We have not found a client yet who claims to be making too much money! And yet businesses are potentially wasting their money by not reviewing their expenses regularly enough.
We all think we have got the best deals possible for our insurances and telephone costs etc but there is extra money to be saved without suffering a reduced standard of service across virtually all costs.
ERC have recently joined forces with UK expense reduction experts to provide a facility for clients and friends alike to receive a free review of their costs and to identify the opportunity for savings. We have undertaken this review and saved money on several aspects of our business that surprised us greatly.
This is Free Of Charge so you have nothing to lose. If you’re interested then please contact me at richard.brown@ercacc.co.uk
accountants liverpool
Would the Tories scrap PAYE if Elected?
A recent article has suggested that radical tax reforms are being planned by the Conservatives that would see the biggest changes to the way income tax is collected for more than six decades.
The Tories are developing a pilot for a new automated bank-based system that would remove the responsibility of deducting and paying income tax from employers.
It is believed the proposed new system could save businesses up to £5.5 billion and increase revenues to the Exchequer by £1 billion.
Employers would no longer be responsible for processing different tax codes and pay income tax for employees. The new system would automatically deduct income tax and National Insurance contributions (NICs) directly from an employee’s gross pay as it is paid into their bank account.
The Tories said the plans were drawn up in response to the increasing failures of the current tax system.
PAYE was introduced in Britain in 1944 and more than 65 years later most taxpayers have both their income tax and NICs deducted at source by their employers.
Only time will tell if this report is true – watch this space.
Chartered Accountants Liverpool, Accountancy Liverpool
The Tories are developing a pilot for a new automated bank-based system that would remove the responsibility of deducting and paying income tax from employers.
It is believed the proposed new system could save businesses up to £5.5 billion and increase revenues to the Exchequer by £1 billion.
Employers would no longer be responsible for processing different tax codes and pay income tax for employees. The new system would automatically deduct income tax and National Insurance contributions (NICs) directly from an employee’s gross pay as it is paid into their bank account.
The Tories said the plans were drawn up in response to the increasing failures of the current tax system.
PAYE was introduced in Britain in 1944 and more than 65 years later most taxpayers have both their income tax and NICs deducted at source by their employers.
Only time will tell if this report is true – watch this space.
Chartered Accountants Liverpool, Accountancy Liverpool
HMRC Errors Highlighted on the BBC
Back in October we advised you that HMRC had been making errors with peoples tax codes and 3 months later the BBC have confirmed this publically.
The CIOT has called on the Revenue to launch a publicity campaign to alert taxpayers to the potential problem.
“Most people on PAYE are used to assuming that what the taxman sends them is correct,” said Andrew Hubbard of the Chartered Institute of Taxation (CIOT).
“But this year, many of them are being given wrong information, and unless they spot it and tell HMRC, their employer will receive the wrong information too.
“They could get a nasty shock when they open their April pay packet and see it is as much as a hundred pounds lighter than they are expecting,” he added.
It is not clear how many incorrect tax codes have been sent out, or may be distributed in the coming weeks.
The CIOT said the scale of the problem might be indicated by the fact that this year about 25 million coding notices are being distributed, which is about twice last year’s number.
The Revenue explained that the increase was a natural feature of the new system.
“It creates a single record for customers for the first time, and this, together with increased automation compared to previous years, is resulting in many more people having more accurate codes than before,” the spokesman said.
The problem appears to lie with a new computer system designed to process the collection of income tax via the PAYE system, along with national insurance contributions.
“The new system is improving the accuracy of the PAYE so that more people than ever before are correctly taxed,” said the HMRC spokesman.
“We have until April to correct the coding notices that are genuinely wrong,” it added.
However the CIOT said the system’s database was failing to distinguish between current jobs and old ones, leading to tax codes being calculated on the assumption that someone has more than one job.
In a few cases the Revenue computer system has removed the personal allowance on the assumption that the person’s income will be higher than £100,000.
Earners above this level will lose their personal allowance this coming tax year, in a measure first announced by the Chancellor in the 2008 pre-budget report.
Any problems or concerns then please contact Lynne Brooks on 0151 702 5604.
