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Offers danish furniture with a product or service that delivers bargain furniture and pub furniture. Alternatively, your accountant may have copies of the forms or use an approved software substitute form package, or you can call the HM Revenue & Customs Corporation Tax Self Assessment Orderline on Tel 0845 300 6555. Make a note of the name and form number of the supplementary page or pages you want before calling. ________________________________________ The declaration The declaration on the Company Tax Return form (CT600) must be signed by a person who is authorised to do so on behalf of your company. The declaration states that "the information I have given in this Company Tax Return is correct and complete to the best of my knowledge and belief". If you sign knowing that there is false information in the return, or that there is concealment of any part of the company's profits or tax payable, the signatory, as well as the company, may be prosecuted. ________________________________________ Individuals, companies and IR35 IR35 legislation took effect from 6 April 2000 and is designed to bring the tax and National Insurance contributions (NICs) paid on certain engagements in line with the tax and NICs paid by employed staff. IR35 may apply when you, as an individual, provide your services to a client through an intermediary. For example, if you set up a partnership or a limited company, your client contracts with the partnership or company rather than with you. This includes where your business contracts with an agency to supply your services to a client. HM Revenue & Customs (HMRC) asks: "If the partnership or limited company did not exist in this arrangement, would your work for the client business appear to be one of direct employment?" If the answer to this question is yes, then IR35 rules may apply. This guide explains the rules surrounding IR35 and how to work out whether the rules apply to you. ________________________________________ Do the rules apply to a particular contract or engagement? The IR35 rules are likely to apply to a contract or engagement if you answer "yes" to both the following questions: • Would you be regarded as an employee if you worked for your client directly and not through your company or partnership? • Do you have rights entitling you to receive a payment from your company or partnership that is not employment income? These questions are explained in more detail below. Would I have been an employee of my client? The rules only apply if you would have been an employee of your client, had it not been for the existence of your company or partnership. If you can answer "yes" to the following questions, you would probably have been an employee of your client for the contract in question and therefore fall within the IR35 rules. • Do you work set hours, or a given number of hours a week or a month? • Do you have to do the work yourself rather than hire someone else to do the work for you? • Can someone tell you at any time what to do, when to do it or how to do it? • Are you paid by the hour, week or month? • Can you get overtime pay? • Do you work at the premises of the person you work for, or at a place or places they decide? • Do you generally work for one client at a time, rather than having a number of contracts? If you can answer "yes" to many of the following questions, you would probably not have been an employee of your client and are therefore outside the IR35 rules. • Are you hired to undertake a specific project of finite duration? • Do you decide how, when and where to carry out your services? • Can you make a loss on the contract? • Do you provide the main items of equipment you need to do the job for the client, not just the small tools many employees provide for themselves? • Are you free to hire other people on your own terms to do the work you have taken on? Do you pay them out of your own pocket? • Do you have to correct unsatisfactory work in your own time and at your own expense? • Do you have a number of customers at the same time? You will have to think about each contract or engagement individually. Some people find that they have some contracts that would have been employment and so are covered by the rules, and others that are not. The number of clients you have may be relevant to the decision whether you work for each as an employee, or as a self-employed person. If you have many different clients this may indicate self-employment, and be a factor that should be considered in addition to the details of each contract. If you have a number of different clients, but are unsure whether you are within or outside the rules, you may wish to contact the IR35 unit through the HMRC website. Before you sign a new contract, it's worth thinking about the IR35 implications. If you feel the contract does not reflect your relationship with the client accurately, you may want to negotiate changes. Read guidance on IR35 on the HM Revenue & Customs (HMRC) website. Do I have rights entitling me to receive a payment from my company or partnership that is not employment income? If you work through a company as a company shareholder, you will have rights entitling you to receive a payment that is not employment income in the form of a dividend on your shareholding. If you are a member of a partnership, your share of profits is usually chargeable as trading income, not as employment income. ________________________________________ Get an expert opinion You can seek a professional opinion from an accountant or independent tax adviser. An Internet search under IR35 will show many such sources for advice. You can also read about supplying services through a limited company or partnership at the HMRC website. If you are not sure whether the new legislation applies to a particular engagement, advice is available from the IR35 Unit, who you can contact for a written opinion. The IR35 Unit can also provide technical advice on the legislation. Contact the IR35 Unit through the HM Revenue & Customs (HMRC) website. HMRC will review the facts. This will involve looking at whether the relationship between a worker and a client would have been one of employment, if there had been no company or partnership. To do this HMRC will review the contract or contracts which establish the relationship. They may also talk to you and others, including the end client and any agency. The IR35 Unit may not be able to provide an opinion if you do not give permission to contact third parties. If you do not agree with the opinion given by HMRC, and further discussion has failed to achieve agreement, you can request a formal decision against which you can appeal. Where can I find out more? To better understand your employment status, read guidance on employment status on the HMRC website. Also read the guidance notes on IR35 at the HMRC website. ________________________________________ My contract is within IR35 - what should I do next? You will have to calculate any additional tax and National Insurance contributions (NICs) on all payments falling within IR35 for the tax year. This is known as the deemed payment. You can read about how to calculate a deemed payment at the HM Revenue & Customs (HMRC) website. You are given a timetable to follow: 5 April - calculate your deemed payment. You can download an IR35 deemed payment calculator from the HMRC website (XLT). 