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

New rules on penalties for late payment to HM Revenue & Customs

New rules on the late payment of PAYE come into force in May to cover the tax years 2010-2011 and beyond.

HMRC has issued a new set of FAQs (Frequently Asked Questions) to help businesses understand what they can and cannot do, and highlight what the penalties for late payments will be. Fundamentally they will not accept many excuses for late payment because they see it is an anti-competitive act.

Penalties will start to accrue as a percentage of the amount owed on a sliding scale if you are late with more than one payment in a tax year. There are additional penalties if payments are late by more than 6 months and further penalties if payments are late by more than 12 months. After that HMRC will probably resort to court action.

If you are finding the management of PAYE or other taxes an issue in your business: we can help.

Give us a call on 01384 235549 or email us at info@lewissmith.com to arrange a free consultation.
Lewis Smith & Co – Accountants for Wolverhampton businesses

Congrats to Stuart – ACCA qualified

Back in October Dudley accountants Lewis Smith & Co announced that it had been awarded gold level status as an Approved Training Practice by the ACCA (Association of Chartered Certified Accountants).

The company also stated that it was dedicated to creating a strong training environment to ensure that the business could nurture talent and expertise to help it grow.

It seems now that those efforts have already started to pay off with the news that Stuart Gregory has passed his ACCA qualification and is now a chartered certified accountant.

We are delighted that Stuart has achieved this accolade. The ACCA qualification is internationally recognised and covers a wide variety of business management topics as well as accountancy ones. His hard work and determination have paid off.

Well done Stuart!

For more information on how Lewis Smith & Co. can help support your business call us to today on 01384 235549 to arrange an appointment or email us at info@lewissmith.com.

Lewis Smith & Co. – Dudley Accountants

Remember to register that you are trading

If you have set up in business as a sole trader then there is something that is very important to do. What is it?

Tell the taxman…now!

If you don’t tell the HMRC that you are trading within a 3 month period of starting in business then you could be liable to a £100 penalty and more attention from the inspectors than you really want. Lewis Smith & Co. have had quite a few instances of people coming to us who have forgotten to register and even if we write a nice letter on your behalf we can’t guarantee to get you off the hook.

The registration process is easy and HMRC provides lots of information to help.

Lewis Smith & Co. specialise in helping people to start up in business whether as sole traders or by setting up limited companies. Just give us a call on 01384 235549 to set up a free, confidential meeting to discuss your business ideas.

Lewis Smith & Co. – Business start-up specialists for Dudley

Lewis Smith & Co. beats tax return record

2010 saw Lewis Smith & Co. beat all previous records for the number of tax returns filed by the January 31st deadline.

“Because of our success in attracting new clients during 2009 we had more tax returns to complete and file than ever before”, said Lewis Smith & Co. Director Andrew Smith. “It is a testament to the expertise and and effort of the whole team that we were able to get all of our clients’ returns posted before the deadline and ensure that everybody received the right treatment from HMRC”.

The Lewis Smith & Co. team gave itself the best possible start through the company’s move to larger premises in Grange Road, Dudley back in August. The new offices have much improved facilities for managing the throughput of client documentation and the allocation of work through to the appropriate experts in the team. It took a great deal of planning as well, of course, to make sure that a vastly increased amount of paperwork could be processed quickly and accurately.

“We started thinking about how we would manage the challenge of all of that new business back in the Autumn”, commented Andrew Smith. “Part of our approach was to encourage clients to provide information well in advance whilst at the same time preparing our business processes to cope with the last minute activity that is always required. Having a lot of business is one of those nice problems to have.”

For more information on how Lewis Smith & Co. can look after your accounts call us to today on 01384 235549 to arrange an appointment or email us at info@lewissmith.com.

Lewis Smith & Co. – Accountants for Wolverhampton businesses