More Tax Toolkits from HMRC

HMRC are publishing an additional three “toolkits” to help tax payers and tax agents reduce errors in tax returns.

The new toolkits cover VAT input tax, inheritance tax and expenses and benefits from employment.

HMRC have been at great pains to stress that use of the toolkits is “voluntary” and that they don’t constitute a set of standards. The guides set out the taxman’s perspective on tax law and regulation (although they were developed in partnership with professional bodies), which tax advisers may choose to disagree with.

The toolkits can be found on the HMRC website.

Let us know if you have used the toolkits and how you got on with them. If you prefer to have a professional organisation look after your tax affairs then give Lewis Smith & Co. a call on 01384 235549.

Lewis Smith & Co. – Thinking about setting up as a limited company: read our article today.

Furnished Holiday Letting – Good News and Bad News

Many of you will have benefited from a number of items of tax relief over the years if you have property that have been designated as Furnished Holiday Lettings (FHL).

Even more of you may have been delighted to hear that the rules were going to extend to properties within the EEA (European Economic Area) – the EU plus Iceland, Norway and Liechtenstein. The government thought that it might fall foul of EU regulations.

However as ever the government “giveth with one hand and taketh away with the other”. The thought of giving tax relief to even more tax payers was as much as they deal with so from April 2011 some key rules are being changed.

  • Property must be available for letting for 210 days per year (up from 140) and actually let for more than 105 days (up from 70).
  • Tax relief, which allows setting losses against other income will be stopped.

If you aren’t sure where you stand with these new regulations then So even if you still qualify for relief it may be more restrictive, and if you don’t qualify then there may be an increased CGT (Capital Gains Tax) exposure. No at all good news.

If you aren’t sure where you stand with these new regulations then feel free to give Lewis Smith & Co. a call to help you sort out your position. Phone 01384 235549 or email to arrange a free , confidential discussion.

Lewis Smith & Co. – Accountants for Halesowen, Cannock and Telford

Had a letter from HMRC?

It probably hasn’t escaped your attention that the HMRC have been sending out letters, which for some people represent extremely bad news. You owe the tax man some money.

Lewis Smith & Co. can’t second guess the contents of those letters nor do we no the circumstances of everybody that gets one but we can give at least some reassurance…Just because you have received a letter doesn’t mean that you have to pay immediately!

The key thing to recognise is that the letters are tax calculations and not demands.

First thing to check is what tax year the letter refers to. HMRC have a 12 month window to notify you about tax shortfalls so if the tax year in question is 2008-2009 and you are certain that you provided the tax man with all of the relevant information regard ing your tax affairs then you may be able to use the “Extra Statutory Concession A19 to write the “debt” off. HMRC can respond with a discovery assessment if they believe that you didn’t provide all of the relevant information.

Then check the information provided in the letter for mistakes in job status, benefits (such as company cars) or relevant tax relief. This was a big exercise and mistakes were bound to have been made. Document any mistakes and write to HMRC.

If the calculations show a shortfall of under £2,000 then you should be asked to pay it back through a new tax coding in April 2011. If the shortfall is greater than £2,000 then you may be asked to pay it back directly. In both cases if payment is difficult propose a payment schedule that you can manage.

Of course if you are unsure about anything related to these letters then remember that Lewis Smith & Co. are here to help. We can check the information and work out whether you really owe any tax or not and deal with HMRC on your behalf regarding debt release or payment terms.

Just give us a call on 01384 235549 or email and arrange a free, confidential meeting.

Lewis Smith & Co. – Chartered Certified Accountants in Dudley

Do you have associated companies?

Dudley accountants Lewis Smith & Co. are highlighting a new way by which the HMRC (HM Revenue and Customs) are becoming more aggressive in the way they deal with small and medium sized businesses.

The issue is the way the tax man treats the notion of “associated companies”. If separate companies are controlled by people HMRC believes are “associated” then the small company corporation tax threshold is reduced pro rata for each company. At one level this sounds fair enough, especially if you have ownership of different companies.

What HMRC are looking to do now, which isn’t quite so equitable, is to enforce a definition of what “associated” means that it previously turned a blind eye to. So now HMRC may associate companies if ownership includes a broad range of family members (including spouse, parents and children), business partners, trustees or even beneficiaries of an estate.

Craig Beale, taxation expert at Lewis Smith & Co. sees the situation like this.

“The degree to which HMRC can and will make changes to make this approach stick is only just emerging. As a scare tactic it may result in some companies agreeing with changes in their tax status that are simply unnecessary.

We are advising our clients to let us know if they think that there any family or business connections that could impact on their associated company status. Fore-warned is definitely fore-armed at the moment.”

If you need expert advice on taxation issues then contact Lewis Smith & Co. today for a free initial consultation.