19 April - send any tax and NICs due on the deemed payment, or a payment on account of any tax and NICs due. 19 May - send your end of year PAYE returns (forms P35 and P14). Include any deemed payment, and the tax and NICs due on it. If you have not finally calculated your deemed payment, include a covering letter explaining that your figures are provisional. 31 January - if you sent provisional figures on 19 May, send corrected figures now, and pay the balance of any tax and NICs due. Remember that interest will be payable on any additional tax and NICs due from 19 April until the date paid. You will also need to be issued with a corrected P60 giving you the information to include in your personal self assessment tax return. You should continue to operate PAYE and pay NICs in the usual way on any salary paid to you during the year, and report any taxable benefits - such as a company car - to HMRC on form P11D. The deadline for submitting form P11D to HMRC is 6 July. Penalties can be applied if it is not received within 14 days of the deadline. See our guide to income tax self assessment for employers. First-year allowances First-year allowances are a tax allowance you can claim on certain purchases or investments in the year you buy them. Small businesses can claim first-year allowances of 50 per cent for expenditure in the 2004/05 tax year and the 2006/07 tax year. In other years, including 2005/06, they can claim 40 per cent. Medium-sized businesses can claim 40 per cent, and in certain circumstances both small and medium-sized businesses can claim allowances of 100 per cent, in the year they make the purchase. However, for most plant and machinery, 25 per cent is the usual capital allowance. This guide explains the different types of first-year allowance and what you need to do to claim them. ________________________________________ What's eligible for first-year allowances? As a general rule, you can claim: • First-year allowances of 40 per cent for most plant and machinery - except for cars, assets you lease out and some "long-life" assets (those that you would expect to last for more than 25 years when they are new). Small businesses can claim 50 per cent for such expenditure in the 2006/07 tax year. • First-year allowances of 100 per cent on cars with low CO2 emissions, other energy-saving investments and water efficient investments. More details on these are listed below. Research and development allowances and tax relief If your business is small or medium-sized and carries out research and development (R&D), you may be able to claim research and development allowances or tax relief on some of your R&D expenses. If your expenditure fulfils the qualifying conditions, your business could benefit from between 100 to 150 per cent tax relief. See our guide on tax relief and allowances for research and development. Energy-saving investments You can claim 100 per cent first-year allowances on your investments in designated energy-saving and water-efficient plant and machinery, made after 1 April 2001. The technologies and products that qualify are on the Energy Technology List and Water Technology List. You can see the Energy Technology and Water Technology Lists at the Enhanced Capital Allowances website. See our guide on environmental tax obligations and breaks. Low CO2-emission cars and gas refuelling equipment First-year allowances of 100 per cent are available for new cars with CO2 emissions no greater than 120gm/km and for equipment for refuelling vehicles with natural gas or hydrogen fuel provided that: • it is "unused and not second hand", and was first registered on or after 17 April 2002 • it is an electric car, or a car with CO2 emissions of not more than 120gm/km driven • the expenditure is incurred between 17 April 2002 and 31 March 2008 Find out about low CO2-emission cars and gas refuelling equipment at the HM Revenue & Customs (HMRC) website. ________________________________________ Work out your allowance The size of the first-year allowance you are able to claim depends on the size of your business and the type of purchase you make. Each item will need to be assessed separately. First-year allowances of 100 per cent If you bought a computer, for example, between 1 April 2000 and 31 March 2004 it was eligible for a 100 per cent allowance. That is, if your computer cost £1,000, you could have claimed a 100 per cent first-year allowance for it. In other words, deducting £1,000 from your company's profit before you calculate your tax. First-year allowances of 40 per cent (50 per cent for a small business in the 2006/07 tax year) If, on the other hand, you buy some equipment for £1,000 that's only eligible for 40 per cent first-year allowance, you can only deduct £400 (of £500 for a small business which is eligible for a first year allowance of 50 per cent in the 2006/07 tax year). If you need any help working out your first-year allowances, or your capital allowances in general, contact the HMRC Employer Helpline on Tel 0845 7143 143, or ask your tax adviser. To work out your capital allowances for subsequent years see our guide on capital allowances: the basics. ________________________________________ Claim first-year allowances Capital allowances must be claimed. If you don't make a claim, you will lose any capital allowance you might be entitled to for qualifying purchases made during the tax year. You can claim first-year allowances on your income tax self-assessment or corporation tax self-assessment return. If you need help making your claim, contact your tax adviser or call the HM Revenue & Customs (HMRC) Employer Helpline on Tel 08457 143 143. ________________________________________ Business expenses and dispensations Whatever type of business you run, whether it is a limited company, partnership or you are self-employed, when completing your tax returns you need to consider which business expenses are allowable and need to be reported. While most benefits and expenses are not subject to PAYE (Pay As You Earn), payments of cash from an employer to an employee should be. You are required to report benefits and expenses payments annually through a P11D and self-assessment return. Any tax owing is then collected from the taxpayer in the year following receipt. This guide looks at which types of business expense are allowable and how they should be treated for the purposes of tax. ________________________________________ Treatment of business expenses Your