February 6. 2018
HMRC will never contact customers who are due a tax refund by text message or by email. Figures from UK Finance show £366.4million was lost to financial fraud in the first half of 2017, with a further £101.2million lost through authorised bank transfer scams.
To help people protect themselves the Take Five campaign (supported by HMRC) has issued three key pieces of advice:
1. A genuine bank or organisation will never contact you out of the blue to ask for your PIN, full password or to move money to another account. Only give out your personal or financial details to use a service that you have given your consent to, that you trust and that you are expecting to be contacted by.
2. Never automatically click on a link in an unexpected e-mail or text.
3. If you're approached with a request for personal information, don't provide it.
If you have any questions about the above please contact us.

January 24. 2018
Your main priority is likely to get your Self-Assessment
submitted on time, but are you completing it correctly? FBTC have compiled an
overview of tips for you to think about when preparing and filing your tax
return.
A key element of your tax return is your income. Are you
including it all?
You will have been required by HMRC to complete the tax
return because you are self employed. However, once asked to complete a tax
return, you have to include all sources of income. So don’t forget bank
or building society interest, PAYE income and rental property income. And this
is income received during the whole of the tax year. If this is the
first year that you began self employment some people mistakenly think you only
include income received after the self employment started. Consider all
expenses that you are trying to claim for to ensure they are definitely
allowable for tax purposes. Getting your income and expenses correct is
important so as to reduce the chances of an HMRC enquiry/investigation.
It isn’t just about what you include it is about how and
where you include it. From year to year you might miss classify your expenses,
recording transactions under different categories. It’s best to be consistent.
Don’t rush to complete your return, there is a chance that
you may transpose figures or add them up incorrectly, which will lead to the
wrong calculations. This might mean you pay more tax than you need to and
nobody wants to do this.
Deadlines are suddenly on top of us even though we know
exactly when they are. Preparation is key to ensuring accuracy and filing on
time to avoid the £100 late penalty charge. It is much better to know what your
tax liability is in advance rather than filing it on the deadline and then not
been able to pay your bill. If you were unable to pay your tax liabilities, you
will start to receive late payment interest from 1st February and
further delays in payment could lead to surcharges based on a percentage of the
outstanding balance.
HMRC state ‘tax doesn’t need to be taxing’, this is correct
it doesn’t need to be and having a professional acting for you can be
beneficial. This is not only to ensure you are compliant with HMRC regulations,
but a good accountant will also save you money.
December 21. 2017
The deadline to file your self-assessment tax return and pay any liabilities
that are due is fast approaching, it is 31st January 2018. Less than
6 weeks to go!
You may have a reasonable reason for missing the deadline, but this has
to be communicated with HMRC and there is no guarantee they will accept your
reasons.
HMRC have published some of the excuses that are given for late filing;
1. My tax papers were left in the
shed and the rat ate them
2. I’m not a paperwork orientated
person – I always relied on my sister to complete my returns, but we have now
fallen out
3. My accountant has been ill
4. My dog ate my tax return
5. I will be abroad on deadline
day with no internet access so will be unable to file
6. My laptop broke, so did my
washing machine
7. My niece had moved in – she
made the house so untidy I could not find my log in details to complete my
return online
8. My husband ran over my laptop
9. I had an argument with my wife
and went to Italy for 5 years
10. I had a cold which took a long
time to go
The above excuses were used in appeals to HMRC against penalties for
late filing. As you might guess, the appeals were unsuccessful.
You will receive £100 penalty for submitting your tax return after the deadline date.
If you would like to chat about FBTC completing your accounts and tax returns,
contact us now on 0344 984 2515 or email fbtcenquiries@fbtc.co.uk

December 21. 2017
It is important to know what expenses are allowable against your
business profit. The following list includes the principle examples of
expenses, that you are likely to incur whilst running your business.
Office Costs
Includes items such as postage, stationary, computer software, printing
material.
