Autumn Statement Tax Summary

George Osborne did not have great tidings to impart when he presented his Autumn Statement to the House of Commons on 29 November 2011. The best he could offer the ordinary taxpayer was a freeze in road fuel duty until 1 August 2012, when it will increase by 3.02p per litre. Train and tube fares were due to rise by a whopping 8.2% next year, but this rise will be limited to (wait for it...) 6.2%.

Businesses who occupy small commercial premises receive some generosity with an extension to the business rates relief scheme to 1 April 2013 (already extended for a year to 1 October 2012). Different business rates relief schemes apply in England, Wales and Scotland so ask your local authority what relief applies to your building. Occupiers of larger business premises may be able to defer payment of up to 60% of the increase in business rates for up to two years.

Other key tax announcements for businesses and individuals were:

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Tax Refund Scam Email

Today I received an email telling me that I was entitled to a tax refund of £268.50!    Of course this would be very nice, but as I make my living giving professional tax advice, I instantly knew that sadly this was just a scam.  I have seen many of these before, but this is the first that I have been sent directly as the target of a tax refund scam!  A copy of the email is below:

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Preferred Advisers for the Commonwealth Judo Championships 2012

I am very pleased to announce that Harries Watkins Jones are the preferred adviser to CJC2012 LTD a company formed to arrange and deliver the Commonwealth Judo Championships 2012.  The event will take place in Cardiff, commencing on the 22nd January 2012.  An exciting high profile event for Cardiff and Wales.   To find out more about the event, visit the official website. 


The Commonwealth Judo Association website stated, "The Commonwealth Judo Association are delighted to announce that the 2012 Commonwealth Judo Championships has been awarded to Wales. The Welsh Judo Association will host the event in January 2012 in the city of Cardiff. The CJA Bid Committee had a difficult decision to select from the two candidates, Wales and South Africa. South Africa will host the 2011 IJF World Junior Championships.

The Welsh Judo Association is busy identifying a management team to deliver a world class event and is working closely with the Welsh Assembly Government Major Events Unit, recently involved in delivering the Ryder Cup at Celtic Manor."

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Harries Watkins Jones Hits Number 1!

The Contractor Supermarket website has a chart of what it rates as the top 100 contractor accountants.  Customers assess accountants in relation to quality, service and satisfaction.  We are pleased to announce that today we have reached the position of number 1 in the chart! You can see the chart here.  We would like to thank everybody that voted for us.  We however are not complacent and are still working harder than ever to increase the quality of service that we provide to our clients.

If you are not a client of Harries Watkins Jones then visit our website to find out ways that we could help you.

September 2011 Tax Tips & News

Welcome...
To September's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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August 2011 Tax Tips & News

Welcome...
To August's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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July 2011 Tax Tips & News

Welcome...
To July's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help! 

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June's Tax Questions and Answers

Welcome...
To June's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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April 2011 Tax Tips & News

Welcome...
To April's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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Budget 2011, Tax Summary

This article aims to summarise the main tax measures of yesterdays Budget however it is not intended to be comprehensive.

Individuals

Personal Allowances
These allowances represent the amount of an individual's income in the tax year that is not subject to income tax. Some people are eligible for several allowances such as the personal allowance, and married couples allowance. The married couples allowance is available to married persons and civil partners, but only where at least one person of the couple was born before 6 April 1935.

The personal allowance for 2011/12 will increase by £1,000 to £7,475, but the 40% tax threshold will reduce to £35,000 (see below). This ensures that higher and additional rate taxpayers do not benefit from the increased personal allowance in this year. From 6 April 2012 the personal allowance will be increased again by £630 to £8,105, and in that year the 40% threshold will be reduced further to £34,370.

Personal allowances are withdrawn at certain income thresholds, indicated below, and cannot be claimed by non-domiciled individuals who elect to have their foreign income and gains taxed on the remittance basis for the tax year.

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Taxation Editor

I am pleased to announce that I have accepted the role as Tax Editor on totalinvestor.co.uk.  I am honoured to have been chosen for this position.

Total Investor is a multi disciplinary information website for both consumers and professionals.  It is growing rapidly with the total number of unique visitors to Total Investor rising by 350% during the last quarter.  Total registered individual professional membership rose from 8,129 to 8,528.  The total number of average daily professional searches rose from 229 to 294, annualising at 107,310 profile searches, up 28%.

However my heart remains firmly in accountancy practice and as Total Investor will only take a fraction of my time, my practice work will remain unaffected. To review the type of work that Harries Watkins Jones undertakes, please visit Accountants Bridgend.

