January Tax Round-up

Firstly, as the Self Assessment Tax Return deadline day has of course passed, you should have filed your tax return for the year ended 5 April 2012 on or before 31 January 2013.

If for whatever reason you have missed this deadline then you do need to think about filing your return as soon as possible, you will recall that we are now in the new penalty regime and the fine can soon reach in excess of £1,000.

What are HMRC up to?

HMRC have announced that from 9 January 2013 they have embarked on a new campaign to chase up businesses that have one or more VAT returns outstanding. Their announcement reminds businesses that failure to submit a VAT return is an offence and penalties could be levied on top of any additional VAT that might be due to HMRC.

The obvious answer is to get any outstanding VAT return(s) completed and submitted online as soon as possible, HMRC have said that they may be more lenient in terms of penalties with those businesses that bring returns and arrears up to date. If you are having cash flow issues then please contact us and we will assist you in dealing with HMRC to put a “time to pay” arrangement in place.

If you have not registered for VAT but should have then again you need to do this as soon as possible, if you are unsure about this contact us and we will be able to advise you.

Business Records Checks
HMRC are re launching their teams to carry out business records checks, these are a little different to formal Enquiry Notices but could bring the same results. Many businesses may have experienced Vat visits and or employer compliance reviews in the past and these visits are basically an opportunity to do both proc esses in one. HMRC will undoubtedly say that the visit is designed to see if there is anything not quite right in terms of record keeping or reporting to them and that they will advise businesses how to correct this so that vat tax and national insurance liabilities do not arise unexpectedly. The truth is of course that they take these opportunities to see what if anything has been done wrong or missed off in earlier periods so that they can raise assessments for any underpaid HMRC liabilities. Theses always carry interest and penalties and can be a significant financial burden to businesses.

What to do?
If you receive a letter from HMRC stating that they would like to carry out a business records check, please notify us immediately, we will be able to ensure that it is carried out at a location of your choice which can be here rather than your business premises and we can attend which will give us the opportunity to provide explanations or clarify potential areas for further enquiries minimising the stress and worry to you and most importantly heading off any potential liabilities.

And finally….. it’s just not cricket!

Oh yes it is, we are aware that HMRC is currently targeting cricket clubs and this is all the way down to small village and community clubs. We understand that HMRC have obtained details from the ECB of all overseas players playing for UK clubs and that they are simply working through a list of the clubs with a view to contacting them all. Their aim is clearly to impose PAYE and National Insurance in respect of monies paid to the overseas players, of course many clubs have not operated PAYE for a variety of reasons. HMRC are also taking the opportunity to check for other potential arrears such as PAYE & NIC for semi – professional players, groundsmen, club stewards and bar staff. There may be other tax issues that come to light and in many cases any tax arrears may be enough to mean the closure of a club.

If you are a member of a cricket club ask to see if any such HMRC letter has been received, we will be able to help if the club doesn’t already have tax advisers.

This blog post was written by Darrell Booth, Head of Tax for Manchester accountants and business advisors, Sedulo.

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