<html> <head> <meta http-equiv=Content-Type content="text/html; charset=unicode"> <link rel=Edit-Time-Data href="Sept08_files/editdata.mso"> <link rel=themeData href="Sept08_files/themedata.thmx"> <link rel=colorSchemeMapping href="Sept08_files/colorschememapping.xml"> <style> <!-- .Section1 {page:Section1;} --> </style> </head> <body bgcolor="#FFFFFF" link=blue vlink=purple class="Normal" lang=EN-GB> <div class=Section1> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td width="100%" class="Normal"><p><a name=top></a><b><span style='font-size:14.0pt; font-family:&quot;Arial&quot;,&quot;sans-serif&quot;;&quot;Times New Roman&quot;'>Northams Chartered Accountants</span></b></p></td> <td class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman"'><img id="_x0000_i1025" src="406.jpg"></span></p></td> </tr> </table> <div style='border:solid gray 1.0pt;padding:1.0pt 1.0pt 1.0pt 1.0pt' width="100%"> <div style='border:solid black 1.0pt;padding:4.0pt 4.0pt 4.0pt 4.0pt' width="100%"> </div> </div> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td width=2 colspan=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1026" src="box_tl.gif"></span></p></td> <td width="100%" class="Normal"><p align=center style='text-align:center'><b><span style='font-size:11.0pt;font-family:"Arial","sans-serif";"Times New Roman";color:black'>Newsletter September 2008</span></b></p></td> <td width=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1027" src="box_tr.gif"></span></p></td> </tr> <tr> <td width=1 class="Normal"></td> <td colspan=2 valign=top class="Normal"><p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>As we near the end of the summer season, or is it the monsoon season, we are including information in the newsletter this month to highlight:</span></p> <ul type=disc> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>Changes to PAYE tax codes 7th September 2008</span></li> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>State Benefits that are tax free</span></li> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>Two important consequences of the new Annual Investment Allowance, and</span></li> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>Postal and payment changes.</span></li> </ul> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Our October newsletter will be published on 6 October 2008.</span></p></td> <td width=1 class="Normal"></td> </tr> <tr> <td width=1 class="Normal"></td> <td colspan=2 valign=top class="Normal"><table border=0 cellpadding=0 width="100%"> <tr> <td valign=top class="Normal"><div align=right> </div></td> <td width=50 class="Normal"></td> <td valign=top class="Normal"></td> </tr> </table></td> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=4 class="Normal"></td> </tr> <tr height=0> <td width=1 class="Normal"></td> <td width=1 class="Normal"></td> <td width=744 class="Normal"></td> <td width=2 class="Normal"></td> </tr> </table> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td width=2 colspan=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1033" src="box_tl.gif"></span></p></td> <td width="100%" class="Normal"><p align=center style='text-align:center'><b><span style='font-size:11.0pt;font-family:"Arial","sans-serif";"Times New Roman";color:black'>Changes to tax codes</span></b></p></td> <td width=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1034" src="box_tr.gif"></span></p></td> </tr> <tr> <td width=1 class="Normal"></td> <td colspan=2 valign=top class="Normal"><p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>For those who have not received the HM Revenue &amp; Customs (HMRC) employers letter we have reproduced below changes to tax codes which need to be made from 7 September 2008.</span></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>The changes were introduced to soften the effects on some lower paid persons who were adversely affected by the scrapping of the 10% starting rate band for income tax on 6 April 2008. As well as changes to tax codes you should also have received new tax tables or changes to your payroll software that accommodate the lowering of the basic rate band for income tax purposes; from &pound;36,000 to &pound;34,800.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Changes to Tax Codes:</span></strong></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>L codes</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - Add 60 to the existing code. For example 543L becomes 603L.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>T codes</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - No change unless you receive P6 from tax office.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>P,V or Y codes</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - No change unless you receive P6 from tax office.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>A or H codes</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - These codes are no longer in use, seek advice from HMRC immediately if you are still using codes with these suffixes.</span></p> <p>&nbsp;</p> </td> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=4 class="Normal"></td> </tr> <tr height=0> <td width=1 class="Normal"></td> <td width=1 class="Normal"></td> <td width=744 class="Normal"></td> <td width=2 class="Normal"></td> </tr> </table> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td width=2 colspan=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1037" src="box_tl.gif"></span></p></td> <td width="100%" class="Normal"><p align=center style='text-align:center'><b><span style='font-size:11.0pt;font-family:"Arial","sans-serif";"Times New Roman";color:black'>State Benefits that are tax free</span></b></p></td> <td width=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1038" src="box_tr.gif"></span></p></td> </tr> <tr> <td width=1 class="Normal"></td> <td colspan=2 valign=top class="Normal"><p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Please ensure that you take account of the following notes when you declare benefits on your tax return.