Our VAT Calculator is a handy application designed to make working with VAT easy. Especially for reverse VAT calculations.

Simply enter the amount you wish to calculate and select if the value already includes VAT or [...]]]> We’ve just released our first Android app for calculating VAT. It’s available in the Android Market here.

Our VAT Calculator is a handy application designed to make working with VAT easy. Especially for reverse VAT calculations.

Simply enter the amount you wish to calculate and select if the value already includes VAT or not. You also have a choice of calculating the standard rate or reduced rate.

We look forward to receiving your feedback and as we update the app, we will keep you posted right here.

The most famous franchise is probably MacDonald’s but there are numerous kinds of franchises out there. In relation to any other small business, franchising has proved to be successful, with 94% of units still operating profitable businesses 5 [...]]]> Franchising can help to give you the confidence you need to start a business on your own.

The most famous franchise is probably MacDonald’s but there are numerous kinds of franchises out there. In relation to any other small business, franchising has proved to be successful, with 94% of units still operating profitable businesses 5 years down the line whilst it is estimated that more than 40% of small firms cease trading within 3 years.

We are basically talking about a Business Format Franchise. It is where a business has established a successful way of working and in order to grow it licences the rights to their methods, know-how, name, goodwill and product or service to others for a certain period of time. They are the FRANCHISOR and the local operator is the FRANCHISEE.

Some Advantages of using a Franchise…

• You don’t have to go through the learning curve of working out what works;
• Their is a proven market for the product;
• You get to use the goodwill and established name of the franchisor;
• You normally have an exclusive area in which to operate;
• All necessary training is provided by the franchisor;
• Marketing assistance is provided by the franchisor;
• Bulk buying powers of the franchisor can be used;
• Banks are often more willing to lend to franchisees where the business plan is more likely to be as predicted.

Franchise Costs
The franchise costs are normally the main downside of choosing to operate as a franchise and consist of the following…

• An initial startup fee
• An on-going management fee or royalty for the franchise which is usually a percentage of annual turnover or mark-ups on supplies.

Whose business is it?
Each franchise is a separate business in its own right and is the business of the franchisee over which they have control. However, the franchisor is likely to retain control over the method of operation and marketing. It is important that franchisor and franchisee get along and work together as a team.

Choosing a Franchise
The British Franchise Association (BFA) is a good place to start when choosing a franchise and they are the only independent accreditation body for franchising within the UK.

It is also useful to attend franchise exhibitions to compare different franchisees.

They have a free video ‘Your Introduction to Franchising’ which provides a wealth of information – more than 33% of franchisees buy this unique, independent guide before making their decision.

BFA members are recommended as they have volunteered to be ‘vetted’ by the BFA and adhere to its codes and standards, based on the European Code of Franchising Ethics. They are also re-accredited on a regular basis.

Before deciding on the franchise you are going to choose you should consider…

• Can you commit to the time and money needed to get going which are both likely to be significant?
• How viable is the product or service or will it be easy to sell in your area?
• Can you speak to other franchisees to verify how they have done?
• How well has the franchise been tested?
• Does the franchisor have the resources to provide the support you need?
• How well do the franchisor’s systems work in practice?
• What are the tends in the market likely to be?

The Franchise Contract
A franchise is a long term arrangement and you need to take legal advice on any franchise contract, ideally from a solicitor who has a lot of experience with franchise contracts.

The franchisor will have a lot of control over how the business is run and you need to ensure you are happy with this and what is in the contract.

How We Can Help You
We can help you look realistically at any franchise proposition and review the basis of the financial projections with you. Assistance in putting together your business plan can be provided.

The service allows taxpayers to register changes in jobs, address and other personal details any time night or day.

HMRC says the online forms take only a few minutes to complete and are much easier than [...]]]> A free electronic service to notify HM Revenue & Customs of any changes in personal circumstances has been launched.

The service allows taxpayers to register changes in jobs, address and other personal details any time night or day.

HMRC says the online forms take only a few minutes to complete and are much easier than notifying the taxman of changes by letter.

HMRC’s Stephen Banyard, said: ‘HMRC needs your correct details on its systems to help us give good and accurate service. Incorrect information can lead to problems – for example, customers not getting the right tax codes and overpayments – so it is really important to let us know the right information quickly.’

HMRC will send out an automatic response advsing the form has been completed correctly.

To use the service click on to: www.hmrc.gov.uk/individuals/change-of-circs.htm

The initiative follows the tax health plan (THP), which was launched last year as an opportunity for doctors and dentists to reveal details of unpaid tax liabilities at the reduced cost of [...]]]> Plumbing is the focus of HMRC’s new tax ‘amnesty’, as the department continues its drive to stamp out evasion.

