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News Bulletins

April 2010 - E-NEWS

Please browse through this month’s articles using the links below and contact us if any issues or questions arise.

Payment of VAT

HMRC are advising businesses that from 1 April 2010 all cheque payments by post will be treated as being received by HMRC on the date when cleared funds reach HMRC's bank account. This change does not affect any cheque payments made by Bank Giro.

Affected businesses will need to ensure that they allow enough time for the payment to reach HMRC and clear into HMRC’s bank account. This needs to happen no later than the due date shown on their VAT return.

According to HMRC’s guidance:

“A cheque takes three bank working days to clear. Bank working days are Monday to Friday excluding bank holidays.
 
To allow for possible postal delays (for which HMRC is not responsible) please allow at least three working days for the cheque payment to reach them and a further three days for the payment to clear HMRC’s bank account.
If your cheque payment does not clear by the due date shown on your VAT return you may be liable to a surcharge for late payment.”

From 1 April 2010 it will be mandatory for all VAT-registered traders with a turnover of £100,000 or more, plus any newly registered traders (regardless of turnover), to submit their returns online and pay electronically. For guidance about electronic payment methods use the second link below or please do contact us.

Internet links: HMRC guidance and HMRC how to pay VAT

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Businesses face fines over online returns

Small businesses risk fines of up to £3,000 if they fail to submit their Employer Annual Returns electronically this year.

All firms with five or more employees must file their details online by 19 May or face a penalty, calculated as a percentage of the amount paid late, with higher fines for consistently late payers.  Firms with more than 50 employees have had to file online since 2006.

Alan Williams, Managing Director said “HM Revenue and Customs (HMRC) has also warned employers that anyone who submits a paper form, even if it is before the 19 May deadline, could face a penalty charge. In order to file online, businesses must register with HMRC’s PAYE online service at www.hmrc.gov.uk/paye. Businesses with fewer than five employees will be given another year to fall in line, while there is also an exception for religious groups whose beliefs are incompatible with electronic communications”.

HMRC claims submitting returns online will reduce delays and errors and is offering it’s own software for free to help small employers. However, business groups have criticised the department’s stance, saying some smaller firms do not have enough IT expertise to file these details online.

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Inheritance tax nil rate band frozen

As previously announced, the nil rate band for 2010/11 will be frozen at the current level of £325,000. This will now be extended to cover the tax years 2011/12 to 2014/15.

Internet link: HMRC Budget note

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National Insurance - New EU rules

HMRC have released new guidance for employers about forthcoming changes to EU rules regarding national insurance for people moving around Europe for work. The rules apply from 1 May 2010. To read the guidance in full, please use the link below.

Internet link: HMRC NIC guidance

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HMRC will publish details of ‘deliberate’ offenders

HMRC have the necessary power under existing tax law to publish the details of taxpayers where it is established that they have committed ‘deliberate’ tax offences. HMRC have confirmed that they will apply this provision for tax periods starting on or after 1 April 2010 and for offences which are committed on or after this date.

Internet link: HMRC press release

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Fit notes

Fit notes will be brought into effect from April 2010 and are a replacement for sick notes. The information that doctors will be asked to provide means that instead of giving patients a sick note saying they are too ill to work, they will be able to advise whether a person may be fit for work with some help and support, and what employers can do to assist in this process. Assistance could include a phased return to work, altered hours, amended duties or workplace adaptations.
According to the advice given on the Business link website:

“If a doctor uses this option, they will give advice about the effects of the patient's health condition and, if appropriate, some suggestions about the types of adjustment or adaptations you could consider making to help your employee back to work.

While you won't have to act on the doctor's advice in a 'may be fit for work' statement, it may help you make simple and practical adjustments to help your employee return to work and reduce unnecessary sickness absence.

If for any reason you can't make the changes necessary to support your employee's return to work, you should - for sick pay purposes - consider the statement as if the doctor had advised that your employee is 'not fit for work'.”
The initiative is designed to encourage employers to be more responsible regarding employee rehabilitation and aims to help reduce the impact of long-term sick leave.

Internet links: Department for Work and Pensions and Business link guidance for employers

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