spring 2008 newsletterpub

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Thanks for taking time out again to read our newsletter. In this edition we have introduced a new feature, giving an EJBC client the opportunity to showcase their business. We are regularly asked for guidance on home office working. The first part of our guide is on page 2. We also cover recent changes to taxation & reporting rules, which we hope you will find of interest. As ever, if you would like to discuss any of the topics in the newsletter further, please don’t hesitate to get in touch.

I am delighted to announce EJBC has become a Chartered practice, governed by The Institute Of Accountants in England & Wales (ICAEW).

to receive a paper copy in the future, please use the ‘unsubscribe’ facility in the e-mail. We have just launched our new website, which will be able to host more features. One development we are keen for feedback about is the opportunity to create a forum for you all to ‘network’. Our idea is to create a private members area on the website where you can share your company details and services. Any member discounts would also be appreciated ! Finally, keep a look out for the launch of EJBC Digital very soon. Emma areas will reduce . Finally, the new capital gains tax regime came into effect. If you require more detailed information on any of these above items, please contact us.

As you may be aware, the ICAEW is widely recognised as the world’s premier accounting body and demonstrates our ongoing commitment to providing outstanding levels of service to our clients. Most of you will have received this newsletter by e-mail. We, like many, are looking for ways to be a little ‘greener’. If you would prefer Due to the extension of the National Insurance threshold, those employees or self employed individuals with earnings of about £40,000 and above, will now pay more National Insurance.


As we outlined in our last newsletter, the beginning of April 2008 has brought a lot of new changes to our tax system, some of The annual personal allowance has which are still being heavily increased to £5,435. disputed! The inheritance threshold has So what has changed? increased to £312,000.

* Gordon Brown has recently announced that he is planning to compensate those who will be affected by the abolition of the 10% From 1 April: The threshold for vat registration tax rate. We will not know much has increased to £67,000. about the details until later in the The corporation tax rate increased year, however he has advised that from 20% to 21% There have also been changes in whatever compensation package is The basic rate of tax reduced from capital allowances, which will put in place, it will be backdated to 22% to 20% increase some claims on new plant 1 April 2008. The 10% tax rate was abolished* and machinery purchased. On the other hand, claims made in other

2B Northbrook Court . Park Street Newbury . Berkshire . RG14 1EA Tel: 01635 46174 E-mail: Web:

A very common and, at first glance, seemingly easy question to answer. But not so, as there are different rules for the self-employed and employees. To make things more complicated, not all employees are treated the same. Below I have outlined claims made by self-employed individuals and in our next newsletter I will look at what can be claimed by employees. evening, from 6pm until 10pm it is used by her family. The room used represents 10% of the area of the house. The fixed costs including cleaning, insurance, Council Tax and mortgage interest, etc total £6,600. A tenth of the fixed establishment costs is £660. For the purposes of fixed costs, one sixth (4/24) of the use by time is for business, so Chris claims £110. She uses electricity for heating, lighting and to power her computer, which costs £1,500 per annum. Chris considers an apportionment of these costs by time and area. A tenth of the costs are £150 and half of these costs by time (4/8) relate to business use, she claims £75. Example 2 Gordon, an architect, dedicates a room solely for use as his office between 9am and 5pm daily. The room contains a workstation, office furniture and storage for his drawings. He uses the room for an average of four hours each day, though often this is spread over his working eight hour day as he has a number of regular site visits to make. In addition it is not uncommon for Gordon to accommodate clients in his office to discuss plans, outside of normal hours. The room is available for domestic use outside of business hours and his family regularly make use of the room for around two hours each evening. After apportioning costs by reference to the number of rooms in the house, Gordon calculates the room uses £300 of variable costs (electric and oil) and £600 of fixed costs (council tax, mortgage interest, insurance). In apportioning these costs by time Gordon claims £680 in total, made up of 4/6 of variable costs (£200) and 8/10 of fixed costs (£480). The claim equates to 75% of the total costs attributable to the room (£680/£900), which Gordon views as a more straightforward but equally reasonable basis for future claims, should his circumstances remain unchanged. Be careful not to fall into the trap of claiming for one room of your house by saying it is used exclusively for business purposes. If you do decide to go this route there could be capital gains implications when you sell your home based on this sole business use. 31st July – 2nd payment on account due under self assessment. 31st July – If you have not filed your 2007 Tax Return, you will receive a further £100 late filing penalty if the return still remains outstanding at this date. 31 October – Filing deadline for paper self assessment tax

Tax dictates that you can only claim for an expense if it is incurred wholly and exclusively for business purposes. However, with issues such as working from home this is not so clear cut. It is important to establish what is reasonable based on the trade you carry out. Say for example you use your home a few hours a week to get your books up to date, generate quotes and raise invoices. A charge of £2 to £3 per week would be deemed as reasonable without needing to take steps to justify this claim. If you work from home on a daily basis you would want to make a larger claim. An appropriate claim you would need to consider what costs you could make a claim for, and how they should be apportioned to your business. Below are some valid examples taken directly from the Inland Revenues manual BIM47825 Example 1 Chris is an author working from home. She uses her living room from 8am to 12am. During the

19th May – The date by which employers should give their employees their P60’s. 5th July – Deadline for filing form P11d. This details any expenses or benefits incurred by a director or an employee. If we prepare this form for you, we will be contacting you shortly for the information which we require.