FUNDS RAISED FOR CHARITY
On a lighter note, we have been presented with a certificate confirming that ERC raised £5,205 for Caudwell Children, our nominated charity for 2009. We would like to thank all our clients, staff and friends who helped make a difference to local children with life threatening illnesses.
ERC has decided to retain Caudwell Children, together with Leukemia Research UK, as our nominated charities for 2010. We hope you will continue to support them both with us this year.
Chartered Accountants Liverpool & Chartered Accountants Chester
The CIOT has called on the Revenue to launch a publicity campaign to alert taxpayers to the potential problem.
“Most people on PAYE are used to assuming that what the taxman sends them is correct,” said Andrew Hubbard of the Chartered Institute of Taxation (CIOT).
“But this year, many of them are being given wrong information, and unless they spot it and tell HMRC, their employer will receive the wrong information too.
“They could get a nasty shock when they open their April pay packet and see it is as much as a hundred pounds lighter than they are expecting,” he added.
It is not clear how many incorrect tax codes have been sent out, or may be distributed in the coming weeks.
The CIOT said the scale of the problem might be indicated by the fact that this year about 25 million coding notices are being distributed, which is about twice last year’s number.
The Revenue explained that the increase was a natural feature of the new system.
“It creates a single record for customers for the first time, and this, together with increased automation compared to previous years, is resulting in many more people having more accurate codes than before,” the spokesman said.
The problem appears to lie with a new computer system designed to process the collection of income tax via the PAYE system, along with national insurance contributions.
“The new system is improving the accuracy of the PAYE so that more people than ever before are correctly taxed,” said the HMRC spokesman.
“We have until April to correct the coding notices that are genuinely wrong,” it added.
However the CIOT said the system’s database was failing to distinguish between current jobs and old ones, leading to tax codes being calculated on the assumption that someone has more than one job.
In a few cases the Revenue computer system has removed the personal allowance on the assumption that the person’s income will be higher than £100,000.
Earners above this level will lose their personal allowance this coming tax year, in a measure first announced by the Chancellor in the 2008 pre-budget report.
Any problems or concerns then please contact Lynne Brooks on 0151 702 5604.
FUNDS RAISED FOR CHARITY
On a lighter note, we have been presented with a certificate confirming that ERC raised £5,205 for Caudwell Children, our nominated charity for 2009. We would like to thank all our clients, staff and friends who helped make a difference to local children with life threatening illnesses.
ERC has decided to retain Caudwell Children, together with Leukemia Research UK, as our nominated charities for 2010. We hope you will continue to support them both with us this year.
Chartered Accountants Liverpool & Chartered Accountants Chester
Reduced Tax Relief for the Highest Earners
From the tax year 2011, those people whose income is £150,000 or more will receive reduced tax relief on their personal pension contributions. But instead of a ‘Cliff Edge’ the reduction in tax relief will be on a sliding scale, so those who earn £180,000 or more will receive only 20% tax relief. People whose income is between £150,000 and £180,000 will receive tax relief of between 50% and 20%. We believe their tax relief will be reduced by 1% for each £1,000 of income above £150,000.
HMRC wants to introduce equality between those who personally pay contributions and those whose employers pay sizeable contributions. Therefore, it will also apply the restriction on tax relief for the highest earnings to employer contributions. As employees aren’t currently taxed on these contributions, the new rule could introduce an additional tax charge on employees.
These changes will become effective in April 2011.Schemes in future will have to let people know the value of their total contribution arrangements, this is straightforward. But for defined benefit schemes, the process of valuing the total contribution could be complicated. HMRC intends to consult with the industry over the next year on the best way of doing this.
It’s important to emphasise that pensions will remain a highly tax-efficient way of saving for the majority of people, and that these changes will only affect a small number of people. But the combination of these two tax changes will significantly reduce the appeal of pensions for the very highest earners in the UK.
These changes will prompt high earners to explore alternatives to pensions and will create a need for more sophisticated and bespoke financial planning. The time for looking at alternatives is now so if you would like an initial chat then please do not hesitate to contact Mohit Saini of ERC Financial Planning Ltd on 0151-227-4792.
