As an employee, tax is paid every month through the payroll – whereas the self-employed person used to pay their tax once a year on 31st January following the year-end.

HMRC introduced Payments on Account some time ago to bring balance between the different tax payment requirements – these Payments on Account are paid on 31st January and 31st July following the tax year, and count towards the following years tax liability.

However, people without an adviser may not realise that these need to be paid and perhaps only save enough to pay their expected tax liability for the year – unfortunately leaving another 50% to find by 31st January with a further 50% by 31st July that they hadn’t budgeted for.

One of the advantages with preparing the returns shortly after the tax year-end is that the tax position is known well in advance, together with the amounts of any Payments on Account due.

Payments on Account are calculated based on the earlier years income and as such will most likely prove to be not entirely accurate when the actual return and computations are prepared.

In cases of rising profits there will be a further tax balance due, however the payments on account remain fixed so there is an advantage in preparing the return in good time and knowing what the balancing payment will be on 31st January.

In cases of decreasing profits, the Payments on Account may be too high and as such an application can be made to reduce these to the actual amounts required. There are penalties for reducing the Payments on Account to a level below the actual amount due, so it is important to make sure that these are calculated correctly. In advance of preparing the return, estimates can be used if next years profit is expected to be lower – but these should be finalised as soon as possible after the end of the tax year.

To summarise the payments that may be due for a new business:

31st January
100% of the tax for the previous tax year
PLUS 50% Payment on Account towards the next tax year.

31st July
50% Payment on Account towards the next tax year.

Payments on account are a common point that I’ve seen catching out several new clients, so early preparation of the accounts and tax return together with the tax computations will avoid any nasty surprises when it comes time to pay the tax liabilities.

I offer a no-charge initial meeting – if you know anyone who has started a business, or is considering doing so, please do put them in touch with me.

In my next blog post I will be covering National Insurance, a ‘hidden’ tax that again people may not have budgeted for when they start a business.

You can read my guest blog post on SuccessNet by clicking on the link:

http://successnet.czcommunity.com/to-the-next-level/can-you-be-in-two-places-at-once/18826/

We have already submitted quite a few tax returns for clients in April, and had confirmations back from HMRC.

At this time of year HMRC can process the returns in a much shorter time, indeed I share below a story about how they have exceeded themselves for one of our clients.

As well as the shorter processing times, the tax liabilities are also known about well in advance and can be planned for – avoiding any surprises close to the payment deadlines. For those that have income taxed at source, underpayments are much more likely to be collected through the tax code in a later year.

HMRC’s new record for processing a client refund
Submitting the returns at this time of year results in a much quicker processing time – in the past I have seen tax positions agreed within 2-3 weeks.

However, for one of our clients HMRC set a new record – agreeing the return and sending out the refund cheque one day after the return was submitted!

We use the award-winning Digita personal tax software, which links directly into HMRC’s systems for return submission. That means the return information is available to them straightaway. As Digita spend many hours each year ensuring their software meets HMRC’s requirements returns have all the information that HMRC need.

A milestone on my YouTube channel
Last month I reached a total of 20,000 views of the videos on my YouTube channel, and these continue to increase.

I share advice for the self-employed, as well as general tips. You can find my channel at:

www.youtube.com/user/taxhelpukcom

As always, if there are any topics you would like me to cover in future articles, or if you have any queries please do contact me.

James

In the early stages of the new tax year it is a good time to prepare and submit the tax returns, so that these can be processed by HMRC when their workload is lighter. Indeed, if a return is submitted close to the submission deadline then it can be many weeks before a refund is processed by HMRC and issued.

In previous years, the quickest I have seen a return processed and the refund issued at this time of year was over about 3 weeks…

However in April 2013 HMRC have beaten this record, with only one day required between return submission and the issue of the payable order to our client!

As we submit the returns online directly to HMRC, using our award-winning software, they have all the information they need which speeds up the process.

If you know anyone who could be due a refund, please do put them in touch – whilst a one day refund might not be possible, submitting the return at this time of year will speed up the process.

We will be meeting at the Woodlands Park Hotel in Cobham, from 6:30am – 8:30am.

You can find out more about the local networking group in Cobham from the link, as well as book your place as a visitor.

With open networking both before and after the formal meeting, it is an ideal time to catch up.