19 May – Final date for submission of form P35, Employers annual return. Failure to file by this date will lead to a penalty of £100 per month that the return remains outstanding.

In a new feature for our newsletter, we put the spotlight on an EJBC client. In this issue, we take a look at Essence Hair & Beauty, an Aveda group Salon, which recently opened in the Broadway, Newbury.
striving to have a positive impact on the environment, Essence takes AVEDA’s ‘green’ philosophy to the next level: “We all need to take responsibility for the world in which we live but many people simply don’t know where to start in trying to make a difference. That’s why at Essence we allow our guests to receive the highest levels of service, quality and luxury without the guilt that they may be damaging or polluting the environment,” she added. Essence Hair & Beauty 10 The Broadway Newbury RG14 1BA Tel: 01635 44994 Web: The only true way to understand Essence is to experience it for yourself., so take advantage of the two great offers kindly provided by Koulla below.

It’s not often you have the chance to both pamper yourself and pamper the environment, but at the new Essence Salon you can do just that. Opened on March 3rd 2008, Essence is an AVEDA hair and beauty salon that puts both its guests and the environment at the heart of its business. How it does this, Koulla Swann, Owner and Senior Hair Stylist, explains: “Essence is a certified Carbon Zero company which means that our net carbon dioxide emissions are zero. We do this by using the latest low energy technologies and only using 100% renewable electricity.

Whilst protecting the environment is a cornerstone of Essence, another is the outstanding customer service offered in its salon and beauty spa. When guests enter the peaceful world of Essence they leave the stress and strain of the world outside, whether it’s for hair styling, a holistic spa or for a day retreat. In addition, all guests will receive at least one of these complimentary services:*

Carbon footprint
“What’s more each time a guest visits Essence we will offset their carbon footprint for the whole week. Offsetting is a way of compensating for the emissions produced by our guests’ cars, home heating and even air travel with an equivalent carbon dioxide saving managed through a certified carbon offset scheme.” In opening her salon, Koulla has brought to Newbury the world’s leading botanically based beauty products manufacturer. Created over 30 years ago, AVEDA was founded with the belief that there is no responsible alternative to doing business other than through environmental sustainability. In

Stress Relieving Treatment - A

relaxing scalp and neck massage using AVEDA essential oils. Hand Treatment - A soothing pressure point hand massage using AVEDA skin care products. Makeup Touch-up - With your favourite AVEDA products. Sensory Journey - An aromatherapy journey with AVEDA's natural aromas. Aromatic Hand Towel - Steamed or chilled towels soothe and refresh. * All served with a soothing cup of AVEDA Herbal Tea.

deadline for paper returns of the 31 October 2008. Those filing electronic returns still have until 31 January 2009. date with developments as we learn more.

New Penalty Regime
The 2007 finance act has given the HMRC a new framework for assessing penalties on incorrect returns, covering income, corporation tax and VAT These changes will apply for returns filed after April 2009 and will be based on taxpayer behaviour, and the tax underpaid. There will be no penalty where the taxpayer makes a simple mistake, however, there will be a penalty of up to : 30% for failure to take reasonable care. 70% for a deliberate understatement. 100% for a deliberate understatement with concealment. Due to the lucrative nature of these penalties we expect to see more general enquires into clients tax returns.

Private Limited Company filing deadline change
This will only affect those trading as a limited company. For accounting periods commencing after the 6 April 2008, the tenmonth window for filing limited company accounts is being shortened to nine months. The full effect of this change will be felt this time next year, so it is worth bearing in mind. As you can imagine, there is also a new regime of penalties effective from the same date. The penalties will be set for late filing as follows: £100 up to 3 months late £250 up to 6 months late £500 for more than 6 months late

Changes to the window for enquiries into tax returns From April 2008
The enquiry window for tax returns covering income for the year ending 5 April 2008, will be linked to the date the return is filed, where previously it has been linked to the filing deadline.

Compliance Checks
This is the new terminology used to describe HMRC checking that business and individuals are paying the infamous ‘right amount of tax’. We will see new rules in this area applying from 1 April 2009. The full detail of these checks are still be to finalised, but we know they will give HMRC the powers to visit client’s business premises, or home (if the client works from home) to check that their level of bookkeeping meets HMRC standards. We will keep you up to

Filing deadline change for paper returns
For the tax year ending 5 April 2008 we have a new filing

A big thank you to: Sarah Burke of The Accessory Queen — Again ! Emma Mason of Emma Mason PR Angella Hill of Angela’s Flowers Chris Davey of Nuclear Ventilation Services Ltd Minoo Atraki of Misiyu Ltd Koulla Swann of Essence Hair & Beauty All of whom successfully introduced new clients to EJBC in the last couple of months. £25 of M&S vouchers are on their way !!

Emma Thomas Rosalind Caffyn Helen Robins Rachel Williams Yvonne Hoptroff Sarah Maskell Keilor Quesada-Getgood

E.J.Business Consultants Ltd 2B Northbrook Court Park Street Newbury Berkshire RG14 1EA Tel: 01635 46174 E-mail: Web:

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