UK accounts and tax

Monthly management accounts are essential to small businesses. The argument that monthly management accounts for sole traders (approximately 70% of all businesses), especially whose income is falling, is superfluous makes no sense. What it means is that monthly management accounts for sole traders should be relatively simple. Regardless of whether business income is rising or falling, it is vital that at least once-a-month business owners review their financial position based on accurate data, whatever the size of their business. Most businesses rely on accounting software, which is governed by GIGO (garbage in, garbage out – or – Good In and Good Out). The key to accurate time management information is a  professional bookkeeper , registered with the  Institute of Certified Bookkeepers . Employing a bookkeeper will save money in the long run, and short term: Accounting errors are very much more expensive to sort out, as opposed to “getting it right first time”. Professional...

FOR THOSE OF US  that can forgive and forget Germany's 4-1 trouncing of England in last year's World Cup, doing business with our German EU partner may spell good news in 2011. Data from the Federal Statistical Office just released in the last couple of days show that Germany is the place to trade nowadays. Domestic investment in machinery last year was up nearly 10%, fuelling better than expected GDP growth figures. Domestic as well as healthy export growth led to the Germans posting a 3.6% rise in GDP in 2010 - far better than many of its western European neighbours. Not only that, but trading with Germany is getting far less risky too. Federal insolvency statistics released this week for the period January to October 2010 showed business insolvencies numbering 26,966 - a year on year fall of 2.2%, but the decline in numbers is gathering pace; in October for instance, corporate insolvencies were down 12.8% on the previous October. Gute Nachrichten!

THE RECENT NEWS  that Companies House will move to electronic filing of statutory annual returns and accounts in 2013 could spell good news for its users. Receiving accounts information in xbrl digitised format instead of paper will provide an opportunity for the house to do some validation checking before it offers it up for public consumption. Visitors to the Companies House website will see a disclaimer there saying that at the present time, information received by its staff is done so in good faith, and that no checking of the data is undertaken. There are two big reasons why not; one is that the paper format gives very little opportunity to run checks on the content, and two, Companies House does not have it in its remit to do validation checks to ensure the information is "kosher". Potential fraudsters know this....that's why many fictitious sets of accounts are being filed on recently acquired shelf companies for the purpose of tricking trade suppliers into providi...

Companies across the UK are being reminded of important changes to Corporation Tax (CT) filing and payment, which come into effect next month. From April 2011, all Corporation Tax payments will have to be made electronically, and all company tax returns must be filed online for accounting periods ending after 31 March 2010. The returns will also have to be filed using a specified data format, known as Inline XBRL or iXBRL. As well as limited companies, the changes will affect other organisations that pay corporation tax, including clubs, societies, associations, co-operatives, charities and other unincorporated bodies. There are a number of options for electronic payment, including: Direct Debit; debit or credit card via the BillPay service; your own bank or building society’s internet or telephone banking service; a BACS or CHAPS transfer; by Bank Giro or at participating Post Offices. Companies will be able to file online either through commercially available software or by using ...

Tax cheats will face up to five years’ detailed scrutiny from the taxman Letters will start to land on the doorsteps of 900 tax cheats, telling known evaders that they are now under increased levels of personal scrutiny as part of the new Managing Deliberate Defaulters (MDD) programme. MDD will closely monitor the tax affairs of individuals and businesses who have deliberately evaded tax to ensure that they are complying with their tax obligations and have demonstrated a permanent change in their behaviour. David Gauke, Exchequer Secretary to the Treasury, said: “Managing Deliberate Defaulters will deter people from evading tax in the future and reassure honest taxpayers that tax evaders will be dealt with. This government has made it clear that we will not tolerate people who refuse to pay their fair share and HM Revenue & Customs (HMRC) will pursue those who bend or break the rules.” HMRC’s Steve Hickman, said: “Tax cheat check-ups will involve continued and clo...

Plumbers, gas fitters and heating engineers are being targeted by the tax authorities in a clampdown on tradespeople failing to declare their earnings and pay tax. Under the tax plan, plumbers, gas fitters, heating engineers and members of associated trades who have tax to pay which they have not yet told HM Revenue & Customs (HMRC) about can come forward by 31 May to tell the department of their intention to disclose what they owe. If they make a full disclosure, most face a low penalty rate of 10 per cent, with a maximum of 20 per cent. They have until August 31 to make their disclosure and arrange for payment to be made. After that date, using information pulled together from various sources, HMRC will carry out targeted investigations aimed at those who have failed to come forward and make a full declaration. Substantial penalties or even criminal prosecution could follow. The plumbers’ tax safe plan (PTSP) is the first initiative in a campaign focused on trade...

TAX BODIES HAVE criticised the Treasury's decision yesterday to ignore pleas for a delay in the implementation of new technology for making tax returns. Treasury minister David Gauke yesterday revealed he would not postpone the mandatory use of the computer language iXBRL beyond 1 April. A coalition of tax bodies had written a joint letter asking for a delay. Companies are due to use iXBRL to make their corporate tax returns from 1 April. HM Revenue & Customs had already signalled its intention to push ahead with the deadline. Companies have been aware of the iXBRL deadline for five years. Anthony Thomas, deputy president of the Chartered Institute of Taxation , said: "This decision will come as a blow to some businesses and members of the professional bodies who are struggling with implementation due to the insufficiency of time between software arriving, and the legislation commencing on 1 April 2011." Concerns were raised after it was revealed by A...

THE TAXMAN'S plans for managing PAYE has been slammed as "unwise and ill-conceived". Proposals have been made by HM Revenu & Customs to gather real time information for tax and universal credit purposes through the BACS system but experts have dismissed the idea. Donald Drysdale, assistant director of tax at ICAS, said: "Given that HMRC have failed to cope with the task of reconciling PAYE and National Insurance Contributions annually, there is no reason to believe that they would be any more successful in clearing the much greater number of reconciliations potentially arising on a monthly or weekly basis under real time information (RTI)." ICAS cites the recent troubles that have hit PAYE systems as proof that a switch to RTI will fail to work. The taxman intends to notify software developers of RTI information by the end of March. Tests with a limited number of employers will then staged before a full scale roll-out.  By Gavin Hinks