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Buy to let landlords take note – HMRC are watching you

If you’ve been keeping up with current affairs of a financial nature, you may have seen headlines towards the end of last year and more recently saying something like ‘Taxman Targets Tax Evasion’. For many, this won’t be relevant, but the latest clampdown stands to affect buy to let landlords who may not have been entirely honest with HMRC.

There are 3 different taxman targets for tax evasion that have been announced of late and it’s all part of a Government drive to increase their funds by £7billion extra every year by the 2014/15 tax year. Other sections of business that are being targeted include taxi drivers and street market traders; each of these is regarded as ‘high risk’ for non-declaration of monies earned.

Are you one of the taxman’s targets for tax evasion?

With buy to let landlords being seen as one of these high risk areas for tax evasion, we are strongly encouraging anyone in this position to look at their circumstances and come forward for help if you think you may owe the taxman money.

HMRC will be looking back as far as 2001/02 and have already flagged up 80,000 buy to let landlords who they believe to have claimed incorrect rental incomes or tax relief. Penalties can be severe, potentially costing landlord tax evaders not just the unpaid tax amount, but also interest on this sum. With the power to backdate for up to 6 years, this can add up to a substantial amount of money.

The way that the taxman targets tax evasion has become more aggressive recently, so if you know you’ve not been acting in accordance with their strict rules, it’s definitely best to hold your hands up to your mistakes now rather than face their wrath. If you voluntarily disclose this information, you’ll stand a much better chance of being treated more leniently and less chance of prosecution.

Tax rules for buy to let landlords

As a buy to let landlord, it’s worth remembering that you can only claim relief on allowable expenses, such as insurance, legal and accountancy fees, property repairs, loan interests and letting or estate agents fees.

If you’re in any doubt about whether or not you’re a potential target for the taxman’s latest crackdown on evasion, or you’re not sure what you can legally claim relief on, please feel free to contact our accountants here at Blue Skies and we’ll help you to get things in order.

Accounting Services Advice – HMRC Bring in New VAT Return Rules

Here at Blue Skies it’s our responsibility to ensure that our media tax accountants keep you up to date and advised of any changes in legislation or policy that may affect you. Therefore, this news post has been created in order to let you know about some important changes that will apply to VAT registered businesses as of spring 2012.

At the moment, HMRC will allow businesses who turnover less than £100,000 a year to submit their VAT returns and pay their VAT through hard copy and non-digital methods, providing they’re not a newly registered business. However, as of 1st April 2012, every single VAT registered business in the UK will be required to submit their VAT returns via HMRC’s online system.

Our Media Tax Accountants Can Help You Make the Switch

These new VAT rules will be applicable for any returns filed for accounting periods that start on or after 1st April 2012. It may be that you use a Blue Skies media tax accountant for all of your accounting services, and that you already have your VAT returns filed via the online system. However, if you’re still doing it the old-fashioned way, our media tax accountants would advise that you arrange to switch to the online method as soon as possible. This will give you the peace of mind that you’re ahead of the game, and won’t forget to do it when the rule changes come into effect! Of course, if you do use Blue Skies accounting services, then we can take care of the switch on your behalf.

There are some great advantages to filing your VAT and tax returns online. Firstly, you will be sent an acknowledgment of your VAT return submission automatically, giving you something for your records to show that you’ve met your reporting obligations. If you do your VAT returns yourself, by using the online system you’ll also be able to take advantage of their arithmetic checker to ensure that your figures are correct – again, if you use a media tax accountant from Blue Skies, we’ll will be looking after the sums for you anyway.

Don’t Forget to Register for your Online VAT Return Submissions!

Another benefit to getting yourself registered to file your VAT returns online now is that you will get an email to act as a prompt, so that you don’t miss your next due date. In order to register for the VAT online service, follow this link www.online.hmrc.gov.uk and click on the register option in the new user section. Remember that you’ll also need to set up an electronic payment method – Blue Skies can help you with this if you require.
If you think you would benefit from our professional accounting services to save you the worry of keeping up with changes to VAT and tax rules, take a look what we can do to help you by following the link.