March's Tax Tips & News

Welcome...
To March's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Questions and Answers section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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February's Tax Tips & News

Welcome...
To February's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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January's Tax Tips & News

Happy New Year & Welcome...
To January's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

A reminder that the most immediate issue to deal with for most businesses is of course the rise in VAT to 20% from 4th January 2011 and of course if you need any help with that at all please contact us.

If you need further assistance with anything just let us know or you can send us a question for our Question and Answer Section.

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October's Tax Tips & News

Welcome  October's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.  Should you wish to be emailed a copy each month then you can subscribe here.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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September's Tax Tips & News

Cycle to Work Scheme Update
The cycle to work scheme allows employers to lend cycles to their employees tax-free, and in some cases the employees can purchase the cycle at the end of the loan period. However, the Taxman is looking carefully at abuses of this scheme...

- Some employers treat the loan of the cycle to employee as part of the employee's salary and reduce their cash wages proportionately. This is known as a salary sacrifice, and the arrangement must be agreed with the relevant employee in advance. If cycles are only provided to employees under salary sacrifice arrangements the whole cycle to work scheme may lose its tax exemption, as some employees cannot have their cash pay reduced due the National Minimum Wage rate rules.

- It is quite common for the employee to purchase the cycle from the employer at the end of the loan period. However, the Taxman says that where there is an automatic transfer of the cycle to the employee at the end of the loan period, the tax exemption for the cycle to work scheme is also lost.

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Harries Watkins Jones a first in Wales

The Professional Contractors Group (PCG) is the voice of freelancing: the association that represents, supports and promotes freelancers, contractors and consultants in the UK.

I am very pleased to announce that Harries Watkins Jones are the first firm of accountants in Wales to achieve PCG Accredited Accountant Status.

If you are a freelancer, contractor or consultant based in South Wales and are looking for expert tax and accounting advice then do not hesitate to contact us.

August's Tax Tips & News

Withdrawal of CIS Gross Payment Status

Every month the Taxman's computer reviews the tax records for a number of contractors in the Construction Industry Scheme (CIS) who qualify for gross payment status. This means that tax does not have to be deducted from payments made by customers. Every contractor's tax record should be reviewed about once a year, but it is not possible to predict exactly when any particular firm will be reviewed.

If the tax compliance record is regarded as unsatisfactory, taking into account the acceptable minor breaches, the computer automatically issues a letter to the contractor informing them that their gross payment status will be withdrawn in 90 days. This is serious stuff as the withdrawal of gross payment status can mean the loss of large contracts, as well as cash-flow difficulties.

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New Bridgend Offices Opening Soon

We are moving from our Pencoed offices on Monday 26th July 2010 to 1a Charnwood Park, Bridgend, CF31 3PL, in order to make using our offices more convenient for our clients. The offices are located approximately 5 minutes from Junction 35 of the M4 motorway.

Our telephone number will change from 01656 863000 to 01656 661100.

The offices are situated just off the A48 to Cardiff, next to the Bridgend Ford Car Dealership.

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The origins of IR35

In this post we consider what IR35 is.

In the words of the Inland Revenue (now HMRC) they defined IR35 as follows:

“These rules were first proposed in the 1999 Budget news release numbered IR35. They have since become commonly referred to as “IR35”. The purpose of the rules is to remove opportunities for the avoidance of tax and Class 1 National Insurance Contributions by the use of intermediaries, such as service companies or partnerships, in circumstances where an individual worker would otherwise be an employee of the client or the income would be income from an office held by the worker. “(Inland Revenue 2004)

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IR35 They think it is all over!

I found this interesting article on the PCG website PCG IR35 article.

If you need IR35 advice then contact us.

Is this the end of IR35?

The new coalition government has promised a comprehensive review of IR35, read here the Professional Contractors Group (PCG) view on the matter.

July's Tax Tips & News

July's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Corner.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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VAT Flat Rate Scheme

We find that many of our contractor clients have benefited from switching to the VAT flat rate scheme. The VAT flat rate scheme is designed to make it simpler and quicker for small businesses to complete their VAT return.

This is because VAT payable to HMRC is calculated as a particular percentage of the gross turnover of the business and not as the difference between VAT on individual sales and purchases. In particular there is no need to record the VAT incurred on most purchases and determine whether it is reclaimable or not, so there is less chance of error. The amount of VAT charged to customers remains the same whether using the flat rate scheme or not.

