Consumers are becoming more and more value conscious as a result of the economic downturn. This has put downward pressure on prices which has resulted in many businesses cutting prices in order to remain competitive and maintain market share. Customers are in a money-saving mood but they aren’t willing to sacrifice on quality. This presents business owners with a new challenge – to maintain a quality product or service but offer more value to customers at the same time.

Your business can take advantage of this focus on quality by minimising price reductions and instead offer more “added value” to customers. Since customers today are more focused on value for money making them feel they have got more “bang for their buck” is key. Make customers feel they have received extra value for the same price that they paid last year. The customer then feels that they have received value for money and the firm has managed to avoid cutting prices. Therefore the business and the customer benefit from the value-added approach.

As customers have become more focused on the value they receive, more and more businesses have implemented this value added approach. 3 mobile have done it by offering unlimited data usage plans to mobile phone packages. Look at ways you can give your customers a little extra added value.

The Revenue Commissioners have recently become aware of another fraudulent email purporting to come from Revenue seeking personal information from taxpayers in connection with a tax refund. This phishing email is headed “2011/28719266428 REVENUE” or “E-mail Fogra #2011-27741NIE”. A link opens up a form seeking personal information, including debit/credit card details, which is attached to the frameset of the www.revenue.ie website. This email, which is the latest in a succession of scams targeting Irish taxpayers, did not issue from the Revenue.

The Revenue Commissioners never send emails which require customers to send personal information via email or pop-up windows. Anyone who is actually awaiting a tax refund should contact their local Revenue Office to check its status. Anyone who provided personal information in response to these fraudulent emails should contact their bank or credit card company immediately.

With the Spring Budget long gone, it’s easy to forget about the changes and how they may affect you in practice.

If you have any worries or concerns then happy to discuss on 01344 620495 or mark.busby@dbsellek.co.uk Time pressured then we’ll come to you – home, workplace or wherever suits.

So we hope you find the following helpful:

• Availability of 100% tax deduction on capital expenditure will reduce to £25,000 (from £100,000) as of April 2012
• Main rate of Corporation Tax lowered to 26% from April 2011
• Small Profits rate (previously known as Small Companies) is now 20%
• VAT registration threshold is £73,000 as of 1 April 2011
• Capital Gains Tax Entrepreneurs’ relief doubled to £10m
• Mileage rates increased to 45p (from 40p) for first 10,000 miles
• Capital Gains Tax exemption raised to £10,600
• ISA annual investment limit raised to £10,680 for April 2011/12 tax year
• Personal allowance increased to £7,475. Basic Rate Band decreased to £35,000
• Annual pension contributions reduced from £255,000 to £50,000 from 6 April 2011

Be aware the taxman is getting tougher with penalty increases and regulation changes. Here is a round up of new HMRC penalties and powers:

Penalties for late tax returns have risen significantly – a return filed 6 months after the deadline could attract a fine of at least £1,300.

Another big change is that fines will no longer be cancelled if the taxpayer owes no money to HMRC, because there is no extra tax to pay or because it had been paid.

There are new penalties for filing late returns and for late payments. Read more for penalties.

Small businesses should watch out for spot checks as HMRC rolls out its “test and learn” trial.

New measures to clamp down on tax evasion

Individuals who deliberately evade tax will now be subject to detailed inspection for up to 5 years. If the taxman finds someone has continued to deliberately evade tax, it may instigate criminal proceedings.

Tougher penalties for offshore tax evasion introduced 6 April 2011.

If you have any worries or concerns contact me on 01344 620495 or mark.busby@dbsellek.co.uk

You probably haven’t had time to consider the impact of the proposed pension changes on your business. So we thought you might find this useful:

What are the changes?

From 2012 the onus will be on employers to automatically enrol staff into a pension scheme and for contributions to be mandatory. This could be an existing company scheme (if it meets the necessary criteria) or NESTs (National Employment Savings Trusts) which are being introduced by the Government to replace the ubiquitous Stakeholder Pension. Currently, employers need only offer a pension for five or more staff and contributions are optional.

When will this happen?

The new rules under the Pensions Act 2008 will come into effect from next year and are being phased in depending on business size.

Who is it for?

This will affect all employees aged between 22 years and the state pension age earning more than £7,475 and not already in a qualifying pension.

What will it cost?

This has caused much confusion but the aim is for staff to contribute 8% of their qualifying earnings towards retirement. Of this 8%, employers will eventually have to fund 3%.

What should I do next?

Don’t wait until 2012 – get in touch with us now to find out how the new rules will affect your business. We can advise on tax planning issues and put you in touch with an independent financial adviser should you require professional financial planning advice. We have no commission arrangement or affiliation with this adviser other than we think you’ll like them!

Please contact me for an initial discussion on 01344 620495 or mark.busby@dbsellek.co.uk

If your annual income has reached £100,000 you will need to complete a tax return for the Inland Revenue. This allows for the collection of any outstanding tax owing that may not be collected through the PAYE (Pay as You Earn) system. Similarly, it allows for any refunds owing too!

If you would like us to help you with your tax return we would be pleased to do so. If your tax affairs are complex or you are receiving income from more than one source then you may be interested in our bespoke tax planning advisory service.

Either way we should be pleased to discuss any concerns you may have with your tax return or tax planning affairs. You can reach me on 01344 620495 or mark.busby@dbsellek.co.uk

Being a contractor under the Construction Industry Scheme (CIS) is complex with the onus firmly on you to ensure you and your subcontractors are compliant with their tax liabilities. The message from the Taxman is loud and clear – know and comply with the CIS rules, avoid mistakes and file your CIS return on time or face the penalties!