business expenses will fall into one of two categories for the purposes of self-assessment - allowable and non-allowable expenses. Broadly speaking, you can deduct from your turnover all the costs you incur for the sole purpose of earning business profits. These are known as allowable expenses. The following gives some examples of the types of cost which are allowable as legitimate types of business expense: • goods purchased for resale • materials used by the business to make goods to sell • rental of business premises • electricity for heating, lighting and manufacture • cleaning You can download the help sheet IR222 on allowable business expenses from the HM Revenue & Customs (HMRC) website (PDF). Business expenditure is deducted in your accounts for the period it was incurred in, even if you are not due to pay the money until later. Bear in mind that expenses may be treated differently for the purposes of VAT. See the page in this guide on the treatment of business expenses for VAT. You cannot claim for non-allowable expenses, which include: • Costs that you incur for a non-business purpose, such as your own personal expenses or drawings. • Capital costs, ie the cost of buying fixed assets or intangible assets, such as goodwill, which last for several years - or losses you suffer when you sell them. You may be able to claim capital allowances on these capital costs. • Costs which are recoverable under insurance. Regardless of whether you are self-employed, or trading as a limited company, you also cannot count the cost of purchasing business premises - or equipment - as an expense. Relief for expenditure is dealt with by claiming capital allowances that can be offset against profits - see our guide on capital allowances: the basics for more information. If you are self-employed, there are a number of other business expenses that are not allowable. These include: • fuel expenses for non-business use of vehicles • any payments made for non-business work • depreciation of fixed assets • non-business motoring You can download a guide to business expenses for the self-employed in leaflet SA103 from the HMRC website (PDF). ________________________________________ Dispensations - what they are and how to apply for them In some cases businesses may be eligible for a dispensation, which can be granted by HM Revenue & Customs (HMRC). This means they do not have to report certain benefits and expenses, however detailed records must still be kept. Dispensations can relieve employers from filing expenses forms (P11Ds) with HMRC for some employees, or it can reduce the amount of information that has to be submitted on each form. Employers are usually required to file a P11D for each employee earning £8,500 a year or more by 6 July annually. However, if an officer of HMRC can be convinced that no tax would be payable by your employees on the benefits or expenses payments that they receive, you may be able to secure a dispensation. Will it cover all my staff? If you do secure a dispensation it may not cover all of your employees. For example, directors or accounts staff who authorise their own expenses may be excluded. It can cover benefits-in-kind, including entertaining and subscriptions to professional bodies. To find out if your business is eligible for a dispensation, read about expense and benefits in kind at the HMRC website. Download an application form to claim a dispensation from the HMRC website (PDF). ________________________________________ Treatment of travel and entertaining Expenses payments can cover: • travel • entertaining • mileage • overnight accommodation Expenses payments made to employees are normally classed as part of their earnings unless they are already taxable or are covered by a dispensation. See the page in this guide on dispensations - what they are and how to apply for them. For more information, download booklet 480 on expenses and benefits from the HM Revenue & Customs (HMRC) website (PDF). Business travel For the purposes of calculating an employee's tax liability, and in calculating National Insurance contributions (NICs), relief is available for two kinds of travel: • travel in the performance of duties (for example, a journey which involves the employee travelling from one workplace to another within the same employment) • a journey the employee has to make to or from a workplace - but not if the journey is ordinary commuting or private travel For more information download the tax and NICs guide to employee travel from the HMRC website (PDF).This guide can also be obtained from the HMRC office dealing with your PAYE. Entertaining For information about entertaining expenses, download the tax guide on expenses and benefits from the HMRC website (PDF). ________________________________________ Treatment of mileage and accommodation Employees using their own vehicles for business travel can now receive certain amounts tax-free instead of being taxed on what they receive and having to obtain a deduction for expenses incurred. They are called Approved Mileage Allowance Payments (AMAPs) and can be calculated using HM Revenue & Customs (HMRC) figures. Chapter 16 of the booklet "Expenses and benefits: a tax guide" contains more about AMAPs. You can download the booklet on expenses and benefits from the HMRC website (PDF). Overnight accommodation In general, accommodation while staying away from home on business is not taxable. Allowable expenditure on such occasions can include: • a meal - including alcoholic and non-alcoholic refreshments • tea, coffee and soft drinks between meals Employees will often also incur additional personal expenses, including: • newspapers • laundry • home telephone calls Although not normally allowable, a special exemption allows employers to provide for incidental expenses up to a certain limit. The limit for tax-year 2005/06 is: • £5 (including VAT) per night for stays within the UK • £10 (including VAT) per night for stays outside of the UK If the limit is exceeded the entire payment becomes taxable - not just the excess. Full details can be found in Appendix 8 of the booklet expenses and benefits. You can download the booklet on expenses and benefits from the HMRC website (PDF). ________________________________________ Treatment of vehicle expenses for the purposes of self assessment If you're self-employed and you want to claim for vehicle expenses you must remember that if the vehicle is also used for private use, only the business proportion of the use counts as an allowable expense. For example if your total vehicle expenses were £3,000 and one-third of your mileage was private - only two-thirds of the cost can be claimed against tax. For example, if the total cost of your vehicle expenses is £3,000, but private mileage makes up £1,000, only £2,000 can be claimed against tax. When you complete your self-assessment tax return (SA103) you should include all of your business expenses in boxes 3.46 