The Taxman can raid tax evaders’ bank accounts

Did you know that HMRC has been given sweeping new powers to raid bank accounts and cash ISAS to recover outstanding tax debts?

The Chancellor, George Osborne, gave the green light for this new move, meaning that anybody who refuses to pay money owing to HMRC can now have the cash taken directly from their bank accounts.

Around 17,000 people who owe an average of £6,000 could be targeted each year.

This move is part of a major Government crackdown on tax evasion but has been widely criticised, so HMRC has been forced to introduce a number of safeguards.

Government crackdown on tax evasion safeguards

• People targeted must always have at least £5,000 left after any raid on their accounts
• Every debtor will first be asked to attend a face-to-face meeting with a tax official, and can go through a county court appeal process

These safeguards were introduced after claims that any mistakes could mean innocent and vulnerable people could be unfairly targeted.

The Taxman can raid tax evaders’ bank accounts

If you have a pressing tax or any HMRC issues get in touch and we will be able to advise you of the best and most course appropriate action; request a free of charge call-back from our website, call 01902 837408 or click here to contact us today!

What to do if you have had a letter from HMRC

Have you had a letter from HMRC?

If you have, don’t bury your head in the sand!

HMRC letters – whether they are expected or unexpected – can be stressful for the recipient.

The first thing to do is read it thoroughly, digest its contents and consider what it is about.

Is it asking you questions or is it stating facts? In any event, it will certainly include advice on any action that may be needed.

Whatever you do, DO NOT IGNORE IT.

Seeking advice about an HMRC letter

Whether you are an individual, a sole trader or a limited company, the letter will have been sent for a reason and it will require action to clarify, resolve or just provide required information the HMRC.

It needn’t be stressful and you are not alone, so take simple steps to understand and talk to the experts.

The HMRC website contains many useful links and FAQ’s - is a great source for getting a greater understanding and knowing what to do and when to do it.

Just don’t ignore or put off dealing with it.

If you are still unsure then give Omni Chartered Accountants a call on 01902 837 408 or click here to contact us - we are always happy to assist.

HMRC cracks down on business tax evaders

Business raids have risen quite dramatically in a bid from the HMRC to crackdown on tax evasion to meet their 1165 prosecution target – in fact, nearly 600 properties have been raided this year so far.

According to research from Pinsent Masons, this figure is nearly treble the amount of raids that have been carried out over the past four years.

Nearly 600 properties were raided this year as HMRC pursues its target of 1,165 tax evasion prosecutions over the course of 2015.

The number of tax evaders who have gone to prison as result of tax evasion has risen by around a third over the last four years, with the average sentence length falling by around 60% over the same period.

These facts suggest that HMRC is now making better use of its powers to prosecute and also pushing for custodial punishment in a wider range of cases, according tax director at Pinsent Masons, Paul Noble.

Noble said;

"An increase in the number of raids conducted and custodial sentences meted out for tax evasion reflect the fact that HMRC is now casting its net wider. It is no longer focusing narrowly on HNWIs and those guilty of the most serious evasion. It is targeting a broad range of taxpayers and refusing to let those suspected of more minor offences slip through the cracks.

"Raids on premises are often an essential means of gathering evidence that is needed in cases dealt with for prosecution. It is labour-intensive work but needed in such investigations. A non-criminal tax enquiry is much more cost effective but does not always send the deterrent message HMRC wish to convey."

If in doubt, check it out! Omni Chartered Accountants are here to help with any tax or accountancy advice that you have – contact us on 01902 837 408 or request a free of charge call back from our website www.taxandacountancysolutions.co.uk.

How to make the HMRC Annual Return easy work

How to make the HMRC Annual Return easy work

When you see the HM Revenue & Customs or Companies House brand at the top of a letterhead, do you get shivers down your spine?

If you do, you are certainly not alone.

We often get calls where clients phone us up in a panic after receiving an ‘Annual Return Reminder’.

What is an Annual Return?

The annual return is not referring to the accounts as such, but a form that can be submitted online or hard copy via the post, which basically confirms any changes to the shareholders, directors and registered office.

In normal circumstances, nothing will have changed and it is a relatively simple task.  You have to complete it every year and it is on the anniversary of the incorporation date.  You have 28 days to complete it. You can check out the date by looking your company up on the Companies House website – which is free.

Why not put a reminder in your diary or calendar system now?

Annual return fines

It may well seem a little OTT for Companies House to send out a letter reminding the company of an annual return threatening fines of £5,000 for non-compliance. 