Chartered Accountants Liverpool and Chartered Accountants Chester
HMRC wants to introduce equality between those who personally pay contributions and those whose employers pay sizeable contributions. Therefore, it will also apply the restriction on tax relief for the highest earnings to employer contributions. As employees aren’t currently taxed on these contributions, the new rule could introduce an additional tax charge on employees.
These changes will become effective in April 2011.Schemes in future will have to let people know the value of their total contribution arrangements, this is straightforward. But for defined benefit schemes, the process of valuing the total contribution could be complicated. HMRC intends to consult with the industry over the next year on the best way of doing this.
It’s important to emphasise that pensions will remain a highly tax-efficient way of saving for the majority of people, and that these changes will only affect a small number of people. But the combination of these two tax changes will significantly reduce the appeal of pensions for the very highest earners in the UK.
These changes will prompt high earners to explore alternatives to pensions and will create a need for more sophisticated and bespoke financial planning. The time for looking at alternatives is now so if you would like an initial chat then please do not hesitate to contact Mohit Saini of ERC Financial Planning Ltd on 0151-227-4792.
Chartered Accountants Liverpool and Chartered Accountants Chester
HMRC & The Pre Budget Report
We have finally received word from the government as to the date for the pre budget report and we all wait with baited breath as to what gems Darling dreams up for us and the rest of the business world to deal with over the coming months. We are all aware that the treasury is finding money hard to come by, unless of course you happen to be a high street bank, so we expect tax to be increased across the board either by stealth or full disclosure. With an election due early next year it would seem logical that the current tenants may not wish to rock the boat too much but would this then be seen as weakness in dealing with the current economic position?…Only time will tell.
Needless to say our website will be updated for all adjustments in rates etc within a few hours of Alasdair Darling’s speech. We will forward the salient points on email as usual so watch this space.
As I’m sure we are all aware, HMRC is particularly aggressive in its attempts to collect tax liabilities currently for all the obvious reasons. However they seem to have the complete opposite approach to tax refunds due. Claims are taking anything between 6 -12 months to resolve in certain cases; phone calls and enquiries into refunds are taking over 30 days to be returned and our clients are frustrated to say the least.
The charter whereby letters and enquiries receive a response within 14 days seems to have been shelved. By contrast HMRC are dealing with the missed deadlines of taxpayers within days and issuing threats of distraint etc within weeks….this smacks of desperation and leaves the honest taxpayer feeling that there is one rule for one, and a whole different set for another. If anyone is suffering from a lack of response from HMRC within a reasonable timescale then we are suggesting that official complaints are made in writing to HMRC and even letters written to their local MP in attempt to receive a reasonable level of service.
Rant over for now but watch this space for the government’s hand reaching ever deeper into the taxpayer’s pocket on December 9th!!
Chartered Accountants Liverpool and Chartered Accountants Chester
Needless to say our website will be updated for all adjustments in rates etc within a few hours of Alasdair Darling’s speech. We will forward the salient points on email as usual so watch this space.
As I’m sure we are all aware, HMRC is particularly aggressive in its attempts to collect tax liabilities currently for all the obvious reasons. However they seem to have the complete opposite approach to tax refunds due. Claims are taking anything between 6 -12 months to resolve in certain cases; phone calls and enquiries into refunds are taking over 30 days to be returned and our clients are frustrated to say the least.
The charter whereby letters and enquiries receive a response within 14 days seems to have been shelved. By contrast HMRC are dealing with the missed deadlines of taxpayers within days and issuing threats of distraint etc within weeks….this smacks of desperation and leaves the honest taxpayer feeling that there is one rule for one, and a whole different set for another. If anyone is suffering from a lack of response from HMRC within a reasonable timescale then we are suggesting that official complaints are made in writing to HMRC and even letters written to their local MP in attempt to receive a reasonable level of service.
Rant over for now but watch this space for the government’s hand reaching ever deeper into the taxpayer’s pocket on December 9th!!
Chartered Accountants Liverpool and Chartered Accountants Chester
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