The initiative follows the tax health plan (THP), which was launched last year as an opportunity for doctors and dentists to reveal details of unpaid tax liabilities at the reduced cost of a 10% penalty.

Under the latest scheme, plumbers, gas-fitters, heating engineers and members of associated trades with undisclosed taxable income from the past five years have until 31 May to register their intention to make a voluntary disclosure.

Participants will then have until 31 August to provide their details and make arrangements for payment. The maximum sanction will be 20% of liabilities, but the Revenue says individuals will be penalised at just 10% if a return has been submitted showing less tax payable than the correct amount because the taxpayer had been merely careless, or if a person started trading without informing HMRC or submitting a tax return but had not deliberately tried to hide the information.

The plumbers’ tax safe plan (PTSP) – which was set up by the Revenue in partnership with the Low Income Tax Reform Group, Tax Aid and the Citizens Advice Bureau – is intended to be the first of several disclosure initiatives targeting trades people. The terms are in line with those offered by the taxman for any full and accurate, unprompted, voluntary disclosure of liabilities.

Once the PTSP window closes in the summer, individuals who have not come forward but are found to have unpaid liabilities will face higher penalties of 30% to 100% of the tax evaded.

Trades people who wish to submit a declaration of intention should so by completing an online notification form or call the dedicated PTSP team on 0845 600 4507.

How prepared are you for this change? Read on to find out more.

What are the impending filing changes for corporate tax returns?

HM Revenue and Customs’ (HMRC’s) changes to the way we file corporate tax returns and supporting documentation become mandatory from 1 April this year.

How prepared are you for this change? Read on to find out more.

What are the impending filing changes for corporate tax returns?

HMRC has announced that, “from 1 April 2011 for any accounting period ending after 31 March 2010, all Company Tax Returns must be filed online with accompanying financial statements and computations in iXBRL format”.

iXBRL (inline eXtensible Business Reporting Language) is a new, electronic format for business information, which HMRC expects to provide benefits in the preparation, analysis and communication of business and financial data. iXBRL is becoming a global standard for financial reporting.

How does this impact on companies?

When companies send their tax returns to HMRC after 1 April 2011, they will have to do so electronically and attach iXBRL financial statements and computations. Otherwise their tax returns could be rejected by HMRC.

Companies will need a method to create iXBRL documents, which will either involve:

• upgrading or purchasing software and training staff, or
• outsourcing to an organisation who can prepare iXBRL documents.

Either way, there is additional work compared to preparing financial statements and tax computations submitted to HMRC by post and there will be a cost implication, particularly for financial statements.

What should companies be doing?

You may not have to submit your tax return on 1 April 2011, but you should be considering what method you will use to meet this requirement.

For further guidance on how this change impacts you, contact us on 0844 357 3646 to arrange a consultation.

The March Budget introduced a number of measures intended to continue the policy of stimulating the economy by keeping public spending substantially above public revenue.  The new Government [...]]]> The year 2010 is more than usually complicated from the tax point of view because of the change of Government and the introduction of an Emergency Budget.

The March Budget introduced a number of measures intended to continue the policy of stimulating the economy by keeping public spending substantially above public revenue.  The new Government takes the view that this policy is unsustainable and that the tax burden must rise in addition to expenditure being cut.  The June Emergency Budget addresses the taxation side of this equation, although the Tax Credit proposals can be seen as part of the plans to reduce expenditure.

As widely anticipated, the standard rate of VAT is set to rise from 17.5% to 20%, but not until 4 January 2011.  There will be corresponding changes to the Flat Rate Scheme percentages, and legislation is proposed to prevent larger businesses charging the existing rate by invoicing early.  The 5% reduced rate remains unchanged, and there are no alterations to the definitions of exempt and zero-rated supplies.

The basic personal allowance for Income Tax will rise to £7,475 for the year, or £143.75 a week, from next April.  This is a rise of £1,000 over the figure for the current year.  It has been publicised as an increase for the under-65s.  The position for the over 65s is unclear, as the enhanced income-related allowances available to them have not yet been announced, but it is likely that they will benefit from the increase if their income stops them from qualifying for the enhanced allowances.

There will at the same time be a reduction in the threshold for 40% tax, which will result in those on incomes above about £45,000 will not benefit from the allowance increase.  The precise threshold figure will be announced later.  The upper earnings limit for National Insurance will also be reduced, to avoid a situation where part of a taxpayer’s earnings is taxed at 40% plus standard National Insurance.