Actually, we have known no company fined for late submission of an annual return but we have known plenty where they haven’t filed the company accounts on time; this misdemeanour carries fines of £150, £375 or £750, depending on how late you are.

If you need any help just ask, but it is relatively easy and straightforward to file the annual return online - the cost is £13.00 for an online filing (£40.00 if hard copy via post).

So if you do get a letter like this, or any other HMRC letter for that matter – don’t panic, give us a call a call on 01902 837 408 or request a free of charge call back from our website.

Click here to take our Accountancy Savings Challenge, as our competitive rates and no-nonsense advice could save your business both money and time!

Have HMRC really waived £100 fine for late self-assessment filing?

If you keep up to date with accountancy news, you may be aware of the rumours that HMRC have been waiving the £100 late self-assessment fine that is usually imposed by HM Revenue & Customs, if the filer has a “reasonable excuse”.

HMRC staff were asked to waive the £100 fine if people with mitigating circumstances appealed after paying up – this was all reported in an internal memo allegedly leaked to the Daily Telegraph.

It is estimated that up to 890,000 people could have potentially benefitted from the amnesty for missing the 31 January deadline as HMRC deals with a backlog of nearly a million letters from British taxpayers.

HMRC said it was trying to focus its resources on tackling major tax avoidance instead of "penalising people for trying to do the right thing".

However, previously, people who appealed the fine faced a two- or maybe even three-week investigation of their tax affairs before a decision was reached.

Leaked HMRC memo

The HMRC memo questioned the "lengthy" process, especially given that the "overwhelming majority of appeals" were actually accepted.

The alleged leaked document stated;

"Our penalty regime is intended to influence customer behaviour, but also be clear and cost effective, fair and proportionate.

"The current way of managing penalties does not meet these objectives, and so we have decided to take a more proportionate approach where a customer has filed their return late, and then appealed against their penalty.

"This means that in the vast majority of cases we will be accepting the customer's grounds for appeal, and we can cancel the penalty."

So, have HMRC really waived the £100 fine for late self-assessment filing?

It may be a hunch, but perhaps the recent act of goodwill could be something to do with a backlog of paperwork and the need for a less complicated appeals system?

In any event, don’t risk filing your self-assessment late - a spokesman for HMRC did add that despite the policy, nobody will be getting off the hook unless they've now sent in their return and "have a good reason for sending it in late".

Don’t take a chance – particularly when affordable help is at hand from Omni Chartered Accountants. Click here to contact us now, request a free of charge call-back from our website http://www.taxandaccountancysolutions.co.uk  or take our Accountancy Savings Challenge today!

Is self-discipline a common trait of successful business people?

Success just happens, right?

We all want to get somewhere in life and in business. We have aspirations, goals and dreams. But why is it that only some people are able to get there?

Is it because of luck, circumstance, or talent?

Depending on the person it could be a combination of these elements.  The one common theme that does come up when conversing with successful people is discipline. Whether it’s a business person growing an organisation or a self-employed sole trader building a small business, discipline is the one element they all have in common. 

Discipline is a fundamental element in obtaining goals, dreams and desires.

Discipline is what keeps us going when times are tough and not going our way. It makes the bad times easier to get through. We must constantly practice, repeat, and believe in our purpose.

Given this knowledge, why do so many individuals leave self-assessment until the last minute?

Don’t leave your self-assessment until the last minute

The end of January may seem like a long way off right now but it will come round quicker than you think. Our advice would be to get your return done as early as possible.

How to avoid HMRC fines

The earlier you start to do it, the more time you have to check that you have everything to complete it, as you may find for instance that you do not have all the interest statements you need. HMRC won’t hesitate in fining you if there are mistakes in your tax return. The last thing anyone needs is a wholly avoidable fine from the tax man.

For many people, filing an online self-assessment return is a straightforward process. However, if you are unsure about the information you are submitting, don’t be one of the almost one million people caught out each year.

Omni Chartered Accountants can help you for as little as £95.00 – call 01902 837 408 and take the Omni Challenge today to see how much we could save you by managing your accounting affairs!

HMRC reduces external debt collectors by 50 percent

Yesterday, we wrote about the UK tax-burden according to a recent report by UHY Hacker Young.

The same company has revealed that HMRC spent £6.8m on external debt collectors in 2014, compared to £14.8m in 2013.

This reduction is down by half, and is likely to have happened after the public backlash about the way in which debts were being persued.

The use of external debt collection agencies began in 2009 as HMRC were under pressure to get the most out of its tax take and reached a high in 2013.

