If you have paid in excess of the maximum NI contributions required for the tax year you can reclaim the excess amount. The PAYE system will normally ensure that you will not pay more than the annual maximum on your regular employment. However, if you have two or more concurrent employments in the tax year, or you are employed and self-employed at the same time, you may pay more NI in the year than the annual maximum.

Each taxpayer has their own annual maximum figure based on their individual earnings. The annual maximum NI for employees will be at least £4,279 and for taxpayers who are both employed and self employed the annual maximum is at least £3,180. However, you need to add to those figures the amount of NI payable at the additional rate (currently 1%), which cannot be reclaimed.

If you believe you have paid more NI than your personal annual maximum you can reclaim the excess by writing to the NI Office in Newcastle upon Tyne. You don’t have to calculate the amount of NI repayment due, as the NI Office will do this for you. But you must provide evidence of your earnings during the tax year, such as P60 forms or accounts. We can help you with all of this.

There is no time limit for reclaiming overpaid NI contributions, so you can submit claims for all past years where a repayment is due.

If you are likely to overpay NI for the current tax year you can apply to defer the NI charges on one of your jobs. Do this by completing form CA 72A for employees, or form CA 72B if you are also self-employed. It is not too late to submit either application.

VAT Rates and Refunds top

VAT can be very complicated at times! Most goods and services carry VAT at the standard rate, which is currently 17.5% and is due to increase to 20% on 4 January 2011. However, some transactions, such as financial services, are exempt from VAT, and some goods, such as children’s clothes, carry VAT at 0%.

To confuse matters even more, certain services can carry VAT at 5%, or 17.5% or 0%, depending on the circumstances. For example, renovating a house that has been empty for at least two years can carry VAT at 5%, but repairing a roof on another building will generally require VAT to be charged at 17.5%, unless the building has ‘listed’ status when the work may be zero rated if it is an approved alteration.

If you find you have charged VAT at too high a rate to your customer you should refund the excess VAT charged, if this is practical and possible. You also need to correct your VAT returns for the excess VAT paid over to the VAT office. You can only make a claim for overpaid VAT for VAT periods ending in the last four years, so don’t delay if you find an error that covers several periods.

For small businesses, keeping track of cash flow can be a struggle. With limited staff, or none at all, keeping on top of accounting often falls by the wayside in busy periods.

There are some simple steps you can take to make sure your business finances start, and end, 2010 in order.

• Set up a filing system and start recording everything

Apart from the legal requirement, by keeping this information split between income and outgoings, you will have a better sense of cash flow, helping you to better manage your business.

By catagorising expenses into ‘rent’, utilities, or stationary, for example, you will get a clearer picture of where you might be over-spending.

• Check your records against your bank statements

Making sure you tick off everything on your statement before filing it away each month will help you keep check of missing receipts, and provide a constant monthly deadline for getting your records in check.

• Get everything on a computer

Keeping your records on a spreadsheet, or using bookkeeping software, will allow you to see transactions in an instant. Figures will be easy to find, should a mystery debit appear on your bank statement, and you can even produce projections, based on previous months.

• Remind yourself

Keep an up to date calendar, or set reminders on your computer – if you use Outlook, tasks, emails and dates can be set to ‘pop-up’ when their due. If you have an accountant, you will also need to enter the date they require your records by.

Leave yourself 30 days before each deadline, allowing plenty of time and avoiding a last minute rush.

If you really can’t commit to the above, it may be time to call in an experienced bookkeeper. Of course, there will be an expense associated with this, but since it could free up your time, and give you better information with which to make business decisions, it might just be worth the investment. I provide a free accountancy question and answer session every Tuesday on Twitter, join me @AccountsAssist.

Blamed on HMRC’s new computer system, the blunder could see individuals hundreds of pounds short, depending on the level of their earnings.

Andrew Hubbard, president of the CIoT, warned advisors and their business clients to check their new codes. “Most people on PAYE are used to assuming that what the taxman sends them is correct, (filing) away coding notices without bothering to check them.

This year, many of them are being given wrong information, and unless they spot it and tell HMRC, their employer will receive the wrong information too and the employee could get a nasty shock when they open their April pay packet and see it is as much as £100 lighter than they expected.”