to 3.48 and 3.51 to 3.63. Any amounts that are not allowable should be entered in boxes 3.30 to 3.45 and totalled in box 3.66. Download self-assessment tax return SA103 from the HM Revenue & Customs (HMRC) website (PDF). For help on completion of your self-assessment tax return download the notes on self-employment from the HMRC website (PDF). ________________________________________ Treatment of business expenses for VAT Some confusion can arise because of the different ways HM Revenue & Customs (HMRC) view certain business expenses - particularly for VAT purposes. As far as HMRC is concerned an expense is tax deductible if it was incurred "wholly and exclusively for business purposes". VAT legislation divides activities into three categories: • non-business • taxable • exempt If you are VAT-registered, you cannot reclaim any VAT you are charged on purchases, which directly or indirectly relate to non-business (outside-the-scope) activities. You can find more information about how to work out the amount of VAT that relates to your business activities on the HMRC website. You can reclaim input tax, which is attributable to the taxable supplies you make (standard, reduced-rated or zero-rated). However, you cannot reclaim the input tax you have been charged on purchases, which relate to exempt supplies you make, unless they are below a set level known as the "de minimis" limit. VAT Notice 706 Partial Exemption gives details of the current de minimis limit and further information on how to calculate the proportion of VAT reclaimable. To avoid problems arising, it is advisable to discuss the treatment of VAT expenses regularly with your accountant and copy all VAT-related correspondence to them. You can find more information on the treatment of business expenses for the purposes of VAT on the HMRC website. You can find your regional HMRC office through the HMRC website. Company cars, vans and fuel Car-related tax and National Insurance contributions are now linked to carbon dioxide (CO2) emissions rather than to business mileage or the car's age. This benefits businesses that use cleaner, fuel-efficient cars. There's even a calculator that does all the hard work for you. This guide explains what you need to do to meet tax requirements for company cars, vans and fuel and takes you directly to the forms you have to fill in. ________________________________________ Which forms do I need to fill in? Offers danish furniture with a product or service that delivers bargain furniture and pub furniture.

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This is simply amazing. Offers danish furniture with a product or service that delivers bargain furniture and pub furniture. Form P46(Car) applies whenever: • a new or existing employee gets use of a company car • an employee no longer has use of a company car • an employee gets use of a different or an extra car • you provide fuel free of charge to your employee where none was provided before Pooled cars are not classed as a taxable benefit because they are not available for private use. You therefore don't need to include them on your form P46(car). Find out about pooled cars on the HM Revenue & Customs (HMRC) website. You need to download and complete form P46(car) from the HMRC website (PDF), and send it to your local tax office within 28 days of the end of the quarter in which the change in arrangement takes place - this will be 5 July, 5 October, 5 January or 5 April. To find out where your local tax office is, call the HMRC Employer Helpline on Tel 0845 7143 143. You can file form P46 (car) online through the HMRC website. Read about and enrol for PAYE Online for Employers. You must download and complete the section of form P11D that relates to company cars and car fuel from the HMRC website (PDF). You need to: • complete and send this form - for each employee - by 6 July, following the end of the tax year • give a copy of the form - or details of the information - to the relevant employees You can also file form P11D online through the HMRC website. Read about and enrol for PAYE Online for Employers. Download Class 1A NICs return form P11D(b) for expenses and benefits from the HMRC website (PDF). There is one for every employer. You can get regular reminders of important tax dates with our Tax deadline email alerts. ________________________________________ Calculate the taxable benefits for company cars To find the taxable benefit of the car and the car fuel you just need to enter the car's details into an online calculator. The calculations will be done for you. Follow these steps: 1. When using the calculator you will need to supply details of the car's approved CO2 emissions figure. This chart explains: CO2 emissions figures If the car - CO2 emissions figure - was registered before 1998 Tick the "no CO2 emissions" box on the calculator - was registered between 1 January 1998 - 28 February 2001 Check the car's CO2 emissions on the Vehicle Certification Agency (VCA) website - was registered after 1 March 2001 Check your vehicle registration certificate (V5C), or check the car's CO2 emissions on the VCA website - is a car which has no approved CO2 emissions figure Tick the "no CO2 emissions" box on the calculator 2. Calculate your company car and fuel benefit at the HMRC website. You will need to enter the car's details and select "Next". You'll get two results: • car benefit charge • company car fuel benefit 3. Enter these results on HMRC form P11D alongside your details. The calculator will save you time but if you'd rather do the calculations yourself, you can download working sheet P11D WS2 from the HMRC website (PDF). You can file form P11D using PAYE Online for Employers at the HMRC website (registration required). ________________________________________ Company vans: what do I have to do? There is a taxable benefit on company vans. As an employer, you have to report and pay National Insurance contributions (NICs) on the taxable benefit of a company van made available for an employee's private use. Use form P11D to report the benefit. You can download form P11D from the HM Revenue & Customs (HMRC) website (PDF). If you are returning any expenses, payments or benefits on form P11D, you will also need to fill in and sign form P11D(b). This declares the Class 1A NICs you need to pay for the year. You can download form P11D(b) from the HMRC website (PDF). You can file forms P11D and P11D(b) using PAYE Online for Employers at the HMRC website (registration required). If the van was not available for the whole of the tax year you can download the working sheet P11D WS3 from the HMRC website (PDF) to help you in calculating the benefit as a percentage of the standard charge. Pooled vans are not classed as a taxable benefit because they are not available for private use. Find out about pooled vans on the HMRC website. The benefit charge for company vans that are shared by more than one employee is shared