Vehicle Costs
Franchise fees
Vehicle insurance
Cleaning
Repairs and servicing
Fuel
Leasing
Road Tax
Breakdown cover
Interest element on finance used to purchase the vehicle
Travel and Subsistence Costs
Parking
Train bus, air and taxi fares
Hotel rooms
Meals on business trips
Staff Costs
Wages paid to another person for work done in your business
Financial Costs
Bank account charges that relate to your business
HP/Loan interest for the purchases of business assets
Accountancy Fees
Advertising and Marketing Costs
Material used to promote your business such as branded clothing and
advertising material
Website
Subscriptions
Trade magazines
Membership to professional bodies
Capital Expenditure
Certain items of expenditure are classed as capital expenditure. These
items include cars, dual controls, computers, laptops, printers and Sat navs.
For these items you are entitled to a capital allowance to set against your net
profit to cover the depreciation of the asset and is in addition to the
finance interest mentioned above under vehicle costs. FBTC will calculate
the capital allowances for you.
Business mileage
Rather than claiming the vehicle costs and capital allowances on a new
car, as mentioned above, it is instead possible to claim business mileage. FBTC
can advise on the most beneficial option.
Private usage
Some expenses incurred may also hold an element of private usage. The
private element of the expense will be disallowed.
FBTC will calculate this for you.
November 16. 2017
The recent publicity
regarding the “Paradise Papers” and last year the “Panama Papers” could lead
one to think that it is only the rich and famous that need to be careful when
it comes to keeping tax affairs in line.
However, we cannot
stress enough that small businesses must also be vigilant. HMRC have been given
significant extra resources to be able to check that businesses and their
owners are paying the correct amount of tax. These resources will be increased
further as Making Tax Digital is introduced.
Penalties for tax avoiders
are primarily a percentage of the additional tax due ranging from 30% to 100%. Tax
evasion can lead to a criminal prosecution and thus the possibility of a
custodial sentence.
Do you know the
difference between tax avoidance and tax evasion?
Tax avoidance can quite
often simply be a difference in interpretation between the taxpayer and HMRC of
the tax rules. HMRC are becoming more aggressive in this area as they seek to
bring in more taxes for the Government.
Keeping accurate records
is vitally important, especially if you are chosen for a ‘Business Record Check’. This document will ask initial questions about your accounting records before HMRC
decide if they will need to pay you a visit to carry out further checks.
It is impossible to say when or if you will ever be
chosen for the Business Record Check. Therefore, it is vital that you keep your
accounting records up to date and in a clear and satisfactory format.
This then takes us to
the question, how often do you keep your accounting records up to date? Once a week?
Once a month? Once a year?
FBTC recommends that you should try and set some time aside each
week to update your accounting records and get into the habit of doing it every
week, whilst the week is still fresh in your memory.
You will find it much easier to recollect what has happened in the
last seven days, than trying to think back over fifty-two weeks, if you are only
completing your records after the tax year has ended.
If you are unsure as to how to keep your records or are concerned
about the standard of your record keeping, then please do not hesitate to
contact us. FBTC does have an online cash book which you may find useful.
November 13. 2017
You
have done it! You now have the freedom and determination to run your own
business. We have put together a short piece of advice for you as you venture
into your newly self-employed role, the following highlights the key areas to
think about during your start up phase.
The
most important element of your business is ensuring positive cashflow. Ask
yourself how far would you get with the money you have in the bank? Most
businesses will say they would make the next 6 months, but it isn’t uncommon
for a business to say they will not even make the month. To assist with your
cashflow, make payment terms as short as possible, however an important point
to note here is you still need to remain competitive, for this your payment
terms will need to be long enough. The nature of your business might mean you
receive income on a prepaid basis or cash immediately on deliver of your
product or service.
What
works for one business will not necessarily work for another. There are lots of
exciting happens at the start of a new business, sometimes so many you might
forget about the less exciting areas such as self-assessment registration and
HMRC compliance.
You
will find your hunger to succeed will keep you motivated, however it is
important not to overstretch yourself, you cannot do everything. What you can
do is ask yourself; Do I need it? Can I afford it?
It
pays to ensure areas such as your accountancy and tax affairs, marketing,
administration and possibly ICT are looked after by professionals. You are likely to see a return from such investments.
