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Commission Refunds

If you invest through a firm of financial advisers, you may well receive a repayment of commission from that firm each year. In previous years any refunded commission was rolled into the earnings from your investments or set against charges, so you may not have been aware of it. However, from 6 April 2013 the financial adviser must deduct interest from any refunded commission and show the amounts paid and deducted separately on your annual statement .

You should look out for these refunded amounts on your investment statement…

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Accelerated Payments

The Taxman now has the power to demand tax from you if you have used a registered tax avoidance scheme, or if he thinks the tax scheme you have used is similar to one that has been judged to fail by a Court or Tribunal.

For some years most tax avoidance schemes have been registered under the Disclosure Of Tax Avoidance Scheme (DOTAS) rules. Each scheme was issued with a DOTAS reference number, known as a “DOTAS number” or SRN, which had to be shown on tax returns of…

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Maximising Statutory Maternity Pay

Paying statutory maternity pay (SMP) is not optional. It must be paid if your employee qualifies, but the good news is that a small business can recover 103% of the SMP paid from HMRC. A business that pays less than £45,000 of class 1 NICs in one tax year is defined as “small” for this purpose.

In a family business there may be scope for maximising the SMP payable for the first six weeks of maternity leave, and hence getting the Government to refund that SMP with a bit…

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EC Sales Lists

If your business is VAT registered and you sell goods or services into other European countries you must generally also submit an additional form to the Government called an EC Sales List (ESL also known as form VAT101). There are no payments to be made or reclaimed with the ESL, as you do on your quarterly VAT return form, but you must submit the ESL on time or HMRC will charge a penalty for late submission.

If you export goods worth more than £35,000 per year you will need…

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Morgan Hemp Sponsors National Youth Squad At European Touch Rugby Championships

 

Morgan Hemp has shown its backing for youth sport in Wales by sponsoring the Welsh national team at the first ever European Junior Touch Rugby Championships.

Morgan Hemp will now feature on the shirts of the Wales junior squad as they take on eight teams from across Europe at the Championships held in Swansea this summer.

Taking place from the 5th – 6th

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Scary Letters

Have you received a scary letter from HMRC lately? Perhaps all HMRC letters are scary, but this latest nudge-letter really takes the biscuit.

In it HMRC says the taxpayer’s effective rate of income tax is lower than the average for taxpayers with similar levels of income. It goes on to suggest that there could be something wrong with the self-assessment tax return for 2011/12 and the taxpayer should check what they submitted for that year. Penalties and interest are mentioned, which would worry anyone – even those with nothing…

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PAYE Reconciliations

If most of your income is taxed under PAYE (Pay As You Earn) you may soon receive a reconciliation of the income tax you have paid compared to the amount that was due to be paid for 2013/14. This calculation arrives on a form P800, which should be checked very carefully for errors and omissions. If mistakes are missed they can be carried forward for several years, resulting in escalating amounts of tax over or under-paid.

For example the High Income Child Benefit Charge (HICBC) may be due where…

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VAT on Digital Services

Do you sell digital services such as: music or software downloads, e-books or online videos? If so, do you know where your customers are, and whether they are businesses or individuals?

From 1st January 2015, when you sell digital services across international borders you will have to collect information about your customers to determine if they are businesses or not, and where they are based. Where your international sale is to a non-business customer, from 2015 you will have to charge that customer VAT of the country where he…

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Real Time Information (RTI) Penalty Notices

As an employer you may have received an RTI penalty warning letter accusing you of not submitting all of the RTI returns required for 2013/14. However, that letter may be incorrect.

HMRC has admitted that its computer has churned out inappropriate penalty warning letters to employers who have submitted employer payment summaries (EPS) during 2013/14. If you have submitted all the required RTI returns for the tax year you can ignore the warning letter, as a penalty will not be charged.

This “cry wolf” by HMRC sets a dangerous precedent,…

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VAT and Discounts

Do you offer prompt payment discounts to your customers – known as PPDs?

Under UK law VAT is payable on the net amount after deducting the discount, whether or not the customer takes advantage of the discount.

Say you sell a carpet for £1,000 + VAT, and offer 3% discount if the customer pays with 10 days. VAT is charged at 20% on £970 ie £194, rather than as 20% of £1,000 which is £200. Even if the customer takes two weeks to pay and thus doesn’t qualify for the…

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