Potential VAT windfall on entertainment expenses

A recent ruling by the EU Advocate General on the laws concerning the block on reclaiming VAT for business entertainment may be highly beneficial for UK businesses.

The ruling found that the laws of some EU companies were too vague and that they should state what types of goods and services are applicable. Whilst the decision needs the backing of the European Court you may be pleased to know that court doesn’t usually disagree with the Advocate General.

The potential effect of the decision is two-fold. Firstly it may make it easier to reclaim more VAT from business related entertaining costs on an ongoing basis. Secondly it may make it possible to make retrospective VAT claims on business related entertainment going back up to 4 years.

We are waiting for the final verdict of the European Court before we start advising clients to put their claims through, and HMRC will no doubt have something to say on the subject. Let’s keep our fingers crossed and hope for a rare victory for the tax payer!

If you have any issues regarding VAT on business expenses then just give us a call on 01384 235549 and we’ll be delighted to talk them through with you.

Lewis Smith & Co. – Company secretarial services for Stourbridge, Kingswinford and Dudley

Professional Fee Protection Service

With a record budget deficit you will not be surprised to hear that HM Revenue and Customs are increasing their efforts to collect tax and VAT revenue.

You are more likely than ever to be subject to an enquiry where HMRC will check your accounts to ensure that your payments are up to date and that nothing is amiss. Even if they can find nothing wrong you are likely to be out of pocket because it takes time and money to present your details to the taxman.

Although we can’t prevent an inspection Lewis Smith & Co. is offering a professional fee protection service that will ensure that you get the best possible support and advice without having to worry about the cost.

The policy will cover you for:

  • Income tax self assessment full or aspect enquiries
  • Corporation tax self assessment full or aspect enquiries
  • VAT disputes
  • Employer compliance disputes

Prices start from only £125 per year (plus VAT).

To find out more about our professional fee protection service and to get a quote for your business call Lewis Smith & Co. today on 01384 235549 or email us on info@lewissmith.com

Lewis Smith & Co. – Due diligence experts for Stourbridge and Dudley

Rock ‘n’ Roll Accountancy

We can exclusively reveal today that one of Lewis Smith & Co’s directors will be playing live on stage at the “Party in the Park” festival at Mary Stevens Park, Stourbridge on Saturday 22nd May 2010.

MaDadsBut which of them will it be?

The smart money was initially on Craig Beale, whose swarthy good looks, high living antics and support for West Bromwich Albion football club seemed to be the perfect credentials for the role of a rock legend. Much to everybody’s surprise, however, our resident rock god can be revealed as none other than Andrew Smith!

Lewis Smith & Co. client Gareth Edwards, of Arrowsmith Marketing, had this comment. “When I heard the news that Andrew would be using a Gibson Les Paul to blast rock songs at hundreds of unsuspecting folk at the festival I was dumbstruck. As far as I was concerned he wasn’t into music at all just Phil Collins, Chris de Burgh and Coldplay. I didn’t know that he even had a guitar.”

In fact Andrew is a member of Stourbridge garage band “MaDads” who have been playing on the underground circuit in the Black Country for some years. Despite never having met other local luminaries such as Robert Plant, Rob Halford or Noddy Holder the band see themselves as the successors to a long standing dynasty. MaDads are a serious band with serious intentions though. Their original material includes the song “Tarka Daal” (YouTube link opens in new window, reduce volume now), which some critics (although not many) have seen as an insight into social and political unrest in the 21st Century. Most people think it is a song about curry.

Andrew is delighted that the secret is now out and the band is making a big public statement. “It took a lot of negotiations with the festival organisers by our agent and our lawyers to get this gig. We have been playing a lot of smaller venues to get up close and personal with our fans. My house, Mark’s house, Ian’s house and Kerry’s house (when she is allowed). This is the springboard we need to get major media coverage….it’s just a shame that we couldn’t have gone onstage before Mr. Tumble though.”

MaDads will be blowing the crowd away from 3.15 (in the afternoon). Be there or be square.

Andrew Smith will be resuming normal service on Monday 24th May at 9.00am

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

Lewis Smith & Co. – Unexpectedly cool accountants

Alun Nicholas MP?

You may remember that we reported how one of clients was involved in a slightly unusual charity event last Summer. Alun Nicholas, who is a chartered architect, grew his hair to support both The Little Princess Trust and Acorns Children’s Hospice.

This year Alun is doing something nearly as unusual…he’s standing as the prospective Independent Member of Parliament for Stourbridge! Of course Lewis Smith & Co. wouldn’t wish to try and influence the opinion of the electorate but we can say that Alun is a pretty good guy. Best of luck to you!

You can find out more about Alun’s views and the reasons he has taken this momentous step in The Stourbridge News and also on Hustings.com.

Lewis Smith & Co. – Accountants for Stourbridge and The Black Country

P35 Employer Annual Return – deadline looms

A very important deadline for employers is coming up fast.

You need to file your Employer Annual Return, better known as the P35 by May 19th 2010. This year almost all employers will have to submit their annual return online – HMRC will not accept paper forms. This means that you must have registered for the PAYE online service with HMRC. This can take up to 7 working days, so you need to start the process soon.