Richard Mannion, director of national tax at Smith & Williamson, said that HMRC’s previous system had suffered problems in the past. “They’ve now installed a new system, which is more flexible, but they are having teething problems.”

The mistake is likely to significantly affect pensioners with part-time jobs or people who hold down more than one job, as the system is likely to generate a different tax code notice per job.

People with investment income may also be affected as the HMRC tries to collect tax due on individuals’ estimated investment income, such as bank interest, dividends and rental income, through their tax codes. In many cases this will be based on previous tax returns and may be excessive and out of date.

To avoid undue taxes, all employees must check their tax code and contact HMRC if it needs to be changed. For more information about understanding your tax code visit: www.hmrc.gov.uk/incometax/codes-basics.

A HMRC spokesperson insisted that “the new system is working as it should…as part of our transition to this new system, in the first year, we also expect some of the codes we issue to be incorrect. Anyone in this position should call HMRC to make sure the right tax code is applied.”

Failure to get forms to Her Majesty’s Revenue & Customs (HMRC) by the fast-approaching deadline will incur an initial £100 late payment charge. If the form still hasn’t been returned by 31st July, there will be a further penalty of £100. If, despite those penalties, you still fail to return your tax forms the HMRC may apply a daily penalty of up to £60.

In certain cases HMRC will waive these penalties: If you have a “reasonable excuse” for missing the deadline, such as serious illness or a close family death for example.

To avoid unnecessary charges, businesses must act quickly to make sure their online tax returns are in on time.

For first-time self-assessment filer’s, or those new to using the online system, registration is required at HMRC’s self-assessment online service, at www.hmrc.gov.uk/sa. Registering is straightforward; simply click ‘Register for Self Assessment Online’. Once registered, an activation code will be issued in the post – this may take up to seven days, so businesses must register this week to ensure codes are received on time.

There are real benefits to filling your tax return online: Your tax is calculated automatically and is processed faster, so any money your owed is repaid more quickly. If you file online, you’ll get an immediate on-screen acknowledgement that the return’s been received – receipts are not provided for paper returns.

HMRC’s Sarah Walker said:

“The 31 January filing deadline is just around the corner, so if you haven’t yet sent in your 2008-09 tax return, you need to take action now. Don’t risk a penalty – make sure you file your return online and on time.”

And don’t forget, 31 January 2010 is also the deadline for paying any tax you owe for the 2008/09 tax-year.

Help is available from the HMRC website at www.hmrc.gov.uk/sa.

The reminder stresses that the 31st October deadline for paper returns has now passed, which means anyone yet to file must do soonline by the 31st January deadline. HMRC warns that if you submit a paper return after 31st October, or you file online after 31st January, you could receive a £100 penalty.

HMRC are expecting more than 9.5m Self Assessment returns this year. Around 5.8m people filed online last year, up from 3.8m the previous year – an increase of over 50%.

If you’re a first-time Self Assessment filer, or you are new to online filing, you’ll first need to register for HMRC’s Self Assessment Online service first.

Registering is simple – visit the HMRC website and click “Register for Self Assessment Online”. Once you’ve registered, an activation code will be sent to you in the post.

Note: It can take up to seven days for your activation code to arrive, so register as soon as possible.

The main benefit of filing online is that your tax is calculated automatically, you get an online acknowledgement once you’ve filed, and it’s processed faster, so any money you’re owed is repaid more quickly.

HMRC’s Sarah Walker said:

“If you haven’t yet sent us your 2008-09 tax return, don’t forget, it must be sent online before 31 January. And if you haven’t filed online before, make sure you allow plenty of time to complete the registration process – that way, you’ll avoid a last-minute rush at the end of January.”

And don’t forget, 31 January 2010 is also the deadline for paying any tax you owe for the 2008/09 tax year.

If you are concerned you may miss the paper deadline, you can choose to switch to online filing.

The online service has a number of benefits:

• online returns don’t have to be filed until 31st January, so you get three months longer to file;
• your tax is calculated automatically;
• you get an immediate online acknowledgement once you’ve filed;
• it’s processed faster, so any money you’re owed is repaid more quickly.

Registering is simple – just visit the HMRC website at www.hmrc.gov.uk/sa and click “Register for Self Assessment Online”.