Thursday April 9, 2009

Dear Customer

Should I register for VAT?

If you are already VAT registered, next time we will look at whether you can be more profitable on the flat rate scheme.

Many businesses put off registering for VAT partly due to the worry about additional record keeping but also in the belief that registering for VAT will be a cost to their business making them less profitable. This is not always the case. Forget tax doesn’t have to be taxing – in some cases tax can be profitable.

In our view, if you are selling to the public, then you should avoid VAT registration until you have to do so, currently where your annual sales exceed £67,000. Registering early in this case would either increase your prices by 15% making you less competitive or lower your profits if you absorb the rise.

If your customers are other businesses, it is likely that they will already be VAT registered and therefore able to reclaim the VAT you charge them on your sales. This means your prices can remain unaltered. You can, however, reclaim the VAT charged to you by many of your suppliers. The result is lower costs to the business, meaning greater profits – the trade off is having to record your sales and purchases in a more detailed manner and to prepare VAT returns to the Inland Revenue. If you think you could benefit from being VAT registered, please give me a call on 0845 644 3579 and I'll happily chat through it all with you. 

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Time to throw away your old P45s

The Inland Revenue has introduced new P45 forms from 6th April 2009. P45s are used when an employee leaves your business. The new forms are A4 in size and contain additional fields for gender and date of birth. Copies of the new P45s can be obtained from the HMRC website via the employer orderline http://www.hmrc.gov.uk/employers/emp-form.htm, though many payroll software providers will have the new forms already built in.

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Are you claiming your tax free childcare vouchers?

Tax free money is lovely, when it's free of National Insurance as well it's got to be even better. Gemelli Childcare Vouchers are one of our clients and they help families save up to £2,390 per annum in tax by implementing child care vouchers. Employers can save over £300 per parent per annum in Employers National Insurance as well. The vouchers can be used to pay towards childcare e.g. nurseries, childminders, after school and holiday clubs and boarding fees. Heather Start of Gemelli is an expert on child care vouchers and helped Inca set up a scheme for our team. If you'd like to learn more, give Heather a call on 01280 - 851113. We think she's great. Heather is also offering a £20 gift voucher to new clients quoting "INC089".

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