Taxing reminders for city companies

Date added: 07 December 2011

Companies throughout the city are being reminded about important tax matters as the year comes to an end.

VAT registration and benefit-in-kind charges are two of the issues that firms need to be aware of over the Christmas and New Year period.

Businesses that should be registered for VAT but have failed to register with HM Revenue & Customs (HMRC), have been given until the end of the month to complete the registration process.

The timely reminder has come from Wolverhampton-based chartered accounts, and finditinwolverhampton member, Muras Baker Jones.

Earlier this year, HMRC launched a VAT initiative offering businesses that had not yet registered for VAT the opportunity to put things right.

Under the scheme, businesses that notified their intention to make a tax disclosure must now register for VAT by 31 December. They will then receive their VAT registration number and will need to submit their first VAT return and make arrangements to pay. The majority of businesses registering with HMRC before 31 December will face a lower penalty rate on the VAT owing.

Meanwhile, Christmas parties could prove taxing for small businesses that fall foul of benefit-in-kind rules.

TaxAssist Accountants have reminded local companies that they can pay up to £150 per head per tax year for a Christmas party, but any greater spend could land employees with a benefit-in-kind charge.

"As well as deciding on the venue, the food and the fix,” said Mike Lawson of TaxAssist, "Employers also need to consider the tax consequences. Otherwise, the office bash could end up costing the very people they are there to reward.”

Employers should also give some thought to any gifts for members of staff. A bottle of wine or a box of chocolates are usually considered to be ‘trivial benefits’ with no tax liability, but a case of wine or an extravagant hamper could be seen as a benefit-in-kind.

"The key is to keep within the limits and keep accurate records and receipts,” Mr Lawson added. "That way, at least one Christmas party headache can be avoided.”

Any company looking for local tax services or a local accountant can use the ‘find a local supplier’ function and search for accountants or accountancy services.

Muras Baker Jones, of Bath Avenue in Wolverhampton, offers VAT planning services and can be contacted via the Muras Baker Jones website.

TaxAssist Accountants’ local branch is in Finchfield Road, Wolverhampton, and can be contacted via the national TaxAssist Accountants website.