Approaching the VAT Threshold?

January is a busy time for both the tax man and those who are in self-employment, due to the online submission deadline for tax returns – however, this January also sees a warning being issued to businesses that may be approaching the VAT threshold; if this is you, you should apply for your VAT registration as soon as possible.

As the tax laws currently stand, if you’re a self-employed sole trader or small business, once you reach a turnover of £73,000 or more you must register for VAT with HMRC. Last year, sole traders who were already VAT registered were given until 31 December to settle their bill – this came hand-in-hand with a reminder from HMRC that all businesses that have reached the turnover threshold for VAT must take responsibility for their VAT registration.

VAT Registration – Don’t Put It Off!

In an attempt to offer fair notice to these sole traders, HMRC contacted approximately 40,000 businesses last summer by sending them a letter to remind them that they were nearing the VAT threshold – of the 40,000 businesses who had been identified and contacted for having a turnover between £50,000 and £70,000, the response rate was less than one in every thousand. Unfortunately, this has led to a clampdown by HMRC, who has now decided to put pressure on any business that is approaching the VAT threshold but has not yet registered for VAT.

If your business is approaching the VAT threshold but you’ve not yet become VAT registered, please take this as a warning that you must take action now. With businesses being targeted throughout January, if you’re investigated and found to have exceeded the £73,000 threshold but haven’t yet completed your VAT registration, you may be given a severe penalty in the shape of a fine, as well as being at risk from prosecution.

Our Accountants Can Help!

So if you don’t want to feel the pressure of HMRC breathing down your neck, and you’re approaching or have already exceeded the VAT threshold, it’s absolutely vital that you contact them and arrange registration straight away. With the tax man getting serious about non-payment and VAT registration, you really can’t afford to take the risk. If you’re not sure what you need to do or you need any advice regarding VAT registration, the VAT threshold or any other tax matters at all, feel free to get in touch with our accountants at Blue Skies and we’ll do everything we can to help.

Budget 2012 – how will it affect you?

None of us could escape the coverage across the media last week of the 2012 Budget – but with so much information disclosed, it can be hard to know exactly what changes might affect you directly. As professional accountants and business advisors, we have a responsibility to keep our clients up to date with any changes that might be relevant to their situation, so here’s our Budget 2012 breakdown and advice to help you manage the changes.

Budget 2012 headlines

  • From April 2013, the 50% highest rate of tax will be cut to 45%
  • For people who earn over £100,000 the effective tax rate for the income between £100,000 and £116,000 remains a swinging 60%
  • Personal income tax allowance raised to £9,205 from April 2013, making 24 million people £220 a year better off, including higher rate earners
  • 300,000 more people will be drawn into the higher rate – 40% – tax band from 2013/14 as the threshold is reduced from £42,475 to £41,450
  • Age-related income tax allowances to be removed for new pensioners from April 2013, and replaced with the same personal allowance as the rest of the population. Allowances for those already of pension age to be frozen
  • Child Benefit will be phased out when someone in a household has an income of more than £50,000. It will fall by 1% for every £100 earned over £50,000
  • A new stamp duty of 7% for homes worth more than £2m. If you buy a house in UK through a foreign registered company the rate of stamp duty is 15%

Personal Taxation and National Insurance Contributions (NIC) Advice for the 2012 Budget

1. If your income is currently over £100,000, or you are expecting it to increase over £100,000 before April 2013, then we need to do some active tax planning on your behalf to minimise the amount of tax you will be paying. We are currently looking through our client lists to identify people who would benefit from this tax planning. If you have any doubt as to whether this will affect you please be sure to contact us as soon as possible.