The special treatment of furnished holiday lettings is to continue for the time being, but there is to be consultation on future changes.  There is also to be a review of the treatment of ‘non-doms,’ who seem at present to receive more favourable treatment in the UK than in most other countries.

The rates of Class 1 National Insurance for employees and employers and Class 4 National Insurance for the self-employed will, as proposed in the March Budget, increase next April by 1% (from 11%, 12.8% and 8% to 12%, 13.8% and 9% respectively).  The threshold for employer’s contributions will, however, rise from the current level of £110 per week to £131 per week, subject to a further increase for inflation.

It was generally expected that there would be an increase in the rate of Capital Gains Tax.  The change that has been brought in is not as bad as many commentators foretold, but it does apply to all gains arising after 22 June 2010.  Capital Gains attract an ‘annual exemption’ of, currently, £10,100.  The rates charged on gains in excess of this will be depend on income.  If the taxable income is below the 40% threshold, gains up to the unused basic rate band will be taxed at 18%.  Any remaining gains, and all taxable gains if the income reaches the 40% threshold, will be taxed at 28%.  The exception will be gains on business assets, which will be taxed at 10%, subject to a lifetime ceiling of £5 million of gains.

Because the Capital Gains Tax changes are being introduced part way through the tax year, there are complications for people who realised taxable gains between 6 April and 22 June this year and realise further taxable gains during the rest of the tax year.  This newsletter cannot detail these complexities.

The main rate of Corporation Tax was to be 28% from 1 April 2011, but will now be 27%.  The small profits rate, chargeable on the vast majority of companies, will also reduce from 21% to 20%.  These changes do not affect the current tax year.

There is to be a National Insurance ‘holiday’ for new businesses setting up in regions outside London, the South East and Eastern England.  This will only apply to business start-ups after 22 June 2010 and will be a maximum of £5,000 for each of the first 10 employees.  The target commencement date is 6 September with a duration of three years, but the necessary arrangements have yet to be made and the start may be delayed.

There are a number of proposals for tax credits, which are aimed at reducing the cost and focussing the benefit on the more needy.  The ‘baby element’ is to be abolished from 6 April 2011, and the ‘over-50 element’ from 6 April 2012, whilst the proposed addition for children aged 1 and 2 will not now be paid.  Annual uprating will be by reference to the Consumer Price Index rather than the Retail Price Index in future.  The child element will be increased by £150 a year over the rate of inflation from 6 April 2011 and by £60 a year over the rate of inflation from 6 April 2012.  On the other hand, the universal Child Benefit will be frozen at its present level until April 2014.

For households with incomes over £40,000, the rate of withdrawal of tax credits will rise from 39% to 41% from 6 April 2011.  This means that for every £1 of income above that point the household will lose 41p in tax credits, rather than the present 39p.  The lower 6.67% rate of withdrawal for the family element of tax credits and the threshold of £50,000 for that withdrawal will disappear, and the 41% rate will apply to that element as well.

From 6 April 2012 the backdating period for tax credit claims will reduce from three months to one month.  The income increase ‘disregard’ will fall from its present level of £25,000 to £10,000 in April 2011 and £5,000 in April 2013.  In April 2012 an income reduction ‘disregard’ will be introduced.  These changes will make it more likely that claimants will be faced with overpayments after the end of the tax year.

Finally, it is confirmed that the over 60s will qualify for Working Tax Credit from April 2011 if they work more than 16 hours per week.

Effectively, for every directorship held, a Director must provide Companies House with details of their usual residential address, as well as details for their, recently introduced, ‘service [...]]]> 1^st October 2009 saw a number of major changes within the Companies Act. One such change was the introduction of a Service Address for Directors.

Effectively, for every directorship held, a Director must provide Companies House with details of their usual residential address, as well as details for their, recently introduced, ‘service address’.

If a Director doesn’t supply a ‘service address’ then the director’s residential address automatically defaults to become the address on public record.  So in essence – don’t supply a ‘service address’ and your home address becomes publically accessible by absolutely anyone.

Remember – anyone can access the public records at Companies House – so if an alternative Service Address isn’t provided – the residential address is on show.

A Director can choose any address as their service address – it can be a home address or perhaps the registered office of the company – or an alternative address.  However, it must be an address where documents can be delivered and an acknowledgement or receipt provided if required.  It cannot be a PO Box or a DX number.

As mentioned earlier, this new legislation only came into effect on the 1^st October 2009 – and so many company directors may not yet be aware of it – but it’s a reality that’s already in place.  There are services available – and a few company registration agents are now offering services to their customers to assist them with the process of protecting their home address.  Some services are costing hundreds of pounds – so our advice is to shop around to ensure you find a cost effective way to protect your address.