Because of this, I offer affordable fixed fee packages with a number of options to suit different needs and budgets – and clearly show the costs of these.

Below is a copy of the package details, from our fees page.

In addition I offer a no-charge initial meeting where we can discuss your tax situation and how I can help you.

In the below video I also run through the packages:

I will also be recording a video run through of the slides and uploading it to my YouTube channel.

In the meantime you can see a sneak peek of the slides on Slideshare:

The new tax year starts on Saturday, so the 2013 tax returns will now become due.

You should have received our letter requesting the information to prepare the return, please let me know if this has not arrived and I will send you a duplicate.

The 2013 return covers the year 6th April 2012 to 5th April 2013, and if you have any payments on account due by 31st July 2013 we can see if these can be reduced by completing your tax return now.

There are still a few days to make any business purchases you were considering, if you wanted to claim tax relief in the 2013 tax return.

Keeping up to date
Tax legislation is constantly changing, I provide regular updates on both my blog and my YouTube channel, in addition to sharing in the monthly newsletter. Please do subscribe to these if you would like to be advised when a new update is available.

You can find my business blog at:

www.taxhelp.uk.com/blog

And my YouTube channel can be found at:

www.youtube.com/user/taxhelpukcom

There are a great number of ways to connect now online.

The traditional telephone (or Skype call) still has its place, but very occasionally it’s just not possible to connect with someone using this method.

You end up playing ‘phone tennis’, leaving messages for each other if your schedules don’t align when the call is made.

That is one of the reasons I offer a no-charge initial meeting, so that we can meet in person without distractions and discuss the tax position.

My meetings are available at a time and location to suit the client, and every month I also have a limited number of evening and weekend meetings available as well.

With the new tax year starting next week, now is the ideal time to review your position.

On the channel I share small business advice and tax tips – and now have nearly 19,000 views of my videos.

You can find my channel at:

www.youtube.com/user/taxhelpukcom

Please do subscribe.

I will be taking a stand again this year at the retirement fair, held in the grandstand at Ascot racecourse.

This years fair will be held on Wednesday 21st August.

You can find out more from the official website:

http://ascotretirementfair.com

I also plan to post tweets and vines (very short videos) from the days events.

You may wonder what the Steering Group is, here is some more information:

Member Steering Group (previously part of Member and Student Services Committee) gets involved in virtually all of the interaction that the Association has with its members.

Our detailed responsibilities are too numerous to mention but our principal objectives are:

1. To monitor and regulate members, as delegated by Council;

2. To provide and develop benefits and support services to members;

3. To be proactive and responsive to the needs of present and future members and their employers and to those who engage their services; and

4. To encourage successful students to take up ATT membership and remain as ATT members.

In furtherance of these objectives we work closely with other steering groups and committees to ensure a coherent and consistent approach.

You can find out more about the ATT from their website, www.att.org.uk

Power Climb: growing your small business, is my second book and was published in 2012.

BNI is the world’s number one referral marketing organisation, with a global membership of over 145,000 people and the founder of BNI, Dr Ivan Misner, has also endorsed my book:

“To read Power Climb is to empower yourself to earn more through learning more—and you will gain greater enjoyment on the journey to the top. With this book, James continues the purposeful work he began with his first book, Chocks Away—helping small business owners achieve more by applying simple, affordable-to-implement tips that will propel business performance and free up time to enjoy other areas of life outside of business. Do yourself a favor and read this book!”

You can read the article on the BNI.com page here.

You can also order the paperback or kindle versions from the below link:

There is now only one month left before the end of the 2013 tax year…

If you were thinking about making any business purchases or investments, now would be an ideal time before the rush in the last few days of the tax year.

Articles
I regularly post articles on the taxhelp.uk.com blog.

These cover tax as well as general business issues, below are links to a selection that you may have missed:

HMRC focussing on rental income

Flexible working is another benefit of being self-employed?

HMRC’s Business Records Checks (BRC)

Payroll changes for 2013 – Real Time Information (RTI)

The High Income Child Benefit Charge (HICBC)

2013 Tax returns
In a few weeks time I will be writing to all our clients to ask for the information to prepare the tax return for the year to 5th April 2013.

I know many people are planning to send these through earlier this year, so they know their tax position well in advance as well as receive any refunds due at an early date.

