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September 2011

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To September’s Tax Tips & MYOB News.

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!
September 2011
· Why MYOB users should avoid ‘Digital Rights Management’
· Business Exit Planning
· Jointly Held Property Tax Savings
· New Mileage Rates
· September Question & Answer Section
· September Key Tax Dates
Why MYOB users should avoid ‘Digital Rights Management’
Many firms are getting in touch to get advice about how to deal with the forthcoming switch off of the MYOB datafiles.  Currently, every 60 days MYOB datafiles in the UK are reconfirmed by MYOB in Australia, using the Digital Rights Management (DRM) reconfirmation process within in the software. MYOB will stop reconfirming the files after December. 

I’d like to relay one of the many conversations I’ve recently had with firms to show the complexity of the situation. 

I took a call from a factory
which is considering alternatives to their current MYOB v18 setup.  They run MYOB over a PC network.  They told me that they had phoned MYOB in Australia to see if they could help/ back down over file reconfirmations.  MYOB Australia responded to say that they would not stop file reconfirmations but that the factory could buy the Australian version of MYOB and use it!

This is very revealing.  It appears that MYOB Australia is
happy to use the DRM as a way of securing extra licence fees from British customers who have already paid once. 

Is Australian MYOB a good answer for UK users of MYOB?

Perhaps the factory should bite the bullet and simply buy the Australian licence.  But there is another problem. 
MYOB in Australia has an agreement with Mamut that Mamut should be the exclusive distributors in the UK.  It could be that Mamut complains and MYOB in Australia changes their mind.  If the Australian parent of MYOB decides to cease to support software in the UK it will have the power to alter the DRM to make the files read-only once again.

I have therefore advised the client not to buy the Australian software. 

Is there a better answer for UK users of MYOB?

This is a key reason why Acclivity AccountEdge software gets a strong review on the software section of this site.  Acclivity does not use DRM. Licences bought from Canada will never be removed from you.  Similarly a version 11 UK MYOB licence cannot be removed from you.  You can obtain a three user licence from this website.

As we approach the deadline for the cut off the situation has started to get quite complicated.  We have therefore started a new blog on the front page of our website to keep you informed of the latest developments.   

There is no ideal solution.  Do phone us if you need some advice on 01422 847500.
Business Exit Planning top
Jointly Held Property Tax Savings top
Are you thinking about hanging-up your working boots and passing-on your business? This takes a lot of planning to get the best possible tax outcome.

If you have younger relatives who could take on the business it is advisable to get those individuals involved in the management for a considerable period before you go. You may need to restructure the business to make this hand-over easier, perhaps incorporate, or slim-down the enterprise.

Where your business is already run though a company, a neat method of exiting for the founder is to have the company to purchase its shares from you. However, this ‘purchase of own shares’, as it is called, must be planned and undertaken in a very precise way to ensure the tax charges are as low as possible.

At the time you sell your business your records need to be complete to allow the purchaser to be sure what he buying, he will conduct a process called ‘Due Diligence’ on your firm to establish whether the final accounts are consistent with the terms of the sale of the business. The list of documents required is intimidating. Most of them can be provided from your MYOB system.

One service we offer is to prepare these documents for prospective sellers. Accurate and consistent documentation of the firm’s finances will help you get a good price for the work you have put into your firm over the years . Read More
With the threshold for 40% tax reducing every year (£35,000 after deducting allowances for 2011/12), it makes sense to review who pays the higher rates of tax within a family. Can some assets be transferred to the partner who pays a lower tax rate to reduce tax?

For example a let property could be transferred from one spouse into the joint ownership of the married couple or civil partners, or entirely into the other spouse’s name. Joint ownership has advantages, as on the eventual sale of the property up to two annual exemptions (£10,600 each for 2011/12) may be available to reduce the chargeable gain. Transfers between husband and wife or civil partners who are living together do not create a capital gains tax charge at the time of the transfer. Read More
New Mileage Rates top
September Question & Answer Section top
Where your employees use a company car or van, but pay for the fuel themselves, the company can pay a fuel-only mileage rate for business journeys. This fuel-only rate is guaranteed to be tax free when it is equal to or less than the advisory fuel rates set by HMRC. These advisory fuel rates are now revised every quarter. The latest rates applicable from 1 September 2011 are shown below for different engine sizes, with the previous rates that applied from 1 June to 31 August 2011 shown in brackets.

Petrol & LPG Engines
1400cc or less: Petrol 15p (15p), LPG 11p (11p)
1401 to 2000cc: Petrol 18p (18p), LPG 12p (13p)
Over 2000cc: Petrol 26p (26p), LPG 18p (18p)

Diesel Engines
1600cc or less: 12p (12p)
1601 to 2000cc: 15p (15p)
Over 2000cc: 18p (18p)

Note there is now a different scale for diesel vehicles. Read More
Q. I received my self-assessment statement and payslip on 17 August 2011, which shows tax due to be paid by 31 July 2011. I paid the tax due as soon as I could, but I am now worried that I will get charged interest and a penalty for late payment. Answer

Q. My son worked for a company that has gone into liquidation. The Tax Office are refusing to acknowledge the student loan repayments which were deducted from his salary in 2010/11 and pass those repayments on to the Student Loans Company. What can he do to get his student loan records corrected? Answer

Q. I recently applied for VAT registration for my business as the turnover had exceeded the compulsory registration threshold. Now I’ve had a call from the VAT office asking to come and see me. What have I done wrong? Answer
September Key Tax Dates top
 19/22 – PAYE/NIC and CIS deductions due for month to 5/8/2011
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, Acclivity, 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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