Currently an individual can contribute up to 100% of their salary or £50,000 whichever is the lower (this will also include employer contributions).

However this is not based on tax years, but by identifying the amount which was invested during the “input period”.

The confusing point here is that “input periods” are not necessarily based on tax years, so if an individual is not aware of the input start and end date, they could over fund and trigger a 50% penalty on the excess.

This however, can be avoided by either changing “input periods”, or in some cases delaying payment by just one day. Until Royal Ascent is given to the new legislation (expected 1^st July 2011) a short term opportunity arises as closing an “input period” can be backdated to last tax year.

The rules are extremely complicated and if you wish to determine whether you may have fallen foul of the recent changes, then please give our in-house financial adviser Andrew Jackson a call. 0115 721 0900

HMRC have said that this was not enough of a deterrent and therefore a new penalty regime has been announced for the 2010/11 tax year.

If your tax return is filed late the new penalties are:

Day one – initial penalty of £100 will be charged regardless of the tax owed or tax paid on account.

3 months late – an automatic penalty of £10 per day, up to a maximum of £900.

6 months late – further penalties will be charged, which are the greatest of 5% of the tax due or £300.

12 months late – more penalties, which are the greatest of 5% of tax due or £300.

In the most serious of cases HMRC will look to impose a penalty of up to 100% of the tax due.

Penalties for paying your tax late are:

30 days late – an initial penalty of 5% of the tax unpaid at that date.

6 months late – a further penalty of 5% of the tax that is still unpaid.

12 months late – a further penalty of 5% of the tax that is still unpaid.

The message really is to ensure that your 2010/11 tax return is filed well in advance of the 31 January 2012 deadline.

For individuals who have not been issued with a tax return to complete, it is important to remember that it is your legal responsibility to advise HMRC of any tax owed.

DO NOT WAIT FOR HMRC TO CONTACT YOU!!

Whilst it is only possible to amend previous claims going back two years, it is currently possible to amend the claim say for the year-ended 31 July 2009 based on new information about expenditure incurred in 1999 that has been overlooked.

Our understanding is that from April 2012, HMRC are looking to introduce a two year deadline from the actual date of purchase meaning that all properties bought prior to April 2010 (that have not already been subject to a capital allowance claim) will be disqualified from obtaining tax relief from April 2012.

In view of the proposed changes owners of commercial property, hotels etc, will have a fairly short time window until April 2012 to claim tax relief on historic qualifying expenditure that may have been overlooked previously.

It is often the case that property owners fail to undertake a thorough tax review of the qualifying expenditure and it might be that you purchased or developed a property some years ago.

If you think you might be caught out by the proposed new time limit, please get in touch – 0115 721 0900

The new site is designed to guide the customer effortlessly through our services information to identify the optimum solution for their needs.

The website will be regularly updated with news and information, so please visit regularly.

The website was designed and developed by Web Revamp Nottingham

The funds have been secured from the European Investment Bank (EIB).  The RBS will have funds available of £300 million at 0.6 per cent below its standard interest rate and Santander has £150 million to lend at 0.7 per cent below its usual rate.

The available money is aimed at businesses with less than 250 employees and should be a welcome boost at a time when lending to small businesses is on the decline.

We can assist with raising business finance so please get in touch.

Talk to us TODAY for help with this matter: Barrie 0115 721 0900 or barrie@smithemmerson.co.uk

Overview:

• National Insurance is not payable on dividends.
• As a higher-rate tax payer, your employment income is taxed at 40%, whereas dividends are taxed at 32.5%.
• Employment earnings above £150,000 are taxed at 50% whereas dividends are taxed at 42.5%.
• Salaries attract both Employers and Employees National Insurance which can be expensive.
• For owner managed businesses the ideal pay structure will be minimal salary and dividends.
• If income can be split with a spouse greater tax savings can be achieved.

Talk to us TODAY for help with this matter: Barrie0115 721 0900 or  barrie@smithemmerson.co.uk

A car only qualifies as a pool car if all the following conditions are satisfied:

• it is available to, and actually used by, more than one employee
• it is made available, in the case of each of those employees, by reason of their employment
• it is not ordinarily used by one of them to the exclusion of the others
• any private use by an employee is merely incidental to their business use of it, and
• it is not normally kept overnight on or near the residence of any of the employees unless it is kept on premises occupied by the provider of the car.

Employers need to be able to demonstrate that the conditions for the car or van to be a pool vehicle have been met, for instance by keeping mileage records to show when the car was used, by whom and for what journeys.

http://www.hmrc.gov.uk/guidance/480_chapter15.pdf

Talk to us TODAY for help with this matter: Barrie 0115 721 0900 or  barrie@smithemmerson.co.uk

However, where the employer has agreed a dispensation with HM Revenue & Customs in respect of business travel there is usually no requirement to report it on a P11d. Receipts or invoices must always be produced by the employee/director with their expenses claims and the expenses claims must always be independently checked and authorised by someone within the business other than the person making the claim.

Where an employer makes a payment in respect of business travel to a provider on behalf of employee/director there is no requirement to report it on a P11d, if the following conditions are met:

1.       The costs are incurred wholly, exclusively and necessarily in the performance of duties of the employee/director.

2.       The costs incurred are reasonable to the business in relation to the nature and reason for the journey.

3.       An employee (other than the employee/director undertaking the travel) arranges the travel directly with the supplier on behalf of the employer and the employer pays for it directly.

4.       If the employee/director undertaking the travel arranges the travel with the supplier it must be made clear it is being made by him or her on behalf of the employer i.e. hotel bookings must always be made in the name of the company rather than the employee/director personal name.

Where an employee/directors spouse or family member accompanies them on business travel there are tax and National Insurance implications and it will depend on a number of different factors as to the treatment of the payment for tax and National Insurance purposes and how it should be reported to HM Revenue & Customs.

HM Revenue & Customs booklet 490 ‘Employee Travel’ contains further detail. Please consult us if you have any concerns or require further advice.

Talk to us TODAY for help with this matter: Barrie 0115 721 0900 or barrie@smithemmerson.co.uk

However tax issues cannot be disregarded as urgent action may be required in the tax year of separation to avoid any nasty tax surprises.

Generally transfers of assets between husbands and wife’s and civil partners take place on a no gain, no loss basis. However, this rule only applies in the tax year of separation. Transfer of assets taking place in a tax year after separation will be treated as being disposed of at ‘market value’ regardless of the proceeds actually received. This can significantly increase your tax liability.

Even if the decree absolute has not been granted, tax may still be due on the transfer of assets if the transfer takes place in a tax year after the tax year of separation.

Talk to us TODAY for help with this matter: Barrie 0115 721 0900 or barrie@smithemmerson.co.uk

This has come as a surprise and should you receive such a letter please let us know immediately.

Please remember that HMRC will look to impose penalties if the standard of your record keeping falls below what they expect.

http://www.hmrc.gov.uk/factsheet/record-keeping.pdf

If you feel you could benefit from a visit to go through things in detail please let us know.

Talk to us TODAY for help with this matter: Barrie 0115 721 0900 or barrie@smithemmerson.co.uk