Chartered Accountants of Poynton, Cheshire |
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Company VansThere has been a big change to the taxable benefit due on vans. Where an employer provides a van for an employee, which they can use for private journeys, the taxable benefit from 6 April 2007 becomes £3000 per annum. This taxable benefit is not levied if the private use is merely incidental. HMRC have given some guidance on what is incidental but this is not exhaustive so we will be pleased to advise on the situation if you are providing vans that can also be used for private journeys. Filing onlineEvery year, employers are required to send details of the salaries, tax and National Insurance deducted from their employees. These year-end returns have to be submitted by 19 May 2007 to avoid a fine. These documents can be submitted on-line via the internet. Appletons can assist you in this process. If you are a small business - defined by HMRC as having fewer than 50 employees - and you file your P35 online, HMRC will pay you £100 tax-free for doing so. You usually claim this back by reducing your next monthly PAYE payment. Tax TipWhen you buy new equipment for your business, ask whether it is energy or water efficient. Check the list on www.eca.gov.uk to see if you could get a 100% deduction fo the cost in the year of purchase. |
Could you cut down your VAT bills & paperwork?If your business has taxable sales (as defined by HMRC) of less than £150,000 a year and few overheads, the flat-rate scheme might save you VAT. The scheme also aims to reduce the administration burden on smaller businesses. How the scheme worksIn brief, the trader still charges VAT on the sales that they make. However, when it comes to completing the VAT return, the procedure is simplified. Usually, when completing a VAT return, the trader totals up all the VAT made on sales and deducts the VAT on allowable purchases. The difference is then due to or refunded from HMRC. Under the flat-rate scheme, all the trader has to do is apply a percentage to the sales made and pay that percentage to HMRC. The percentage to use is supplied by HMRC in VAT leaflet 733. ExampleThe trader should calculate their sales for the quarter, including any VAT that has been charged. So, let's assume that ABC Advertising Agency has sales, including VAT, of £10,000 in the quarter. The rate to be used for a trader in the advertising industry is 9.5%. The amount of VAT due is £950 (i.e. 9.5% of £10,000). There is no need to make adjustments for any purchases made, although there are special rules for capital purchases over £2000. How do I apply?You can apply online at www.hmrc.gov.uk or by using the application form which is part of HMRC leaflet 733. How long can I stay on the scheme?You can stay on the scheme until your sales reach £225,000. There are special transitional rules to guide you as your sales reach this limit. Why should I use the scheme?The scheme offers two big advantages:
Special flat-rate scheme discountAs an incentive, if you use the scheme in the first year of VAT registration, the percentage is reduced by 1%. Will it work for my business?There is a 'ready reckoner' in the flat rate scheme section at www.hmrc.gov.uk. This allows you to evaluate whether it is financially viable to use the scheme for your business. , Alternatively, Appletons Accountants will be pleased to advise you. |
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