Time To Pay – Update

HM Revenue & Customs’ Time to Pay (TTP) scheme is under scrutiny once again. This time, it has emerged that the taxman has been agreeing multi-million pound TTP arrangements without requiring businesses to undertake independent reviews to check their viability.

Earlier this month, HM Revenue & Customs released its figures on TTP arrangements, and an analysis of the data by industry publication Accountancy Age showed that 140 high-value arrangements (over £100,000 a year) worth £45m were made in June, at an average of £321,000 each. This compares with an average of around £180,000 to £200,000 in each of the previous 15 months.

HM Revenue & Customs has stated that a small number of very high-value arrangements made in June skewed the figures and, if it were not for these, the average would be similar to other months. Research showed that these arrangements would have to be collectively worth around £17m to skew the June average figures to this extent.

Back in 2009, Alistair Darling announced in the Pre-Budget Report that HMRC would require businesses applying for TTP for debts of £1m or over to provide an independent business review (IBR) supporting their request. This involves the businesses appointing insolvency practitioners to review their long-term viability – but a freedom of information request has shown that no IBRs were carried out in June, and only six had been carried out in total between January 2010 and June 2011.

Senior Partner Paul Carvell comments: “HMRC has claimed that an IBR is not always required in £1m+ cases, because each TTP request is considered on its own individual merits and circumstances. However, in light of the taxman’s recent reluctance to agree TTP arrangements with so many struggling businesses, this seems rather an odd situation. It would appear that, for a few large-scale enterprises with outstanding tax liabilities, HMRC is prepared to be more lenient. When you contrast this with the declining number of TTP arrangements made for smaller sums, one has to wonder whether it’s one rule for bigger companies and another for SMEs.”

Do You Need The Info2Grow?

Helping local businesses gain access to vital information is the plan behind ‘Info2Grow’, a new initiative from Stewart Fletcher & Barrett, Lloyds TSB Commercial and Nuneaton-based solicitors Tustain Jones, in association with Nuneaton & Bedworth Borough Council. The event is also being supported by the Chamber of Commerce and the Federation of Small Businesses.

The aim of Info2Grow is to provide invaluable advice for businesses who are looking to progress to the next stage in their development, but who are encountering some barriers to achieving the growth they hoped for. Topics covered will include finance, employment, marketing and risk management (amongst many others), and there will be an extensive Q&A session where attendees can quiz the advisers about specific problems they may be facing. The event will be held at The Chase, Higham Lane, Nuneaton on November 10th, and will run from 4.30pm until 7pm.

Senior partner Paul Carvell explained: “This event presents a unique opportunity to directly access advice from a cross-section of business experts on how you can take your business to the next level. We hope that this initiative will prove to be the kick-start that many local businesses need to take their operations to the next level.”

As well as Paul Carvell, advisers will include Alan Ison (Lloyds TSB Commercial), Adrian Young (Federation of Small Businesses), Jo Darling (HR – Stewart Fletcher & Barrett Group) and Peter Tustain (Tustain Jones Solicitors), and experts in areas such as wealth management and business start-ups will also be in attendance.

Alan Ison commented: “At Lloyds TSB Commercial, we are proud of our record in helping businesses cope in a tough economic climate, and I believe an event like Info2Grow will provide a valuable resource for the local business community.”

Anybody interested in coming along can fill in the online form at www.sfb.uk.com, or email tracy.johnson@sfb.uk.com.

Vince Cable Fined By HMRC

There has been fresh embarrassment for the government as it has been revealed that business secretary Vince Cable has been fined for failing to pay up to £25,000 in VAT on money he received for his media work.

Mr Cable, who has publicly condemned tax avoidance in the past, was ordered to pay a £500 penalty by HM Revenue & Customs after it emerged that he had not paid the tax on time. The cabinet minister is believed to have made a considerable sum from media work and book deals in the two years before he assumed his current role, with estimated earnings of £192,000 on top of his annual MP’s salary. However, he failed to register it.

Paul Carvell, senior partner at Stewart Fetcher & Barrett, comments: “Despite his claim that the mistake was made unknowingly, Vince Cable must realise that this is not the sort of error that the business secretary can make without incurring a substantial backlash. HMRC rules clearly state that if a person’s turnover of VAT-liable goods and services over a 12-month period exceeds the current £73,000 threshold, they must register for the duty within 30 days.

“Considering his previous comments about tax avoidance, he has now left himself in an untenable position, whereby he himself is open to ridicule, and the government is exposed to further embarrassment.”

