New ISA rate

Individual Savings accounts (ISAs) allow people to save or invest up to a limited amount of money without paying money on the interest gained.
In this year’s budget, Alistair Darling announced new limits for the ISA for the year starting on 6th April 2010.
What this means for the savers is that instead of a limit of £7200 for Stock and Shares ISA’s they now have one of £10,200.
Also the Cash ISA increased its limit from April this year from £3,600 to £5,100.
If the rate of inflation averages out at the government’s predicted target at 2 per cent, the ISA limit could rise above the £10,400 for the year 2011/12 tax year.
Statistics gathered by Barclays show a worrying 42 per cent of the nation did not even know about this increase and an even more alarming 70 per cent of the population does not even know how much they can invest into an ISA.
If you have any queries regarding your ISA allowance, feel free to contact Taxfile‘s tax agents.

HMRC is phasing out paper VAT returns

From 1 April 2010, most VAT registered businesses will be required to submit all VAT returns online and make payments electronically.
If your business either has an annual turnover of £100,000 or you register for the first time (or become legally required to register) on or after 1 April 2010, you will be required to deal with VAT returns online.
For those businesses already registered with a turnover below £100,000, there will be no requirement to lodge electronically. However HM Revenue and Customs have indicated that by 2012 electronic filing will be compulsory for all VAT registered businesses.
So if you do need to do online for VAT, you will need to register for electronic VAT filing with the HMRC as soon as possible.
At Taxfile we can help you to work out whether you will need to move online for VAT and help you manage this transition.
Please get in touch with one of our helpful staff members on 020 8761 8000 or email at info@taxfile.co.uk.

Tax Health Plan (THP)

The HM Revenue & Customs is offering a disclosure opportunity for medical professionals known as Tax Health Plan (THP).
Under the plan, medical professionals have until 31 March 2010 to notify the HMRC that they will be making a disclosure of any undeclared tax bills.
After which the full disclosure and payment of all outstanding taxes and duties, interest and penalties must be made by 30 June 2010.
Under the Tax Health Plan, the HMRC are offering a reduced penalty rate of 10% but no penalty where the total of unpaid tax is less £1000.
After 31 March 2010, the HMRC have stated that they will be undertaking a data matching exercise using information from payments from NHS trusts, private hospitals and medical insurers.
If the choice is made not to disclose and HMRC discover any undeclared tax bills, they will seek to apply penalties of 30% to 100% of the unpaid tax bill.
If you wish to take advantage of the THP, Taxfile‘s tax agents may be able to assist you in entering the THP and preparing your disclosure. Pop in to see us or call us on 020 8761 8000 to book an appointment.

Ministers of religion and their allowable expenses

There are certain expenses that you can claim as a minister of religion as long as they are incurred wholly and exclusively for the duties of the office or employment.
• The cost of ministry journeys from one place of work to another.
• Also allowable are related costs of accommodation and meals.
• Maintenance, repairs and insurance of vicarage or manse
• A proportion of the cost of lighting, heating, cleaning and maintaining of premises where you live.
• A proportion of rental cost if part of the house is used mainly for work;
• Cost of postage, stationery;
• Cost of telephone calls where a deduction is made to cover personal calls;
• Cost of repair or replacement of robes worn for divine service;
• Communion expenses such as bread and wine;
• Subscriptions to professional bodies approved by HMRC;
• Secretarial assistance cost;
• Books used in the conduct of services or preparation of sermons;
• Work-related training;
• Reasonable entertaining costs for official visits from clergy or officers of the church;
• Temporary cover cost known as locum tenens.
For more information about taxation of ministers of religion you could visit HMRC.

31st January Deadline

If you have not submitted your tax return to HM Revenue and Customs already, you must do it online by the end of this month.

If HMRC receive your tax return after 31 January you will be liable for a late filing penalty of £100.
But even if if you miss the deadline for your tax return, you will not have to pay the penalty if you pay all of the tax you owe by 31 January.
In some rare cases, you might still be allowed to send your return on paper after the October deadline when no software is available. This is the case for the following types of returns:

SA700 – Non-resident Company Tax Return
SA970 – Trustees of Registered Pension Schemes

According to HMRC, “Tax returns that are in an HMRC office letter box when it’s first opened on Tuesday 2 February or delivered to an HMRC office by hand on Monday 1 February will be treated as being received on the 1 February. You won’t have to pay a late filing penalty, but HMRC will have longer to start a check into the tax return – until 30 April 2011 rather than 31 January 2011”.

So if you have not managed to deal with your tax affairs so far, Taxfile’s tax accountants can still submit your tax return on your behalf at reasonable rates.

Hurry up and beat the deadline!