31st Mar 2010

From Business Link (2)

Legal update: tax and rates changes from April 2010

Here are the tax returns and payroll changes coming into force from 1 April 2010.

1. Moving from paper to online VAT Returns and paying electronically

From 1 April 2010 you will have to submit your VAT Returns online and pay any VAT due electronically if either of the following applies.

• You have an annual turnover of £100,000 or more (exclusive of VAT).
• You register or should have registered for VAT on or after 1 April 2010 (regardless of your turnover).

If you fall into either of the groups mentioned above, you will have to file all your VAT Returns online - including nil and repayment returns - even if your turnover drops below £100,000 in the future.

Find out more from this guide: Moving from paper to online VAT Returns and paying electronically.

2. Tax compliance

From 1 April 2010 there is a new range of penalties for inaccuracies in documents. Along with stricter penalties there are clearer requirements designed to make it easier, not more difficult, for small business owners to follow the rules.

While penalties are becoming heavier for people who deliberately try to deceive the HMRC, they may be waived where people can demonstrate they have taken reasonable care in collating their expenses. So that means that if you make a genuine error, not a careless or deliberate mistake, you will not be penalised.

Meeting the new requirements

Business owners and the self-employed are reminded to be as careful as you can be with regard to keeping:

• a record of all your sales, with copies of any invoices you have issued
• a written record of all your business purchases and expenses
• invoices and receipts for all your business purchases and expenses
• details of any amounts you personally pay into or take from the business
• copies of business bank statements

And, where applicable:

• cash book
• petty cash book
• order notes and invoices
• copy sales invoices
• details of any other business income received
• details of any private money brought into the business
• till rolls or other form of electronic record of sales
• details of any other income
• any cash taken out of the till to pay small business expenses
• bills and invoices for purchases and expenses
• a record of stock on hand at the end of the year
• all bank and building society statements, pass books, cheque stubs and paying-in slips which include details of business transactions

For more support and advice, visit the Business Link 'Tax Help' online support page.

3. New rateable values

The Valuation Office Agency has updated the new rateable values which are effective in England and Wales from 1 April 2010, based on market rents at 1 April 2008. Check the details of your 2010 valuation on the VOA website - Opens in a new window.

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