Don’t ‘do a Vince’ – call Sasha in our tax department now on 02476 384171.

Would You Fail A Business Records Check?

HM Revenue & Customs (HMRC) has announced an extension of its business records checks programme – after the pilot scheme found that around 44 per cent of businesses visited had issues with their record-keeping, while around 12 per cent of those visited had seriously inadequate records. Business records checks were piloted earlier this year in eight key areas, and involve checks on the adequacy of small and medium-sized enterprises’ business records.

HMRC will employ 120 full-time staff to implement the programme, and plans to complete up to 12,000 business records checks by the end of the current financial year, with 20,000 provisionally planned for 2012/13. Initially, only the most extreme cases of poor record-keeping will incur a penalty – however, in the longer-term, HMRC intends to issue penalties of up to £3,000 for serious inadequacies in record-keeping.

Adam Bexon, partner at Stewart Fletcher & Barrett, said: “The importance of good record-keeping cannot be overstated. It will help you pay the right amount of tax – no more and no less – thus helping you to avoid interest and penalties. Keeping adequate records will give you a clearer idea of your financial situation, which allows you to make business decisions that will give you the best chance of success.”

Research by the Organisation for Economic Cooperation and Development (OECD) indicates that poor business record-keeping generally leads to an underassessment of tax, even where there is an audit-type check into a return for the period covered by such records. On this basis, poor business record-keeping is responsible for a loss of tax in up to two million SME cases annually.

If you are worried about failing a business records check, why not try out our free online business records checker here: http://www.sfb.uk.com/business-record-checker.htm

Studies Pay Off For Emily

Stewart Fletcher & Barrett is celebrating its latest success story, as accounts clerk Emily Smith, who has been with the firm for more than six years, has just achieved her ACA qualification. This, following on the heels on her AAT certification, means that she is now a fully-fledged chartered accountant – and all at the age of only 22!

Emily explains: “After a total of six years spent studying, I am incredibly pleased to gain my full professional accreditation – although it has been a long journey, and sometimes it has been difficult juggling my studies with a full-time job.” In fact, not only has Emily been juggling her work and her studies, but she also recently married her fiancé Sean – so she has had a lot on her plate! “Things have been a bit hectic over the past couple of months,” she admits, “but I’ve made it through with the support of my family, friends and employer. I’m now looking forward to getting on with the rest of my career – and with married life!”   

Partner Peter White commented: “At Stewart Fletcher & Barrett, we pride ourselves on our long-established record of supporting junior team members in the acquisition of their professional qualifications. We like to think of this as investing in our future, as well as helping our staff to develop to their fullest potential. Emily really does deserve to celebrate – she is still very young, but has worked extremely hard, both at her studies and in her role here at the practice, and we are all very pleased for her.”

VAT – Are You Registered?

People who attempt to avoid VAT rules have until 30 September to register to pay what they owe under a new HMRC campaign. This focuses on individuals and businesses trading above the VAT registration threshold – a turnover of £73,000 – but who have not yet registered. Specific sectors to be targeted by the taxman include construction, business services, hair and beauty, hotels and catering, retail distribution, recreational services, motor vehicle distribution and repair, sanitary and domestic services, agriculture and horticulture, property and road haulage.

Under the terms of the VAT Initiative, those who have not registered to pay VAT can come forward at any point up until 30th September to tell HMRC that they want to take part. If they make a full disclosure, most will face a low penalty rate of 10% on VAT that has been paid late. After this date, however, HMRC will begin investigating those who have failed to come forward, and substantial penalties and even criminal prosecution could follow.

Sasha Wickham, Tax Manager at Stewart Fletcher & Barrett, advises: “While most people do register for, and pay, the correct amount of VAT, there are still a large number of individuals and businesses who have not yet addressed this issue – and they could soon find themselves falling foul of the law. Those coming forward are invited to also disclose any other tax arrears. Where they have to pay a penalty on undeclared tax other than VAT, this will be lower than the customary penalty of up to 100 per cent charged to those who fall outside the opportunity. However, the Revenue appear to be using scare tactics – forcing people to rush into making decisions. We urge anyone who thinks this may be relevant to them to pick up the phone and give us a call before they act.”

State Pension Age Set To Rise

It has been reported that the government will bring forward an increase in the state pension age to 67 under radical plans designed to prolong the working life of millions of people aged 50 and under. Ministers are already pushing controversial changes through parliament to raise the age at which men and women can claim a pension to 66 by 2020. Now, as the government moves to keep up with ever-increasing life expectancy, the retirement age could rise to 67 as early as 2026 – which would affect 8.1 million people in their 40s who would otherwise have expected to retire at 66.

