Tax First News Update 2005

“Breakthrough” on employer’s liability for small companies

The Government has announced that with effect from 28 February 2005, companies in which the owner is the sole employee will no longer have to buy employer’s liability compulsory insurance.

The measure is expected to save sole employee companies an average of £250 a year, and will benefit around 30,000 UK companies

The announcement follows a consultation in which nearly 80% of respondents said that the requirement should be dropped.

This liability insurance has been much discussed recently, with many suffering from the rapidly increasing premiums and other finding it difficult to obtain proper cover if any

Preventing illegal working in the UK

The Asylum and Immigration Act, which came into force last year on 1 st May 2004, under Section 8 contains new measures for employers, so that additional checks will need to be done on all new employees to make sure that they are allowed by the Home Office Regulation to work in the UK.

Under this Section 8, employers must make basic document checks, to make sure that the employees are legally entitled to work in the UK

The changes brought about by this section is to check a list of specified documents, which are deemed acceptable by the Home Office for the purpose of verifying that employers have checked and copied specified “original” documents belonging to the employee, from the items shown on the approved list. Only by this evidence can the employer make a statutory defence against any conviction, if the worker is later found to be working illegally or using false documents to gain “lawful employment”.

Employers must also make sure that they comply in their recruitment practices with Equal Opportunities and not discriminate individuals on racial grounds.

For more information about employing foreign workers from within the EEC, visit the Immigration and Nationality Directorate at www.ind.homeoffice.gov.uk

WEB INFO:

Very Useful for all types of Businesses and Start-Ups: www.businesslink.gov.uk
More about Employing Foreign Workers: www.homeoffice.gov.uk
And the Rules for Employing Foreign Workers: www.workingintheuk.gov.uk
Inland Revenue web site: www.inlandrevenue.gov.uk

Do you need HELP with any of the following:

• Personal Taxation – Does the Budget tell you what you are entitled to?

• Do you use a Company Car or Van – Don’t know how this is going to affect your tax?

• Selling your property, which is NOT your main residence – Don’t know about CGT allowances?

• Do you have a business but find problems with keeping the necessary records for Accounts purposes – we can give you some basic training to make you understand your business and keep track of all you Income and Expenses on MS EXCEL or MS ACCESS

• Preparing Tax Returns - still not sure what goes where and why?

• Checking Tax Returns – how do you know you have got it right?

• Checking Revenue Tax Calculation – Did you know that the Revenue makes mistakes and if left unchecked or challenged, you could end up paying MORE TAX?

• Reoccurring problems with Inland Revenue – anything considered that has been causing problems between you and the Revenue. Did you know that they might even pay you compensation?

• Have you suffered additional “professional costs” for Inland Revenue errors?

MANY OF THESE ISSUES COULD BE FIXED WITH PROPER PROFESSIONAL ADVICE and YOU MAY EVEN GET MONEY BACK IN YOUR POCKET.

So call us on 020 8684 1924 or go to our web site at www.taxfirst.biz
LOOK at the “testimonials” – What other’s say about us!

HAVE YOU LOST OUT ALREADY or ARE YOU STILL LOSING OUT?

From 1 February 2005 in our Tax Health Check we will ONLY be able to go back and examine various allowances or tax credit entitlements from 6 April 1999 to 5 April 2005 and the 2005/06 Tax Year 2005/06 is referred to as the “open year”.

For those working and paying tax in 1999/00 the Annual Personal Allowance was £4335 (tax free). This figure changed each year rising to £4615 (2002/03 & 2003/04) to £4745 (2004/05) and £4895(2005/06). The last number is removed and replaced by “L” as 474L in 2004/05. We will all be familiar with this tax code in our pay slips and on P45s as well as on the P60s for 2004/05. A LOT OF INDIVIDUALS ARE STILL CONFUSED ABOUT THIS.

To simplify further your £4745 in 2004/05 or £4895(2005/06) is divided equally over 52 weeks, giving your Weekly/Monthly TAX FREE PAY. If anyone has worked in the UK and earned less than this amount, but has paid tax, either because their Employer taxed them on Emergency Tax Code (474 L X) or Basic Rate Tax Code (BR), they could all have a potential tax refund to claim. If you paid basic rate tax throughout 1999/00 or 2004/05, you could be entitled to a tax refund of around £1200 per year. One of our clients saved over £7000 in tax because his employer had put him on basic rate tax for 5 years!

In 1999/00 a married couple living together as husband and wife were able to claim “Married Couples Allowance” – MCA. Many have not claimed this and lost out. Couples that separated in 1999/00 could have continued to claim “Married Couples Allowance” for each partner in the year of “separation”, therefore until 5 April 2000.

Single Parents with children that were working and paying tax could have claimed “Additional Personal Allowance” up to 5 April 2000 – equal to Married Couples Allowance.

These unclaimed allowances mean that many people are throwing potential tax refunds away and beyond reach if unclaimed before 31 January 2006.

The “Married Couples Allowance” and “Additional Personal Allowance” along with several other allowances were all abolished on 5 April 2000.

