News from Khan Thornton

Penalties for missing the tax return deadline

2012-01-26T10:05:50+00:00

If you miss the deadline, the longer you delay, the more you'll have to pay. It is important to send your tax return to HMRC as soon as you can. The table below shows the penalties you'll have to pay if your tax return is late. If a Partnership tax return is late, each partner will have to pay the penalties shown below.

Length of delay	Penalty you will have to pay
1 day late	A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late	£10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above.
6 months late	£300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late	£300 or 5% of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100% of the tax due instead. These are as well as the penalties above.

Recovering the cost of Subscriptions

2010-12-09T10:13:37+00:00

We have recently been asked by a Doctor about how to recover the cost of subscriptions back on a Tax Return.

We advised that there are a number of ways to do this but that the main two would be to claim it back through your tax code or to do a tax self-assessment return.

We also advised that there may be relief on other job related expenditure which lot of doctors don’t claim from the tax office.

There are many ways that Doctors and GP’s can reduce their tax liability; for the best advice simply contact us and we will let you know what options you have open to you.

Increased VAT Rates

2010-12-06T09:30:10+00:00

Standard Rate Vat Increase

On the of 4th January 2011 the standard rate of VAT will increase from 17.5% to 20%.

Goods/services provided before the change

The new rate generally applies to all VAT invoices issued by a business on or after 4th January 2011. However, where a business issues an invoice on or after 4th January 2011 and the goods or services were provided prior to 4th January 2011, the business may apply VAT at 17.5%.

Goods provided after the change

If a business has received a payment or issued an invoice before 4th January 2011 but the goods will be provided (or services delivered) after 4th January 2011 then the supplier has a choice, either:

to leave the VAT charged at 17.5%; or
to account for VAT at the new 20% rate.

Accountancy Software & EPOS Tills

Most accountancy software and EPOS tills will have the ability to update the standard VAT rate – however it may be preferable to create a new VAT rate as the old may not be required for some time.

Advice from HMRC

Clearly advice will differ from one business to another so we suggest reading these notes from HMRC.

Alternatively you can contact us to make sure your needs are being met.

Christmas Parties

2010-12-01T18:17:45+00:00

It’s now the season to be merry so that means office parties... with this in mind we thought it would be a good idea to think about TAX rules.

The Good News!

Within reason the cost of entertaining employees is generally allowable against profits (unlike entertaining customers).

But What about PAYE?

Providing the annual costs of functions in a tax year is less than £150 (inc vat) then there are no tax implications for the employees – however it is important that all costs associated are taken into account (transports, accommodations, meal, drinks and so on).

And if the costs do exceed £150?

If the costs are going to exceed £150 per person then we suggest you contact us so we can advise how to best deal with them.

Introducing Dino Khan

2010-11-26T15:14:10+00:00

Hi, My name is Dino Khan and I work here at Khan Thornton.

What we aim to do here is provide people with advice and peace of mind with respect to their accounting needs.

You can contact us on 0800 356 8296 or email me directly using dino@khanthornton.co.uk.

Doctors Tax Advice Benefits

2010-10-26T13:01:21+00:00

There are many benefits to working with us to reduce your tax bill.

We are regularly being asked how doctors can reduce their tax bill and retain more of their income.

For us it’s simple; but accept that it may not seem so on the outside. We suggest you simply give us a call or email us today to find out more.

Self Employed GP Locum's

2010-10-04T11:04:15+00:00

Question:

I am currently working as self-employed GP locum. My income will be in the region of 70k to 90k.

I’ve been told that it may be worthwhile for me looking at changing to a limited company – can I ask how do I do this and what is the likely cost?

Answer:

The likelihood is that as a self-employed locum, earning 70k to 90k per year that you would be better to look at setting up a limited company. By doing this you may be able to benefit from tax savings as well as a greater degree of personal security.

Our advice is usually given in the following manner:

Initial discussion over the phone or email to take instructions… we do not charge for this.

Further advice is available in writing by email and letter at £110 per hour. The fee is agreed in advance and paid by credit card or cheque.

As a firm of Chartered certified Accountants we advise small business in many aspects; a speciality of ours is working with General Practitioners, Doctors and Dentist.

Introduction to Doctors Tax Services

2010-09-26T12:51:24+00:00

Thanks for taking the time to stop and watch our introduction to our doctors tax service.

As doctor tax advisors don’t always know what options you have and what benefits you can take advantage of.

At Khan Thornton we simply keep our team up to date on what works best for all kinds of Doctors so that we can always give the best tax advice.

Wesley Snipes faces jail for tax evasion

2010-07-21T19:53:02+00:00

Blade actor Wesley Snipes is to serve a custodial sentence of three years for tax evasion in the US, an appeal court has ruled.

The US actor earned more than $37m (£24m) between 1999 and 2004 but failed to file any income tax returns during that period, according to official court papers, the BBC reports.

In February 2008 Snipes was found guilty of failing to file tax returns to the US Inland Revenue. He was sentenced in April and launched an appeal in May.