It is also an ideal opportunity to combine this with the special offer below:

Special offer on fees in April
Over the last few years I have run a special offer, where people receive a 10% deduction on their tax fees for invoices issued and paid before the end of April.

This has been proving increasingly popular with clients, as it is an easy way to save money, so I will be running this offer again in 2013.

The return can be completed later in the year if you are waiting for information to arrive – as long as the invoice is settled before the end of April then you will still qualify for the special discount.

If there are any topics you would like me to cover in future articles, or if you have any queries please do contact me.

James

You may think that this is a simple answer, but one thing that people regularly forget is the cost of their own time.

If you are going to see an adviser with a high street office, then in addition to the time cost of the actual meeting itself you also have to allow for commuting and parking time – and perhaps even a cost for parking as well.

When you add these up, at the normal hourly rate you would charge a client, then the cost of that free meeting can be significant.

That is why I offer my meetings at a time and location to suit the client – and also have several evening and weekend appointments available each month, so people don’t need to take time away from the working week.

Just last weekend I met with a new client on a Saturday morning, at a hotel near a main road that was convenient to him.

When considering advisers, it’s important to remember to include the cost of your own time for meetings.

Through my membership in a business networking organisation, giving presentations is something that I have done regularly since 2008.

Initially these were to one local group of 20-30 members but I have also presented to various sizes of groups up to in excess of 100 people.

The audiences have mainly been business owners themselves, I have also presented to over 50 IFAs as well as to 85 chartered accountants.

The venues have ranged from small hotels, to the LSE in London, and even to a group based at Puerto Banus in Spain.

My presentations have covered various topics, such as tax and also using social media for business as well as business training.

If you would like to make a booking, please do get in touch.

If you are an employee, then copies of your P60 or payslips are usually what they are looking for.

When it comes to the self-employed, they will be looking for copies of your accounts.

It is a normal part of the process for them to ask your accountant to complete a form with details of your business as well as the details from the accounts.

The mortgage companies will also ask what qualifications your accountant has, both of my own are ‘approved’ qualifications that the vast majority of lenders accept.

Occasionally I do receive enquiries from people asking if I can certify their accounts for a mortgage application – unfortunately unless these are accounts that I have actually prepared for them then I am unable to assist.

If you know anyone who is currently completing their own accounts, they may wish to engage the services of an accountant – not only from the potential tax and time savings that can be achieved, but also from the point of view of future mortgage applications.

Now is a good time to review whether to purchase new equipment, whether that is computers, vehicles or other assets that you will use in the business.

For the self-employed, qualifying expenditure will achieve tax relief in the accounts thereby reducing potentially your tax liability.

There is a double benefit, you have new equipment that can increase productivity in your business going forwards and also pay less tax as a result of the relief given against the profits from last year.

Please do contact me if you would like to review any purchases you are thinking of making, there is a good window of opportunity for planning in advance of the end of the tax year.

Unfortunately, many mobile phone contracts do not include 0845 numbers in their inclusive calls allowance – meaning that there is a cost for the call, which is compounded if people are put on hold.

Realising this, back in May 2011, I introduced an additional 03 number so that taxhelp.uk.com clients could call us from their mobile and the call would count as part of their inclusive minutes.

It is good to see that HMRC are also taking this step, which was reported in February 2013, for their helpline numbers.

As a self-employed person, this can easily be achieved – structuring your day so that you can complete your work as well as minimise your travel costs (another point raised by the survey.)

However it is important to be able to take advantage of this benefit – many people set out in self-employment aiming to do this, but find that ‘work gets in the way.’

As an entrepreneur, work doesn’t seem like work to us as it is something we enjoy and have chosen.

This is something I cover in my video on downtime, and its importance for the self-employed:

The format of this is that firstly a letter is sent to the business, and then a telephone call is made about a week later to ask a series of questions.
Following the call HMRC will decide whether the business records are adequate or whether further assistance or a visit is required.

As these letters are not copied to agents, it is important that you notify your accountant if you receive one.

There are many options for keeping business records now – in this video I cover some of them, that can make the process easier for you:

HMRC’s own statistics show that in 2010/11 only 48% of calls were answered, however this increased to 74% in 2011/12.

Their target is to answer 90% of calls, and they have announced the recruitment of an additional 1,000 staff to help them achieve this goal.

