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October 2011

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To October’s Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

Please contact us for advice in your own specific circumstances. We’re here to help!
October 2011
· How to carry on using MYOB!
· Splitting Businesses to Avoid VAT
· Business Record Checks Update
· Student Loan Notices
· October Question & Answer Section
· October Key Tax Dates
How to Carry on Using MYOB! top
If you want to carry on using your existing MYOB datafile join the MYOB Users Group!

We believe that anyone with a valid MYOB licence (from version 13 to version 18) should be able to carry on using their software. We are therefore supporting the MYOB User Group to help users at this difficult time. The User Group is an incorporated Association, ‘MYOB Users Ltd’ and is funded entirely by MYOB users through an annual membership fee.

One of the main benefits of joining the User Group is that it will regularly give access to confirmation codes. These will allow users to carry on using their software beyond December 2011. The Association holds a program (securely) that calculates these codes. The codes must be renewed every three months. The Association asks all those seeking to become a member for evidence of their licence. 

The MYOB User Group also provides user support by email and telephone. It has set up user forums so people can discuss and help each other with MYOB related issues.

The User Group has been set up as a not-for-profit however it does need some income so it can provide its services. Membership costs £35 per year.
We hope you consider joining – just go to

Splitting Businesses to Avoid VAT top
Business Record Checks Update top
Now the standard rate of VAT is 20%, some business owners are 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 alive to this tax planning and where he believes they have been artificially separated to avoid VAT, he will direct that the businesses should be re-aggregated.

A frequent target of the Taxman on business-splitting grounds are VAT-registered farms, where a member of the family runs a bed & breakfast business which is not VAT registered, from the same location. He will argue that because some buildings have both a farm use and a B&B function, the two businesses are part of a whole and should come under one VAT registration. Read More
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. Read More
Student Loan Notices top
October Question & Answer Section top
As an employer you are required to collect repayments of student loans your employees took out through the Student Loan Company (SLC) while they were studying, during years after September 1998.

You are told to start making SLC deductions by a form SL1 from the Tax Office (HMRC). HMRC is currently tidying-up the data it holds on employers who collect student loan repayments. You may receive an unexpected SL1 notice for a current employee from whom you are already collecting SLC deductions. Alternatively you may receive SL1 notices for employees who have left your employment. In both cases you should simply file the SL1 notices and take no further action.
Read More
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? Answer

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. Answer

Q. The Tax Office has written to me saying £2,800 tax I owe will be collected by restricting my PAYE code for 2012/13. What does this mean? Answer
October Key Tax Dates top
 5 – If a Tax Return has not been received, individuals and trustees must notify HMRC of new sources of income and chargeability in 2010/11

14 – Return and payment of CT61 tax due for quarter to 30 September 2011

19 – Tax and Class 1B national insurance due on PAYE settlements for 2010/11

19/22 – PAYE/NIC and CIS deductions due for month to 5/10/2011 or quarter 2 of 2011/12 for small employers

31 – Deadline for 2010/11 self assessment paper returns to be filed for HMRC to do the tax calculation and/or if tax underpaid is to be collected by adjustment to your 2012/13 PAYE code (for underpayments of up to £3,000 only)
Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.
About Us top
Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Mamut, Solar Accounts, Quickbooks or Clearbooks. We offer a range of accountancy services despite being specialists.

‘All clients using these software packages can benefit from our support. Visit our website for a look at the resource on offer.’

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