Head of private client services at UHY Hacker Young, Mark Giddens, said;

"Debt collection agencies are rarely the most appropriate way for HMRC to collect unpaid taxes.

"HMRC need to be absolutely certain that they are correct when employing these sort of tactics. There is no guarantee that HMRC's databases are exactly up to date. The danger is that if errors are made then taxpayers are left out of pocket and fighting for their own money against a government agency.”

HMRC can now also, rather controversially, taken on the power to demand that any disputed tax is paid up front. They are also looking at the possibility of taking unpaid taxes directly from people's bank accounts.

What do you think of this whole affair? Is HMRC always right? What about genuine disputes and mistakes?

If you would like to talk with us about your business cash-flow then request a free of charge call back from this website; we are here to help advise and guide when it comes to all money matters for your company.

Is HMRC benchmarking the tip of the iceberg for the UK SME?

Is HMRC benchmarking the tip of the iceberg for the UK SME?

Benchmarking for driving instructors is a guide devised by HMRC for businesses to compare business performance with other business in the same trade.

It is a scheme that it is beginning to test on certain trades - one of these trades is driving instructors.

HMRC using benchmarking to check tax returns

The HMRC is testing the use of benchmarking as it believes that it will help business owners to make sure their Tax Returns are correct.

HMRC has gathered information over three years from driving instructors, analysed turnover and expenses. From this, it has worked out a net profit ratio.

HMRC has determined that the net profit benchmark ratio in this sector is between 39 and 59 percent.

This means that if you are a driving instructor, HMRC would expect your net profit to be in the region of 39 and 59 percent of your turnover.

If your business net profit ratio is not within this range, HMRC may believe that this indicates that there are errors within your tax return.

We are here to help with any queries that you may have regarding the benchmarking system and of course, to make sure that your tax returns are dealt with efficiently and accurately – making sure that no undue distress is caused by unnecessary errors!

For more information, request a free of charge call back from our website or click here to enquire.

3 common misconceptions SMEs have about accounting and tax

Anyone who is thinking of, or has already set up, their own business may admit to having preconceived ideas about how tax and accounting works.

For some, these misconceptions could have put them off even starting up their own business so instead, they have stuck with the security of working for an established employer.

Don’t let this stop you from fulfilling your dream of running your own company.

Below are some of the most common misunderstandings.

1. My business is too small to need an accountant

Regardless of how big or small your business is, you can always benefit from the help of an accountant.

If cash flow is limited then admittedly a full time employee may not be the most practical step. However, many small companies enlist the help of an accountancy practice that can keep track of figures, submit tax returns on time, carry out payroll services and best of all, advise you on the best ways to save your company money.

Even if you’re happy to take on the extra workload yourself, hiring an accountant purely for the money saving advice can be well worth your time. You stay in control of what you want when, but you benefit from the professional knowledge, experience and advice.

2. I can do my accounts myself

This is of course true – you can do your accounts yourself. However, as mentioned above, even though it may not seem like it at the time, an accountant can save you a lot of money in the long run.

Furthermore, very few successful entrepreneurs got to the top because they spent their days bookkeeping.

You are of much better value to your business when you spend time working on new business development and growing the company rather than doing things that you can hire others to do.

3. HMRC is always right

Just like any business, HMRC isn’t immune to making mistakes. Although they endeavour to achieve incredibly high levels of accuracy, human error is part of life.

If you are uncertain about a tax bill, the complexities of filing online, your tax code or anything else to do with your accounts, check out the FAQ’s and help available on the HMRC website.

Alternatively, if you have been left incredibly confused by tax codes and balance sheets, or just want help or advice, contact Omni Chartered Accountants who will be able to advise you accordingly.

HMRC eases stance on late PAYE filings

UK businesses with less than 50 employees will now be allowed three days’ leeway by HMRC before being penalised for late filing of PAYE submissions.

HM Revenue & Customs has confirmed that late payment penalties will carry on being reviewed on a “risk-assessed” basis as opposed to being issued automatically.

No change to PAYE filing deadlines

HMRC have confirmed that there will be no change to the actual filing deadlines, which usually means that businesses need to file them actually on or before each payment due date.

HMRC will be closing close to 15,000 PAYE schemes in March 2015 in a bid to prevent unnecessary penalties being issued, for companies that have not filed a PAYE report since April 2013, and as a result, look to appear to have ceased trading.

These company schemes will be written to, advising them about the planned closure and what they should do if they are - or should be - operating PAYE.

Employers with less than 50 employees are also reminded that late filing PAYE penalties will apply from 6 March.

