Personal Self Assessment Deadline - 31st Jan

With Christmas on the horizon, it’s easy to forget that there’s another big day just over a month away – the deadline for filing a personal tax return (online) on 31st January 2012.

This deadline refers to the tax year 2010 – 2011 (ending on 5 April 2011).

You are required to complete a self assessment if, during this period, you were a Director of a company or you received any taxable income outside of a normal PAYE salary.  You also need to complete a self-assessment if you’ve been requested to do so by HMRC for any other reason.

Tempo takes care of your business’ tax affairs, however, if you also need to complete a personal self assessment return, we are always on hand to help – just get in touch and ask us for a quote to get everything sorted for you.

Try not to get caught up in the festive frenzy and leave it to the last minute, as the penalties for filing your return late are even more punitive than the credit card interest charges on your Christmas shopping. One day late and you incur a £100 fixed penalty, followed by £10 a day for the next 9o days, which could work out more than the tax actually owed. After six months and then again at a year you will then be fined a further £300 each time, or 5 per cent of the tax owed, whichever is greater. Ouch.

For full details of the self assessment process visit: http://www.hmrc.gov.uk/sa/deadlines-penalties.htm

How to have a Happy (Tax-Deductible) Christmas

Source: freedigitalphotos.net

Christmas Parties for Employees

The festive season offers an ideal opportunity for you and your staff to get out of your normal workspace for a Christmas party, and it’s a great way to show your appreciation for all their hard work during the year. Even better, providing you stick to the HMRC guidelines, the party expenses are tax deductible too.

The guest list:  Keep in mind that in order for the expenses to be tax deductible, the party must be open to all employees, and each employee can bring one partner/spouse too. As the director of a limited company, you are also considered to be an employee. However, non-employees (including clients or suppliers, for example) are not included in this allowance.

The budget:  You can claim up to £150 for each employee and their non-employee guest per year. This does not have to be at one single event, as long as the total cost per year, per head, does not exceed £150. This also includes all the associated costs of organising the event such as travel to the venue, accommodation, and the food, drink and entertainment during the actual party.

Benefits in Kind:   If you exceed £150 per person in one year, even by £1, there will be a ‘benefits in kind’ charge for each employee and they will have to pay tax and Class 1a NICS on the whole amount spent per head on the function. So it makes sense to organise a modest event rather than blow the budget!  Also remember, the £150 is not an allowance, but a maximum limit for the actual cost, so don’t feel you have to spend the full amount.

A note for Scrooge:   This applies to all expense claims, of course, but remember you can’t simply claim back £150 cash allowance from your business and not hold a party – you can only claim for legitimate expenses incurred for an actual event!

Christmas Lunch for Clients or Suppliers

Freelancers, self-employed individuals and contractors who don’t have staff to celebrate with may consider taking their most valued client out for a Christmas lunch to show their appreciation. However, this is classified as business entertainment and is not tax deductible, and you can’t claim VAT back either. However, treating your best client to lunch has relationship-building potential that may prove well worth the money – and after a glass of mulled wine they might be willing to give you a cheeky heads-up on next year’s projects too…

Finally, don’t forget to keep all your receipts and upload them to your Tempo account as soon as possible to keep your expenses on track.

Enjoy the party!

Highlights from the Autumn Statement

This week’s Autumn Statement from the Chancellor of the Exchequer George Osborne contained a raft of announcements designed to bring security to the economy and stimulate business growth.

Mr Osborne pledged: “We will do whatever it takes to protect Britain from this debt storm, while doing all we can to build the foundations of future growth.”

So, we asked our team which initiatives will have the most impact and benefits for SMEs in the coming year.

Finance for Small Businesses

The Government has announced it is to underwrite at least £20 billion (possibly up to £40 billion) of business loans under the National Loan Guarantee Scheme, set to run for two years from 2012. This could deliver up to a one percentage point reduction in the cost of a business loan, but if credit checks and lending criteria are not relaxed, will this new scheme have a real chance of boosting growth?

We recommend you go back to basics with a solid business plan, backed up by cash flow figures and realistic growth forecasts, and you may have a better chance of getting funding to take your business to the next level.

Changes For Employers

Getting the right team in place is essential to help your business thrive – but dismissing unsuitable staff can be a minefield. The qualifying period for unfair dismissal claims will increase from one year to two from April 2012, making it more tempting for employers to recruit new staff. There are also plans to make the dismissal process simpler and quicker, and fees will be introduced for those who want to bring cases to employment tribunals. The prospect of new Compensated No Fault Dismissals for smaller businesses with fewer than ten staff means employees could be dismissed with no possibility of a tribunal – unless discrimination is involved.

Disputes and tribunals can be costly for small businesses. For a useful guide to your obligations as an employer, visit: http://www.businesslink.gov.uk/employment

Travel Expenses

The planned fuel duty increase of 3 pence per litre due to take effect on 1st January has been dropped, and the 5 pence per litre increase scheduled for 1st August 2012 will go down to 3 pence, giving some relief to commuters and businesses where travel is a necessity.

Don’t forget to keep your petrol receipts and log your business mileage. The Tempo online accounting system means you can upload receipts using our iPhone app and we can help you keep track of your travel expenses.

Business Rate Relief

The holiday on business rates for small companies announced in the Budget has now been extended from October 2012 until April 2013. All businesses, including larger ones, will be able to defer 60% of next year’s rise in business rates to the two following years.

Thinking of opening a new business premises? Find out more about business rates at: www.businesslink.gov.uk/businessrates

For full details of the Autumn Statement visit:  http://www.hm-treasury.gov.uk/as2011_index.htm