The Insider - June 2012


Published on

The Insider - June 2012

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The Insider - June 2012

  1. 1. 18 Hyde Gardens Eastbourne BN21 4PT East Sussex 01323 431 200 INSIDER <<Company File Name>> JUNE 2012 <<PDF Description 3>>Welcome to your Junenewsletter. This month,we weigh up the benefits andpitfalls of employing contractorstaff for your business. Elsewhere,we look at how advisory fuel rates and what important records youneed to obtain when reclaiming VAT. ConsMeanwhile, with recent figures showing firm insolvencieswere on the up in the first quarter of 2012, we outline žžCost - it could cost your business more to hire a shorta short business health check to minimise the risk of term contractor than recruit a new employee.insolvency. Finally, in Your Money, could you be in line for an žžIn house skills – outsourcing doesn’t let your own inearly refund – or bill - from the taxman? house staff learn or acquire new skills žž xisting employee resentment – permanent staff may EContractor vs. permanent staff - the pros begrudge contractors being paid more for doing similarand cons. work. žžWork ethic – some contractors may not appreciateThe number of temporary agency contractors has risen your personal business culture, lack motivation orsharply in recent years, with over a quarter of a million now working in the UK; the majority of whomwork in the private sector. Businesses may stand to gain from žžTax implications – contractors or subcontractors haveusing contractors to carry out short term work, or when different tax implications and it’s important to know yourspecialist skills on specific projects are required, however, responsibilities. It is important to discuss this with’s important to weigh up your options before taking on acontractor. We can help with management and tax responsibility regarding contractors. PleasePros contact us to find out more.žžFlexibility - you can hire a contractor as and when your business needs fluctuate Company car advisory fuel rates andžžSpecialist skills – one off jobs which require specific reclaiming VAT expertise can be solved through contracting HMRC first published advisory fuel rates in 2002, allowingžžFast turnaround – contractors can start at short notice businesses to reimburse employees for work related travel, or and work for short periods of time, even if larger when employees are required to repay the cost of fuel used numbers are required for private travel, in company cars.žžLess admin – you normally have no PAYE or national HMRC allows businesses to reclaim the VAT element on fuel insurance requirements for contractors. Temporary – mileage allowances, as long as they are close to its own set easy to obtain temporary cover for staff who are away. fuel mileage rates. The rates reflect average fuel costs at the time they are set and are reviewed four times during the tax year - please contact us for the most up to date rates. Employers may continue to use either the previous or new current rates for one month after the date of change.
  2. 2. Businesses wanting to reclaim VAT on mileage must retain the žžA growing amount of work-in-progress which is not billedfollowing records: on timežžThe distance (mileage) travelled, and whether the journey žžA shrinking/reducing bank balance was business or private. žžLittle control over, or knowledge about, costsžžThe vehicles engine size in cc žžRising stock levels but static salesžžThe rate of mileage allowance. žžBeing involved in contract disputesžžThe amount of input tax claimed. žžLate payments (more than a month) to HMRC.We can help with reclaiming VAT. Please In many instances, these problems can be rectified, but earlycontact us. intervention is paramount. This could include an immediate cash management plan and a recovery plan, both of which will build confidence with stakeholders such as banks andBusiness health check – minimising the suppliers who need to be reassured you are taking appropriaterisk of insolvency measures.Figures from the Insolvency Service last month indicated Of course, best practice would be to implement preventativethat the number of company insolvencies increased in the measures from the outset. This could include creatingfirst quarter of 2012, with more than 4,000 firm liquidations. a business plan, regular account audits, professionalDespite the number of personal insolvencies decreasing, it is management reviews, performance projections and cash flowclaimed that most business insolvencies occur as a result of forecasts and closing monitoring costs as well as sales. Thesemanagement missing key indicators. are all aspects in which we can assist.Impending problems which could lead to insolvency include:žžBusinesses taking longer than six weeks to collect We can help you minimise the risk against payment from debtors business insolvency. Please contact us to see how we can help.žžIncreasing credit to, and working with, key debtorsYour money These errors may have occurred if your circumstances haveAre you in line to receive an early tax changed during the past tax year; if you have changedrefund - or bill - from HMRC? employment, had gaps of unemployment or multiple jobs or pensions which affect your tax free allowance, and ifHMRC’s annual automatic review, or ‘reconciliation process’, you have received benefits in kind through your employerwhich calculates whether individuals have paid the correct which may have changed.amount of tax through its Pay As You Earn (PAYE) service isnow underway, nearly two months earlier than usual; leaving Those who have paid too much or too little tax will bemillions in anticipation for a tax rebate, or a nasty surprise for contacted by HMRC via post from May through to Octoberthose who may owe the tax man. 2012. Automatic repayment will be made to those who have overpaid, while HMRC will usually automaticallyHMRC estimates that around 3.5 million taxpayers may have recover any underpayments through the PAYE system inover-paid tax and could potentially be in-line to receive an instalments over the coming year.average rebate of £379. Alternatively, around 1.6 millionindividuals may have underpaid tax and will owe an averageof £537 to the tax man. June’s Money Facts Current bank rate 0.5% Quantitative Easing £325 billion Scheme Current inflation 3%