September 19. 2017
Everyone
has different ideas and views on what they class as ‘successful’, is it the
amount of money you make or is it having the perfect work life balance (does
this even exist?). If you know what you want to achieve you are heading in the
right direction. The following factors will help you to achieve your success!
Focus – What do you want to achieve?
Set yourself short term goals to ensure you stay on track. By knowing what you
truly want, you can define your business and achieve your goals.
Believe – In yourself and your business. If you don’t
who will?
Tax – Don’t
forget about it! Ensure you plan for your taxes. (We can look after this area
for you, one less factor to worry about!)
Creativity – Stand out from your competitors, think outside of the box, sometimes
it is good to be different. Develop your business to put you ahead of the rest.
It is also important to realise you don’t know everything, be open to new ideas
and opportunities that approach you.
Adapt – You need to do this for your
business to survive, adapt to change to ensure you are giving your customer
what they want and need (they may not know they need it yet). Opportunities
sometimes fall into your lap which aren’t the norm and you need to be able to
understand how to deal with such happenings.
Challenges – Identify and manage your challenges, develop your analytical skills.
There is never a problem you just need to find the solution. This will help you
move your business forward.
Cash - Feed your bottom line, find ways to get
money upfront to improve your cashflow. Make sure your capital
expenditures aren’t draining your business.
Organisation – This is important in both your personal and business life. Been
organised means you have control and this will increase your productivity.
Understand – Spend time researching your industry and your
target audience, you will then understand what your customers want and need.
This way you can ensure your business is offering the correct products and
services, in the right place and at the right time.
Notes – Reflect on your business, write down your
thoughts. Keep your notes to help you plan and prepare for the future.
Self-reflection will help you to develop self-awareness and encourages active
engagement in your work.
Technology –
Stay ahead
of the game, every day is changing. Does your business require you to use the
latest software? Should you be liaising with your customer more, can you do
this by using new technology? We can do everything we need to with our mobile
phones, is their opportunity for you to make changes? Smartphones,
social media, texting, emails and other communication channels make it easy to
get your message out.
Add Value – Give your customers that little
bit extra. Find low cost or no cost ways of making clients feel even better about
the product or service you have provided. Such acts will increase your gestures
of goodwill and also increase your word of mouth referrals.
Net Profit – Keep an eye on your net
profit, make sure you know how your business is operating. This then supports
your focus, creativity and understanding. This also give you the opportunity to
recognise any areas of concern, manage your finances and deal with any
challenges.
Consistency – Ensure you develop positive
habits that you can enforce over a long term. Therefore, giving each of your
customers the same experience.
You – Take time
for you! You are the most important part of all!
August 18. 2017
As well as paying Income tax and NIC’s based on profits for the
financial year, self-employed individuals are required to make ‘payments on
account’ towards the next tax year.
If your total Income tax and NIC’s for the year is greater than
£1,000, in addition to your Income tax and NIC bill, you will be asked to make ‘payments
on account’ towards the next year. They
are payable in two equal instalments.
One by the end of January following the end of the tax year and one six
months later by the end of July.
How are they calculated? In simple terms, each of the two payments
on account are calculated as 50% of your total Income tax and NIC due for the
year just ended.
When your tax bill is calculated for the following year, the total
Income tax and NIC due is reduced by the sum of the two payments on account you
have made in the year. Consequently, if
your profits are exactly the same amount in that year you will have already
paid your total tax bill in advance. If
your profits are more or less than the previous year, this would result in a
balancing payment or a refund.
So why do these payments have to be made? Does it sound unfair? Not if you consider that unlike the employed
paying Income tax and NIC under PAYE, the self-employed have nine months after
the tax year ends in which to pay their Income tax and NIC bill. HMRC’s view is that by then, you will have
been earning towards that year so they want a cut of it before the tax year has
ended. It also keeps you up to date with
your payments and gives you a clearer indication of where you are with your tax
affairs.
Under certain circumstances, payments on account can be reduced or
completely removed. This should only be
done under guidance and advice from your tax adviser. Unfortunately, the ‘I cannot afford to pay
them’ reason to reduce/remove payments on account will not wash with HMRC!