In many cases though, queries can be answered by your accountant – this is one of the reasons behind the fixed-fee packages I offer.

Rather than spend your time on hold, clients can call/email/text me with any tax queries they may have and I will answer these for them – all included as part of the fixed-fee package.

Usually, general queries are something that can be quickly answered by someone familiar with your case and the current legislation – saving you time that you can put to better use.

In the 9 months to the end of September 2012 the number of students registering with the ATT increased by 47%, bringing the total number of registered students to 5,100 – the first time in the Association’s history that it has broken the 5,000 barrier.

As the number one professional body for those involved within tax compliance, it is great to hear how the ATT continues to grow.

You can find out more about my tax association from www.att.org.uk

For those that do run a payroll, even if there is only one employee, then the new changes will apply from 6th April 2013.

In the past it was possible to manually run a payroll, filling in the forms by hand and submitting these to HMRC when required during the year.

Now, this will be replaced by a submission to HMRC whenever someone is paid and any tax due to HMRC may also become payable earlier rather than under the old quarterly payment schedule.

Due to the additional requirements, particularly potential fines when the person running the payroll is on holiday, many people have decided it is simpler to outsource their payroll preparation to a bureau.

If you would like a referral to a payroll bureau who can assist you, please do contact me for an introduction.

It only applies to people when their own, or their partner’s, income exceeds £50,000 a year – if your income is below this then it does not affect you.

Should your income exceed this level then it would again only affect you if you or your partner are receiving child benefit payments, or if someone else is claiming child benefit payments for a child that lives with you. If this is not the case, then it also does not apply to you.

If the HICBC does apply, then there are a couple of options:

1) Keep receiving the child benefit payments.

2) Stop receiving the child benefit payments.

Should you continue to receive child benefit payments, and your income be above £50,000, then these will need to be reported on the tax return.

For those who have professional advisers, it will simply mean notifying your accountant. For others, they will have to register for self-assessment and complete a tax return each year.

As a fellow of the ATT, I have also served on the Member steering group for some years.

The meetings are held at the ATT’s head office, near the Houses of Parliament.

We keep in contact between meetings via email, sharing our opinions on membership matters.

As the ATT is the leading professional body in the UK dealing with tax compliance, I am looking forward to our next meeting.

Sometimes people believe that their property might not be making any money, so doesn’t have to be declared.

Unfortunately, this is not the case, and it could also be costing the landlord money as well as risking fines and penalties.

It is important to prepare rental accounts each year so that all income and expenses can be accounted for. Only then will you know which of your rental properties are in profit and which are operating at a loss. This information is important as to planning whether to continue with individual properties.
In addition, if a property is making a loss, this can be carried forward against future profits. If accounts and tax returns have not been prepared, then this is lost and as a result they could end up paying more tax.

When it comes to selling the property, sometimes people don’t realise that this has to be reported and could result in a capital gains tax liability. Additionally, they may miss expenses that they are allowed to claim for when preparing these calculations.

With HMRC cracking down on both these areas, now is a good time to seek professional advice and bring your affairs up to date – you could even find that you have rental losses to carry forward and reduce future tax bills.

Looking at home businesses, this percentage rises to 100%.

It’s important to consider this when looking at the contribution small business makes to the economy.

As a result, they will have been fined £100 – this is quite an additional source of income for HMRC, however it is an additional cost that is unnecessary.

The rules on penalties changed last year, now the fines aren’t related to the tax due so we could find the situation where people are due a repayment but receive a fine for being late in submitting this!

The tax year ends on 5th April each year, and the returns can be submitted after this date as soon as all the information is available.

Rather than wait until the last minute, it is always better to complete the return early – the tax is not payable any earlier, and if the business profits have reduced in the last year it may be possible to claim a reduction in the 31st July payment on account.

Please do refer anyone you know who missed the deadline to me, at the end of February there is a 5% surcharge on the tax outstanding so it is important to act now to avoid this.

I offer a no charge initial meeting, so that we can discuss the opportunities to help people pay less tax and avoid fines.

It’s All in the Follow-up! 15 Top Tips

The Follow-Up Call is essential to achieving event ROI. Once an opportunity has been identified, this is the first step towards converting it into a sale. Interestingly, however, making The Follow-Up Call to a guest is not as easy as it sounds, particularly where a new relationship has been forged.

