Alexander Bursk

Penalty Deadlines

Barry Fine — Mon, 14 Nov 2011 00:00:00 +0000

DON'T BE PENALISED!

It is vital to submit documents before penalty deadlines and we ensure that all our clients do this.

Key dates are as follows:-

Self Assessment

30th September - The last date paper tax returns for the year ended on the previous 5th April can be submitted
31st January - Tax Returns can be submitted online upto 31st January.If thet are late then they incur an automatic £100 penalty.
From 2012 penalties will no longer be reduced if there is no tax payable
28th February 28th - Anyone who has not paid tax due on January 31 is liable to a 5% surcharge on their bill.
31st July - Tax Returns still outstanding from the previous year are liable to a further £100 fine. Anyone who has not paid tax due on the January 31st is liable to another 5% surcharge on their bill.
Payroll Returns 6th July - Failure to submit returns P9 or P11D incurs an initial penalty not exceeding £300 and a continuing penalty not exceeding £60 for each day on which the failure continues after the imposition of the initial penalty. Penalty not exceeding £3,000. Failure to submit P.A.Y.E. Returns - £100 penalty for each 50 employees, or part thereof, for each month the failure continues.
Statutory Accounts 9 months after year end - Accounts of private companies have to be submitted to Companies House within nine months after the year end to avoid a late filing penalty charge. The penalty increases the later the accounts are delivered as follows :

Penalties

Not more than 1 month £150
More than 1 month but not more than 3 months £375
More than 3 months but not more than 6 months £750
More than 6 months £1500

In addition the penalties double if accounts are filed late 2 years in succession this increases

Corporation tax returns 12 months after year end

Corporation tax returns have to be submitted to the Inland Revenue within 12 months from the year end to avoid a £100 fine.

The above is not a complete guide to the penalties that can be incurred but merely a guide to assist in submitting things on time and avoiding gifting penalties to the Goverment.

Capital Allowances, C02 Emissions and Automatic Cars

Barry Fine — Mon, 14 Feb 2011 00:00:00 +0000

The Capital Allowances that can be claimed on cars are based on C02 emissions of that car.

If the car is 100% used for business, then the Capital Allowances treatment is as follows:

Over 160 per g/km - Special rate pool qualifying for 10% written down allowances, no balancing allowance on sale.
160 g/km or less but more than 110 g/km - Main pool qualifying for 20% written down allowance. Proceeds on sales are deducted from the pool.
110 g/km or less - 100% Capital Allowances.

If you are Self Employed and use a car partly for business use then there are special rules.

The Capital Allowances will be worked out separately for each car, reducing the claim by the non business use amount. Whether your car is greater or less than 160 g/km, you will still get a balancing allowance on the sale of the car. The affect is to get the allowances earlier in the life of the car at 20% instead of 10%.

If you are claiming VAT then the VAT disallowance on petrol expenses is based on the C02 emissions, so the lower the C02 emissions, the smaller the VAT disallowance.

Barry Fine of Alexander Bursk has recently had a surprising experience in relation to the above. Barry said that he went out looking to buy a nearly new automatic estate and was surprised by the lack of choice. The Government introduced these C02 restrictions on 6 April 2009. As a result it is harder to find a 12 month old automatic estate with C02 emissions below 160 g/km because the manufactures are only now introducing greener engines for automatics.

Of course if you drive a manual car, you don't have any of these problems.

Janis Taylor, Secretary at Alexander Bursk retires

Barry Fine — Wed, 02 Feb 2011 00:00:00 +0000

Janis Taylor secretary at Alexander Bursk for 14 years has retired. Brian Shafar (partner) thanked her for being his secretary for all that time and wished her a happy retirement.

Janis was also one of the three receptionists at the firm. Her family connection with the firm will remain, however, as her daughter Sharon works as one of the other secretaries and receptionist.

Alexander Bursk wishes her well in her retirement which will give her more time to devote to watching Burnley Football Club and going to Cliff Richard concerts.

Book Keeping for VAT

Barry Fine — Mon, 15 Nov 2010 00:00:00 +0000

What records must I keep for VAT?

The basic rule is that you must create and retain normal business records. You do not have to keep records in a set way and most bookkeeping and computer systems will meet this requirement.