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>The State Retirement Pension</span></strong></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Your state pension is taxable but do not include either the Winter Fuel Payment or the Christmas Bonus as both of these latter payments are tax-free.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Incapacity Benefit (IB)</span></strong></p> <ul type=disc> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>Short term IB paid at the lower rates is not taxable for the first 28 weeks, after 28 weeks it becomes taxable.</span></li> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>Short term IB paid at the higher rates is taxable.</span></li> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>Long term IB paid at the higher rates is taxable unless benefit commenced before 13 April 1995.</span></li> </ul> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>The new Employment and Support Allowance</span></strong></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>This new benefit is being introduced from October 2008. It will replace the existing Incapacity Benefit and Income Support for all new claimants.</span></p> <ul type=disc> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>If the payment of this allowance is contribution based it will be taxable.</span></li> <li><span style='font-size:9.0pt;font-family:"Arial","sans-serif";"Times New Roman"'>If the payment is income based it will be tax-free.</span></li> </ul> <p>&nbsp;</p> </td> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=4 class="Normal"></td> </tr> <tr height=0> <td width=1 class="Normal"></td> <td width=1 class="Normal"></td> <td width=744 class="Normal"></td> <td width=2 class="Normal"></td> </tr> </table> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td width=2 colspan=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1041" src="box_tl.gif"></span></p></td> <td width="100%" class="Normal"><p align=center style='text-align:center'><b><span style='font-size:11.0pt;font-family:"Arial","sans-serif";"Times New Roman";color:black'>Annual Investment Allowance personal considerations</span></b></p></td> <td width=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1042" src="box_tr.gif"></span></p></td> </tr> <tr> <td width=1 class="Normal"></td> <td colspan=2 valign=top class="Normal"><p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>From the 6 April 2008 sole traders and partners can claim up to &pound;50,000 a year as a direct write off against their profits if they invest in certain qualifying assets; plant and equipment, vans and so on. Small and medium sized companies can also claim (from 1 April 2008). This article alerts individuals claiming the allowance of two other matters they should consider before making a claim.</span></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>First the good news!</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Tax credits</span></strong></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>If the claim you make reduces your income sufficiently you may be eligible for tax credits.</span></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>The problem is that until the current tax year's earnings are quantified, you will not know for certain that you are eligible to claim - a pity as you can only back date claims for three months!</span></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>A possible solution may be to make a protective tax credit claim now. Your initial claim may show £nil but when adjusted for your actual post AIA claim the actual claim achieved may be much higher.</span></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>And now the bad news!</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Mortgage applications</span></strong></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>Many lenders now ask for taxable income rather than trading profits when they consider if you are eligible for a loan. If your trading profits of &pound;50,000 are covered by an AIA claim of &pound;50,000, zero income is not going to qualify for much of a loan. Hopefully lenders will take into account the reason for the dip in your taxable income - but some may not!</span></p> <p>&nbsp;</p> </td> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=4 class="Normal"></td> </tr> <tr height=0> <td width=1 class="Normal"></td> <td width=1 class="Normal"></td> <td width=744 class="Normal"></td> <td width=2 class="Normal"></td> </tr> </table> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td width=2 colspan=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1045" src="box_tl.gif"></span></p></td> <td width="100%" class="Normal"><p align=center style='text-align:center'><b><span style='font-size:11.0pt;font-family:"Arial","sans-serif";"Times New Roman";color:black'>HMRC further online incentive</span></b></p></td> <td width=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1046" src="box_tr.gif"></span></p></td> </tr> <tr> <td width=1 class="Normal"></td> <td colspan=2 valign=top class="Normal"><p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>From 1 October 2008 HMRC will no longer send taxpayers a postage paid envelope to use when paying their tax or filing/paying their VAT returns.