That’s right – the government is forcing everyone to pay into a pension scheme, whether they like it or not.

From 2012-2016, the government is phasing in pension reform. Every employer will have to operate a company pension scheme if they have empoyees who earn over the personal allowance for tax per year (£7475 for 2011-12). Employees will have to contribute to the pension scheme. Employers will also have to contribute to the scheme. Some small employers may have to consider pay cuts or freeze pay rises for staff in order to afford it. This will impact most people.

There has been some talk about it but, so far, it’s not been widely publicised and many employers and employees aren’t aware of it, or how it might affect them.

Employees:

If you earn over the personal alowance, you will have to make pension contributions via payroll if you don’t already contribute to a company scheme.

You will receive tax relief at source: the pension contribution will be take out of your pre-tax pay. So, if you earn £250 a week and pay £10 into a pension, your tax and NI will be calculated on £240 a week.

Employers:

If you already have a pension scheme then, as long as it meets the prescribed standards (which it probably will), you shouldn’t have to worry.

If you don’t have a pension scheme, the default scheme to enrol in is called NEST. If you don’t shop around and choose your own pension scheme, this is what you will end  up with. The financial advisers we have spoken with have all expressed concerns of how good this offering will be, but it will meet the government’s requirements – which is to help fill in the “pensions black hole.”

The other option is to consider the needs of your business and staff, and talk to a financial advisor about setting up a scheme that is more appropriate for your business and may give better value and returns in the future.

Pension reform: the facts

The government are phasing in the compulsory pension schemes depending on the size of the employer. Pension schemes will have to be offered as follows:

2012: employers with over 30,000 staff

2013: employers with more than 350 staff

2014-2016: everyone else

Employees will be “auto-enrolled” onto these schemes.

The employer’s contribution is a compulsory 3%.

The employee’s contribution is 4%.

If you are an employer paying someone over the personal allowance, this affects you. Speak to us today about what your options are.

Closed: Thurs 22nd December 2011 – 3rd January 2012.

Wednesday 4th January – office reopens.

From all at Farrant Frost, have a wonderful Yuletide and best wishes for the new year

Jenni

If you file online, the deadline is 31st January 2012, but if you want to file on paper, and you still need to do your tax return, time is running out.

Farrant Frost are holding paper tax return clinics at our Pewsey office throughout October. Call us on 01672 564 370 for more information or send us an email.

What is a tax return clinic?

Many people who need to complete a tax return have relatively simple affairs and want to do it themselves without the expense of an accountant. However this can leave questions and sometimes people want reassurance without having to wade through HMRC’s own guidance.

A tax return clinic is an opportunity for you to sit down with an accountant here in Pewsey and ask us any of those tax return questions that you’ve been wondering about. Or maybe you’ve got all your information but are a bit daunted by the paper form. We can help you fill it in. Or, we can just look over what you’ve done and put your mind at rest.

For £30 (including VAT) you can speak to one of our accountants for 20 minutes and ask us your tax return related questions.

Normally, taxpayers in self assessment either have to pay the full fee to an accountant, or do it themselves, with no option in between. We want to bridge that gap for people. We aim to make accounts and tax as simple and painless as possible.

The tax clinic will help with self assessment tax returns that include income from interest, dividends, benefits, pensions, employment, self employment and rental income. Please see below for more details.

What if I’m filing online?

If you plan to file online, you can still take advantage of our tax return clinic to ask us your questions.

Great! When is it?

Tax Return clinics are available throughout October. Our drop-in sessions are Tuesday-Friday at 10am -12.30pm, during the middle two weeks of October: 11-14th and 18-21st. You don’t need to pre-book, just turn up. If these aren’t convenient, you can always book an appointment. If you want an early evening slot, please just ask.

What’s this I hear about fresh coffee and cake?

If you come along to one of our drop-in sessions, we’ll have fair trade fresh coffee on the go, along with tea and biscuits. And mineral water. And possibly fresh fruit juice and/or cake. Lovely.

What do I need to bring?

Please bring with you summaries of all your income sources in the 2010-11 tax year (6th April 2010 – 5th April 2011). These will will typically include:

• Certificates of interest received (and tax deducted) from bank and building societies
• Dividend vouchers for dividends received from shares held
• Forms P60 or P45 from any employments or pensions
• Forms P11D or P9D (expenses and benefits from employment)
• A record of the amount of state pension or taxable state benefits received in the year
• Income and expenditure from rental property you have, including lodgers in your own home
• Income and expenditure from your simple self employment
• Records of pension payments made to private pensions (for higher rate taxpayers)
• Records of any gift aid payments made to charities in the year (for higher rate taxpayers)
• Records of any other income received in the year.

Please note that, amongst other things, Tax Credits and income from ISAs do not need to go on your tax return.

We will advise you how to show your income on the returns. If there are any basic tax-saving measures we spot that are not already included, we will suggest these to you. We can also assist with record keeping, should you wish.