July 18. 2017
Did you know you could
receive a £150 penalty notice for failing to display a ‘no smoking’ decal
in your work-related vehicles?
In line with the Smoke-Free (Exemptions and Vehicles)
Regulations 2007, you must ensure that at least one 'no smoking' sign is
displayed in a prominent position in each compartment of your vehicle. Visit Smoke Free England for more information.
According to Cancer Research UK, the number of smokers in Britain has fallen by 1.9
million since the smoking ban was enforced in England, 10 years ago.
Whether you operate your business from a vehicle or premises
make sure you are meeting the regulations to prevent unnecessary costs. If you
receive a penalty notice it is not an allowable business expense.

July 14. 2017

April 4. 2017
Plan ahead! Look forward and see where you are heading! Plan
for paying your taxes on time……
Your income tax and national insurance liabilities are
payable by 31st January each year.
You may also be liable for payments on account towards the
following year on 31st January and 31st July each year.
Be organised and choose one of the following options…….
- Set up a
savings account with your bank
- Set up a
payment plan with HMRC – 0300 200 3835
FBTC would advise you save between 15-20% of your gross
income.
Always contact HMRC should you
need to discuss your tax bill and please don't stick your head in the sand.
Interest and penalties are charged on liabilities paid late.
If you’d like further advise on
this or any accountancy matter, please contact FBTC
on 0344 984 2515.
Don't forget to check out
our Facebook and Twitter
pages!
January 24. 2017
Let’s talk about how and
why HMRC Investigations happen, this week’s tip explains the best way to deal
with an enquiry and keeping the taxman happy.
Once the Revenue has taken up
an enquiry, it is in the taxpayer’s interest to settle the enquiry as speedily
as possible by cooperating with HMRC and providing them with any information
they request as they do have statutory powers that they can put in place if
they don’t get the information that they require within specified periods of
time.
The length of an investigation
can vary from months to sometimes years depending on what HMRC find and how
they decide to progress. During an
enquiry, the Revenue may well look at your personal expenditure as well as your
business records. It is important that
you can also account for entries on your personal bank, building society and
credit card statements as well as your business statements. The Revenue will often deem receipts that you
cannot account for as undisclosed business income.
Clearly, the best way to
avoid having an enquiry into your tax return, is to ensure that when your tax
return is submitted it includes accurate and complete accounts information and
that it also gives full details of all your non-business income such as any
bank or building society interest, income from property, Capital Gains
etc. This may be stating the obvious but
it can only be achieved by keeping full and accurate records:
-You should always record all
sales and business receipts as you get them and retain the records;
-You should keep back-up
records, for example, invoices, bank statements and paying-in slips to show
where the income came from;
-You should record all
purchases and other expenses as they arise and ensure, unless the amounts are
very small, that you have, and retain, invoices for them.
It is important that each
entry is recorded as and when it happens.
By doing this, it reduces the chance of you omitting or entering an
incorrect amount if you have to record it on your records some weeks or months after
the event.
You will see from this how
important it is for you to keep accurate records in both your personal and
business dealings. By doing this, the
chances of you getting a letter from the Revenue will be considerably reduced. However, if you are unlucky enough to still
be selected for an enquiry, your hand is much stronger when you can produce
accurate, well-kept and timely records.
The FBTC online cashbook is a
great way to record your business income and expenditure. Have a read of the FBTC Online Cashbook
"Simplicity at its best!"
If you have any questions
about Revenue investigation or the online cashbook, please get in touch;
Call 0344 984 4445 Email info@fbtc.co.uk
January 16. 2017
The first line of the letter that tends to send a
shiver down the spine of most self-employed individuals if they are unlucky enough
to receive a letter from HM Revenue & Customs.
You may have submitted your Tax Return and thought ‘great,
it has been accepted’. But confirmation of receipt doesn’t mean to say that
HMRC have finished with it.
Under Self-Assessment, the Revenue’s method of dealing with
Tax Returns is to “Process Now / Check Later.” The Revenue then has a
period of time to review the entries on the Return. If some of the
entries on the Return differ from information which they already hold or if
these entries fall outside the normally accepted patterns for that particular
business sector, then there is a possibility that the Return could be selected
for an enquiry.
