HIGHER RATE TAX PLANNING

We're sure that you will have heard that the 2009 Budget introduced a new 50% rate of tax for income over £150,000. This new rate will be effective from 6th April 2010, so any tax planning will have to be made during this current tax year. It is not always possible, but if any amounts paid above £150,000, whether by remuneration or dividend, can be advanced into the 2009/10 tax year, a 10% saving can be achieved.

Additionally, if the result of advancing income into this current tax year is that total earnings for the following fall below £100,000, the full personal allowance will be available, resulting in a further saving of £2,590 (see below).

We at Myrus Smith will, of course, advise you of the optimum strategy to achieve the significant tax saving opportunities available.

From April 2010, the Personal Allowance will be reduced on a sliding scale for those with total income of between £100,000 and £140,000. No Personal Allowance will be available for those with income over £140,000.

FURNISHED HOLIDAY HOMES

If you rent out a property in either the United Kingdom or the ‘EU', which has either made losses or you are thinking of selling, there may be substantial tax reliefs available. To qualify for these the property:

	must be available for holiday letting to the public on a commercial basis for 140 days or more, and
	let commercially for 70 days or more, and
	not occupied for more than 31 days by the same person in any period of seven months.

If you have such a property, please let us know, as soon as possible as the reliefs end on 5th April 2010.

TAX PAYMENTS

Good News First

In recognition of these hard times, the Revenue have set up a help-line for individuals and companies having difficulty in paying their tax.

We have been involved in successful applications to pay the tax that would normally be due on 31st January 2009 and 31st July 2009 by monthly instalments up to December 2009. With the current interest rate for tax paid late at only 3%, this can prove significantly better than borrowing from banks. That is, assuming that you can find one willing to lend!

And Now The Bad News

With effect from (and including) the 2009 Tax Return, it will no longer be sufficient to have paid the tax by the following 31st January to avoid being charged a penalty for late submission of the form. From this year onwards, if it is late, there will be a penalty.

BIG CHANGES AT COMPANIES HOUSE

Following full implementation of the Companies Act 2006, private companies and limited liability partnerships with accounting periods beginning on or after 6th April 2008 will now have just 9 months to file statutory accounts at Companies House.

So, for example, 31st December 2009 accounts need to be filed by 30th September 2010 and 31st March 2010 accounts will have to be filed by 31st December 2010. It is now even more important to start work on statutory accounts at an early date, so as to avoid inevitable complications arising from filing accounts in December.

In addition to the shortening of the period allowed for filing accounts, late filing penalties have increased by 50% and will double if accounts are late in successive financial years. Even if accounts are filed one day late, a filing penalty of £150 will be levied and the penalty will increase to £375 if the accounts are filed more than one month late and no more than three months late.

Companies House has also issued ‘Registrar's Rules 2009' which are less flexible than those seen in the past. For example, documents may now be rejected if they are not signed in black ink, or if the Registrar does not consider that forms are clear enough to be scanned as a public document.

This means that any accounts filed close to the filing deadline may be rejected if they are not 100% compliant, in which case they will be rejected and could incur a filing penalty. Where there has been a certain amount of discretion on the part of the Registrar in the past, this is not likely to happen in the future.