For many, The Follow-Up Call fills them with dread. Fears of rejection bubble to the emotional surface, and frequently, left to their own choice, Hosts will fail to follow up on their contact and will actively busy themselves with other tasks to avoid making that call. Many admit to engaging in
displacement activities and if we are being honest, I am sure we have all felt this way about an
unpleasant task we have had to do, in the past.

What follows are 15 tactical tips to help build your confidence before you pick up the phone:

1. clearly decide why you are making the call and what you want as an outcome. This call is all about securing a meeting – nothing more!

2. create enough time for the call. Sounding rushed because you have another pressing appointment to attend will be picked up in your tone and may have a negative impact

3. switch your mobile to silent, so you are not distracted should it ring whilst you are talking

4. have their business card, or any other medium where you have recorded all the details from your conversation, in front of you and visible (e.g. Aha Moment, and any other information you have learnt about them, their business, their challenges)

5. have your tablet, laptop, desktop or even some blank paper to hand to enable you to take notes easily

6. have your schedule/meeting planner open and ready

7. consider where you wish to propose that you meet, in advance (your offices, their workplace or at a neutral venue, like a hotel lounge, restaurant, coffee shop etc)

8. know lots about the person. Research the client’s personal profile on LinkedIn (for background)

9. know lots about the company. Research the company website and also their company page on LinkedIn (for due diligence)

10. prepare what you will say to the answer machine, the gatekeeper and to the prospect. If you have to leave a message, this information needs to be clear and concise but also complete (brevity is not the sole determinant). If you are not sure what you want to say, write it down

11. have a clear outline in your mind of how your products or services can help solve their problem, based on the conversation you had at the event

12. consider standing up for the call (this facilitates the flow of adrenaline and will naturally add energy to your tone)

13. give your full attention to the call and conversation (perhaps even turn your chair to face the wall so you are not distracted)

14. consider the transaction value, or the lifetime value, of the potential opportunity and give the call the respect it deserves – it could be the call that secures your annual bonus!

15. expect a positive outcome

The Follow-Up Call is a highly influential component in ensuring you achieve your event ROI goals.
By following these tips your organisation will stand head and shoulders above your competition and Hosts will be perceived as professional, reliable and trustworthy in the mind of your guest.

Mark Perl – Author, speaker, trainer and expert in the skills of Planning and Hosting events professionally

www.impeccablehost.co.uk
@markperl
#impeccablehost

taxhelp.uk.com February 2013 newsletter

Now that the 31st January tax deadline has passed, it is a good time for planning.

There is no video this month, due to last week’s tax deadline, these will return next month.

With a couple of months before the end of the tax year, there is time to look at both tax and business planning.

Who do you know who missed the tax deadline?
If there is anyone you know, time is running out to avoid further penalties.

They will have already received a £100 fine for a late return form, however HMRC will add 5% to their tax bill at the end of February – without a return they won’t know if they have paid all their tax to avoid this surcharge.

After that, HMRC can impose a daily £10 fine for not submitting the return – this is due to legislation brought in last year, and we have already seen them applying these fines.

Please do refer anyone who may have missed the deadline, as the penalties can amount to £1600 or more.

Tax planning
The end of the tax year is a good time to review whether now is a good time to purchase new equipment, whether that is computers, vehicles or other assets that you will use in the business.

It can also be a good time to look at tax efficient investments, as both of these may reduce your tax liability for the year ended 5th April 2013.

Please do contact me if you would like to review any purchases you are thinking of making, there is time for planning before the end of the tax year.

Business planning
It is also a good time of year to look at potential growth opportunities for the year.

Because of the need for people to obtain assistance from someone who has actually experienced growing a business from scratch, I started my consultancy OP Business.

I advise on a range of areas, such as:

- Pre-start planning
- Business planning for growth
- Online effectiveness
- Sales & Marketing
- Video for business
- Blogging for business
- Author advice
- Social media for business

For 2013, as well as the fixed fee packages covering one specific area I also have a range of rates available so that people can mix several areas within one meeting.

The costs are also a tax deductible business expense for the self employed, and prices start at only £150

You can find out more from the website for my OP Business consultancy.

If there are any topics you would like me to cover in future text or video blogs, or if you have any queries please do contact me.

James