There is a time limit within which the Revenue can take up
an enquiry. This is currently within 12 months of the normal filing date
for the Return i.e. a 2015/16 Tax Return must be filed with the Revenue by 31st
January 2017, therefore the window for opening an enquiry is up to 31st January
2018.
However, it has been known for HMRC to open an enquiry
outside of that time frame which is called a ‘Discovery’ enquiry. Why can
they do this you ask? Because they can! Such an enquiry can take
place where based on the information (or lack of) shown on the tax return HMRC
could not have known that the tax return was incorrect and issued an enquiry
within the normal time limits.
In addition to the ‘normal’ lines of enquiry, HMRC are now
carrying out random ‘Business Record’ checks in which
they look into your record keeping. If they have reason to believe that
it is not up to scratch, they will arrange to make a visit.
Unfortunately, no one is immune from receiving a ‘Business
Record’ check, however you can take steps to avoid a full-blown
investigation. How? Stay tuned for our next tip – Keeping the Tax
man at bay!

January 6. 2017
Do you want an easy to use online cashbook system to record your business income and expenditure?
Fill your car with fuel then head to your next lesson. 5
minutes to spare before Justin Thyme arrives for his 3pm lesson, then login to
your FBTC online cashbook and add the £50.00 fuel expense to your cashbook. It
is as easy as that!
Record as you go then you can spend your own time reading
Intelligent Instructor magazine. Prevent the end of year rush to record your
income and expenditure.
Tracey Leck, FBTC Accounts Technician, advises the online
cashbook is the way forward to streamline your accounts. It is the most
efficient way of recording your income and expenditure.
But don’t take our word for it, Deborah Hunter has been an
FBTC client since 2011, see her thoughts on our cashbook system; “I use the online cashbook for ease. I can log at my
leisure, come back to it when I please and it orders each entry in the date
order. Simplicity at its best!”
Stephen Harlow is another client of ours that favours the
online cashbook, “Having
used the online cashbook since joining FBTC in February 2016, I can only
recommend it to all, especially those currently using the paper format
cashbook. Data entry is simple with nicely laid out and intuitive categories’’.
If you have any questions about our online cashbook get in
touch. If you want to start using the online cashbook it is a straight forward
transition and we can advise you accordingly.
Call us on 0344 984 2515 or email us at info@fbtc.co.uk to take advantage of our FREE online cashbook.
March 24. 2016
Sadly Easter Eggs are not an allowable
business expense.
This maybe a good time to mention some expenses
that are not allowed. In other words, those expense that do not meet the HMRC
test of ‘wholly and exclusively for business purposes.’
There are a whole raft of expenses that could be deemed allowable but in fact
are not. The most commonly asked about are:
-Personal insurance and sickness policies. It probably makes sense to
have such insurance but unfortunately the costs are not an allowable business
expense. The fact that they are personal expenses is a bit of hint.
-Work clothes and shoes. You may quite rightly claim to your accountant:
‘I have to look good whilst I teach’. True, but so do most people who go
to work in any professional capacity and they have to personally pay for their
suits, shirts and ties. It is no different for a driving instructor or any
other similar profession. However, shirts and tops are allowed for tax
purposes if they display a prominent logo promoting your business. Shoes
are a definite no: we all have to wear shoes.
-Spectacles and eye tests. This is an interesting one but at the end of the day
we all have to take regular eye tests, wear glasses if required, and pay for
them personally. The same applies to sunglasses.
The list of non-allowable expenses is understandably endless. Some of the
strangest requests that have made the non-allowable list include chewing gum,
gym membership and solar panels.
Making a claim for an expense that is not allowed for tax purposes on your tax
return could land you in hot water with HMRC if they investigate the detail of
your return. Usually the cost to you of that investigation will be far in
excess of the expense you were endeavouring to offset against tax. Seek
expert advice before deciding whether to include an item on your tax return, if
you are not 100% sure about it. Call us 0344 984 2515!
What about a chocolate calculator then??
Happy Easter....