between the employees on a just and reasonable basis. Employees pay no tax if: • the only journeys made in the van are work journeys, eg delivering goods or making calls to customers • all the journeys are work journeys and travelling between home and work Employees pay tax if they use their van for private journeys - unless this private use is insignificant, eg taking rubbish to the tip once or twice a year. If there is tax to pay because of private use, employees are charged tax on the following amounts: • 2005/6 - £500 - reduced to £350 if the van is over four years old • 2006/7 - £500 - reduced to £350 if the van is over four years old • 2007/8 - £3,000 - with an extra tax on £500 if they have free or subsidised fuel for private use Employers will pay Class 1A NICs on the same amounts. If your employees are affected by these changes, contact HMRC so that their tax codes are changed to make sure they pay the right amount of tax. ________________________________________ Fuel for company cars and vans: when is it not taxable? There are circumstances when you do not have to pay National Insurance contributions and your employee will not have to pay tax on the benefit of the fuel for a company car or van. These are when your employee: • buys their own fuel and you repay them for business mileage only • repays you for all fuel they have used privately • replaces the fuel they have used privately You may find it helpful to use HM Revenue & Customs (HMRC) advisory fuel rates as a guide to how much you repay your employee and how much they should pay you. These are only available for cars and cannot be used for vans. Find the advisory fuel rates on the HMRC website. You can also read guidance on how to use the advisory fuel rates for company cars at the HMRC website. ________________________________________ Fuel for your employees' private use As an employer, you need to pay National Insurance contributions (NICs) on fuel provided for an employee's private use. This includes journeys to and from work in all company cars and in chargeable company vans. What do I need to do? If you provide "free fuel" for an employee, you have to advise HM Revenue & Customs (HMRC) of the arrangement by completing and returning the following forms: • P46 (car) - download form P46 (car) from the HMRC website (PDF) (cars only) • P11D - download form P11D from the HMRC website (PDF) • P11D(b) - download form P11D(b) from the HMRC website (PDF) Send these to your local tax office - if you are not sure of the address, contact the HMRC Employers Helpline on Tel 08457 143 143. You can also file these forms using PAYE Online for Employers at the HMRC website (registration required). You can calculate your company car and fuel benefits at the HMRC website. This will help you complete form P11D. ________________________________________ VAT on business cars and commercial vehicles There are special rules for VAT on business cars and commercial vehicles. You can't normally reclaim the VAT you have to pay on a new car or used car. However, if you are a taxi operator, driving school, self drive hire, contract hire operator or motor dealer and are able to fulfil the specific conditions, input tax (VAT on purchases) may be recoverable. Some businesses may be able to claim input tax on genuine pool cars provided they are not available for any private use. You can find out about pooled cars on the HM Revenue & Customs (HMRC) website, or contact the HMRC National Advice Service Enquiry Line on Tel 0845 010 9000. If you are able to recover the VAT paid as input tax you must charge output tax (VAT charged on a sale) if the car is sold and issue a tax invoice if your customer is VAT registered. VAT incurred on the purchase of a commercial vehicle - a van, lorry or tractor, for example - can be reclaimed in full subject to the normal rules for input tax deduction. When you sell a commercial vehicle on which VAT has been recovered you must charge output tax and issue a tax invoice if your customer is VAT registered. Leased vehicles If you lease a car for business purposes, VAT may be reclaimed on 50 per cent of the vehicle element of the lease charge if the vehicle is available for private use. Input tax on the maintenance and optional services element of any lease charge is recoverable in full subject to the normal VAT rules. Leased commercial vehicles are not subject to any input tax restriction on the finance element of the lease. VAT and fuel If the business pays for both private and business fuel used in a car, a fixed VAT charge is applicable based on the cubic capacity of the engine and fuel type - this is called the fuel scale charge. This simplification method allows the business to reclaim VAT on both the business and private elements of the fuel. If the business does not pay for fuel used in cars for private mileage, a scale charge does not apply and VAT may be reclaimed on fuel bought for business purposes provided you keep a detailed record of business mileage and sufficient receipts to demonstrate that VAT has been paid. Read notice 700/64 VAT on motoring expenses at the HMRC website. Fuel used for private purposes in commercial vehicles is not recoverable as input tax. When fuel is used for private purposes the amount of input tax recovered should be adjusted to reflect the business use only. It should be noted that for VAT purposes home to office journeys are not treated as business mileage. See our guide on when you can reclaim VAT and when you can't. ________________________________________ Here's how I arranged for my employees to have company cars Sadik Pothiawala Samarind Limited Sadik's top tips: • "Read the small print in any lease contract and be clear of the return date of the car, mileage, agreed condition and any penalties." • "Assess the overall cost of a company car on your business." • "Check the value your insurance company puts on the car compared to the finance company, and beware of any shortfall." ________________________________________ Sadik Pothiawala is managing director and co-founder of Samarind Limited, which designs, supplies and supports off-the-shelf and bespoke computer packages for SMEs. Today, the company employs 15 people and has six company cars. Sadik believes offering company cars has helped the company attract top staff. What I did Consider different ways of obtaining the cars "Whether we opt for a contract-hire or leasing agreement, or an outright purchase, depends on the circumstances. "For cars that do very high mileage we've tended to go for contract-hire agreements as these include maintenance. We also lease two of our cars, so we're responsible for the sale at the end of the deal. This is a good option if there is the possibility that we need to keep the car for another year at the end of the agreement. If we've got a surplus of cash, it's more cost-effective to buy the car outright. "There's no right or wrong way, it's just a matter of