Between October and December 2011, there were 28,973 individual insolvencies in England and Wales, a 5.6% decrease on the same period the previous year, and down from 30,219 in the third quarter.

Personal insolvencies in 2011 totalled 119,850, a decrease of 11% from 2010. This included:

• 41,845 bankruptcies, which were down 29% on 2010,
• 49,056 Individual Voluntary Arrangements (IVAs) – down 3% on 2010 – and
• 28,949 Debt Relief Orders (DROs), a 15% rise on the previous year.

Statistics from the National Institute of Economic and Social Research (NIESR), released earlier today, show that the UK economy is set to enter recession in the first half of the year, shrinking by 0.1% during 2012 (following its 0.2% contraction in the final quarter of 2011).

However, NIESR predicts that it is not all doom and gloom and that the economy should bounce back and grow by about 2.3% in 2013. Simon Kirby from NIESR, comments: “That the economy is in poor shape is obvious. The degree to which this persists is uncertain.”

The statistics also show that unemployment is at its highest since 1995 at 8.4%. NIESR predicts that at its peak in 2012, 9.1% of people in the UK will be unemployed. It is set to average 8.9% over the year, equivalent to approximately 3 million people.

The Thinktank calls for the Government to cut back on its austerity measures and inject a little more than it had planned into the economy, and for the Government not to alter its fiscal path, it would be “accepting a significant degree of long-term economic and social damage.”

What do you think to these statistics and this viewpoint? Is NIESR right to suggest the Government alters its fiscal plan?

If you missed the tax return deadline, you’ll be charged an automatic £100 penalty.

If you fail to pay any tax owed, you will pay further penalties:

• Thirty days late - 5% of the tax you owe at that date
• Six months late – an additional 5% of the tax you owe at that date.
• Twelve months late – an additional 5% of the tax unpaid at that date.

You will have to pay interest on anything you owe at a rate determined by HMRC.

Don’t delay…

If you would like more information on how to complete your self assessment return, call us today on 01327 811164.

Here are five ways to save on your tax bill:

• Buy a new company car. Company cars with CO2 emissions of over 160g/km will attract less tax relief from 1 April 2009 (for unincorporated businesses it is 6th April 2009), so you may want to acquire any new cars in this category before that date. You will also accelerate capital allowances for all plant and machinery by purchasing before your accounts year end.
• Make a payment into your company pension scheme before the year end to reduce your company’s marginal corporation tax rate
• Make personal pension contributions to make the most of tax relief of up to 40%. Even pension contributions for your children can benefit.
• Use up your ISA annual investment allowance of £7200 tax-free.
• Research other investment based tax reliefs such as the Enterprise Investment Scheme and Venture Capital Trusts.

If you’d like help understanding your tax and how much you could save, call us now on 01327 811164.

But reports this month suggest fewer than 10,000 businesses have benefited from the initiative.

Speaking to the Press Association, a Treasury spokesman said:

“Over 10,000 businesses have already been helped by the scheme, with these employers benefiting by an estimated £6m. But more businesses could benefit and HMRC has been working to increase this number.”

Are you missing out? Speak to your accountant today, or call us on 01327 811164 to make sure you’re making the most of the scheme.

Unless that sum is already covered by PAYE tax payments, or payments made earlier on account, you will required to clear it by making a ‘balancing payment’, which may also include capital gains tax and/or student loan repayments if applicable.

In most cases, the balancing payment must be made by January 31st after the end of the tax year in question so it is likely you will make payment at the same time as filing your self-assessment return. If you are not able to make payment by the due date, interest will be accrued continually until the balance is settled in full.

If you are concerned about your tax liability and would like to understand how it might be minimised, call us for a chat on 01327 811164 or email info@accountsassist.com

If you’ve never filed online before, you will need to register with HMRC’s self-assessment online service, at www.hmrc.gov.uk/sa.