2. If your income fluctuates over/under £100,000 between tax years (April to March) then consider ways of moving income between years in order to flatten income and keep adjusted income below £100,000 if possible. For example – PAYE, defer bonus or bring forward; Self employed, put off job till next year or bring forward work if possible; Shareholders of own companies, bring forward or defer dividends to minimise personal tax bill. Also, consider timing of lump sum pension or gift aid payments to achieve maximum tax relief.

3. If you earn over £42,475 and are already making personal pension contributions, then carry on making them.

In summary, the main changes in the Budget 2012 that will have an impact on your tax situation are:

1. Personal Allowance increased to £9,205 in 2013/2014 up from £8,105 in 2012/2013
2. Top rate of income tax cut from 50% to 45% from April 2013
3. Age-related allowances for pensioners to be frozen, starting in April 2013

Post Budget 2012 VAT advice

There were no major VAT changes announced in the Budget 2012, but if you’re not currently VAT registered but earn over £14,000 then we recommend you voluntarily become VAT registered under the Flat Rate Scheme – so please contact us to discuss the benefits for you. If you’re already VAT registered, then you should be putting aside 17% of your income into a separate VAT account.

Post Budget 2012 business accounts and taxation advice

1. If you have a limited company you should still not purchase and run cars through it UNLESS it is an environmentally friendly car; currently below 110g/km is considered environmentally friendly. From April 2013 it reduces to 95g/km. No change to rules regarding vans/pickups run through a company. These tax advantages of an environmentally friendly car also apply if you’re self employed.

2. From April 2013, if you have a limited company and have no other income (e.g. from PAYE, letting rentals, etc), and assuming that the company has made enough profit, you can take £38,900 (£3,241 per month) out of company without paying any personal tax.

Announcements made in the Budget 2012 pertaining to business accounts and taxation includes:

  • The Government will reduce the main rate of corporation tax to 24% from April 2012, however the small companies rate of 20% will stay the same (a “small company” has annual profits under £300,000). This main rate will then be reduced by a further 1% in each of the following two years, and as a result will be 22% from April 2014. The 18/28% rates for Capital Gains Tax remain unchanged
  • Cash accounting for tax purposes on small unincorporated businesses with income up to the VAT registration limit of £77,000 from April 2013 if no serious concerns are raised following the Government consultation. This could mean that businesses falling into this income threshold can prepare accounts based on the date they got paid rather than the date you actually did the work. The detail on how this will work will be published in due course
  • The Government is consulting on standardising expenses for unincorporated businesses to allow a fixed amount to be claimed rather than recording actual amounts
  • CO2 emissions for 100% Capital allowances on green cars as long as cars are under 95g/km from April 2013, currently 110g/km.
  • Main rate for cars drops from 160 g/km to 130 g/km from April 2013 – so for any car bought after April 2013 with CO2 > 130 g/km = 10% capital allowances

Budget 2012 Tax Credits and allowances advice

From January 2013 Child Benefit will be phased out when someone in a household has an income of more than £50,000. It will fall by 1% for every £100 earned over £50,000. Only those earning more than £60,000 will lose Child Benefit entirely.

Our accountants advise you to contact the Child Benefit Office on 08453 021 444 or go to Child Benefit: Directgov – Money, tax and benefits if you don’t currently receive Child Benefit and have children under 16, or under 20 and still in education.

Other Budget 2012 changes

  • If you employ anyone, then be aware that the National Minimum Wage will be increased again from October 2012
  • From the 2014-15 tax year HMRC will introduce a new Personal Tax Statement with details of tax paid and how it was spent by the government
  • The Government will introduce a new stamp duty land tax rate of 7 per cent for residential properties over £2 million.

If you have any questions regarding the outcome of the 2012 Budget, please feel free to contact our accountants here at Blue Skies, and we’ll do everything we can to help.