judgement in each case." Fill in form P11D "Every tax year we complete form P11D for each car we provide, because HM Revenue & Customs (HMRC) essentially views a company car as a salary increase for the employee, so we have to pay more National Insurance. The amount is related to the car's carbon emissions and value. "Calculating the emissions is straightforward, and can be done online or using a chart from the HMRC website. The point is we need to do it accurately otherwise we're liable. It's also important to note that the value of a car includes any extras it might have and is based on the full list price, not what we paid for it." Pay for employees' private mileage "We have some employees who commute long distances and we pay fuel for all their journeys. Paying for private mileage is a heavy burden on our company from a tax perspective, but we believe it contributes to reduced staff turnover." What I'd do differently Set out a formal policy for employees "We've been fortunate in that all our employees have looked after their cars but some people can abuse them. I'd formalise a company car policy in my employment documents from the start, covering what the company pays for and what the driver is expected to do in return. We didn't do this at first." Download this case study and 20 like it in our free book, "Here's how I run my business" (PDF) Business rates Businesses and other organisations that occupy non-domestic premises pay non-domestic rates, often called business rates, to help fund local services provided by local authorities, eg police and firefighting. If you use a building or part of a building for business, you will probably have to pay business rates. Since 1990, businesses have been assessed differently to domestic properties. Domestic properties pay council tax - homes are allocated a band by the Valuation Office Agency (VOA) and the amount payable is set by local councils. Businesses are given a rateable value which, in conjunction with the multiplier, or Uniform Business Rate, set nationally for each country in the UK, produces the business rates liability. In England and Wales, rateable values are assessed by the VOA and the multiplier is set in England by the Department for Communities and Local Government, and in Wales by the Welsh Assembly Government. In Scotland rateable values are assessed by the Scottish Assessors and the multiplier is set by the Scottish Executive. This guide explains who pays business rates, how rates are calculated, how to pay them and how to challenge your rateable value. ________________________________________ Business premises Business or non-domestic premises include most commercial properties, such as shops, offices, pubs, warehouses and factories. If part of a building is used for business and part for residential purposes - such as a shop with a flat above or a solicitor's office in a domestic property - the part used for business counts as non-domestic premises. So, if you live and work in the same premises, you generally pay business rates on the part of the property used for business and council tax on the residential part. If you own and rent out a holiday cottage, take in lodgers or run a guesthouse you may have to pay business rates. Download a guide to rating information on holiday cottages from the Valuation Office Agency (VOA) website (PDF). Download a guide to the rating of guesthouse and bed & breakfast accommodation from the VOA website (PDF). In Scotland if you hire out your holiday home for more than 140 days a year or you provide bed-and-breakfast for more than six people at any one time, you will have to pay non-domestic rates. You will also pay council tax on the part of your property you use as your home. Most business premises are subject to business rates, but the following are exceptions: • places of public religious worship • fish farms • most farmland and farm buildings • moveable moorings • public parks • sewers • some types of property used by the disabled ________________________________________ Working from home If you work from home you may have to pay business rates on the part of your house that you use for work. But you will still have to pay council tax on the rest of the property. Whether your local council charges business rates or not depends on the degree of commercial use. For example, if you keep a computer and a filing cabinet for work in the living room, you would probably not have to pay business rates, as the main use of the room would still be domestic. But if you converted a room into a workshop and only used it for work, that room would be classed as non-domestic premises and subject to business rates. See our guide on how to use your home as a workplace. The rules are the same whether you work from home for an employer or run your own business. But each case will be slightly different and considered on its own merits. The Valuation Officer will need to consider a number of things including the extent and frequency of the business use and any modifications made to the property to accommodate that use. View some examples of working at or from home on the Valuation Office Agency (VOA) website. Find out about working from home and business rates at the mybusinessrates website. In Scotland if you work from home, you may be liable for non-domestic rates on the part of the property used for work, and you will be liable for council tax for the rest of the property (although your property's valuation band may change). It will depend on the circumstances of each case and you should ask your local Assessor for advice. Find contact details of your local Assessor on the Scottish Assessors website. ________________________________________ How business rates are calculated Every commercial property has a rateable value determined by a Valuation Officer. The rateable value is a professional view of the annual rent for a property if it were available vacant and to let on the open market. Rateable values are based on market rents at an earlier valuation date - a date specified by the government. The law requires that rateable values are re-valued every five years so that the values in the rating list are kept up-to-date. For the 2005 rating list, which came into effect on 1 April 2005, the valuation date was 1 April 2003. The next revaluation is expected to be on 1 April 2010, based on a valuation date of 1 April 2008. Find rateable values for business premises in England and Wales on the Valuation Office Agency (VOA) website. You can also find rateable values for business premises in Scotland on the Scottish Assessors website. If the property is both residential and business, it will probably appear in the council tax valuation list and the non-domestic rating list. Your local council works out your rates by multiplying the rateable value by the multiplier, or Uniform Business Rate, set by the government. Each year the multiplier cannot rise by more than the rate of