We at Tax First are amazed that so many individuals did not claim these allowances and this year is the last year in which any claim for such allowances could be made, because the window will close on 31 January 2006, after which there can be NO TAX REFUND claim for 1999/00 Tax Year.

We have detailed above the most common items, but there are other allowances, which again will not be claimable if your claims are not submitted before 31 January 2006. We offer a FREE TAX HEALTH CHECK and A FREE INITIAL CONSULTATION . So introduce as many individuals as you can to us and we will reward you £25 per referral, providing we go on to deal with that claim and fees are settled per our “terms and conditions”. Last year one person received over £300 in gratuities plus a £80 watch!

There were NO “additional allowances” in 2000/01 but things changed in 2001/02 and 2002/03. The Government introduced Children’s Tax Credit, worth £520 in 2001/02 and £529 in 2002/03. It was either claimed via an adjustment in the tax code or on the 2002 and 2003 Tax Returns. We also show in this News Letter that many individuals have not claimed “baby credit” worth £529 in 2002/03. This could be claimed by husband or wife or divided up as necessary and was NOT means tested, therefore if someone had a child in 2002/03 they could claim Children’s Tax Credit PLUS “Baby Credit”, which would give them £1058 (before any restrictions were made by Inland Revenue). Our Tax Health Check is FREE. Nothing to lose!

Many clients have claimed these but we know so many people have NOT been aware of these introductions. People many thousands of them have NOT claimed, losing £1578 (total) just in these new allowances. In 2003/04 and 2004/05 the NTC “new tax credit” was introduced and is means tested with all claims being processed by Tax Credit Office in PRESTON.

Still not sure? – Call us for a FREE TAX HEALTH CHECK on 0208 684 1924

CHILD TRUST FUND VOUCHERS – (CTF)

If you had a child after September 2002, you will receive £250 of Child Trust Fund (CTF) vouchers in the run up to April.

Every child born after September 2002 will receive vouchers worth £250 to “invest” rising to £500 for those in low-income families and now parents have to decide where to invest this money.

WHAT WILL YOUR MONEY GROW INTO?

There will be three types of account to invest in:

1. A Stakeholder – investing in shares which gradually move to less risky investments as the person nears 18 years.

1. A broad shared – based fund which can be anything from a tracker to a make your own selection type fund.

1. And an account such as a deposit account in a bank or building society.

So far there are 75 financial organisations committed to offering CTFs falling into these three categories.

Some companies will offer incentives for investment providing this happens before 6 April 2005.

The fund would also receive a further top-up from the Government on the child’s 17 th Birthday and families and friends can contribute up to £1200 per year tax-free.

Children will be able to access the fund after their 18 th Birthday for their own use, such as:

• Meeting University costs or further education

• Paying a deposit for a house or flat

• Paying for a holiday

• Other expenses – to start a pension fund!

This will no doubt give these children a better chance to meet certain, perhaps not all the challenges they may face in 2023 and with the top-ups and “gifts” from the family this could be a substantial sum if properly looked after and managed on behalf of the child.

For more information on this topic please refer to:

• www.childtrustfund.gov.uk
• www.inlandrevenue.gov.uk/ctf/parenth.htm

Telephone: 0845 302 1470
For Independent Financial Advice: www.unbiased.co.uk

This is the last chance to claim for 1999/00!
We save tax for 9 out of 10 people we see. No savings – No fees charged !

Baby Tax Credit – “never heard of this”

It is important that if you have a family member, friend, colleague or anyone you may know, whether they are a married couple or single parent that if they had a child born between 6 April 2002 to 5 April 2003, they should get in touch with us, as it is 99% possible that they may NOT have received this little know allowance, either in their tax code or if they are self-employed or directors, this may not have been claimed on their Tax Return.

This “allowance” is available to all individuals who were working and paying tax in the UK in 2002/03.

We have met many people who never heard of this, let alone understood how to go and get back £529 from the Inland Revenue.

So if you know these
“new parents” even if this is not their first child, it may be their second or third, born after 6 April 2002 and before 5 April 2003, get them to call us and we will do the rest.

We will include these individuals for a 6 years tax screening we call the
TAX HEALTH CHECK, which in 9 out 10 cases results in tax savings!!!!!!!!!!!

More money in the pocket – Over 300K has been claimed back from the Revenue!

“BABY CREDIT” CLAIM FORM

Simply complete this form online or print & post to make a Baby Tax Credit Claim

DO YOU KNOW of anyone who may benefit from our FREE TAX HEALTH CHECK?

DO YOU WANT TO ASK ABOUT TAX? (Free Initial Consultation)

NOT SURE IF YOU HAVE CLAIMED ALL YOU ARE ENTITLED TO?

DO YOU FIND TAX CODES CONFUSING?

STARTED A SMALL BUSINESS AND HAVE NOT YET REGISTERED?

NEED SMALL BUSINESS ADVICE?

CALL US on 0208 684 1924

Referrals are always welcome and we may
even reward you £25 per recommendation.