March 14. 2016
We recently wrote about ‘employing’ someone to take care of
your paperwork, answering your calls and basically all things office related. A
common question relates to utility bills and what can and cannot be claimed as
business expenses. Your driving school
business is predominantly run from your tuition vehicle but it still may be
possible to gain tax relief against certain utility bills.
Some of your business, such as preparing lesson plans and
bookkeeping is carried out at home but this would probably account for less
than 10% of your time. So what expenses are allowable for tax relief? In most cases, it will be small proportion of
your heating and lighting bills.
Unfortunately, rent, rates, council tax and water rates are not allowed
for tax purposes. It may be possible to gain relief by making a claim for ‘home
use as office’ but whether this is beneficial is heavily dependent upon your
personal circumstances and you should certainly seek expert advice before
proceeding down this route!
If you decide to ‘build’ an office in your home or add an
extension in which to house an office you should ask yourself if it is
justifiable and necessary for the running of your business. However, it is possible to gain tax relief on
items that you purchase to ‘kit out’ your ‘office’ such as filing cabinets and
the like, but not the cost of construction or converting a room into an office.
Generally, for a small business, a table in the kitchen will
suffice for your paperwork!
What would your dream office look like???
If you’d like further advice on this or
any accountancy matter please contact FBTC
on 0344 984 2515.
March 2. 2016
Telephone calls and paperwork! And all you want to do is go
out and do what you are good at – teaching people to drive. Why not ask a
family member to manage your diary, take telephone calls and more importantly
keep your accounting records up to date? There is nothing like having a free
administration service on hand when you need it.
But is having your family member work for free the best way?
Not necessarily and it can benefit you as a self-employed individual if you
‘pay’ someone to run your ‘office’ and keep your paperwork in order as the cost
is tax deductible against your trading income.
However, in the complex labyrinth of UK tax rules,
regulations and do’s and don’ts, paying someone is not as straight forward as
you would think:
-You must pay the person the average hourly ‘going rate’ for
the type of work they carry out;
-You have to consider whether the person already receives
any other form of taxable income. If
they do, the addition of your ‘pay’ may push their total income over the
taxable limit and they could end up having to register for self-assessment and
paying tax themselves on this new income;
-There has to be a paper trail of payment. This is one of the areas HMRC will look into
closely if you are ever unlucky enough to be picked for an investigation,
specifically transactions between family members.
Paying a family member to help you out could open a can of
worms and could prove quite costly if it not administered correctly but done
properly is a good way to reduce your tax bill.
If in doubt, ask! 0344 984 4445

February 22. 2016
How often do you keep your accounting records up to
date? Once a week? Once a month? Do you play catch up at the end
of the tax year when your records are requested from your accountant?
You should try and set some time aside each week to update
your accounting records and get into the habit of doing it daily or weekly, whilst
the week is still fresh in your memory. The FBTC online cashbook is a great tool to do this! Click here to find out more about our online cashbook.
You will find it much easier to recollect what has happened
in the last seven days, than trying to think back over fifty two weeks, if you
are trying to complete your records after the tax year has ended.
The advantages of sticking to this regime are
plentiful. As well as being able to keep
a track on how your business is performing, it will assist you in answering the
questions from the dreaded ‘Business Record Check’ letter should you be unlucky
enough to receive one from HMRC. Based
on a set of answers you give in relation to questions about your accounting
records, HMRC will decide if they will need to pay you a visit to carry out
further checks. The more accurate
information you can supply them with, the better your chances are for not
getting a visit.
If
you’d like further advice on this or any accountancy matter please contact FBTC on 0344 984 2515.
Please visit our Facebook and Twitter page.
February 3. 2016
Plan ahead! Look forward and see where you are heading! Plan
for your taxes……
Let's get organised! Start a saving account or maybe a payment scheme with HMRC, prepare yourself for your final liability.
Don’t forget as well as income tax, Class 4 National Insurance also needs
paying and you should be planning and accruing for this too.
Always contact HMRC should you need to discuss your tax bill, don't stick your head in the sand. They may agree a payment plan which is a much better option than accruing interest on what you owe.
If
you’d like further advise on this or any accountancy matter please contact FBTC on
0344 984 2515.
Don't forget to check out our Facebook and Twitter pages!