Don’t forget 31 July deadline to renew Tax Credit info

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31 July is the date by which HMRC needs to receive your Tax Credit record update. You should have received your Renewal Pack by the end of June latest (if you haven’t, call 0845 300 3900). HMRC needs the renewal to check for any changes to your circumstances. Remember to read the instructions very carefully and send off before the deadline otherwise you may run the risk of Tax Credit payments being interrupted, or worse, being asked to return some of the money paid since 6 April 2007 plus any amounts overpaid for the previous year.

If you were awarded more than one tax credit award during the 2006-7 period, you need the equivalent number of Renewal Packs.

More details on how to renew your tax credit information at the HMRC website.

Brussels wants to impose VAT on food & children’s clothes

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The European Commission is trying to harmonise VAT rates across its member countries. In so doing it wants the UK to fall in line with a rate of at least 5% on food and children’s clothing.

When it joined the EU in 1973 the UK had fought very hard not to have to charge VAT on such items (as well as the printed word, e.g. newspapers) and, as a concession to Brussels it had agreed to impose a ‘zero rated’ level of VAT. That way, VAT was effectively levied but at a valueless rate. Now Brussels wants the zero rate to be scrapped and replaced by a rate of 5% minimum, for certain products including nappies, for example.

The labour Government will fight to retain the zero rate and can use its veto if required. If successful, UK families will save a staggering £28 billion each year.

Taxfile, a walk-in “tax advice shop” based in South London, can help with all VAT matters including VAT returns and registering for VAT as well as book keeping, general accounting, tax advice and so on.

Taxman’s mistakes mean 1 million pay wrong bill

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There are more than a million of us in the UK who are paying the wrong amount of tax, thanks to the taxman. £157 million was overpaid to the Revenue last year, according to the National Audit Office (NAO). 540,000 of us – that’s over half a million – were overcharged, but still others were undercharged, the latter totalling £125 million in the same period.

The NAO attributes the staggering level or errors to the fact that many people change jobs so frequently and this makes the calculation more complicated. But it doesn’t end there. Correcting the mistakes will cost both the Revenue and the tax-payer time and money, as well as unnecessary stress. Unexpected tax demands will come as a shock, particularly to vulnerable groups such as pensioners, who are likely to be the most severely affected.

Matthew Elliott of The Tax-Payers’ Alliance commented that “This report demonstrates yet again that the tax system is becoming too complicated and taxpayers who do not have the money to afford top accountants are getting tied up and ripped off by the taxman….It’s the complexity of the system that’s trapping people, so it needs radical reform.”

At TaxFile in Tulse Hill, South London you can drop in to see one of their tax advisers and, for an affordable fixed fee, they will sort your tax out for you and relieve you of the stress and uncertainty. TaxFile bridge the gap between you and the taxman. They level the playing field. They specialise in one thing; tax, and do not charge the higher fees normally associated with swishy accountants.

Taxman wants powers to seize tax straight from bank accounts

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HM Revenue & Customs is seeking the right to seize unpaid tax straight out of bank and building society accounts, without consent. Apparently such powers would be used only against deliberate tax evaders in a bid to avoid seeking a court order. They are part of a consultative document called, “Modernising Powers, Deterrents and Safeguards“. It would work like this: the relevant amount would be frozen in the account. It would be withdrawn by HMRC only if a payment ultimatum had not been met after several written letters were sent, several telephone calls had been made, and at least one visit had been made to the non-payer’s home. We all know that tax bills are not always correct, however, and this is a major worry for some.

A spokesman for HMRC defended the idea saying that it would use the proposed powers only against chronic late payers and continued, “We do not, and will not, seek access to personal bank accounts unless all other exacting avenues of communication have failed.”

Tax advice from such companies as South London based TaxFile can help to level the playing field when a tax dispute arises. As we say above, tax bills from the HMRC are not always correct first time, and a little professional advice from an expert in the field of tax accounting will mean that you only pay the correct amount of tax and nothing more.

Let Taxfile introduce you to VAT

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Value Added Tax is a tax on consumer expenditure. It is collected on business transactions, imports and acquisitions.
There are three rates of VAT:
•standard rate, 17.5%
•reduced rate, 5%
•zero rate.
Businesses charge VAT on their sales and this is known as output VAT and the sales are referred to as outputs. Similarly, VAT is charged on most goods and services purchased by the business and this is called input VAT.
The output VAT is collected from the customer by the business and must be regularly paid to HMRC.
The input VAT on goods and services purchased can be deducted from the amount deducted from the amount of output tax owed. It is worth mentioning that certain types input tax can never be reclaimed such as business entertainment expenses and for most of business cars.
You are required to register for VAT if your turnover is over 64000.
You can apply for voluntary registration that would allow you to reclaim your input VAT which could result in a repayment of VAT if your business was principally making zero rated supplies.
It is very important that a VAT registered business maintains complete and up-to-date records including details of all supplies, purchases and expenses for 6 years.
Taxfile can assist you with registering for VAT and with completing your VAT return.
We will discuss VAT in more detail next week!

Welcome to Taxfile Property & Lettings Taxation Blog

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With increased interest in Buy to let and property investments, the private rented sector has attracted many changes in legislation.

Every week we shall and attempt to familiarise ourselves with issues affecting existing and potential landlords and the Taxable allowances thereon incurred.

Overall, the housing act 2004 introduced many changes affecting the private rented sector replacing FITNESS standards under the old environmental health rules.
Landlords and letting agents have a duty to make sure that a property they rent out is “FIT” at the time of letting. Failure to do this could lead to prosecution. It is important that Landlords suffer the expenditure required to comply and keep good records and receipts so Taxfile can maximise your relief against both capital gains and income tax.

To begin with HMO – Houses in Multiple Occupation include bedsits, shared houses, hostels, bed & breakfast.

Not all HMOs are licensable although the larger HMOs do need a licence. Some local authorities have adopted selective licensing and, where this applies, all privately rented properties require a licence.

HHSRS – Housing Health and Safety Rating System, applies to all residential accommodation (not just the privately rented sector) and is enforced by the Environmental Health Officer who will arrive at a “Fitness score” for the hazard rating of your property. It enables local authorities to deal with 29 different risks hazards, include cold and heating, ventilation, trips and falls, security, lighting, and the complex area of danger from fire.

Fire; both local councils and the fire and rescue services have a role in enforcing Fire standards and I shall discuss this further next week.

Hi, let me introduce myself! I’m Taxfile and this is what I do:

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• I deal with the Inland Revenue on your behalf taking the strain off you at a taxing time!

• I have over 10 years experience in helping individuals as well as businesses prepare their tax returns and accounts for the tax office.

• I can help you register as self-employed, guide you with your property lettings, set up a limited company or sort out your National Insurance.

• Also, I can assess your eligibility for tax credits ( Pension, Child,Working)or help you register as an employer. You might also need help with your payroll and your book-keeping.• If you need to register for VAT or you have a tax enquiry, I am here for your assistance.

So whether you’re a cab driver or a bricklayer, a painter or a landlord, I can help you with your tax return. I pride myself on providing a personal service at very reasonable rates. Visit www.taxfile.co.uk and judge for yourself!

Tax problem? You name it, I solve it!