HMRC chase tax on eBay auctions

If you’re one of the many people who make an income from regularly selling goods on eBay or other online auction sites, then be aware that HMRC could soon be looking at you for unpaid tax. A new HMRC campaign was launched in March this year, with the sole purpose of chasing tax on eBay auctions – this means that if you’re a regular seller on auction sites and you haven’t fully disclosed your income to the taxman, they’ll be looking to recover any tax owed, along with added penalties on top. This could spell trouble for active sellers, who may need to get some accounting advice urgently in order to assess their potential liability.

HMRC have outlined the terms that auction site sellers must comply with in order to try and avoid these penalties. If you believe that you owe tax on eBay auctions then you must notify HMRC of your intention to disclose the relevant information by 14th June 2012. Full disclosure and payment of any tax outstanding will then need to be made by 14th September.

HMRC demand auction sites to release information

HMRC aren’t just relying on sellers to disclose any owed tax on eBay auctions either – they have also issued notices to all online auction websites requesting that they supply information regarding their sellers, or face having to pay a penalty themselves. Auction sites are to provide full details of all of their business members, including their registered name and user name, address and postcode, date of registration, email address, company name (where applicable) and telephone numbers. These details will then be used by HMRC to help identify who may owe tax on eBay auctions or other auction sites.
Failure to disclose your tax liability through this kind of trading will not only mean that you have to pay the tax liability, but you’ll also incur penalties plus interest fees too. HMRC are looking at raising a total target of £4 billion through owed tax from this campaign by 5th April 2013.

Accounting advice if you think you may be affected

If you think that you may owe tax on eBay auctions or other online activity, then you need to act straightaway in order to reduce the potential for extra penalty payments. Blue Skies are here to offer accounting advice and help if you think you may be affected by this new HMRC campaign.

Please contact Blue Skies as a matter of urgency in order to get your tax affairs organised – specialist accounting advice is essential if you want to ensure that your liability to HMRC regarding tax on eBay auctions is met.

PAYE and Class 1A NICS payment warning for employers

Making payments to meet your PAYE and Class 1A NIC responsibilities as an employer is generally a fairly straightforward affair, but a word of warning has been sent out to employers in light of the next payment date falling on a weekend.

Electronic payments fall on the 22nd of the month after the tax month or quarter to which the due amount relates to, so employers due to make a payment on the 22nd July need to be aware that this date falls on a Sunday this year, which means that payments will not be cleared with HMRC by the date specified due to no banking activity taking place on Sundays.

In light of this, we would advise all employers who are required to make a payment by this date to arrange to make their payment through the Faster Payments Service which will clear regardless of whether it’s a banking day or not. For more information, please visit the HMRC website via the link.

Taking care of your business accounting

When we work with our clients on business accounting matters, one thing that we often provide as part of our remit is bookkeeping services. If you’re new to business or self-employment, it’s very handy to know exactly what this entails – you can then make a choice as to whether you take care of this element of your accounts yourself or outsource it to a professional company like Blue Skies.

What are bookkeeping services?

Bookkeeping is essentially keeping a record of all financial transactions that are conducted during your business dealings – and while it’s an essential element of your accounting responsibilities, it’s only one part of the overall process.

When you do your bookkeeping, or take on a professional to provide these services, it involves all sales, purchases, invoices, receipts, petty cash and any other financial transactions being inputted into a recording system. These figures can be recorded in hard-copy formats, such as in ledgers and day books, or via computer software. This creates a ‘trial balance’ from which an accountant can prepare end of year tax and VAT returns, and makes the job of completing these legal requirements much easier and less time consuming.

A trial balance isn’t just useful for calculating end of year accounts either. Because these financial records are kept updated on a daily, weekly or monthly basis, they are incredibly useful when it comes to keeping your finger on the pulse of your business finances and general circumstances. From the data collected in your account books, you can see whether you’re making a profit or running at a loss, identify your cash flow situation and note any missing or late payments or areas of concern.

Why use professional bookkeeping services?