Pensions Minister Steve Webb has stated that further moves are necessary, and that the coalition government will discard the former administration’s timetable, under which the pension age was to be increased to 67 in 2036 and 68 by 2046. He has described the timescales for 67 and 68 as ‘too slow’, and explained: “If it is 67 in the mid-2030s we will be going backwards in terms of share of your life in retirement. I mean the problem would be worse than 20 years before.”

Martin Lindsey, Director of Stewart Fletcher & Barrett Wealth Management, notes: “It has become clear that more needs to be done to avoid a major pensions crisis. With average life expectancy rising by, on average, two and a half years every decade, it is not surprising that some tough decisions have to be made, and quickly. Obviously this is a worrying issue that affects many millions of people, and any increase to the state pension age needs to be handled in such a way as to ensure that people have enough time to plan for the change.”

 

If you would like some advice or help with pensions, retirement or planning for your future, call SF&B now on 02476 384171.

Stewart Fletcher & Barrett Supports ‘Breastacular’ Event

Stewart Fletcher & Barrett is showing its support for the local breast cancer care unit by sponsoring a table at the ‘Breastacular’ charity dinner and auction on the 16th September.

The event, which promises to be a top night out, will include a champagne reception, dinner, auction, raffle and live band, and will be held at the Ambleside Club inNuneaton. It has been organised by a group of local ladies under the ‘Breastacular’ name: Angela Hammonds, Paula Inglis, Louisa Bosworth, Gemma Brining, Rachael Stinton, Rachael Clarke, Fiona Brown and Anna Riley.

They describe themselves as: “just a group of Nuneaton Girls who would like to arrange a dinner to support the Breast Cancer Care Unit at George Eliot Hospital.” The aim of the event is to raise money towards buying a Sentenial Node Biopsy machine costing £15,000.

Angela herself has just recovered from two years of treatment for breast cancer, and was treated at the unit, as were her mother and her sister. She explains: “This is a way of repaying and supporting the unit and the brilliant service they provide for women in the Warwickshire area.”

 The event looks set to be a roaring success, with all 16 tables sponsored by local businesses, who have also contributed by providing auction and raffle prizes which include a stay in a holiday cottage inCornwall, an Aston Martin for the weekend and a helicopter ride.

Senior Partner Paul Carvell said: “We are really pleased to be able to support Angela and the other Breastacular ladies in this fundraising effort. They have done a sterling job organising this event, and all of us at Stewart Fletcher & Barrett wish them the very best with it. We will also be keeping a collection tin in reception after the event so that anybody who can’t attend and wishes to make a donation can do so.”

Audits – Nothing To Be Scared Of!

If your company’s turnover exceeds £6.5m, you will be required by law to undergo an accounts audit. This is an official, independent inspection of your business accounts carried out in order to evaluate your financial systems and records, and to ascertain the validity and reliability of the information provided by them. An auditor will assess whether they have been prepared in accordance with Company Law, and whether they provide a true and fair reflection of your financial situation. 

The knowledge that your business is facing an audit can be enough to induce anything from mild apprehension to outright fear – even if you’ve been straight down the line with your finances. People worry about minor mistakes or genuine errors that may have occurred, and the consequences that may befall them should any miscalculations come to light.

 However, if the right firm is appointed, an audit is very rarely as daunting as it may seem at first. As with everything, the more audits a firm does, the better a job it will do for its clients. Rather than being a costly yet ultimately pointless exercise, an audit can actually be turned into a highly worthwhile activity. After all, if your company exceeds the required turnover, an audit is not optional – so it makes sense to get the most value out of it.   

Many accountants perform audits very rarely – if at all – because they lack clients with a high enough turnover. This may be true in your case, especially if you have never had to undergo an audit before. You may simply have outgrown your old accountant, or perhaps it would just make more sense to have your audit conducted separately from your accounts package.   

 To speak to a member of our team about audits, call now on 02476 384171.

20 Years Service For Lindsey

Peter and Adam present Lindsey with a bouquet

It was a day to celebrate on Friday 2nd September as Senior Manager Lindsey Chinn marked 20 years of working for Stewart Fletcher & Barrett. She was presented with a bouquet of flowers by partners Adam Bexon and Peter White. We hope she’ll be with us for at least 20 more!