The minutes of the first meeting of the Forum have now been published and amongst the basic structures, rules, etc, the Forum started to discuss the key areas:-
Segmentation
They are looking to give guidelines as to what might constitute an IR35 low, medium and high risk client.
What a job that is! How exactly are they going to decide who falls into what category?
Reviews (investigations)
In seeking to dispel the opinions of many that HMRC select at random for IR35 reviews, they actually advised that “in fact all IR35 reviews are conducted on the basis of risk assessment”. Procedures are in place already to refer so-called high risk cases to a specialist team for potential review.
On this particular point, what then does the government expect HMRC to do differently?
How does HMRC select cases for review?
HMRC said it was not possible to publish its detailed risk criteria, but it agreed to providing greater transparency about the process.
So how transparent are HMRC willing to be? Back to the segmentation above then?
Who does reviews?
Previous by various teams around the country. In future only by specialist teams.
OK, this may help with consistency but back to segmentation again about who might actually get a review.
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( 3.1 / 64 )Another week begins and with the end of the personal tax year, it will be a busy one!
Any end of tax year planning should just be getting finished rather than just started. And all of the new rates and allowances will come into effect on Wednesday.
Meanwhile, it will now cost you 46p to send a normal letter, up a record 5p - our door is always open for personal drops off and visits rather than relying on the costly and often unreliable snail mail!
In other news I read earlier that Tesco are starting to sell used cars online - no doubt they will shake this market up (no doubt they will with banking as they gradually increase their banking offering) and it also makes you wonder what else they are looking at.
And the Olympics row over money between the British Olympic Association and the London Olympic Games Organising Committee rumbles on (any of you out there who remember the BOA chief Colin Moynihan from football ID cards in the 80s might be yawning now) .... wake up..... various IT industry figures are talking positively about the possible demand for IT contractors to help with the wide and varied IT requirements that the Games will bring not only before and during but also afterwards.
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( 3 / 122 )As you all know VAT will be rising from 17.5% to 20% in January 2011.
For most businesses this is just another costly exercise changing IT and pricing. It is however a good bit of news for the Contracting world on the whole
For an IT consultant for every £10,000 invoiced for before and after the rise-
The net gain before would be £222.50 and after it would be £260
Therefore the net increase in 'free money' would be £37.50
For a Management consultant the gains are slightly higher at -
£281 per £10,000 before and £320 per £10,000 after therefore an increase of £39
This may not sound a lot but when you consider turnover in the region of £100,000, that business would be receiving effectively free revenue of around £375-390 per annum (for doing nothing) Not bad!!
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( 2.9 / 194 )If Local Government secretary, Eric pickles, has his way, the barriers most business see now will be removed. He has recently announced that the government hopes to scrap the off-putting form-filling rules currently in place, thereby substantially increasing uptake of available tax breaks. Mr Pickles added that he intends to double the tax discounts available for Ltd Company contractors and other small business, as well as making it much easier for them to claim everything they’re eligible for.
Recognising that small businesses will play a pivotal role in helping the UK back to full recovery, Mr Pickles said that as the government rebalances the economy, it remains determined to give them all the assistance it can. If the government offers tax support to small businesses, it shouldn’t then deter people from claiming with yards of red tape.
Pickles added that he and the government wanted to see as many small business rate payers as possible claiming their tax cuts; to bring this about, changes to the rules are necessary so that local councils can administer the breaks efficiently without getting tangled in miles of superfluous government red tape. Many in the UK’s contracting community will agree with his sentiments.
It would also be nice if they realised that the increases to National Indsurance will severly hurt small businesses. 1% of any salary roll is a lot of money to find even if they have just robbed Peter (Corp tax deduction) to pay Paul (NIC increases!)
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( 3 / 210 )Part-time eBay traders and other small and medium enterprises may need to register with HM Revenue & Customs for self-assessment tax returns, or face new penalties that could double the tax due, the department warns.
Particularly those whose small businesses are approaching the £70,000 gross sales threshold for VAT need to tell HMRC of the fact.
Others who need to tell HMRC of the change in their circumstances include those who are renting out a property or receiving an income outside their regular jobs, or if they have sold an asset at a profit, HMRC said.
It may also include job seekers who earn income while looking for a new job, in which case they need to register as self-employed, an HMRC spokesman said.
The spokesman said timing is important. Under regulations that took effect from 1 April, taxpayers could face a penalty of up to 100% of the tax due on the undeclared income.
"The amount of the penalty will also depend on how much help you give HMRC. If you provide access to your records and help HMRC calculate what tax is due, the amount will be reduced," the HMRC said.
But if you tell HMRC within a year of the change in your income, HMRC may cut the penalty to zero.
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