The BKN Blog

Following on from The National Apprenticeship Week 2012, it has been announced that Small and Medium sized businesses can apply for the new Apprenticeship Grant for Employers of 16 to 24 year olds "AGE 16 to 24".

The incentive is available from 1st February 2012 until 31st March 2013 for eligible employers

 who recruit an Apprentice who is aged 16 to 24 years old, for the first time.

The value of the grant is £1,500 (Exempt of VAT) and is payable in two instalments, for up to 40,000 eligible employers who commit to employ one or more apprentice.

For more details on the "AGE 16 to 24" grant please see the link and pdf document below.

• http://goo.gl/HkQQ8
• AGE 16-24 Grant - Feb 2012.pdf

This week the government announced a new subsidy for individuals and companies who opt to buy ultra-low emission electric (Plug-in) vans.

The scheme means that anybody purchasing a qualifying van can get 20% off the cost price of a new vehicle, up to a maximum of £ 8,000.

In order to qualify for the grant the Vehicles must meet a rigid criteria, the headline of which is that it must emit less than 75 grams of carbon dioxide (CO2), per kilometre driven.

For businesses, as well as the grant you and your clients can benefit from zero-rate company car tax and you will not be required to pay the congestion charge in London.

In addition, the Car grant of up to £ 5,000 has been extended and is now available for electric cars purchased up to 2015.

For a full list of all of the Vans and Cars available for a grant, please click on the links below. 

Vans: http://www.dft.gov.uk/topics/sustainable/olev/plug-in-van-grant/

Cars: http://www.dft.gov.uk/topics/sustainable/olev/plug-in-car-grant/

The Association of Chartered Certified Accountants (ACCA) has released the results from the latest ACCA examinations in December 2011. Candidates from around the world took more than 363,000 papers, with 6,313 students successfully completing their final ACCA exams.
 
Clare Minchington, ACCA executive director said: 'We congratulate those who have succeeded in their exams – and we are delighted to see that more than 6,000 have completed their examinations, having been able to demonstrate the financial knowledge and professional skills which are needed by organisations in challenging economic conditions. We look forward to welcoming them to ACCA membership on completion of their practical experience requirements.'

The December 2011 session ACCA Qualification pass rates were as follows:

Paper F1, Accountant in Business, 63%*
Paper F2, Management Accounting, 53%*
Paper F3, Financial Accounting, 54%*
Paper F4, Corporate and Business Law, 49%
Paper F5, Performance Management, 38%
Paper F6, Taxation, 48%
Paper F7, Financial Reporting, 56%
Paper F8, Audit and Assurance, 36%
Paper F9, Financial Management, 38%
Paper P1, Governance, Risk and Ethics, 51%
Paper P2, Corporate Reporting, 48%
Paper P3, Business Analysis, 51%
Paper P4, Advanced Financial Management, 34%
Paper P5, Advanced Performance Management, 29%
Paper P6, Advanced Taxation, 39%
Paper P7, Advanced Audit and Assurance, 31%

December 2011 session Foundations in Accountancy pass rates:

Introductory Certificate in Financial and Management Accounting
FA1, Recording Financial Transactions, 69%*
MA1 Management Information, 65%*
Intermediate Certificate in Financial and Management Accounting
FA2, Maintaining Financial Records, 62%*
MA2, Managing Costs and Finance, 57%*
Diploma in Accounting and Business
FAB, Accountant in Business, 46%
FMA, Management Accounting, 41%
FFA, Financial Accounting, 42%
Foundation Specialist papers
FAU, Foundations in Audit, 53%
FTX, Foundations in Taxation, 70%
FFM, Foundations  in Financial Management, 40%
 
* Combined pass rates for paper-based and computer-based exams.

If your clients business is registered for VAT in the UK and they sell to VAT registered customers in other EU countries your client is required to submit an EC sales list (known as ECSL or form VAT 101), to HMRC. If your client moves their own goods to a branch or subsidiary of their business in another EU country, they may also have to complete an ECSL for that period.

The ECSL is generally submitted quarterly, but businesses that export goods totalling more than £35,000 (excluding VAT) per quarter must complete an ECSL every month. If your clients business only sells services to other EU countries they can continue to submit a quarterly ECSL, but they can opt to submit monthly ECSL forms.

