You need to tell your local HMRC office, if you:

• start getting a second income
• become – or stop being – self-employed
• start or stop getting company benefits – like a company car or medical insurance
• start getting a company or personal pension
• start getting the State Pension or other taxable benefits

You’ll also have to let your Tax Office know if other income that you get – like savings or rental income – increases or reduces.

All these things and more can affect the amount of Income Tax that you have to pay.

If you need help or advice on the above, please get in touch with us on 01327 811164 or via email info@accountsassist.com.

Blog post adapted from HMRC, 2012.

From scrapping the 50p tax, raising the tax-free threshold and tax breaks for married couples – the Government is looking at all options.

Interestingly, new reports in the media suggest that David Cameron is considering proposals under which working mothers would be given tax breaks for employing domestic help such as cleaners, gardeners or babysitters.

The scheme, which is currently running in Sweden, would be designed to reduce cash-in-hand domestic work by making it cheaper to employ workers officially. The scheme was presented to the Prime Minister during his visit to Stockholm for the Nordic-Baltic summit earlier in the month.

A similar system is already used in the UK for employing a nanny. Currently working families employing a nanny registered with Ofsted can claim a childcare voucher from their employer and reduce their tax. If the scheme is extended to other domestic workers, they would also need to be registered.

Reports say Cameron is also considering proposals under which the retirement age would be raised automatically in line with life expectancy.

What are your thoughts? Would you welcome this tax break?

Review Your Expenses
Look at your current expenses such as wages, rent, insurance and communications. Ask your existing suppliers for a better deal, and get quotes from competitors to uncover potential savings. If you find a better offer that your existing supplier can’t or won’t match, then switch.

Early Payment Discount
You might encourage your customers to pay early by offering a discount for early payment. The level of the discount should depend on the profits you are making on orders. This can help to speed up payment, improve your cash flow and reduce bad debts. Also, if you usually pay invoices before the due date, ask if there are any discounts available.

Invoice Factoring
This involves selling your invoices to a third party. In return they will process the invoices and allow you to draw funds against the money owed to your business. Essentially, these companies provide a finance, ledger management and debt collection service.

Inventory Control
Finding the right balance between having enough stock to make sales and reducing the money you have tied up in stock can really help. Why not try negotiating ‘Just In Time’ delivery terms with your suppliers? This means your suppliers will deliver the stock only when you need it (i.e. when you have an order), so you don’t tie up valuable cash in stock, which you don’t have a need for.

Leasing Assets
Owning fixed assets, such as premises or equipment, is better than renting them for long  periods of time. But sometimes it makes more sense to lease assets rather than own them outright. One option would be to selling an asset and leasing it back- this would really help your cash-flow.

Have a good credit control in place
It is important that you keep in regular touch with your debtors and that you regularly review the levels of credit given. Collections should be done regularly and professionally and notes should be taken when credit controlling so that patterns become apparent.

If you would like more information on how to manage your cash-flow, call us today on 01327 811164.

• your employer held the wrong tax code
• there was a delay in passing over your P45 after changing employers resulting in an emergency tax code
• you only worked for part of the year
• you made a mistake on your tax return
• HMRC made a mistake

If you think you’ve overpaid, call HMRC on 0845 300 0627 to find out if they are missing any paperwork – this will put you on the road to being on the right tax code.

If you correct any tax issues mid-year, you should automatically receive a rebate at the end of the financial year.

If not, you may need to request a rebate by contacting HMRC again.

Before you call HMRC, make sure you have:

• Your payslips
• Forms P60, P45
• Information about your employment and benefit history
• Information about your pensions and other income 

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