What we will not do at the tax return clinic:

We pride ourselves on accuracy and attention to detail. Some taxation affairs require more in depth attention and we do not feel a 20 minute sit down is enough to provide the level of service and accuracy required for services including but not limited to:

• Capital gains computations
• Busy rental property portfolios
• Preparation of business accounts
• Detailed taxation advice

You will be asked to sign an Engagement Agreement – this is a condensed version of the Letter of Engagement which accountants issue to clients. It outlines our responsibilities and the nature of the tax return clinic engagement. Payment of £30 is to be made by cheque (payable to Farrant Frost) or cash on signing the Engagement Agreement, before your consultation takes place. A VAT receipt will of course be provided.

I’d rather not do my tax return at all, actually…

If you’d rather hand your whole tax return over to us, we’d be happy to help. Just give us a call on 01672 564 370 or send us an email and we’ll look after it all for you.

Image provided by Images_of_Money via Flickr

In the current economic climate, people understandably want to reduce their costs and strip out anything unnecessary. Management accounts are an essential tool to help do this, and can save you far more than they cost to produce.

Simple management accounts may cost less than you think

If you keep your books in a modern accounting package, like Solar Accounts or Accounts Portal, then the facility to run simple reports like a profit & loss, balance sheet or debtors and creditors is built in. If you use a professional bookkeeper, then adding some basic management reports to the package shouldn’t cost much more, and provides so much more value than simple tax compliance.

If you get confused when you look at accounting reports, we will happily give you a quick talk through the basics for free. We can also provide more in depth training for those who wish.

Cash is king

Cashflow is king; more advanced management accounts can provide you with cashflow projections, budgeting forecasts and analysis and more.

Management accounts can turn your job into a business

If you’re a small sole trader who wants more than simply having a job where you are your own boss, having up to date business information can help you transform your job into a thriving business – you can go on holiday and the business is still making you money!

If you are happy with the size and structure of your business and have no plans to expand, simple regular reports and accounts are still a useful tool in helping you streamline your business finances, maximising your profit and minimising your tax.

Talk to us for free to see what type of management accounts can help you today

Once you’ve made the decision to switch, all you have to do is one thing:

1. Write to your current accountant saying you wish to change, give your new accountant’s name and details, and give them consent to pass your details on.

The incoming accountant then does the rest!

2. The new accountant writes to the outgoing accountant with a letter of “Professional Clearance.” This is a standard process, and the two accountants handle all of the necessary paperwork and handover between themselves.

It’s that simple.

We would be very grateful for any and all sponsorship – our page is here.

Dont forget to gift-aid it!

Remember – if you are a higher rate taxpayer, you will get tax relief on your charitable donations if you declare them on your tax return.

There are various tax breaks for businesses who promote the health and wellbeing of their employees. As us about the Cycle to Work scheme, or how to claim back expenses for work related cycle trips.

Some more scam emails are doing the rounds, this time entitled “Income tax repayment” or “Tax refund notification”.

Delete and DO NOT click any links in the email. If you are in self assessment, any tax you owe or are due back will be calculated via your tax return.

HMRC state on their site:

“HMRC will never send notifications of a tax rebate by email, or ask you to disclose personal or payment information by email. If you have received an email claiming to be from HMRC that you suspect may be fraudulent, please forward it to phishing@hmrc.gsi.gov.uk.”

If you think you may have overpaid tax, please contact us to see how we can help you.

We’ve smoothed out our pricing policy, meaning great value complete accounting can be yours for low monthly fees, every month, even if you join part way through your financial year. Great!

For example, if Bob’s monthly fee is £30, and he joined us in month 4 of his financial year, he will need to pay for months 1-3 as well as month 4 onwards. Previously, we typically added all prior months into the first invoice. That would be a bill to Bob for £120. We didn’t like it, we don’t like lump sums here at Farrant Frost and All Beans Counted, but we couldn’t think of a better way.

A cup of tea later, we’ve made it so much better! Now, if Bob joins us, we will invoice him £60 for the first 3 months he’s with us, then £30 per month thereafter. This gets all of his financial year done, with a much smoother cashflow. And there’s still no contract or tie-in!

We like it. We hope you will too.

Have a look at our ABC site to see if affordable, simple to use, “we-do-it-all, you-don’t-have-to” accounting and bookkeeping is for you.

And while you’re here, please vote for us in the Progressive Practice competition. Thanks!

We look after everything - down to the last bean

We want to make number 1!

We can only do this if you vote for us. It only takes a minute.

Our All Beans Counted service is a complete, low cost accounting service that keeps the tax man happy and puts you in the picture with your business finances every month. No spreadsheets, no entering your transactions on an online interface, just give us your paperwork (in a provided envelope or electronically) every month and let us look after everything for you.

This is due to our innovative service All Beans Counted and the way we’ve streamlined our systems to mean we can provide a premium accounting service for a great low fee.

The final 5 competitors will be put to a public vote – we hope you will support us!

We will be posting a link to the competition as soon as it’s launched.

~Jenni