Taxfile passes HMRC inspection with flying colours!

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HMRC inspect high volume tax return agentsHMRC have recently been targeting tax agents who file high volumes of tax returns and, as one of the UK’s top 100 tax return preparers by volume, Taxfile had the honour of having an inspection by HMRC inspectors during late October.

The two senior inspectors met all Taxfile staff who prepare tax returns and analysed the procedures undertaken by them to arrive at the figures entered on customer returns. They also reviewed, on a spot-check basis, a selection of files worked upon over this Summer. Analysis included checks on procedures, figure work and record keeping including the level of detail recorded in notes. The result was a resounding success – Taxfile passed with flying colours – of course!

HMRC were also satisfied with the way Taxfile had dealt with any occasional instances of missing client receipts. They reiterated that, where clients had lost receipts, some kind of proof of purchase was always needed in lieu of the official receipts. For example bank statements showing that the purchase was made via a debit card or cheque, or credit card statements showing the purchase was made originally with a Visa or MasterCard. Our own recommendation is to Read more

Online banking may save you money!

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Online banking can save you money on your accounting costsDo you have online banking? Sending us downloaded statement information straight from your online banking means we can more easily import the data into our system and check for expenses and income which might otherwise have been overlooked. It can also fill in the gaps where you are missing receipts or invoices. This simple service could therefore save both time and money! Most online banking platforms allow you to export this information, for example as a CSV file, and this format is perfect for our accounting system.

Don’t have online banking? No problem! We also have a new system where we can scan in your paper statements straight into our ‘Bankstream’ accounting platform, making analysis faster and easier.

Either way, ask us for further information or, better still, send us a sample download of a typical month’s bank data (or Read more

Tax bomb

Avoid Significant HMRC Penalties – file your tax return on time!

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File your tax return in time or face severe fines[UPDATED AUGUST 2020] Did you know that you get an automatic £100 minimum penalty if you file your Self Assessment tax return (or pay any tax owed) even one day late? After 3 months you can add £10 per day extra to that fine (up to 90 days/£900 max) and after 6 months it gets significantly worse. And remember that you need to file your return on time even if you don’t owe any tax, or if you have already paid it! Latest indications are that there are also no warnings given by HMRC. See the table below for the detail.

Late return penalties by HMRC

So our message is simple: don’t file late, and don’t pay late! Taxfile are here to help you, of course. We know Self Assessment Tax Returns back to front and we can help you file accurately, and on time. If you’re late, we can help to sort things out quickly and so keep any HMRC penalties to a minimum.

Read more

Save Money, Beat the December Price Increase!

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Beat the price increaseWhere possible, Taxfile customers are urged to submit their records to Taxfile before December 1st 2014 so as to beat the price increases which will come into effect from that date. Taxfile has held its prices for several years now, and unusually long for our industry, however every so often we have to take stock and catch up with inflation and the ever-increasing costs of operating a business inside London. At time of writing, Taxfile customers still have time to submit their paperwork and records for professional tax and accountancy help – for example for tax returns – so can totally avoid the price increases this year if they act reasonably fast and get their figures and records etc. to us before December 1st. This will also avoid bottlenecks as we fast approach the busiest time in the tax year. Taxfile will also be sending out reminders to its active customer database.

** New – Early Bird Reduction **

* If you miss the December 1st deadline, don’t worry because we’re offering a 5% ‘Early Bird’ reduction on prevailing Taxfile prices if you submit all your records to us before the end of December.

Call 020 8761 8000, click here to contact us or book an appointment online.

Taxfile would like to thank its customers for their loyalty and custom throughout the years, and for their understanding when occasionally we have to make these increases so as to keep pace with the rising cost of operating in London.

(For tax returns, figures and records are required for the year ending 5 April 2014).

It’s official: thousands are on the wrong tax code!

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With the tax return deadline being only hours away (midnight 31 January 2014) there is still time to get professional help if you need it – particularly because HMRC  often get it wrong according to new research by UHY Hacker Young.

In just one example, HMRC sent a tax bill to a pensioner which demanded over £576k in tax! With an income of only £11k per annum this was clearly incorrect but what if it had been only hundreds of pounds wrong – would the pensioner have noticed and, if so, would he have been confident enough to question it with the might of HMRC?

According to the research, HMRC employees have been making ‘basic’ errors which have led to problems such as people being on the wrong tax code and consequently underpaying or overpaying tax. While underpaying it may sound attractive on the face of it, chances are the system will catch up and then a correction will need to be made later on, leaving the taxpayer with an unforeseen bill to pay – a real blow for cashflow.

While the UHY Hacker Young research cites an error rate in 2013 of 37% in the sample tested, HMRC are arguing that the research is wrong and that their PAYE coding notices are 99% accurate. Either way, when you consider that Read more

Tax return help 7 days a week!

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By midnight on 31st January 2014, you will need to have submitted your self-assessment tax return to HMRC and have paid them any tax due for the 2012-13 financial year. It doesn’t matter if you have zero tax to pay – you still need to submit your tax return on time or you will be hit with an automatic penalty of £100 (delaying even further can, in the worst case scenario, increase this fine to as much as £1,600).

In view of this, for the month of January you can get help 7 days a week from Taxfile in Tulse Hill, South London.

Our team of tax advisers and accountants can help you with your return whatever your employment status. We can help you register with HMRC if you are not already registered, check your form and help fill it in where necessary, make sure you’ve claimed for any allowable expenses to offset tax, make sure you haven’t missed anything or claimed for something you shouldn’t have claimed, compute any tax due (or due to be refunded), and submit your tax return on-line (the only option available this late into January – paper returns are already too late!). Read more

HMRC now see payments you receive via credit card!

