Quest Duthoit — Chartered Accountants

PAYE — The world has changed. HMRC are fed up with being the last organisation to be paid. There are substantial penalties for the first time starting from 6 April 2010. If your monthly payments are late, HMRC may not even contact you during the year but when the P35 is filed you may be in for a significant penalty based on the amounts, the number of times, and the period of lateness.

INCOME TAX — The new era of 'tax the rich' starts on 6 April 2010. There are 2 new tax rates. £100k - £112k at an effective rate of 60% with the loss of the personal allowance. Above £150k at 50%. Some sole traders and partnerships will be much more tax effective to convert into limited company status. Also, to consider transfer of part of the business or company to the spouse in some cicumstances, allowing them to be taxed at lower rates on part of your income.

COMPANIES — Do you want to buy out a fellow shareholder in the recession? Always consider whether the company is able to buy it's own shares rather than you buy them personally - it's usually a much cheaper option.

RESIDENCY — Gaines- Cooper v HMRC has massively changed the goal posts when considering whether you are genuinely non- resident. Compliance with the 90 day rule is not a means of achieving non- residency but of ensuring it, once an individual has already become non-resident. The cost of making a mistake is enormous. You need to consider work abroad, and then social and family ties in the UK are the key focus.

VAT — New businesses and existing ones with a turnover of £100k plus, must submit returns electronically from 1 April 2010.

COMPANY CARS — The capital allowance tax relief received by the company is now only 20% per annum for cars with less than 160g/k. Consider whether leasing may give you earlier tax relief. Cars in excess of 160g/k get 10% but there are leasing restrictions also. Buy a car with less than 110g/k and get 100% relief in the first year - there are some cars in this category and they are certainly very tax efficient!