While bookkeeping isn’t necessarily complicated, it can be a real drain on your time – with so many different books or systems to enter your figures into, and the amount of work required growing in line with the development of your business, you can soon find that several hours can be swallowed up by this easy task. It can also be difficult to know what you can enter as an expense or what proportion of some expenditures can be claimed as a tax deductible business cost.

By using business accounting specialists like the team here at Blue Skies, you can pass all of your accounts and tax matters into our capable hands – our comprehensive bookkeeping services mean that you can leave the numbers to the experts, while you head out and build on your business successes!

Freelancing in the entertainment industry

When freelancing in the entertainment industry, not only do you need to know your specialist field like the back of your hand, but you also need to have a good grip on the business side of things too. As a freelancer, you are your own commodity and you need to ensure that you manage yourself and your business well.

Tips for entertainment freelancers

Whether you’re a presenter, a producer, a researcher, a musician or any other entertainment professional, there are certain things that you should pay special attention to if you want to be a true success. One aspect that’s absolutely essential is to make sure that you always get agreements and contracts put into writing – this offers you protection against unexpected changes or claims that the rate of pay is lower than originally agreed. If you’re not sure how a contract should be set out or what you should be looking for in any contracts supplied to you, then our entertainment accountants here at Blue Skies are always on the other end of the phone if you need some assistance.

Another good idea is to perform checks on individuals or companies who wish to partner with you on projects or hire your services. Make sure they’re well established with a good reputation – check with other professionals in your field, look online for warnings or forum entries or speak to other, similar businesses to see if they have heard of them.

Self-development is another thing that you should spend some time focusing on; it’s unlikely that you’ll be working all the time, so spend some of your free time honing your skills and keeping up-to-date with changes in your industry. The more responsive you are, the more professional you’ll appear.

Keeping an eye on the pennies

Like it or not, there’s always going to be a degree of admin to do when you work on a freelance basis. Essentially you are the business, so you’ll need to keep track of your finances and register for taxation purposes. With this type of working style comes a responsibility to file tax returns and potentially VAT returns too – with hefty fines to pay if you don’t comply with the rules.

If you’re not certain about how to take care of this side of things, you can always employ the services of a fixed fee accountant. Our specialist entertainment accountants are well versed in your type of business and can complete all of the necessary financial paperwork and documentation for you – and all for an upfront cost, giving you access to help and advice whenever you need it without any nasty surprise in the form of additional invoices!

Finally, when freelancing in the entertainment industry or working as a contractor in any other sector, it’s essential that you continually make new contacts and get your name known. Networking is a great way of marketing yourself – and it’s also worth getting your own website too.

Our entertainment accountants can help to put you in touch with others in your field, so make sure you take advantage of our networking support if you decide to sign up for our fixed fee accountant services.

While there’s always a serious side to business, there’s one thing you should never forget – enjoy it!

Business advisors – service standards

Here at Blue Skies, our business advisors have the important task of helping you to enjoy continued growth as a business or contract worker. In order to help you achieve this, there are some vital qualities and abilities that our advisors need to demonstrate in order to give you the best possible results. We believe that any advisor should display the same integral virtues in order to provide you with the best standards of service, so we thought we’d share our thoughts with you to help you assess the services that you receive from us, or any other professional that you may use.

The top 10 qualities and skills a business advisor should possess

Here is our list of the top 10 qualities that you should seek in a business advisor – and the characteristics that all of our media specialists here at Blue Skies demonstrate!

1. Listening skills – it’s impossible to offer good advice without first listening to your specific circumstances and personal objectives. Our accountants and business advisors are always happy to take the time to listen to your needs to ensure that we can offer you tailor-made advice and support.

2. Business and management skills – being successful means understanding how business works and the different functions and roles required of anyone in a managerial position. Our advisors are always extending their own personal knowledge in order to keep up-to-date with the latest developments in the world of business so that we can help you to run yours like clockwork.