The Taxman is currently writing to taxpayers who are suspected of tax fraud, asking them to make a full disclosure of their wrong-doing under the contractual disclosure facility (CDF).

If your client receives a letter offering the CDF, it is a very serious matter. The Taxman has taken a view that he could launch a criminal investigation into your clients tax affairs, but has decided that a criminal case is not cost-effective. Instead he is offering your client a binding agreement to come clean, with the promise of low penalties.

Your client only has 60 days to decide whether to accept the CDF. If they don't reply in that period, the Taxman will start a formal investigation into their tax affairs, which could result in a criminal case. The CDF letter will also contain a denial letter, which your client can sign and return if they believe they have no involvement in tax fraud. 

Book-keepers Question: I have a prospective client who has always calculated their own business income for a full year to 30th April each year. On their self assessment tax return for 2010/11 they have recorded their business profits, income and expenses for the year to 30th April 2010. But when I rang the Tax Office (HMRC), on behalf of the client, to query this - the adviser told me that their accounts should always be drawn up to 5th April each fiscal year. Have they been doing it wrong for 20 years?

BKN Answer: The adviser at the tax office is wrong. Your client can draw up their business accounts to any date they please. The year end of 30th April gives them a long delay between the end of their accounting year and the date on which they will need to pay tax on the profits for that period.

For example, if your clients year end is 30th April 2011 (not first year), this will be reported on the 5th April 2012 tax return. Please also note that by adopting a year end other than 5th April each tax year, this may bring about amendments required on the basis period and potentially overlap profits on your tax calculations and tax return.

PAYE and other payroll deductions need to clear Taxman's bank account by 19th of the month, if paid by cheque. Electronic payments can arrive by 22nd of the month, or the last banking day before that date.

If your clients use the faster payments service (FPS) to make their PAYE payment, the amount transferred will clear the Taxman's bank account the same or next day. However, there are limits on the amounts that can be transferred per day and per transaction using FPS, which vary from bank to bank. So check what limit your client’s bank applies.

Late payments of PAYE will result in an automatic penalty of up to 4% of the PAYE that was paid late. Your client is permitted to make one late payment of PAYE during the tax year, but two or more late payments will mean that a penalty will be charged after the end of the year.

In addition, if your client has still not paid after six months they may have to pay a further penalty of 5 per cent. A further penalty of 5 per cent may be charged if they have not paid after 12 months. These apply where only one payment in the tax year is late.

The Taxman has already issued many penalties for late payment of PAYE in 2010/11, and some of these penalties have been calculated incorrectly. If your client receives a penalty notice, you need to check it as soon as it arrives. Any appeal must be submitted within 30 days.

If your client is in the process of closing down their company, or are thinking of doing so, they need to know about the change in the tax law from 1 March 2012.

If your clients company contains significant value, they will want to extract the cash and assets in the most tax efficient manner. Until now your client could ask the Taxman to apply concession C16 to the payments made during an informal winding-up up of the company. Concession C16 allows the payments made to shareholders (known as distributions) to be taxed as capital gains. Shareholders who were also officers or employees of the company may be able to claim entrepreneurs' relief on those gains, which means the gain is taxed at just 10%.

Concession C16 is generally granted when the company has paid all its creditors, including the Taxman, and the owners promise not to start-up the same business in a different company. Concession C16 will cease to apply from 1 March 2012, and will be replaced by a new law as follows:

- Where the distributions are more than £25,000 in total, all those distributions will be subject to income tax (at rates of 25% or 36.11%), in the hands of the shareholders.

- Where the total value of the distributions to the shareholders of the company is no more than £25,000, the entire amount will be taxed as capital gains (at 10% where entrepreneurs' relief applies, or at 18% or 28% otherwise).

- Payments made as part of an informal winding-up on or after 1 March 2012, will be subject to the new law even if permission to use concession C16 was previously given.

- It doesn't matter on what date the company is finally dissolved or struck-off, it is the date on which the distribution is made that counts.

If your clients company holds significant value and they want to close it down, they can opt to use a formal liquidation. This will allow all the distributions to be treated as capital gains and for the lower tax rates to apply. However, a registered liquidator may charge a fee of £5000 or more to undertake the liquidation.