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On September 1st 2013 new legislation kicked in which allows HMRC automatic access to data showing payments made to businesses via credit card, going back as long as 4 years. HMRC will receive this information direct from the companies who process credit card payments on behalf of businesses (‘merchant acquirers’).

No personal data identifying the card owners, nor the credit card numbers, will be supplied as part of the data — it will primarily show the quantity of transactions and values credited to any particular business via credit card. On its own this may reap £50 million per annum in otherwise ‘lost’ tax revenue and the exercise will be helped by HMRC’s ‘Connect’ system which compares data coming in from various sources and cross-refers for consistency. The scheme’s implementation has been aided by a £1 billion budget given to HMRC aimed at tackling tax evasion and fraud.

The new legislation is part of the Finance Act 2013 and is part of a major crackdown on tax evasion which overall costs the taxpayer £9 billion a year Read more

New brochure available for download

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Taxfile's BrochureHave you ever wondered what other services the Taxfile group can help you with? Well, find all the answers in the new downloadable brochure, which outlines services undertaken at the various different offices in both South London and Exeter, Devon. From accountancy and bookkeeping for SMBs to simple tax returns for individuals and right through to the most complex of complicated tax issues – we’re here to help and the new brochure gives you all the contact details for each office including address, email, telephone, Skype ID, how to book appointments on-line and, finally, what discounts are available – both to new and existing customers – it’s all there … or rather I should say … it’s all here! (A4 PDF format, less than 1MB).

Tax Enquiries: Guilty Until Proven Innocent!

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An enquiry is defined as seeking information, asking, questioning. Self Assessment is a process now/check later regime. According to HMRC,enquiries encompass all work carried out to check returns after processing – from a single enquiry about one entry in a return to a detailed examination of all the taxpayer’s affairs.
Under Self Assessment, taxpayers have clearly defined obligations while HMRC has defined powers in order to make sure that all taxpayers meet such obligations.
There are two types of tax enquiries:
•full enquiries (covering every single aspect of the return) and
•aspect enquiries(dealing with only one or more aspects of the return).
According to HMRC, a full enquiry is one which seeks to address all the significant risks of error in the return, including the risk of the return being fundamentally incorrect whereas aspect enquiries are those which fall short of a full, in-depth examination of the whole return but instead concentrate on one or more aspects of it.
Aspect enquiries, although more limited in scope than full enquiries, should not be seen as any less thorough or investigative.
If no enquiry is made within the allowed period (one year from the day the tax return is received by HMRC, for specific examples follow this link), the return becomes final unless the tax office makes a discovery assessment as a result of the return being incorrect or there was fraudulent or negligent conduct in making the return.
A very small proportion of returns will be taken up for enquiry on an entirely random basis. Most of the enquiries may start because either the return was sent in late, or some figures in the tax return did not match their records or just HMRC received a tip off.
All taxpayers should be aware that there is a chance of their returns being subject to enquiry.
Where a tax return has been selected for full enquiry, the enquiry officer aims to identify and examine all the significant risks of error in the return, including the risk that it is fundamentally incorrect. Also, where the business records do not prove to be as accurate as they should be, the officer in charge will need to look at the private side.
In order to make sure that there is no undisclosed source of income or additional cash coming from somewhere which was not taxed, the enquiry officer uses three main techniques:
•Cash Flow Tests involved with an analysis of drawings;
•means tests which determines the amount of money that is available to a taxpayer for living expenses.
•capital statements dealing with a detailed accumulation of information about capital worth, income of all sorts and expenditure.
Individuals with complex tax affairs investigated by HMRC should seek early help from a professional advisor to guide them through every step of the enquiry from responding to the officer, arranging a meeting to negotiating a settlement.
Taxfile‘s tax agents in South London and Exeter will guide you through this process and try to save you tax, interest and penalties.
Taxfile is happy to announce that we have recently renewed our free-of-charge enquiry protection cover. The insurance will cover the whole costs involved in dealing with your tax investigation so you can give you piece of mind and save you hundreds of pounds at the same time.
So pop in to see us and make the best of it!

Childminders and tax

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Registered childminders are people that work in their own homes to provide care and learning opportunities for other people’s children.
Childminders need to declare their income from their self-employment by filling in a self-assessment tax return every year.
Many childminders are members of the National Childminding Association (NCMA).The NCMA had an agreement with with HMRC in terms of allowable expenses that a childminder can have. They agreed that receipts for items of expenditure will not be required for items costing less than £10.
Also they agreed with the HMRC that full-time childminders (40 or more hours a week)can deduct as expenses a third of their heating and lighting costs and 10% of water rates and Council tax. Food and drink provided for children are acceptable and receipts are not required provided that the figures are reasonable.
Probably not everyone is aware of 10% Wear and Tear relief available to childminders. 10% Wear and Tear of total childminding income may be deducted as an expense to cover the wear and tear of furniture and household items. Once a childminder claims this relief, he/she cannot claim for replacing such household items.
Other expenses allowable in calculating the taxable profit are the cost of toys, books, safety equipment, travel fares, NCMA subscription, Public Liability Insurance, stationary, the cost of phone calls for childminding purposes, cleaning, accountancy fee, children gifts,training costs, resources (like paint, arts/craft)and Ofsted Registration fee(Office for Standards in Education).

For more details regarding childminders and their relationship with tax, you can seek guidance from Taxfile’s tax agents in South London (Tulse Hill) and Exeter.