Here are some of the important CIS rules contractors need to be aware of:

Keep checking the CIS and employment status of your subcontractors on a regular basis to ensure you deduct the correct amount of tax from sales invoices.

Be prompt when sending information to your accountant for filing your monthly CIS return. There is an automatic penalty for late returns starting at £100 for 50 or fewer contractors.

Remember to send a monthly deduction statement to those subcontractors whose pay you are required to make a deduction.

If you work under the CIS scheme as a subcontractor in your own right and you wish to maintain gross status you must fulfil various tax and record keeping obligations, which will be checked at an annual compliance review by HM Revenue & Customs. Some larger companies may refuse to deal with non-gross status companies.

Be aware contractors are liable for non-compliance by overseas contractors and subcontractors used for UK installations.

Read more on CIS obligations

Let us know if you have any worries or concerns. Lately we’ve been fairly successful in helping Construction clients retain their gross status!

VAT Alert

1. Did you realise that you are responsible for ensuring subcontractors are registered for VAT?  This can typically affect Construction businesses who can unknowingly reach the £73,000 VAT threshold very quickly. This can only be good news for subcontractors helping them avoid penalties and cash flow issues should they have to pay back VAT.
2. Watch overseas subcontractors you engage as they can unwittingly reach the VAT threshold and often don’t think they need to register

If you’re worried about CIS or VAT please call Lindsay Gray on 01344 620495 or lindsay.gray@dbsellek.co.uk

The  message is loud and clear if you’re a contractor under the Construction Industry Scheme (CIS) - avoid mistakes and file your CIS return on time. 

Beware the Taxman is cracking down on late and inaccurate CIS returns with automatic penalties. Whatever the reason for a late return, the basic automatic penalty is £100 for one with 50 or fewer subcontractors on it. There is no leniency for inaccuracies either so should you forget to sign your return there will be no extra time allowed for sending it back again. Penalties are charged for each month a return is late.

CIS penalty update

Delivering outstanding customer service is the key to long-term customer relationships and business survival. Today’s customers will no longer put up with a raw deal and they don’t care who they tell. With the huge advances in Twitter and Face Book unhappy customers can literally spread discontent around the globe in express time. Social media has empowered the individual and given them a far reaching voice.

For many, customer service means nothing more than answering the phone or doing their job. What it should mean though is avoiding people saying anything negative about you and proactively finding those individuals who will say nice things about you and your brand both on and offline. So it pays to have a dedicated person within your organisation tuning into social media sites and other media listening to what is being said about you and your products or services. This then gives you the platform to respond to customers immediately dealing with negative remarks and encouraging positive customer feedback from your advocates.

In Professional services like Accountancy it can be difficult to identify a true point of differentiation. Clients have specific criteria when looking for an Accountant and of course, price is important but equally we are finding that being local, personal attention and hands-on Partners are top of their wish list too. What we’ve tried to do at Davis Burton Sellek is to engage with clients by being friendly but professional, listen to their needs (from the type of coffee they like to drink to what they enjoy doing at the weekends) and to explain accountancy and taxation in plain English. This has created a rather special client base who not only think of us as long-term partners but in many cases regard us as firm friends – something which I am extremely proud of.

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Spring has sprung at last and where was I this lunchtime? I was inside listening to none other than Mr Osborne’s dulcet tones telling us how we’re all in this together for this, his second Budget. I have to say Mr Osborne certainly gave a polished performance today. I get the feeling he’s probably been having some secret voice coaching since the last Budget. Maybe he’s been taking lessons from the King’s Speech and Colin Firth.

So here’s the thing, rather than simply repeating the Chancellor’s Spring Budget announcements which can be quite dry, I thought I’d give you my Jeremy Clarkson slant and tell it how it is. It looks like the Chancellor is broadly encouraging investment into the UK ish. Whether you agree or disagree with Osborne’s announcements today, his focus was definitely macroeconomic and not micro with his attention firmly on attracting inward investment and heading off  a steady exodus of high earners and companies to more pleasant tax-efficient climes. Yet I can’t quite get my head around the fact he wants to charge Non-Domiciles £50,000 but then let them off remittance taxation if they invest back into the UK economy.

Chill the bubbly if you’re a business owner thinking of selling your business any time soon then get on the phone to your accountant or investment adviser. You’ll now be far better off with the Chancellor’s pledge to double Entrepreneur’s relief from £5 to £10 million. And if you’re the type of investor who likes to take a punt and invest in the more risky entrepreneurial type companies then you can now invest more heavily and get more tax relief when investing in Enterprise Investment Scheme qualifying companies

As Osborne struggles to compete and support the private business, he knew he needed to do something about taxation. So his decision to reduce Corporation Tax by 2% in 2011 falling to 23% by 2014 is good news indeed. He left the Smaller Companies rate of Corporation Tax well-alone and this will fall to 20% from 2012. He also plans to remove the burden of red tape, delay Small Business rate increases and make credit more readily available for the business start-up and SME. Not quite sure where Boris Johnson will set up his enterprise zone though – maybe a Gin Distillation factory in Knightsbridge?

For those of you in a charitable mood you can now also get a discount on your Inheritance Taxation which can’t be bad. And of course the ubiquitous pothole pot means you can now lobby your local council to improve a road near you. While the 45 pence mileage rate rise for the first 10,000 miles was a nice surprise but a long time coming and why the 25p rate on mileage thereafter?  An added bonus and welcome respite came when the Chancellor finally saw sense and cut fuel duty by 1p per litre from 6pm 23 March.

To sum up, hold onto your hats folks we’re in for a rocky ride!