Changes to be Aware of (May 2017)

Having just returned from a tax update course it appears that HMRC are adamant in pressing forward with reporting your business activities quarterly “direct from software”. Starting April 2018.

Although no finer details have been issued on how this process is to take place nor even what detail of information the required, we are advising you to ensure that you have book keeping records in place and that your vat quarters coincide with your accounting year end. This will mean that when you prepare your vat returns you can upload the quarter to HMRC at the same time. The normal fines and penalties will be in place for not reporting quarterly but we anticipate will be low key in year one.
Should you wish to discuss this further please telephone Lois on 01458 272547

Changes to be Aware of (November 2015)

From 6th April 2016

  • Withdrawal of Employers Allowance where only employee is a director
  • Changes in benefits in kind
  • 10% wear and tear allowance on furnished letting abolished
  • Fitting and Furnishing replacement allowance is back
  • Dividend taxation

From 6th April 2007

  • Landlords will no longer be able to deduct all of their finance costs on domestic rental property
  • Changes in non domicile rules
  • IHT nil rate band extension

One Year On...

One year on in our new offices we find ourselves having settled into an orderly environment. During the year we have expanded our client base and assisted in several business start ups and teaching Sage to those investing in computerising their book keeping. This step enables businesses to have more up to date information on the business, ie monthly profit and loss accounts as well as having more complete records when it comes to the annual accounts. Tax planning becomes much easier and more accurate when we are able to view 10 months profits before arriving at the year end. Advice on dividend planning, pension payments and capital purchases to reduce tax payments can then be given when requested and the action taken within the accounting period.

We stepped back to review the areas of business we were offering and found that there were gaps in the advise offered. Were have always carried out payroll , vat, business plans, accountancy and taxation but have been unable to give pension and investment advise. We have rectified this by forming an association with a local firm who are able to give excellent financial advice on pensions (including auto enrolment) as well as investment and IHT planning. We feel this gives us the ability to review our clients affairs over all the taxes to achieve a complete financial overview.

We have taken on a further member of staff to join our accounts team, who will also train for the association of accounting technicians examinations. We look for all our staff to keep up their qualifications and technical ability so that any irregularities are picked up quickly during vat or accounts preparation and the relevant advice can be given.

The feed back that we have had from many new clients is that “my accountant never explained that” but in fairness we cannot explain everything so we need you to ask questions to be able to give you the relevant information. We encourage clients to telephone and ask any queries they have so that answers are obtained straight away and are not left until after the year end by which time it maybe too late to rectify the problem.

Growth Accelerator?
Earlier this year Somerset Accountancy Services bought out half of the old AD Accountancy which has brought a big growth in their work load and the scale of their operations. They took advantage of the move to relocate from Huish taking over the purpose built facilities of the old AD Accountancy practise on the Bancombe Industrial Estate.

The firm has grown considerably with the move, taking on an additional 8 employees as well as themselves. The firm had grown steadily over the years before the merger, serving all kinds of clients from sole traders to partnerships and limited companies in all sorts of different businesses. The core offering has grown too and they often provide both business and personal tax services to business owners and their families. Having such a prominent office complete with branding and signage has obviously raised the profile of the business.

However the firm have been in business around these parts for over 20 years, quietly getting on with the business of growing their portfolio and expanding their service offering. Eric Hodges with a background in stock valuation, VAT and Payroll teamed up with wife Lois who has expertise in accountancy and taxation. The mix of services was a pretty obvious fit, there were few overlaps and between the two of them they could offer a pretty complete package of services for the owner managed businesses that comprise most of the businesses in the Levels area.

Part of the approach of the firm is to persuade clients to take on more of the recording work, which helps keep fees to a minimum, but just as important, means that Eric, Lois and the team can focus on where they can add most value. Eric says “we try to offer affordable training on keeping computerised and manual records to our clients who need it. They should see the benefit when it keeps their accountancy costs lower.”

You can contact Somerset Accountancy Services on 01458 272547 or via the first meeting is always free

Penalty Letter - June 2012

June 2012

You have probably become aware that over the past few years HMRC have invested time and money into improving  their computer systems, making it more flexible to gather information and collate it to individual people. We have seen this in the P800 notices sent out,  to collect under paid taxes from individuals over the past two years(or even to repay over collected taxes!).

HMRC’s approaches to collecting tax are changing  rapidly and over the next year this will become more apparent. HMRC may have seemed  fairly silent over the past few years  but it has quietly been bringing legislation to be able to toughen up on tax evasion.

These penalties have not been used much but we should not become complacent –they are there and will be used robustly now their computer systems are in place.

2007 New penalties for errors- careless ? deliberate? Concealed?
2008 New regime for failures to notify
2009 New regime for late filing/payment
2010 New penalty rates for offshore matters
2011 Penalties for poor record keeping  – right to inspect these at you premises (and dig?)
2012 VAT and PAYE withdraw of paper filing
2013 Real time payroll – send payroll information online to HMRC before you pay for every payment

This is a whole new concept came in  April 2013 whereby you need to submit to HMRC pay details that you are about to make on or before the payment date, these will include Name,  address, Ni no,  Hours worked, Gross pay, Ni deducted, tax deducted and net pay. Every time a payment is made to an employee there is a requirement to file on line. It is essential to think about frequency of payments, how overtime will be calculate and when it is paid. It is important to get this right because the new  benefit system will be paid out based on what you submit.

You may think that because you do not run a PAYE scheme this does not apply and in part you are right. HOWEVER  It is even more essential that you hold forms P46 for EVERY person that you make a wage payment to (including paperboys and youngsters) and that they have signed to say it is their only or main employment.

2013 Employers responsible for new pension regime
Employers are being forced to pay into pension schemes on behalf of  their employees on top of a percentage they will need to deduct from the employee. Some low paid employees may be able to opt out but an election to opt out will need to be made.


Yours sincerely,

Lois and Eric Hodges

Somerset Accountancy Services.