It is not yet known when the custodial sentence will take place or whether it will be in his hometown of Florida or where his original trial took place in New York.

Source: Accountancy Age

Overpaid tax could run to £3bn

2010-07-21T19:49:06+00:00

The taxman is struggling with 18 million cases of overpaid and underpaid tax amounting to tax payers contributing £3bn more than they should done.

A report on HM Revenue & Customs from the National Audit Office said: "The exact amounts of tax over and underpaid and the number of individuals affected cannot be determined until these cases are resolved. Reducing this backlog of cases remains a very significant challenge."

Commenting directly NAO chief Amyas Morse said: "The department has not made enough progress in reducing the backlog of 18.2 million income tax cases where there is potentially overpaid or underpaid tax. It also needs to improve its collection rate for tax credits debts, which substantially lower than that for tax debts."

More also said HMRC needed to develop its information systems needed to be developed to properly monitor the success of its campaigns targeting the collection of specific taxes.

He said HMRC had been affected by the recession which had increased the value of tax debt to be recovered while at the same time coming under pressure to streamline because cost cutting.

2009-10 saw HMRC collect £435.1bn, down 1.3% on 2008-09. Amounts due, but not yet paid stood at £26.1bn.

Source: Accountancy Age

Car Dealer Accounting Issues

2010-07-21T12:45:16+00:00

There has been a good start to 2010 in terms of UK retail motor trade performance. However looking forward the following should be considered to maintain profitability.

Ending of scrappage scheme

New car sales have benefitted from the scrappage scheme which ended on 31st March. Some manufacturers have introduced their own schemes to
replace this.

Introduction of Showroom Tax on 1st April

The VAT increase on 4th January 2011 is likely to lead to an increase in sales at the end of the year to beat the VAT rise, this may have an effect on sales at the start of next year.

Dealers should plan early for the VAT rise and take into account anti-forestalling legislation.

Used car values

The used car market has been very difficult and it is increasingly important to control used stocks, to minimise overage vehicles and potential write downs.

Cash Flow

It goes without saying that cash flow is closely managed. Control working capital to maximise your cash flow.

Lack of information It is important to have access to up to date and accurate management accounts. You need to know now! Don’t rely on year end accounts, be in control of your business.

Khan Thornton are on Twitter (we hope)

2010-07-15T15:08:44+00:00

OK, ok, so we are not geeks or anything but hopefully this will flow through to Twitter!

We hope that Twitter will be something that our clients can use to keep up to date with out news, knowledge base and alerts.

Stress for UK businesses as credit conditions worsen

2010-07-14T07:44:46+00:00

Over 127,000 UK businesses are in financial distress, with £69.5bn of liabilities at risk of default.

This was according to the latest Red Flag Alert statistics for the second quarter of this year from restructuring specialists Begbies Traynor.

The report found that although the numbers of companies experiencing distress have fallen (by 21% compared to 161,601 in Q1 2010 and by 31% compared to previous peak levels of 185,813 in Q2 2009), they remain at historically high levels (up 15% from 111,089 in Q2 2008).

If you would like to look at raising capital contact us now for FREE on 0800 358 8296.

Late filing concession ends in March

2010-07-14T07:36:09+00:00

HMRC announced in June that the Extra Statuory Concession B46 (ESC B46) allowing a seven-day grace period for late employers’ and contractors’ returns will cease from 31 March 2011.

Introduced in 1995, ESC B46 established the principle that penalties would not be charged when employers and contractors submitting tax returns and CIS forms had taken “all reasonable steps” to file their returns on time, but were not able to do so due to unforeseen circumstances such as postal delays.

With the advent of online filing, which is required for P35s and P14s and will become mandatory for Corporation Tax returns from 1 April, HMRC considers the concession to be “redundant” because the delays it was intended to address will no longer happen. Returns must therefore reach the department by their due date or incur a late filing penalty of £100.

Confirming the new penalty regime in the Revenue & Customs Brief 24/10, the department explained: “Any customers filing a return late will, as now, be able to request us to remove any penalty, if they believe they had a reasonable excuse for the delay in filing. We will consider every case on its own merits. Customers can also appeal against the penalty to a Tribunal.”

If yo think this may effect you contact us now FREE on 0800 358 8296.

HMRC Pressing Southend United

2010-07-14T07:23:14+00:00

"Accountancy Age" are reporting that HMRC have called for Southend United to be placed into administration.

"Football club Southend United has 14 days to prove it is solvent or face administration, a court heard yesterday.

The club was handed a stay of execution by the courts yesterday, despite HMRC seeking the appointment of administrators.
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HMRC petitioned the High Court to wind up Southend United yesterday for non-payment of £238,710 in tax.

Southend United is also facing another winding up petition next week from Charterhouse Commercial Finance for £140,000.

HMRC said the club's history of failing to pay its taxes demonstrated it was insolvent.

The High Court has given the club until 2 August to prove it is solvent and able to continue trading."