Focus Newsletter October 2011
Posted: 12-10-2011 20:53
Welcome to the first of what will be regular newsletters focusing on what is happening currently that may affect the way you carry out your business.
1. Capital Allowances
The Finance Bill introduced by this year’s budget introduced some changes to capital allowances, the most significant one of these was to reduce the Annual investment Allowance from £100,000 to £25,000 per year from April 2012. This may impact on your capital spending this year if your accounting period straddles 1 April 2012 as it may mean that you might not be entitled to the 100% annual investment allowance on all your purchases this year. It is essential that you contact us if you are planning a major capital spend and you are assuming that you will get the 100% allowance.
2.Business Records Checks
HMRC have announced a new initiative ‑ Business Records Checks. Starting in 2011 this will target 50,000 businesses per annum over the next 4 years.
H M Revenue and Customs will be visiting Small and Medium sized businesses to check on the adequacy and accuracy of their accounting records.
HMRC will select businesses for a record check on the basis of a risk assessment "focusing on businesses that have features associated with poor record keeping". You will be notified in advance if HMRC are planning to visit your business to make one of these checks.
The maximum penalty for failing to keep and preserve records is £3,000 per tax year or accounting period. In addition to this penalty there may be further penalties if HMRC discover that you have filed an incorrect return due to the poor records.
Please talk to us if you have any concerns over this.
3. PAYE Penalties
Since 6 April 2010 a new penalty regime has been in place for failure to pay PAYE & NIC on time and applies to late payments relating to the tax year 2010 – 2011 onwards, including student loan and construction industry scheme deductions and annual payments of employers’ Class 1A and 1B NIC.
The initial penalty is a percentage of the tax that is paid late and the amount of the percentage can be up to 4% depending on how many times you have paid late in the year. Where monthly or quarterly payments remain unpaid after 6 months, a penalty of 5% may be imposed and a further 5% may be charged if the payments are outstanding after 12 months.
In addition to the late payment penalties there are penalties for the late submission of your P35, which is £100 per 50 employees per month or part month that your return is late, the same penalties also apply for late submission of P11D(b). There are also payments for filing an incorrect return and these vary from 30% to 100% of amended tax.
4. The Bribery Act
From 1st July 2011, The Bribery Act 2010 came into force.
What does this mean for small businesses? It may affect how you conduct business in the UK and Overseas. The Act defines what a bribe is and it makes a criminal offences of: Offering, promising or giving a bribe; requesting, receiving, or agreeing to receive a bribe; offering, promising or giving a bribe to a foreign public official with the intention of influencing that official in the performance of his/her duties to gain an advantage; and failure by a business to prevent bribery by its employees or associated persons acting for, or on behalf of, the business.
The penalties for conviction of these criminal offences are severe. For an individual, the penalty can be a maximum sentence of 10 years' imprisonment and a fine and there are unlimited fines for companies.
If you have any queries about any of the matters in this newsletter, please contact Paul Wragg.
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