inflation. A smaller increase can be specified by the Treasury. In England, a lower small business multiplier is used if your business qualifies for Small Business Rate Relief. In Wales, there is no Small Business Rate Relief scheme, so only one multiplier is used. Some other business rates reliefs, including rural rate relief, may also apply and this and any other allowances you may be entitled to will be subtracted from the bill. See the page in this guide on business rates reliefs. Find out how business rates bills in England are calculated on the mybusinessrates website. If you have a query about your bill, you will need to contact the rating department of your local council. The multipliers are different in Wales, Scotland and Northern Ireland. Read a guide to the non-domestic rating system in Wales from the Welsh Assembly Government website. Find out how rates are calculated in Scotland on the Scottish Executive website. Find out how rates are calculated in Northern Ireland on the Rate Collection Agency website. ________________________________________ Paying business rates Normally, the occupier of the property has to pay the business rates. This is usually the owner or the leaseholder of the property. If you rent or lease your business premises, your rent may include rates. If it does, the landlord is responsible for the payments. When you start a new business, you should tell the local council that covers the area so it can charge you the correct rate. The local council will normally send you a rates bill in March or April. Most councils ask you to pay in ten equal monthly instalments. The bill shows: • how much you have to pay and how the amount was calculated • when you need to pay each instalment and how much to pay each time If you miss an instalment, the council will send you a reminder giving you seven days to pay. If you miss this deadline or another payment, you will have to pay the whole outstanding balance for the year. If you still do not pay, the council may take action in court to recover the debt. If a premises is vacant, you won't have to pay business rates for the first three months. After that, rates are charged at 50 per cent of the usual, occupied rate. Some properties - such as factories, or listed buildings - pay no rates if they are empty. You might like to check with a surveyor to see if your premises qualify as empty. The council uses its discretion to reduce the rates on partly occupied properties. ________________________________________ Business rates reliefs The following types of business are entitled to relief: • Charities and community amateur sports clubs can get their business rates bills reduced by 80 per cent. Some councils may reduce it further. • Other non-profit organisations can apply to the council for up to 100 per cent discretionary relief. • Certain rural businesses, such as village shops and petrol stations, may be able to claim rate relief. In England, local councils can also grant 100 per cent relief to smaller businesses in rural areas that are of particular benefit to the community. Community Interest Companies (CICs) have no automatic entitlement to rates relief. However, local authorities may reduce or cancel bills completely for some not-for-profit organisations. To find out more about CICs see our guide on legal structures: the basics. In addition, businesses in England with rateable values below £15,000 (or £21,500 in London) can apply to their local authority for Small Business Rate Relief: • if your rateable value is below £5,000, you get 50 per cent rate relief • for rateable values from £5,000 up to £9,999, the relief decreases on a sliding scale • from £10,000 to £14,999 (or £21,499 in London), your rates are calculated using the lower small business multiplier You can read guidance on Small Business Rates Relief and other business rates relief at the mybusinessrates website. In Scotland, the Small Business Rate Relief Scheme was introduced in 2003. Find out more about Small Business Rate Relief in Scotland on the Federation of Small Businesses website. In addition, in England, there are transitional arrangements that limit the change in your rates bill caused by the 2005 revaluation. Large increases or decreases are phased in gradually over a maximum of five years. Transitional relief is automatically included in your bill and comes into effect if your bill would have been higher or lower than the previous years by more than a preset amount. Transitional arrangements for revaluations MAXIMUM RISE TABLE (England) Year Small property (rateable value under £15,000 or £21,500 in Greater London) Large property (all others) 2005/06 5 per cent 12.5 per cent 2006/07 7.5 per cent 17.5 per cent 2007/08 10 per cent 20 per cent 2008/09 15 per cent 25 per cent 2009/10 n/a n/a MAXIMUM FALL TABLE (England) Year Small property (rateable value under £15,000 or £21,500 in Greater London) Large property (all others) 2005/06 30 per cent 12.5 per cent 2006/07 30 per cent 12.5 per cent 2007/08 35 per cent 14 per cent 2008/09 60 per cent 25 per cent 2009/10 n/a n/a The arrangements are different in Wales, Scotland and Northern Ireland. To learn more, you will need to contact your local council. You may also be able to get hardship relief if you are finding it difficult to pay. You will need to contact your local council for more information. Find your local council using our Contacts Directory. ________________________________________ Challenging your rateable value If you own or occupy a property, you can challenge the rateable value it has been given if: • you believe the rateable value shown in the rating list on the day it was compiled is inaccurate • the Valuation Officer has changed the rateable value and you think it is now inaccurate • there has been a material change in circumstances, eg a physical change in the property or a change in use • there has been a change in the local area or in the use of a neighbouring property • the rating list should show that some part of a property is domestic or exempt but doesn't • the rating list should not show that some part of a property is domestic or exempt but does so • a property is shown in the list as one or more different properties but ought to be shown as one property • a property is shown in the list as one property but has been divided into more than one property • the address shown for a property is incorrect • the description shown for a property is incorrect What to do if you disagree with your rateable value You can contact the Valuation Office Agency Helpline on Tel 0845 602 1507 where you can speak to trained staff who will answer your questions and explain how the rateable value has been allocated to your property. If, having raised your query with the Valuation Office Agency (VOA), you are not satisfied with the outcome and feel that your rateable value is incorrect, you can appeal. An appeal firstly takes the form of a "proposal" to have