Apart from keeping business records and the special requirements explained in paragraph 2, your records should be complete, up to date and allow you to calculate correctly the amount of VAT that you have to pay or can claim from HM Revenue & Customs.
Are there special records for VAT?
Yes. There are two records that are specifically required for VAT. These are:
- The VAT account. In many cases this will be based on a routine business record of VAT owed or claimable.
- A VAT invoice for supplies to other VAT registered businesses. A 'VAT invoice' is just the term for an invoice which contains some information required by VAT rules. Most commercial invoices will already contain the right information.
What do business records include?
VAT law requires you to keep all your business records and will include:
- Annual accounts, including profit and loss accounts
- Bank statements and paying-in slips
- Cash books and other account books
- Credit or debit notes you issue or receive
- Documentation relating to dispatches/acquisitions of goods to/from EC Member States
- Documents or certificates supporting special VAT treatment such as relief on supplies to visiting forces or zero-rating by certificate
- Import and export documents
- Orders and delivery notes
- Purchase and sales books
- Purchase invoices and copy sales invoices
- Records of daily takings such as till rolls
- Relevant business correspondence
- VAT account
What is a business record will depend on the type of business you run. You will always have to keep a VAT account and copies of invoices but some of the other records above may not be a normal record in your business. If that is the case you don't have to keep such a record just for VAT. But equally, some businesses will create additional business records and these must be retained and produced to HMRC on request

Generally, you must keep all your business records for VAT purposes for at least 6 years. Records that you use for other tax purposes may need to be kept for longer periods.

If the 6-year rule causes you serious storage problems or undue expense, or you need advice on records for other types of tax, then you should consult our advice service. We may be able to allow you to keep some records for a shorter period.
What additional records might I have to keep?
HM Revenue & Customs may direct some businesses to keep additional records. This is were they have reasonable grounds to believe that such records might assist in identifying supplies on which VAT is at particular risk of going unpaid. This will most commonly arise with supplies of mobile phones and computer chips, but is not limited to these types of supplies. Failure to comply with one of these directions can result in a financial penalty.

You have a right to appeal against the issue of a direction and against the imposition of any penalty for non-compliance.
Can I keep my records on computer?
Yes. It is common for business records and accounts to be kept on a computer and there are no special VAT rules about using a computer.
Can I keep my records on microfilm?
You can keep your records on microfilm, or microfiche, provided that copies can be easily produced and that there are adequate facilities for allowing Revenue officers to view them when required. You do not have to apply in advance to keep your records in this way, but we may require you to keep them in a different format if these requirements are not met.
What if I fail to keep or produce records?
There is a financial penalty for a failure to keep or produce the records required by law.You can request a review of any penalty or appeal to the independent VAT and duties Tribunal.
What happens to my records if I sell or transfer my business as a going concern?
In most circumstances the seller of the business will retain the business records. When this happens, the seller must make available to the buyer any information the buyer needs to comply with his VAT obligations.

Where the buyer takes on the seller's VAT registration number the seller must transfer the records to the buyer, unless the seller needs to retain the records.
Who should I turn to for help?
The partners at Alexander Bursk will assist in advising on all aspects of record keeping and bookkeeping.

Tax Return Penalties

Barry Fine — Mon, 08 Nov 2010 00:00:00 +0000

Errors on tax returns are judged on the behavior of the taxpayer who madethe mistake.

Anyone who takes reasonable care to get their tax return right will not be penalized, even if they make a mistake,

Reasonable care is defined by HMRC as: keeping accurate records to make sure tax returns are correct; checking what the correct position is when a taxpayer doesn't understand something; and telling HMRC promptly about any error that is discovered in a tax return or document after it has been submitted.

If reasonable care isn't taken, and this results in a tax underpayment, then the errors will be penalized.

In cases of lack of care, the penalty is set at 30 per cent of the understated tax, although the figure can be reduced, depending on the circumstances in which the disclosure is made, if the taxpayer notifies HMRC of the error.

In cases where taxpayers deliberately understate the amount of the tax they owe, the penalty is 70 per cent of the understated tax and 100 per cent where the taxpayer steps to hide the error.

The penalties for tax errors have been extended to most other taxes, levies and duties,

Barry Fine FCA, partner at Alexander Bursk says "the regime is simpler and more consistent than previously,but likely to result in much higher fines for errors with less scope to obtain mitigation through negotiation.

Top 10 Tax Return Mistakes

Barry Fine — Mon, 01 Nov 2010 00:00:00 +0000

"Self assessment returns must be in by 31 January - or taxpayers face a £100 penalty, "says Barry Fine FCA, Partner at Alexander Bursk.

When processing tax returns, HM Revenue & Customs has found the ten most common mistakes are:

A 'yes' tick has been entered in one of the questions 1 to 9 on page 2 of the tax return but the supplementary page has not been forwarded with the tax return.
Failure to complete the self-employed pages, particularly on page SEF4 from box 64 onwards.
Detailing information on separate schedules instead of including the information on the return.
Entering manuscript notes on the return i.e. "per accounts" and/or "information to follow" instead of entering actual figures on the form.
Failure to complete a separate supplementary page for each individual employment.
Entering the net figure of employee personal pension premiums instead of the gross.
Entering the figure of capital expenditure in Box 48 of the Self Employment pages instead of the capital allowances (i.e. claiming excessive relief).
Failure to enter bank account details on TR5 of the core return where a repayment is due. The Revenue will assume you wish to leave the overpaid amount on your record, to be set against future liabilities – you have the right to choose.
Entering your pay in box 1 of the employment schedule but not entering any tax deducted in box 2.

And most importantly . . . . .
If you fail to sign a paper return, it will be rejected immediately.