A discussion document has been published by HMRC in order to gauge views by the deadline of 11th May 2015. Suggestions concerning potential improvements to the way in which penalties apply for PAYE payment failure or to meet deadlines for registration or returns will be considered.

How to run your PAYE smoothly and avoid penalties

Of course, it is not always easy running a business and PAYE is something that a good accountant like Omni Chartered Accountants can help you with.

Seeking help with your PAYE affairs may work out more cost-effectively than you may think, especially when you consider the time saving and potential problems that your company could face if deadlines and payments are not made by the dates as set out by HMRC.

For more information, contact us now by clicking here or request a free of charge call back from our website by clicking on the link at the top of this page. 

Can I switch from being a limited company to sole trader?

Here’s a typical question…

“I bought and took over a small business back in 2010, which was a limited company. Turnover has diminished so a lot less admin is needed. Is it possible to change a limited company to sole trader?”

Here’s the answer!

Can I switch from being a limited company to sole trader?

1.    Striking off a limited company from the Company Register

A limited company can cease trading at any time but as it has a separate legal entity it has to be removed from (or 'struck off') the Register of Companies.

Before that can happen, financial reports up to the date of cessation must be prepared and filed and any outstanding corporation tax paid. If there are any unrelieved corporation tax losses (losses accumulated not yet offset against taxable profits), these will be lost.

2.    Asset disposal and liability settlement

In addition, any remaining assets must be disposed of and liabilities must be paid. Assets can be 'sold back' to you. This includes items such as a website and email address.

3.    Dealing with the VAT and PAYE

If the company is VAT registered you should check if it is possible for the registration to be transferred to the Sole trader. As you purchased a business there may be some goodwill remaining which will have to be written off. Any PAYE scheme must be closed.

4.    Closing company bank account

After the final payments of tax and other liabilities, etc. the bank account must be closed. It is possible to apply to HMRC that any distributions (usually the bank account balance) can be treated as a capital gain subject to capital gains tax instead of income tax. Generally there is a tax saving on this.

However this can be complicated so you should talk to your accountant for the best advice. In any case, this can only be done when the company is closing down and not at any other time.

5.    Notify HMRC and other parties

If the business is transferred to a sole trader you will need to notify the existence of the new business to various agencies such as HMRC. Arrangements to have insurances transferred to the sole trader business will also have to be made.

The payments on account regime for Income Tax for sole traders is particularly onerous in the first year or two of trading, so you will have to put by a percentage of income (approximately 20 per cent) to make the payments when they fall due.

Seeking advice makes this whole process easier!

Of course, this whole process can seem quite a daunting one, so it makes sense to seek professional advice if you can.

Omni Chartered Accountants are experts in all areas of small business accounting and taxation advice, and can offer free of charge advice to help you make the right decision and also offer a cost-effective solution to dealing with the stages that are required to make the transition from Limited Company to Sole Trader.

Call 01902 837408 today or request a free of charge call-back from our website for an initial consultation – alternatively, click here to contact us via our dedicated client contact form.

Top 10 worst excuses for not filing or paying tax returns

HM Revenue and Customs have released their latest list of the 10 worst excuses people have given for filing or paying their tax return late (yes, seriously):

1.      My pet dog ate my tax return…and all the reminders

2.      I was up a mountain in Wales, and couldn’t find a post box or get an internet signal

3.      I fell in with the wrong crowd

4.      I’ve been travelling the world, trying to escape from a foreign intelligence agency

5.      Barack Obama is in charge of my finances

6.      I’ve been busy looking after a flock of escaped parrots and some fox cubs

7.      A work colleague borrowed my tax return, to photocopy it, and didn’t give it back

8.      I live in a camper van in a supermarket car park

9.      My girlfriend’s pregnant

10.  I was in Australia

Whilst it is possible to appeal the late filing penalty that HMRC will automatically levy for filing or paying late, unsurprisingly, none of the above led to a successful appeal.

Given the above exactly what does count as a ‘reasonable excuse’?

A “good” reason for consideration has to be something unexpected or outside of your control.

For example, if your partner died shortly before the tax return or payment deadline, or if you had an unexpected health issue resulting in a stay in hospital that prevented you from dealing with your tax affairs, it is likely that this would be considered.

Excuses such as bounced payments, a general lack of funds, difficulty using the HMRC online system or the lack of a reminder letter would not be allowed as reasonable excuses.

Clearly, the best way of avoiding a late filing penalty is to submit your tax return, and pay any tax due, by the 31 January. No surprises, really.

If you need assistance with your tax return, give Omni Chartered Accountants a call now on 01902 837 408 or contact us.