Late VAT Registration
Q: I didn’t realise I should’ve registered for VAT earlier in the year until recently when I was preparing my accounts. I read about a ‘VAT amnesty’ recently- does this apply to me?
A: In July 2011, HM Revenue & Customs launched the VAT Initiative, which was for individuals and businesses that were trading above the VAT registration thresholds but had failed to register. Under the Initiative, traders would face reduced penalties if they came forward.
Sadly, traders wishing to make use of the Initiative should have notified HM Revenue & Customs by 30 September.
Having said that, HM Revenue & Customs encourage traders to come forward and declare any under paid tax, as they will be charged lower penalties than if HM Revenue & Customs catches them first.
If you would like some assistance with VAT registration and the preparation of your VAT returns, please feel free to contact TaxAssist Accountants.
Bad weather conditions
Q: If an employee cannot get to work because of bad weather, do I still have to pay them?
A: Generally, there is no legal obligation to pay your staff if they are late in or do not arrive to work at all because of bad weather. They will have to take unpaid or annual leave. Having said that, you should check what is written in your employees’ contracts of employment, as you may have made some concessions.
If your employee is unable to get to work because they need to look after their children because their school is shut, this may qualify as Time Off for Dependents. An employee is entitled to as much of this unpaid time off as a tribunal would see fit.
Ultimately, you should ensure that your policies are clear and applied as fairly as possible.
Van or Car?
Q: I am a small business owner and I am planning to change some of the business’ vehicles this year. Some of my mates have been telling me vans are the best option. Are they right, and if so, can you explain why?
A: The advice from your friends is actually pretty sensible. Vans have a number of advantages for tax purposes:
•More relaxed rules with regards to avoiding benefit in kind charges
•Lower benefit in kind charges- both for the provision of the vehicle and fuel
•Any input VAT suffered on its purchase can usually be reclaimed
•Vans should qualify for the Annual Investment Allowance for Capital Allowances purposes
Defining a van can be tricky, as there are different criteria for different areas of tax, but try to stick to the following conditions:
•A vehicle that is not commonly used as a private vehicle and is unsuitable for such use
•A vehicle primarily suited for the transportation of goods- no rear seats/ windows,
•Has a maximum legal laden weight of 3,500kg
Discussing this with an accountant before you make any purchases, could prevent you from losing tax relief and being unable to reclaim VAT. So if you would like to discuss your vehicle purchases in more depth, please feel free to contact TaxAssist Accountants.
Lloyd Stubbs specialises in managing tax and accountancy affairs for small business owners and can be contacted by phone or email
Disclaimer – advice shared in this column is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this column, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.