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Harries Watkins Jones are a Bridgend and Pontypridd (South Wales) based firm of Chartered Accountants, tax and business advisers. They pride themselves in providing high levels of service. With each and every new client, they never assume their requirements but seek to tailor their services to their individual needs.Their goal is to build a strong and sustainable working business relationship with each client and to offer them real solutions to their business problems.

To find out more please visit their website.

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Saturday, 15 October 2011

Business Record Checks Update

The Taxman believes that a lot of businesses do not pay the right amount of tax because they don't accurately record their business income and expenditure. In other words their business records are not of a high enough standard to produce accurate accounts. We agree that many businesses do not keep perfect records but we work with business owners to help them retain the necessary documents, and use those records alongside a good understanding of the business, to produce a reasonable statement of profit or loss for the tax return.

Unfortunately the Taxman is not taking such a helpful approach. He is now sending out 120 tax officers to examine the un-sorted raw records held at thousands of businesses. If the tax officer (who is not a trained accountant), judges the business records to be inadequate the business owner could receive a penalty of up to £3,000.

Some businesses have been visited already as part of a training exercise for the tax officers. Following those 'test and learn' visits the tax officer may have made recommendations, but he won't have raised a penalty, unless there were absolutely no business records to examine.

Saturday, 8 October 2011

Splitting Businesses to Avoid VAT

Now that the standard rate of VAT has been raised to 20%, some business owners are increasingly tempted to split their businesses into different entities, so the part with non-business customers or both parts falls under the compulsory VAT registration threshold when split. This enables them not to register to have to charge VAT to those customers. The Taxman is watchful of this type of tax planning and where he believes they have been artificially separated to avoid VAT, he will direct that the businesses should be re-aggregated.

Sunday, 2 October 2011

October 2011 Tax Questions & Answers

Q. My cafe was badly damaged in the recent riots, but my loyal customers have collected £3,000 to help me open the business as quickly as possible. How should I treat this sum for tax purposes? Is it a personal gift, or a contribution to be set against my repair costs?

A. This gift from your customers should be treated as income for your business for income tax or corporation tax purposes. You are likely to have a lot of repair expenditure to set against your income for the current period, so you may well not have a profit to declare even after including the gift as income.

Q. I've received a tax refund for 2010/11, but I'm worried that it's not correct as I usually have tax to pay each year. Also I haven't even submitted my 2010/11 tax return yet.