By the way if you do file late then expect an immediate penalty of £100 plus a further £100 per month until you do submit the form. You have been warned!

If you need any advice on completing the Employer Annual Return for your business then just give us a call on 01384 235549.

Lewis Smith & Co. – Helping clients in Pensnett, Blackheath and Netherton

Tax Tips for Small Business

We know it is hard work sort out all of your financial and taxation obligations when you are starting in business or growing fast. We often get questions about how to deal some of the more intractable issues that we all face from time to time.

Here are just a few pointers to try and make your day a little easier.

  • Cars
    Let’s start with cars. Lots of people of people come to us asking what’s the most tax effective way of running a car as though there is a magic formula. Our experience suggests that there just isn’t a generic answer. It really does depend on factors like how you have set your business up, what type of business you are running and how you are operating.

    We would even go as far as say that your tax position is less important than the deal you can get from the supplier.

  • Registration
    For those of you who only been trading for a short time then we need to remind you to register with HMRC for tax and National Insurance purposes. If you leave it for more than 3 months after commencing trading then you could get fined up to £100.
  • VAT reclaim
    If you have registered for VAT you can claim it back on, say, equipment purchases from when you started trading not just when you raised your first invoice.
  • Cash Sales
    If you have a cash sales business (e.g. a fish and chip shop) then you do nee to keep your cash till receipts at the very least. Not having a proper record will alert HMRC inspectors very quickly and remember that you need to keep information for at least 6 years. By the way after 6 years you are allowed to get rid of all of that paperwork.
  • Expenses
    Remember to keep receipts for all business related expenses (and that does include the cup coffee you had on the way to meet a customer) and record your activity – especially mileage. These expenses mount up over the course of a year and we are often surprised about how many people don’t record them properly and so lose out.
  • Claiming for home use
    Home based business people are sometimes disappointed when we suggest that they can only claim around £3 per week for use of utilities and space. The reason is that if you claim more then you may become liable to capital gains tax when you sell the property or face paying business rates! Neither of which seem to be an attractive proposition.

Running a successful business is no easy feat and we have been able to take away some of the stress for lots of people.

If you think that Lewis Smith & Co. could help you then just give us a call today on 01384 235549 or email us on info@lewissmith.com to set up a free, confidential discussion.

Lewis Smith & Co. – Management accountants for Stourbridge

50p tax rate for high earners

In a tax rise that was first announced in the 2009 Budget a 50p tax rate has now come into force on taxable incomes above £150,000.

At the same time high earners will also be hit by a new 42.5 per cent tax on dividends and people earning more than £100,000 a year will have their personal allowance reduced.

Here at Lewis Smith & Co. we are sad to say that these changes aren’t going to hit any of us personally. However if you see this report and shudder then we suggest that you give us a call on 01384 235549 or email us at info@lewissmith.com and arrange to come and talk to us. We can’t guarantee that we will reduce your tax burden but we have helped lots of people do just that.

Lewis Smith & Co. – Accountants for Kingswinford

What’s the impact of the budget on Black Country business?

From a Lewis Smith & Co perspective this has been a very typical pre-election budget. Lots of fine words from the Chancellor but not too much content.

There have been some changes that are going to help small businesses around the Black Country but the planned increase in National Insurance contributions is still going ahead, which will offset any positive moves for most of us. Let’s take a look at the budget announcements that may matter most to you.

  • The Annual Investment Allowance for plant purchases (which allows you to write off 100 per cent of qualifying expenditure against your company’s taxable profits) has been increased from £50k to £100k. This may help you to bring forward investment decisions for plant and machinery.
  • There will be cut in business rates of around 7p in the pound for small businesses from October this year for 12 months. If you have previously paid rates of up to £6,000 then you won’t be liable for business rates for a year from October.
  • The Chancellor has called for RBS and Lloyds to provide £94bn in new business loans, nearly half to small and medium-sized businesses over next year. A credit adjudicator has been established to put pressure on the banks to lend by reviewing loan requests to see if they have been unfairly rejected. Let’s hope that it does create a little more urgency in issuing finance.
  • The threshold for stamp duty for first time house buyers is increasing to £250k for 2 years, which could help to stimulate the housing market. However the rate is raising to 5% for properties selling for greater than £1m from April 2011.
  • Annual limits on Individual Savings Accounts (ISAs) will rise from £7,200 to £10,200 next month.
  • Inheritance tax threshold frozen for four years and no further changes to VAT or income tax are planned. What the planning period is we don’t know.

That’s this year’s budget dealt with. But do you remember that there were changes announced in the last budget which will be coming into effect this year? The Government is probably counting on the fact that had forgotten them.

  • There will be a higher rate of Income tax for those earning more than £150,000 – a rise to 50% from April 2010
  • Tax relief on pensions to be reduced for people on more than £150,000 a year from April 2011 – People earning up to £150,000 will get 40% tax relief, with the relief tapering down to 20% for those with a taxable income of £180,000.

If you want to understand more about the impact of the budget on your business then feel free to give us a call on 01384 235549 to discuss your issues.

Lewis Smith & Co. – Supporting business in Stourbridge, Kingswinford and the Black Country