Welcome to the August 2013 Newsletter from Connolly Accountants Ltd

Individuals are being given the opportunity to settle their outstanding tax bills under a new campaign launched by HM Revenue & Customs (HMRC). The 'My Tax Return Catch Up' initiative is aimed at individuals who have failed to complete a self assessment tax return for any year up to 2011/12. The move follows a number of previous campaigns by HMRC, which have netted the taxman millions of pounds in unpaid tax.

Meanwhile, a new report has highlighted the pivotal role of small businesses in boosting local economies. Latest research suggests that a much higher proportion of the money spent by local authorities with small businesses is re-invested back into the local economy, when compared with larger companies in the same area. Authorities are now being urged to utilise the full potential of SMEs by awarding a greater proportion of contracts to local businesses. 


HMRC offers 'second chance' for outstanding tax returns

HMRC has launched a new campaign aimed at taxpayers who have failed to submit their self assessment tax returns for previous years.

The campaign gives these taxpayers a time frame in which they are able to submit their outstanding tax returns, which could reduce the charges they incur.

A similar campaign last year targeted higher rate taxpayers who had failed to submit a return for 2008/09 or 2009/10. Following this, over 3,000 people came forward voluntarily to file more than 5,500 tax returns, generating in excess of £30 million.

Under the latest scheme, taxpayers who received a self assessment tax return or a notice to complete a return for any year up to 2011/12, but who failed to take action, must notify HMRC that they wish to take part in the campaign, before submitting the return. They can do this by completing a form online, posting it, or contacting HMRC by telephone. They will then have until 15 October 2013 to complete and submit their returns and pay any outstanding tax.

Individuals who fail to meet this deadline will be liable to penalties of up to 100% of the tax due, and could face criminal investigation. However those who are proactive and come forward to pay their outstanding returns will receive the best terms that HMRC can offer in relation to penalties.

HMRC expects that most people will not have to pay 100% of the penalty fees. Interest will remain payable for late payments of tax on all self assessment tax returns.

The tax authority will be writing directly to several thousand people it has identified using intelligence-gathering software, with follow-up calls expected to be made to many individuals in due course.

Marian Wilson, head of campaigns at HMRC, said, 'This is definitely the best time to catch up, on the best possible terms. While some penalties will apply, it is likely to cost people more if we have to find them rather than them coming to us'.

The campaign is the latest in a string of HMRC schemes designed to recoup unpaid tax. Previous initiatives have resulted in payments of more than £547m from voluntary disclosures, and nearly £140m as a result of follow-up activity.

We can help to keep your tax affairs in order and we would be happy to complete and submit any outstanding tax returns on your behalf. Please contact us for further advice and assistance.


Small businesses 'generate more for local economies'

A new report has suggested that a significantly greater proportion of the money spent by local authorities with small firms is re-spent within the local economy, when compared with larger firms in the same area.

Local authorities throughout the UK were asked to take part in a survey undertaken by the Federation of Small Businesses (FSB) and the Centre for Local Economic Strategies, with the aim of determining how much local authorities spent on goods and services in their local area, and with whom.

For every £1 spent with a small or medium-sized enterprise, 63p is re-spent locally, compared to 40p in every £1 spent with a larger business. Despite the fact that large businesses received £500 million more in spending terms, small companies are believed to have generated an extra £746 million for the local economy.

The report revealed that last year, local businesses were paid £8.7 billion from local authorities for goods and services. The FSB says it would like authorities to use more local businesses, and believes that if each authority spent an extra 3% of their budget with local firms, an extra £788 million could have been raised for local economies.

John Allan, the National Chairman for the FSB, commented, 'The evidence speaks for itself. Spending locally invests in jobs and growth for the area. We want to see more of this happening across the country'.

However, Mr Allan acknowledged that 'a one-size-fits-all approach won't work', and the FSB is calling on local authorities to work with their local FSB, to 'create an environment in which small firms can grow and prosper the areas they work in'.

Meanwhile, the Business Secretary, Vince Cable, said: 'This report shows what I have known for a long time - more of our small and medium sized companies must get a fair share of public contracts'.


ESSENTIAL TAX DATES FOR AUGUST

2 August
Submission date of P46 (Car) for quarter to 5 July.

31 August
Annual Adjustment for VAT partial exemption calculations (May VAT year end).


QUOTE OF THE MONTH

'British businesses are buzzing with innovation and ambition, and delivering the best possible climate for them to grow should be at the top of the Government's agenda'.

Simon Walker, the Director General of the Institute of Directors (IoD), expresses his support for a new taskforce to tackle EU red tape.


WEBSITE OF THE MONTH

www.gov.uk/contracts-finder

Search for live and forthcoming Government contracts in your area.


ON OUR WEBSITE

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