3. Looking at the bigger picture – when you’re involved in a business yourself it can sometimes be hard to see the woods for the trees; an advisor has the benefit of being able to step back and see the bigger picture, helping you to put things in perspective and also identifying problems and ideas that may not be so clear from close quarters.

4. Industry specific knowledge – as media specialists, our business advisors understand your industry and can therefore offer a more streamlined service that resonates with the environment in which you work; it’s always best to use someone who really knows and understands your sector.

5. Honesty – there’s no good getting advice if it’s not completely honest. It’s our job to tell you the truth, not to dress things up and manipulate facts just to give you the news that you want to hear.

6. A sounding board – our advisors are here to listen to your ideas and then provide honest feedback. This gives you a platform for venting your thoughts, formulating plans and getting a constructive opinion.

7. Rectifying mistakes – we can help you to rectify past mistakes or bad financial decisions, helping you to bring your business back in line and smooth over any problems that may have occurred.

8. Maximising income – our accountants and advisors can pinpoint areas that may be straining your finances and show you ways in which you can boost your income and improve your profits.

9. Growth support – we can help you with PAYE, National Insurance Contributions, VAT and anything else that may become relevant overtime.

10. Approachability – all of these things are all well and good, but you also need a business advisor who is friendly and approachable. While we recognise your business is serious business, we also ensure that we are easy to deal with too.

Call on us at any time

If we sound like the kind of business advisors you’d like to deal with, feel free to call on us any time at all – as media specialists, we’re always happy to hear from professionals across the TV and media industry.

We’re hiring! Join the Blue Skies team

We are currently recruiting for the following positions –

Accounts Apprentice
Senior Accountant

Accounts Apprentice

Accounts apprentice needed to work in our busy Accountants’ practice in Sandy, working a four day week (with day release to college on the fifth day) to perform general administrative/accounts duties and provide support to the Accounts Teams as required. An excellent opportunity for the right candidate to gain experience in all aspects of accountancy as full training will be provided.

Duties include:

The job involves a variety of general administrative and accounts duties, including:

  • General administrative duties – photocopy and filing
  • Sorting post
  • Maintaining records
  • Basic processing of receipts and income on SAGE and our bespoke accounting software
  • Assisting the rest of the team

Applicants should have 3 GCSE’s, grade C equivalent or above, good organisation skills, ability to use Microsoft Office competently, have good communication skills with a confident telephone manner. Also be able to understand what is required and respond accordingly.

Benefits include flexi time, company pension, death in service and AAT day release to college.

In the first instance please send a CV and covering letter to Miss Sara Housden via email on sara@blue-skies.tv

Blue Skies ethos is to actively promote and support all of our employees to expand their skills and confidence through achieving professional qualifications.


Senior Accountant

Salary – depending on experience plus benefits including flexi time, company pension, death in service and health insurance

An exciting and challenging opportunity has arisen within our specialist accountancy practice who deal with clients in the TV, Media and Creative arts sector. We are looking for a technically skilled qualified accountant (ACA / FCA / ACCA / FCCA) with extensive experience within a practice environment to manage a client portfolio and take responsibility for the delivery of the clients’ accounting needs.

This role requires a forward thinking individual who can provide a high level of accounting expertise, including accounts preparation, personal tax and tax computations, together with dealing with ad hoc tax queries. You would need to be comfortable talking to clients on technical matters but in simple layman terms. Professional and friendly in your approach, you will be looking to not only deal with your clients’ accounting needs, but also provide proactive advice to those clients whilst supporting and helping train those around you in a friendly but busy environment.

Our ideal candidate will have extensive practice experience in a fast paced environment. You will be self-motivated with a positive approach to work and excellent communication skills. With great attention to detail and accuracy, you will be adaptable to change and flexible to the shifting priorities of the daily workload.

Although ideally you will be a qualified accountant, QBE candidates with a solid practice background will be considered.

In the first instance please send a CV and covering letter to Miss Sara Housden via email on sara@blue-skies.tv