Tax Newsletter 22 Oct 09
This week's national postal strike could delay a large number of VAT returns and the personal tax returns due in by 31 October 2009. We have advice on how to avoid penalties for late filing of these returns. We also have tips on achieving some benefits from the changeover of the standard VAT rate effective from 1 January 2010, and we provide an update on changes to entitlement for state benefits from 2 November 2009.
You may also be interested to note a couple of recent changes we have made to our website. When you use the search facility the results now include an extract from each advisers' profile. We have also updated the FAQs on our site and added a link to these from the main menu bar.
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And now, on with this week's practical points:
Beating the postal strike
There is still a week or so to get paper SA and VAT returns to HMRC before the deadline of 31 October, but due to the postal workers strike you cannot rely on the Royal Mail delivering normal or second class post in that time. So what are the alternatives?
Sorry - the rest of this item, our practical advice and useful links are only available to professional members.
VAT increase on 1 January 2010
The standard rate of VAT will rise from 15% to 17.5% on 1 January 2010, but in order to benefit from the lower rate for a while longer, you and your clients need to take action before that date.
This increase will have no effect on business customers who can reclaim all the VAT on their purchases. However, customers who are not VAT registered, and exempt or partially-exempt businesses will appreciate an opportunity to delay or avoid the VAT increase, perhaps by paying in advance. Where material, such advance payments could provide a much needed boost to your own or your client's cash-flow.
Sorry - the rest of this item, our practical advice and useful links are only available to professional members.
Entitlement to state benefits
Sadly some of your clients may have had their incomes reduced during this recession to such an extent that they now qualify for a range of state benefits.
You may feel uncertain about advising in this area, but there are a number of online resources to help you.
Those aged 60 or over, and families with children aged under 16, are most likely to qualify for state support, and both these groups will benefit from changes in the benefit rules effective from 2 November 2009. From that date the level of savings that is ignored when applying for benefits for older people, increases from £6,000 to £10,000. This will increase entitlement by up to £8 per week for benefits such as council tax support, housing benefit and pension credit.
Also from 2 November child benefit income will be completely ignored when calculating entitlement to housing benefit and council tax support. These benefits can be claimed up to 13 weeks in advance, so if the removal of child benefit from the assessment makes your client eligible from 2 November they can submit a claim now.
HMRC have launched another campaign to encourage childless individuals to claim working tax credit, as those on lower incomes often don't realise that they qualify for this benefit. We covered this issue in our newsletter of 14 May 2009 but since then HMRC have....
Sorry - the rest of this item, our practical advice and useful links are only available to professional members.
Spotlight on: Iain Macleod
When working in partnership with accountants on their clients Iain is flexible as to how that relationship works in terms of advising the end client - ie it can be a direct or indirect relationship with them. Iain will happily take over the entire conduct of an enquiry or simply advise on a specific aspect.
You can see Iain's full profile here. It usefully contains examples of his various specialist areas.
Tax Fun spot
One day king Gordon called to the palace his chief tax collector, Dave. 'I really must have some more taxes' said the king 'otherwise I will not have anything to pay my servants (and that includes you, by the way). But I don't want to annoy my subjects, so what can we do?'
'We don't need any new laws' explained Dave 'in fact you could just issue a proclamation that from now on we will expect your subjects and especially the bankers to forget the actual wording of the law and instead act in accordance with your Majesty's intentions when making those laws. No one need bother about the written laws ever again! We could call this concept "the spirit of the law".'
'But how do I know what my intentions were?' exclaimed the king, 'I just pass the laws you give me.'
'Sire, I shall be more than happy to tell your Majesty what your Majesty's intentions were, should the need ever arise' beamed Dave, bowing lowly.
Adapted from a wonderful fairy tale penned by Trevor Johnson, a senior technical editor with CCH. You may notice a similarity between the fairy tale and prospective developments in the interpretation of our tax laws.
Items appearing in this 'tax fun' spot are taken from the Accountant-Jokes.com blog - with my permission!
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