</span></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>This apparently is a signal to us all to make returns and payments online.</span></p> <p><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>To ease the payment process HMRC are also about to make it easier to pay our tax by allowing us to use our credit card. Legislation has just been passed that will allow them to recover the credit card charges. HMRC will charge you 0.91% for the privilege.</span></p> <p>&nbsp;</p> </td> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=4 class="Normal"></td> </tr> <tr height=0> <td width=1 class="Normal"></td> <td width=1 class="Normal"></td> <td width=744 class="Normal"></td> <td width=2 class="Normal"></td> </tr> </table> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td width=2 colspan=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1049" src="box_tl.gif"></span></p></td> <td width="100%" class="Normal"><p align=center style='text-align:center'><b><span style='font-size:11.0pt;font-family:"Arial","sans-serif";"Times New Roman";color:black'>Tax Diary September/October 2008</span></b></p></td> <td width=2 class="Normal"><p><span style='font-family:"Arial","sans-serif";"Times New Roman";color:black'><img border=0 id="_x0000_i1050" src="box_tr.gif"></span></p></td> </tr> <tr> <td width=1 class="Normal"></td> <td colspan=2 valign=top class="Normal"><p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>1 September 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - Due date for corporation tax due for the year ended 30 November 2007.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>19 September 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - PAYE and NIC deductions due for month ended 5 September 2008. (If you pay your tax electronically the due date is 22 September 2008)</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>19 September 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - Filing deadline for the CIS300 monthly return for the month ended 5 September 2008. </span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>19 September 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - CIS tax deducted for the month ended 5 September 2008 is payable by today.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>1 October 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - Due date for corporation tax due for the year ended 31 December 2007.</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>19 October 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - PAYE and NIC deductions due for month ended 5 October 2008. (If you pay your tax electronically the due date is 22 October 2008)</span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>19 October 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - Filing deadline for the CIS300 monthly return for the month ended 5 October 2008. </span></p> <p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>19 October 2008</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> - CIS tax deducted for the month ended 5 October 2008 is payable by today.</span></p> <p>&nbsp;</p> </td> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=4 class="Normal"></td> </tr> <tr height=0> <td width=1 class="Normal"></td> <td width=1 class="Normal"></td> <td width=744 class="Normal"></td> <td width=2 class="Normal"></td> </tr> </table> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td colspan=3 class="Normal"></td> </tr> <tr> <td width=1 class="Normal"></td> <td valign=top class="Normal"><p><strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'>DISCLAIMER - PLEASE NOTE:</span></strong><span style='font-size:9.0pt;font-family:"Arial","sans-serif"'> The ideas shared with you in this email are intended to inform rather than advise. Taxpayers circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.</span></p></td> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=3 class="Normal"></td> </tr> </table> <table border=0 cellspacing=0 cellpadding=0 width="100%"> <tr> <td colspan=3 class="Normal"></td> </tr> <tr> <td width=1 class="Normal"></td> <td valign=top class="Normal"><p><span style='font-size:7.5pt;font-family:"Tahoma","sans-serif"'>Northams</span></p> <u1:p></u1:p> <p><span style='font-size:7.5pt;font-family:"Tahoma","sans-serif"'>21-23 New Street</span></p> <p><span style='font-size:7.5pt;font-family:"Tahoma","sans-serif"'>Devon&nbsp; EX14 1HD</span></p> <p><span style='font-size:7.5pt;font-family:"Tahoma","sans-serif"'>Tel: 01404 45994  Fax: 01404 46470 web: </span><span style='font-size:10.0pt'><a href="http://www.northams.com/"><span style='font-size:7.5pt;font-family:"Tahoma","sans-serif";color:purple'>www.northams.com</span></a><u1:p></u1:p></span></p> <p><span style='font-size:7.5pt;font-family:"Tahoma","sans-serif"'>Northams is registered for VAT under reference no 540590849.</span></p> <u1:p></u1:p> <p><span style='font-size:7.5pt;font-family:"Tahoma","sans-serif"'>The Principal of the firm is a member of the Institute of Chartered Accountants of England and Wales (ICAEW) and the Chartered Institute of Taxation.  These bodies have their headquarters in the <st1:country-region u2:st="on"><st1:place u2:st="on">UK</st1:country-region> and their rules of professional conduct can be obtained from their web sites.</span></p></td> <u1:p></u1:p> <td width=1 class="Normal"></td> </tr> <tr> <td colspan=3 class="Normal"></td> </tr> </table> </div> </body> </html>