Lewis Smith & Co. – Accountancy, taxation and business advice for companies in Kingswinford

2010 National Minimum Wage Changes

Click here for the latest changes

There have been changes to all of the statutory minimum wage levels which could affect you and your employees.

As from October 1st the statutory minimum to be paid to a worker is as follows:

  • Aged 16 – 17 £3.64 per hour
  • Aged 18 – 20 £4.92 per hour
  • Aged 21 and over £5.93 per hour

There is a new Apprentice minimum wage of £22.50 per hour. This new rate will apply to:

  • Apprentices under 19
  • Apprentices aged 19 and over, but in their first year apprenticeship.

If you need to discuss the implications of these changes to your business or employees call Lewis Smith & Co. on 01384 235549.

Lewis Smith & Co. – Accountants for Halesowen businesses

Rock ‘n’ Roll Accountancy Part 2

MaDads You may remember the stunning revelation in May that Lewis Smith & Co. director . Andrew Smith was a member of Stourbridge band “MaDads”

The news was leaked in advance of a major gig by the band at Stourbridge, UK’s “Party in the Park” festival.

We are pleased to announce that footage and photos from that appearance are now available so you can see Andrew at his virtuoso best.

Many people have asked Andrew if this is a permanent career change.

Andrew Smith was a member of Stourbridge band “Should the call come for MaDads to headline one of the big festivals; Download, Reading, Isle of Wight or Cradley, then obviously I would be off like a shot.” Says Andrew.

“But Rock ‘n’ Roll is a funny old game and you just never know when lady luck is going to strike. Until the time comes I will be concentrating on the topsy turvy world of year end accounts and VAT returns.”

The video below shows the band playing their crowd pleasing favourite “Tarka Daal” (Andrew is the one on the far right of the screen). For those of you with great fortitude and a limited taste in music, a further selection of Madads’ videos featuring Andrew are available on YouTube.


For rock ‘n’ roll accountancy call Lewis Smith & Co. today on 01384 235549.


Lewis Smith & Co. – Unexpectedly cool .accountants for Dudley, Wolverhampton and Stourbridge

Why set up a limited company?

The quickest and easiest way to start up in business is to become a sole trader. There is very little red tape, not too many financial regulations (although you still need to keep proper records and pay your taxes) and you can administer the business as you see fit.

At Lewis Smith & Co. we often get asked by sole traders whether they should take the next step and set up as a limited company. There always seems to be some reluctance because it sounds more complicated or expensive than the way they normally operate.

In fact there are some big advantages to taking up limited company status. This list of pointers will give you a better understanding of whether you should make the decision to become incorporated.

  • The most compelling reason to go limited is the opportunity to reduce your tax bill. As a sole trader or partner you could be paying income tax at the 40% rate. Shareholder directors can be remunerated through a combination of income and dividend payments based on company profit. The starting rate of Corporation Tax on profits is only 21%.
  • The ability to be paid through dividends also reduces overall National Insurance payments.
  • A limited company offers directors a more tax efficient way of making pension payments for themselves and employees.
  • There is more paperwork involved in running a limited company but most of it is quite routine. Your business accounts need to be more detailed, which means that using an accountant is probably a good idea, but you don’t need a full audit until your turnover reaches £5.6 million.
  • You only need to have one shareholder, who can also be a director, to start your company.
  • Sole traders have a personal responsibility for business debts. The directors of a limited company are not personally liable unless they trade when insolvent.
  • Creating a formal company gives you a legal and financial structure that makes it much easier to bring new people into the business (by appointing directors) or to take over other businesses
  • Your incorporated status raises your profile and adds to your credibility in the marketplace. Some organisations (particularly in the public sector) find it difficult to work with sole traders.
  • Lewis Smith & Co. can set up a limited company for you from as little as £250 + VAT, ready to trade.

If you are thinking about setting up a limited company then we can take you through what’s required and how you might benefit in a free, confidential discussion. Just give Lewis Smith & Co. a call on 01384 235549.

Lewis Smith & Co. – helping businesses in Dudley, Wolverhampton and Stourbridge to grow.

“Pay Less Tax” seminar a success

The Lewis Smith & Co. “Pay Less Tax” seminar on August 2nd attracted an excellent turn out. What company wouldn’t want to reduce its tax bill?

What seemed to interest the delegates the most was the range of options available. Directors of companies with at least £100,000 of profits (available in cash) could use a number of variations of an EBT (Employee Benefits Trust) to dramatically reduce Corporation Tax liabilities. There are also a number of ways that contracts can be set up to allow directors, contractors and employees to minimise tax and national insurance payments.

A different approach is required for every circumstance, of course, so the first step is to contact Lewis Smith & Co. by telephone on 01384 235549 or by email and arrange a confidential meeting. We can help you work out the best approach to reduce your tax liabilities.


Lewis Smith & Co. – Start-up business experts for Dudley and the Black Country