If your business receives payment by debit or credit card, you may get a letter from HMRC asking you to check it has all been declared on your 2015/16 tax return.
Last month HMRC launched its Card Transaction Programme – a chance for businesses who may not have declared all their sales to get their affairs up to date under the best possible terms. Laws passed in 2013 give HMRC the power to access data from organisations that process credit and debit card transactions for businesses, which is how they are now able to check.
Some businesses (and their accountants) are now getting letters from the HMRC Campaigns and Projects team, giving them 28 days to:
Check the income on tax returns for 2015/16 is correct
Go back and look at earlier years if a discrepancy is found
There are then 3 ways to respond:
1.If you have additional income to declare, go to cardtransactions.campaign.gov.uk which explains how to bring your tax affairs up to date in a straightforward way
2.If you have declared everything, call 0300 123 9272 to avoid further unnecessary contact
3.If you need more than 28 days to check your records, call 0300 123 9272 to arrange this.
If you get a letter it is because HMRC suspects you of under-declaring income, so don’t ignore it! It is possible that there will be no penalty to pay, or perhaps up to 20% of the tax due, depending on the circumstances. However failure to declare the underpayment is likely to lead to higher penalties or even a criminal investigation.
Providing you have a 64-8 in place your accountant should also get a copy of the letter, but knowing the vagaries of HMRC and the postal service, don’t rely on this!
For help and advice on this or any issues contact Altus here.
Have you ever received your final year accounts from your accountant and realised that the year didn’t go quite how you expected it to?
You didn’t expect the profit to be that low, or you didn’t think costs would be as high. Oh well, it’s too late now, the year is over, the money has been spent, and you have already started the next year.
The following year end comes around and you have the same thought process… sound familiar?
Then it is time to be proactive – and create a budget!
You may budget for your weekly shop, for your holidays or for your wedding; you may budget for your mortgage, for Christmas, for birthday presents, or even budget for your monthly clothes shop. All of us have budgeted for something in our personal lives even if it is just kept in our heads.
So if we budget outside of work then why do many company owners not budget for their business?
The act of creating a budget for a business is very useful, and can be an eye-opening experience.
It forces you to stop and look at what you have spent in the past and make decisions about how much you want to spend going forward. You set an amount and you stick to it.
Businesses need to budget to control costs and understand where their money is being spent and on what. The only way that you can reduce costs is to understand what the costs are in the first place. This will improve efficiency and in turn improve your profits.
If you don’t stick to your budget, the costs get out of control and money often gets wasted.
When you set a budget it helps you to recognise problem areas and spot issues coming down the line. This means you can be proactive and plan for those times early instead of having to deal with them at a moment’s notice.
It also helps you to see when you are likely to have cash flow highs and lows and you can plan accordingly.
Therefore, set your budget – stick to it – your business will benefit.
If you would like any assistance in creating or using a budget to help your business move forward and grow then Altus is here to help. Contact us here.