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Emergency Budget June 2010

We all knew that Chancellor George Osborne was going to announce an increase in Capital Gains Tax (CGT) today, but we didn't expect the rate to rise immediately. Other surprises included reductions in the rates of corporation tax for both small and large companies and in the rates of capital allowances for all businesses.

A rise in the standard rate of VAT to 20% was widely expected, but this increase has been delayed until 4 January 2011, which is the first working day after the Christmas break.

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Cost effective simple book-keeping

We often hear small business owners say that the waste too much precious time on keeping their books!  We have a number of simple and cost effective solutions.  Click on this link to find out more about our book-keeping solutions and how you could save both time and money!

Tax Enquiries and Investigations

Need help fighting the Taxman?

It is an unfortunate fact of business life that you may well come under enquiry by HMRC through no fault of your own or of your accountant. HMRC now investigates businesses at random as well as for specific reasons. A full investigation is not a pleasant experience for anyone. Without expert defence it is possible to get trampled all over.

If you are selected at random, you need an accountant who knows how HMRC works and thinks and is prepared to fight your case. We make sure that Taxman keeps to their own internal guidelines and don't over step the mark. We will talk you through the enquiry process and what to expect and support you throughout.

Our skilled experienced team of professionals are able to offer the following services:

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June's Tax Tips & News

This is a copy of of our monthly newsletter, to receive your free copy direct, please subscribe here.

Welcome...
To June's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Corner.
We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

Read more »

The Construction Industry Scheme

Special tax rules apply to the construction industry and workers which are detailed in The Construction Industry Scheme (CIS).

CIS uses a verification system for contractors to confirm whether a subcontractor should be paid gross or net.

Construction Activities

The definition of construction activities is widely drawn and so most businesses working in construction will be caught by CIS. It applies to sole traders, partnerships and Limited Companies but not to private householders who are paying contractors.

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Contractors accross the UK

We often get asked is there a limit to the geographical area we accept clients from. Although our client base is predominantly from the major South Wales towns and cities, Cardiff, Swansea, Newport, Bridgend, Pontypridd etc., due to the nature of the specialist services we offer we act for clients all over the UK.

With the advancement of technology we are now able to deliver many of our services to our clients without the need to meet with them face to face. This means that it is now practical to deal with clients on a national or international basis. We have found that this is particularly beneficial to clients that spend a considerable amount of time working away from home.

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Managed Service Companies

A Managed Service Company differs to a Personal Service Company in that there is normally a scheme provider that operates the company on behalf of the worker. Often these are known as "composite companies" with perhaps 10 to 20 workers being put through the same company or "managed personal service companies" with one for each worker but managed by the scheme provider on behalf of the worker.

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Dragonfly Consulting tax case

The Dragonfly Consulting tax case established that the Tax Inspector can question the relationship between the end client and the worker, and if he decides that it is really one of employee and employer, in spite of all the various contracts, agency and service company in place, the extra tax due will fall on the worker's own company.

The case demonstrated how the contract between the agency and the final client can knock for six any clever contract drawn up between the worker's company and the agency. HMRC have proved that the entire stream of contracts needs to be considered and compared to what actually happens on the ground.

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Government wants to replace IR35

It seems that the new Con-Lib government wants to replace IR35, what will be in its place though? Link to accountancy age article.

IR35 Personal Service Companies

IR35 was brought in to prevent the payment of less tax and national insurance by using a personal service company or partnership to provide services through rather than being a direct employee.

For example, by using a personal service company it has been possible to extract income from the company in the form of dividends rather than salary so saving substantial amounts of national insurance. In addition, shares of the company may be split with the spouse of the worker to help avoid higher rate tax and there is far more that can deducted in the way of tax deductible expenses by operating through a company rather than as an employee.

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Our new website

We have just launched our new website, with lots of free resources. Why not click here to have a look!

Solutions for Contractors

We offer comprehensive tax advice to contractors. Please contact us if you would like a free consultation to discuss the tax advantages of contracting in more detail and the different possible scenarios.

We offer special all inclusive services for contractors including...

■Company formation;
■Annual Accounts;
■Company tax returns;
■Personal Tax Returns;
■Company secretarial service;
■Book-keeping;
■VAT Returns;
■PAYE Returns;
■Tax computations;
■Review of contracts for IR35 status;
■Provision of anti IR35 draft contracts;
■Dealing with IR35 disputes.

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May's tax tips & news

Welcome...
To May's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.

Please contact us for advice in your own specific circumstances. We're here to help!

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Welcome!

Welcome to our new blog, dedicated to tax and business issues facing Contractors in the UK.