your rateable value reassessed. You can submit your proposal online through the VOA website, or in writing to your group Valuation Office. You can also contact the VOA to order the appropriate form. Scottish businesses should contact your local assessor through the Scottish Assessors website. Businesses in Northern Ireland may appeal to the Commissioner of Valuation. Download information on complaints procedure on the Northern Ireland Valuation and Lands Agency website (PDF). ________________________________________ The appeal process The Valuation Office will acknowledge receipt of your proposal and let you know in writing when your case will come up for discussion. Programming is an initiative designed to inform ratepayers when their case will be dealt with by the Valuation Officer. This may take some time, so you should let the office know if this means you are suffering hardship - they may be able to speed things up. Most cases are settled by agreement. Where agreement is not reached within three months of receipt of your proposal form, it will be automatically referred to the local Valuation Tribunal in England and Wales, or the Valuation Appeals Committee in Scotland. Businesses in Northern Ireland may appeal to the Lands Tribunal within 21 days of the decision of the Commissioner of Valuation. Download paragraph 6 of the charter standard statement from the Valuation and Land Agency website (PDF). You can also download the land tribunal appeal form from the Valuation and Land Agency website (PDF). Referral of your case to the local Valuation Tribunal does not mean that your case cannot be settled by agreement. In the event that agreement cannot be reached, however, the tribunal will hear your case as a formal appeal if you wish to proceed. You will be notified of the date and time of the hearing. You do not have to go to the hearing - you can state your case in writing if you prefer - but it is advisable to attend. The only costs you will pay will be for your professional adviser if you employ one. Fees may be charged for any work carried out on your behalf, even if this involves only giving advice and information. Make sure you fully understand the terms of any contract before you sign it. You will have to pay your rates in full until a decision has been reached and if you are successful the council will pay back any overpayment with interest. The Valuation Tribunal Service (VTS) is an independent, legal body that deals with business rates and council tax appeals. You can find your local VTS on the VTS website. For information on making an appeal in Scotland, read the non-domestic rates guide on the Scottish Executive website. Environmental tax obligations and breaks Environmental taxes are designed to encourage efficient resource use and discourage business practices that damage the environment. For instance, if you invest in environmentally friendly equipment, you could receive tax breaks. Energy-efficient machinery, for example, qualifies for a 100 per cent tax allowance in the first year that you buy it. This allows businesses to offset the costs against taxable profits. This guide provides information on how environmental taxes are levied, who collects them and who pays them including information on exclusions, exemptions and tax credits. ________________________________________ Climate change levy and exemptions The climate change levy (CCL) is designed to persuade businesses to reduce their energy use or use energy from renewable sources. It applies to: • electricity • natural gas as supplied by a gas utility • petroleum and hydrocarbon gas in a liquid state • coal and lignite • coke • semi-coke of coal or lignite • petroleum coke Commercial and industrial users of energy from these sources must pay the tax. Suppliers of these goods collect the tax. The tax does not apply to domestic users or charity usage for non-business purposes. Rates The tax is charged at an exact rate per unit of energy: Commodity Normal rate Electricity 0.43 pence per kilowatt hour Gas 0.15 pence per kilowatt hour Petroleum gas or other gaseous hydrocarbon supplied in a liquid state 0.96 pence per kilogram Any other taxable commodity 1.17 pence per kilogram These rates are due to increase in line with inflation in April 2007. Read about the proposed changes to the CCL on the HM Revenue & Customs (HMRC) website. Reduced rates, exclusions and relief There are a range of reduced rate supplies, exemptions and relief. Businesses operating in areas deemed energy intensive - such as aluminium, chemicals and food - may get an 80 per cent reduction if they join an agreement negotiated by their trade body and the government. To qualify, these businesses have to meet binding targets - reviewed every two years - for reducing energy use. Read about the CCL and emissions trading on the NetRegs website. The following commodities are exempt from the levy: • supplies not for burning or consuming in the UK • LPG or solid fuel resold for non-taxable use, eg garages selling bags of coal • supplies from certain combined heat and power schemes • electricity from renewable sources • supplies used in certain forms of transport • supplies used to produce taxable commodities other than electricity Read a guide to reduced-rate VAT on energy saving materials on the HMRC website. Read about exemptions, exclusions and relief on the HMRC website. You can also download the following forms from the HMRC website: • form PP10 - to provide supporting analysis for your application for reduced rates and relief (PDF) • form PP11 - to apply for reduced rates and relief (PDF) You may also find it useful to read about measures you can take to reduce energy consumption at the Carbon Trust website. ________________________________________ Landfill and waste management Landfill tax is paid on top of normal landfill fees by businesses and local authorities that want to dispose of waste using a landfill site. It is designed to encourage businesses to produce less waste and to use alternative forms of waste management. VAT is calculated on the value of supplies, inclusive of landfill tax. There are two rates of tax: • the lower rate - £2 per tonne for inactive waste such as rocks and soil • the standard rate - £21 per tonne in the 2006/07 tax year, increasing to £24 per tonne in 2007/08 The government has stated that the standard rate of landfill tax will increase by at least £3 per tonne in subsequent years to a rate of £35 per tonne in the medium to long term. Waste arising from the following activities is exempt subject to meeting certain conditions: • some dredging activities • quarrying and mining • pet cemeteries • reclamation of contaminated land Inactive waste used for landfill restoration and filling quarries is exempt subject to meeting certain conditions: Offers danish furniture with a product or service that delivers bargain furniture and pub furniture. You will want to find out more information.