Click ‘Register for Self Assessment Online’ in the top right hand corner, fill in your details and you’ll be sent an activation code which will be issued in the post. This can take a week or more, so if you haven’t already, now is the time to act! Anyone who fails to meet the 31 January deadline will be fined £100, regardless of whether or not any tax is owed.

When you gain access to the system, you will be able to complete your details online, entering in your income details as you would on the old paper forms. A key benefit of filing online, however, is that when you complete your details, you will receive instant confirmation that your return has been received and your tax liability will be calculated automatically. You will be invited to make a payment, if there is an amount owing.

If you are concerned about filing your return and would like some assistance, call us for a chat on 01327 811164 or email info@accountsassist.com

Your return will show your income (what you’ve earned) and capital gains (gross income) and allow a final figure to be produced stating the amount of income tax you are liable to pay.

Where can you get one?

Before you can file your self-assessment tax return, you will need to register with the HMRC by visiting http://www.hmrc.gov.uk/sa/register.htm. HMRC will then use the information you provide to set up a record for you.

You will then receive a ten-digit tax reference, called a Unique Taxpayer Reference, which will be used on all correspondence and login details to allow you to file your future returns online.

HMRC will send you a letter each year, usually in April, telling you to complete your tax return. If you haven’t received this letter by the end of April, you should get in touch with HMRC.

You can submit your tax return online or on paper.

We’ve put a handy guide below of all the key deadlines for 2012:

1. For online submission of 10/11 tax year information – Midnight 31st January

2. For ‘balancing payment’ – 31st January

3. For first payment on account self-assessment payment – 31st January

4. For second payment on account of self-assessment for this tax year – 31st July

5. For second payment of self-assessment for previous tax year – 31st July

6. For paper submission of 11/12 tax year information – 31st October

If you would like more information on how to keep on top of your self assessment tax return and payments, call us today on 01327 811164.

Speaking to the Guardian, Tara Kneafsey, a director at RSA, said:

“Confidence is a critical factor for SMEs as we approach 2012 – confidence in knowing they are protected should the unexpected happen and confidence in having access to capital to maximise growth opportunities.”

“Our research suggests that this investment and support will increasingly be sought from private investors rather than banks in the coming years.”

If you’re struggling to get much needed financing for your business, one thing worth doing is to ask for feedback from your bank manager and anyone else who can offer you useful input.

It might be that with some letters of intent from buyers and a rejigged business plan, you can improve your chances of securing funding.

Research possible business grants for funding options. In some cases, you may qualify for a grant from the government, Regional Development Agencies, Local Councils or the EU.

Alternatively, you might want to join up with a business partner or angel investor who can bring additional funds into the business.

Finally, if funding isn’t forthcoming, consider franchising. If you are operating in a saturated market, it may be that you can establish your business better by becoming part of a larger brand.

Getting on the wrong side of the tax system can create huge problems that are easy to avoid if you do everything right to start with. Check out our guide of what you need to do if you’re a private teacher.

• Keep a record of all your incomings – Private teachers/coaches tend to be paid cash in hand and this why HMRC is now targeting private teachers to make sure they are paying the right amount of tax.
• Keep your receipts for business purchases – As well as keeping a record of your incomings you need to keep a record of your business expenses. This includes all business purchases you make, anything from supplies to travel costs need to be recorded.
• Keep all documentation from HMRC – This is your own record of your communications with HMRC.

What to do if you receive a letter from HMRC stating they are carrying out inquiries into your tax affairs

Firstly, don’t panic, stay calm and give detailed information back to HMRC.

1. Contacting HMRC – When you first make contact with HMRC fully answer all their questions in as much detail as possible, referring to your own records. Contact information is available on their website (www.hmrc.gov.uk).
2. Co-operate – Remember that HMRC has a legal right to demand information from you and other people you have worked with e.g. your bank manager, your customers, and your suppliers. The more you co-operate with HMRC the easier and quicker any issues will be resolved.
3. Talk to a professional – Talking to a professional can sometimes prevent you from being the subject of an inquiry to start with. If you do become a target of an investigation, consider engaging a professional to help guide you.