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

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.

If you pay any kind of employee expenses or benefits, you will need to complete a P11D (for employees earning more than £8,500 per year) or P9D (for employees earning less than £8,500 per year).

To enable you to complete these correctly, you’ll need to keep a record of every benefit and expenses payment you provide to your employees.

Make a record of the date and details of every payment and keep receipts and other documentation alongside these in a way that can be easily cross-referenced if necessary.

Although the information for each payment will be different, remember to record all the information to enable you to work out the value you need to put on your employees P11D or P9D at the end of the tax year.

The sort of payments you should be recording might include:

• Travel expenses – Record the amount claimed, when it was incurred and the date claimed. You must also keep the receipt for the expense.
• Petrol – As with travel expenses, you will need to keep a record of the costs and the date they were incurred and claimed.
• Company car – if you give your employee access to a company car, your records will need to provide information covering the car and running costs of the car. Details needed include make, model, age, list price and fuel type. There will be additional forms to complete in this case.

Sometimes employers choose to give an employee a company car to commute to work instead of giving them a pay rise, travel costs or other employee benefits. Company cars are typically given to sales managers, who need to travel long distances or management members. A company van is typically given to plumbers, tradesman etc that need a van to enable them to do their job.

Company car private usage is taxable on the employee. The employer is responsible for paying for paying the Class 1A NICs. This needs to be reported to HMRC on the employee benefit form P11D for each tax year.

To work out what a company car is worth to an employee, and what it will cost your business, you can use the HMRC’s calculator.

Finally, it should be noted that if a company car is used by a director or employee for personal use after April 2011, the company will need to complete a P46car form.

The inquiry found that HMRC’s service to UK taxpayers had dropped to unacceptable levels during the last tax year (April 2010 – March 2011). MPs said the inquiry’s findings were “disturbing”. The Treasury Select Committee stated that the public had lost confidence in the tax system.

When examining HMRC’s performance, the committee stated that “poor service standards have been an issue for many years.” Criticism was levelled in particular at way HMRC handles telephone calls during peak times, finding that many taxpayers were having to waiting for long periods of time to speak to an advisor.

The response to postal enquires was delayed as well, resulting in the public losing confidence in HMRC.

The Select Committee pointed out that HMRC’s service to taxpayers could get worse before it gets better due to a number of reasons, including:

• “Overly ambitious” computer projects, such as the new plan to make employers submit “real-time” information regarding employees PAYE payments.
• Complex tax laws.
• High reliance on the internet for filing tax returns or giving out information to businesses and/or taxpayers. This is a disadvantage for those without good internet connection or internet knowledge.
• Previous job cuts and the possibility of more job and spending cuts over the next few years.
• It was also recommended that HMRC should use cheaper 0345 numbers for customer queries, unlike the currently used and more expensive 0845 phone numbers.

Although the inquiry found that HMRC service to taxpayers wasn’t up to standard, the report did say that HMRC does a good job in collecting taxes from UK taxpayers.

Before you know it, you can easily become swamped with all the little bits of admin that need doing, you might even be put off before you start trading!

Here’s our ten-step checklist for start-ups to help you see the wood from the trees and get on with doing what you do best:

1) Have you got the funds (plus a little bit extra saved in case of emergency)?

Starting a business can be expensive – not least if you’re giving up another income to start your new venture – so make sure that you’ve accounted for all feasible expenditure for your first few months of trading.

2) Have you got time?

Starting your own business can also be hugely time consuming. To be successful, you’re likely to need more than just funds – you’ll also need the support of those around you, free time to put into making it work (are you going to have a ‘day job’ too?), and a good dollop of self-belief.

3) Do you have a business plan?

Business plans are vital. A good business plan will include: realistic financial projections, market and competitor research, an executive summary detailing your business proposal, your aims, what your product or service is, and who comprises the management.

4) Are you aware of all of the Health and Safety and insurance regulations for your industry?

Different industries carry different Health and Safety and insurance regulations. Make sure you’re familiar with yours and that you have all the right documents and policies in place; the last thing you want is to be closed down for breaking the law.

5) Have you opened a bank account for your business?

You’ll need to set up a separate bank account to any personal ones for your business. This is a statutory requirement.

6) Do you have a licence?

Some businesses require a licence from the local council to operate. This includes the likes of taxi firms, window cleaners, driving instructors and restaurants.

7) Have you arranged an accountant, bookkeeper, or record keeping system?

Whether you intend to keep your own books, or pay someone else to do it, it’s important that you start as you mean to go on, and keep clear records from day one. Think about how you are going to record your receipts, how you will invoice, and decide on some sensible systems to keep track of any other dealings your business has.

8) Have you registered with HMRC?

When setting up your own company or going self-employed, you need to register with HMRC as it will affect your tax and National Insurance contributions. You will be required to file certain forms and make certain payments throughout the year, so you may prefer to engage an accountant to do all of this for you.

9) Have you registered with Companies House?

If you plan to trade as a Limited Company, you need to register with Companies House. You can register online or get your accountant to do it. You’ll need to know your Company Name and Address, Officer Details (Director and Secretary), Share Capital and Shareholder Details, and make a registration payment of £18.

10) Do you need marketing materials?

You may not want to splash out on leaflets and ads from day one, but the vast majority of businesses have websites these days to outline what they do and showcase their services/products. You don’t have to spend a bomb, but having a basic web presence is now pretty much expected of all modern businesses. Business cards may be another essential, especially if you intend to get out there and network to win business.

Working through this checklist, you may find that it throws up as many questions as it answers! If you’re still struggling, give us a call on 01327 856076 and we’ll be happy to talk you through your options.

To keep things simple, many small business owners use accounting software to help them keep an accurate record of their incomings and outgoings, and to make it easier to file their tax returns at the end of the financial year.

But what’s the right accounting software for you? This guide details the factors to consider when choosing accounting software, and explains how to ensure that it is tailored to your requirements:

What does accounting software do?

Accounting software packages are computer-based programmes designed to simplify the bookkeeping process.

Essentially, if you pick a good package, and set it up correctly, all you should need to do is input your key data correctly (and promptly!) and the software will ensure that your books are in good order.

What do you need?

1. Just the basics? Basic accounting packages might just offer some fields for you to record your incomings and outgoings, and then produce final figures for you. Check for the features that suit the way you trade e.g. the ability to add client records, the ability to bill by unit and by hour etc.
2. Tax help? Higher tech programmes will do more to help you run your business, such as generating invoices, receipts and reminders. Top notch software will also allow you to upload information straight to the HMRC website when filing your tax return.
3. Payroll? If your business has employees aside from yourself, you may want a package that is able to record and manage your payroll, including generating payslips, and calculating tax and NI.
4. On PC or in the cloud? Some accounting software can be installed on your PC, whereas others simply offer you an online login. Having a central access point can be very useful if you tend to access your records from lots of different devices (but make sure you keep a hard backup somewhere).
5. Bells and whistles or ease of use? If you’re pushed for time, a package that does everything but make the tea might look good, but if you haven’t the time to learn how to use it, it can prove a false economy. Most packages come with a free trial period, so it’s worth getting set up, and then deciding if it’s worth the time, or if you’d be better off employing a bookkeeping and/or chartered accountant.

If you’re struggling with your record keeping, give us a call on 01327 856076 and we’ll be happy to talk you through your options.

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.