January to 3.2%, and registered a marginal decline in February to 3%."
The government's VAT has faced heavy criticism, with a recent poll by the Federation of Small Businesses finding that that 97% of firms polled said the VAT cut had "no impact at all," on their business.
Source: www.newbusiness.co.uk
www.ukba.co.uk
Monday, 9 March 2009
VAT rate change - no help to SMEs
82% of SMEs feel that the Chancellor's VAT rate cut was not a good idea.
According to a survey released today. The findings of the survey, conducted by mid-market business software house Access Accounting, will make difficult reading for the government as it looks at ways to stimulate the suffering economy.
The Chancellor's 2.5% VAT rate cut has been in effect for almost three months, yet 51% of businesses say that the change is not doing enough to stimulate the economy. 27% believe that it was a good start, but that the Chancellor needs to do more. Overwhelmingly, 98% feel that the rate change will not result in any material increase to their business.
When asked what other steps the Chancellor could take to help SMEs, 21% of respondents suggested that the Chancellor should force banks to pass on rate changes to business overdrafts and loans. 19% want to see a decrease in corporation tax rates and 16% want increases in tax allowances for small and medium businesses. 16% also want to see a reduced legislative burden on employers, while 13% want better protection for small and medium businesses from bad debt situations.
Kevin Misselbrook, Customer Services Director of Access Accounting said, "The Chancellor needs to start listening to UK businesses. Cutting the rate of VAT has clearly done nothing to stimulate business or the economy. The results of this survey show that more could be done to help boost the economy without putting greater time and cost pressures on small businesses."
When asked about the cost of implementing the VAT change, 53% of businesses estimated that it cost less than £100. However the time-costs associated with the change varied; 42% had to spend half a day to make the changes, 25% required less than a day, 15% used 1-2 days, 12% are still addressing the issue to date and 6% took more than 2 days. With 4.7 million businesses in the UK, (according to the Department for Business Enterprise & Regulatory Reform), the base cost to implement the changes, even at a cost of less than £100, cost UK businesses approximately £470 million.
Misselbrook continued, "The government is doing little to help SMEs survive the current economic situation. The VAT rate cut has been more of a burden than a boon to SMEs, forcing them to look internally for ways to save money and operate more efficiently."
In offering a solution for businesses, Misselbrook said, "It's very likely that the government will continue to play with business taxes. Businesses are already faced with a challenge as they look to 2010 when once again they'll need to implement the planned VAT rate increase. SMEs should be looking to update their accounting systems to ensure that they can implement any changes efficiently. They should also look to software vendors that demonstrate agility in responding to government legislation."
When asked how long it will take for the economy to recover, the largest group of respondents (47%) predicted twelve to eighteen months, 24% said eighteen to twenty-four months and 19% felt it would be twenty-four to thirty months or thirty months or more. Just 11% believe the recovery will begin this year.
Generally, 52% of respondents are uncertain about the economy. 25% report they are not confident and 15% are very unconfident about the economy; only 8% believe that they are confident at the moment.
"We are in an uneasy time and the importance of knowing the money you have in your business is crucial as it could mean the difference between surviving or not. Every company should have a transparent accounting system, helping businesses to monitor cash flow and budgets as well as conducting data analysis and importantly, being able to adjust to the governments ever changing demands."
Source: Access Accounts
According to a survey released today. The findings of the survey, conducted by mid-market business software house Access Accounting, will make difficult reading for the government as it looks at ways to stimulate the suffering economy.
The Chancellor's 2.5% VAT rate cut has been in effect for almost three months, yet 51% of businesses say that the change is not doing enough to stimulate the economy. 27% believe that it was a good start, but that the Chancellor needs to do more. Overwhelmingly, 98% feel that the rate change will not result in any material increase to their business.
When asked what other steps the Chancellor could take to help SMEs, 21% of respondents suggested that the Chancellor should force banks to pass on rate changes to business overdrafts and loans. 19% want to see a decrease in corporation tax rates and 16% want increases in tax allowances for small and medium businesses. 16% also want to see a reduced legislative burden on employers, while 13% want better protection for small and medium businesses from bad debt situations.
Kevin Misselbrook, Customer Services Director of Access Accounting said, "The Chancellor needs to start listening to UK businesses. Cutting the rate of VAT has clearly done nothing to stimulate business or the economy. The results of this survey show that more could be done to help boost the economy without putting greater time and cost pressures on small businesses."
When asked about the cost of implementing the VAT change, 53% of businesses estimated that it cost less than £100. However the time-costs associated with the change varied; 42% had to spend half a day to make the changes, 25% required less than a day, 15% used 1-2 days, 12% are still addressing the issue to date and 6% took more than 2 days. With 4.7 million businesses in the UK, (according to the Department for Business Enterprise & Regulatory Reform), the base cost to implement the changes, even at a cost of less than £100, cost UK businesses approximately £470 million.
Misselbrook continued, "The government is doing little to help SMEs survive the current economic situation. The VAT rate cut has been more of a burden than a boon to SMEs, forcing them to look internally for ways to save money and operate more efficiently."
In offering a solution for businesses, Misselbrook said, "It's very likely that the government will continue to play with business taxes. Businesses are already faced with a challenge as they look to 2010 when once again they'll need to implement the planned VAT rate increase. SMEs should be looking to update their accounting systems to ensure that they can implement any changes efficiently. They should also look to software vendors that demonstrate agility in responding to government legislation."
When asked how long it will take for the economy to recover, the largest group of respondents (47%) predicted twelve to eighteen months, 24% said eighteen to twenty-four months and 19% felt it would be twenty-four to thirty months or thirty months or more. Just 11% believe the recovery will begin this year.
Generally, 52% of respondents are uncertain about the economy. 25% report they are not confident and 15% are very unconfident about the economy; only 8% believe that they are confident at the moment.
"We are in an uneasy time and the importance of knowing the money you have in your business is crucial as it could mean the difference between surviving or not. Every company should have a transparent accounting system, helping businesses to monitor cash flow and budgets as well as conducting data analysis and importantly, being able to adjust to the governments ever changing demands."
Source: Access Accounts
Friday, 6 March 2009
Tax doesn't have to be taxing
HMRC has released a series of online video guides to help small companies and start-ups with the complexities of the UK's tax system.
The guides, presented by Dan Snow, cover a variety of important tax topics - such as VAT, Corporation Tax, and PAYE.
The online guides also cover other areas such as the Construction Industry Scheme, importing and exporting, keeping accurate records, and things to consider when employing other people.
A new guide is also available alongside the videos - "Giving your business the best start with tax".
Dan Snow commented: "We've broken the information down into small video chunks, so that people can access exactly what they need to know. Hopefully this makes the new videos really useful for people and businesses."
Access them by clicking here.
The guides, presented by Dan Snow, cover a variety of important tax topics - such as VAT, Corporation Tax, and PAYE.
The online guides also cover other areas such as the Construction Industry Scheme, importing and exporting, keeping accurate records, and things to consider when employing other people.
A new guide is also available alongside the videos - "Giving your business the best start with tax".
Dan Snow commented: "We've broken the information down into small video chunks, so that people can access exactly what they need to know. Hopefully this makes the new videos really useful for people and businesses."
Access them by clicking here.
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