Entries from February 2006 ↓

The government is attempting to collect additional taxes by urging people to report tax cheats. As part of this initiative, TV adverts will be screened starting with tomorrow night during Coronation Street. The ad highlights a new hotline for people to call with information on tax evaders - 0845 915 4515

HMRC chairman Sir David Varney said: “By far the majority of people are honest taxpayers, but there is a minority out there who refuse to pay their way. People who don’t pay affect us all, and turning a blind eye only reinforces their behaviour.”

The tax rate for small companies that pay dividends is changing on 1 April 2006. By small companies, I mean companies with annual profits less than £50,000.

For the current year, you can gain a tax advantage by delaying payment of your dividends until 1 April 2006 or later. And if you pay the dividend before 6 April 2006 you won’t lose a personal tax advantage that you might otherwise do.

Make sure you get the paperwork dates right though as this is only a 5 day window!

The Isle of Man Treasury has announced tax cuts in an effort to encourage more wealthy individuals to its shore.

Personal income tax rates are set at 10% and 18% with any income in excess of £100,000 being tax free. And corporate taxes have been reduced to zero completely.

The downside is a rainy climate but at least you don’t have to worry too much about speed limits!

HMRC has had to change the wording of an advert designed to counter tax avoidance. The original advert depicted a plumber hiding under a sink and the words “With your help, we’ll make sure self-employed people who don’t pay their tax have nowhere to hide.”

Following complaints from the Association of Plumbing & Heating Contractors and the Federation of Small Businesses the Taxman has agreed to change the wording to “With your help, we’ll make sure people whose business is not registered for tax have nowhere to hide.”

It has been calculated that the UK government will have wasted £82bn of our taxes this year. For example, £25m wasted on an asylum centre that was never built, £100m wasted on keeping 25,000 homes empty for asylum seekers who never materialised. Not to mention wallpaper at £400 per roll and football world cup tickets for civil servants.

Remember, this is your money paid for through your taxes. Wouldn’t you prefer to have this money spent on hospitals or schools? Or, maybe you could be allowed to keep it and spend it on what you would like?!

Reports are coming in of HMRC being reluctant to renew CIS gross payment certificates to sub-contractors.

The reasons for the refusal are starting to get more and more minor so make sure you send off your forms and payments in good time.

Revenue & Customs enquiry centres are implementing a new system in an effort to reduce waiting times for the public. The changes are being brought in across the country and include floorwalkers to answer quick queries, encouragement to use telephone and internet help lines and an appointment system (waiting time is max 10 days) for more involved enquiries.

Fingers crossed that this is one of those changes that do actually work.

There are many small businesses that filed their PAYE papers on line back in May 2005 expecting to receive the £250 incentive that HMRC had been shouting about so much.

Our experience suggests about one third of businesses are still waiting for their cheque. The bad news is that the Taxman has just announced that its going to take at least another 3 months. But he is very sorry for the delay!

Do you think we, as taxpayers, can pay our tax 12 months late and just say “sorry” - we think not.

The government has announced that the 2006 Budget will be delivered by Gordon Brown on 22 March 2006 at 12.30pm. I can’t wait!!

Chances are this will be Mr Brown’s last Budget as I’m sure he would rather be thinking about PM duties.

One way to reduce your tax bill is to employ your husband / wife in your business. Be careful though, the Taxman won’t give you a deduction if the wages you pay are too high for the work done by your spouse.

Let’s say your spouse helps out with the bookkeeping, answering the phones, managing your diary etc. The best thing to do is to get a quote for the cost of employing an office assistant or secretary to do the role and then pay a similar hourly rate to your spouse.

Be sure to keep evidence of this quote, the duties and responsibilities of the role and the number of hours per week that the job requires. That way, when the Taxman asks the question, you will have the answer!