Hit with an unexpected tax bill

You pay it, and the accountant reimburses any penalties or interest that’s due, assuming that it’s his fault.

Do you mean your own personal tax and NI from self-employment, or the company’s PAYE and NIC? If the latter I suppose it must be for your employees rather than the directors? If that’s the case then have the deductions from the employees been made properly?

Posted under Uncategorized

Posted by Alec at 5:24 pm, March 22, 2007

4 Comments so far

  1. Alec added on  March 22nd, 2007 at 17:55

    Assuming the directors are also the sole shareholders, NI shouldn’t be an issue anyway. Is this a real accountant?

  2. Alec added on  March 22nd, 2007 at 17:58

    I don’t understand this 8/9 months thing either. You’re meant to calculate (and account for/pay) the directors’ NICs on a pro-rata basis over the year based on salary received, then calculate what you SHOULD have paid at the end of the year based on the full year’s ACTUAL taxable earnings. You can’t do this until after April 5th though, unless the accountant is working a few weeks in advance. 8/9 months just doesn’t come into it as far as I know; maybe I’m wrong though – I don’t claim to be an accountant, I only know the bits that have relevance to me. Maybe your accountant could put something in writing to you – I might learn something from it.

  3. Alec added on  March 22nd, 2007 at 18:04

    The first message was to Kate, the second to John.

    Next Accounts Due: 25/02/2007 OVERDUE

  4. Alec added on  March 22nd, 2007 at 19:30

    John, this isn’t aimed at you or your company in particular so please don’t take it personally. It does apply to you though, so please accept these comments as being made without malice.

    Businesses operated through limited companies enjoy huge advantages – shareholder-directors can take advantages of big tax breaks and in most cases can legally just walk away from the company’s debts if things just “don’t work out.”

    In return for being allowed to operate behind a cloak of (almost) anonymity and limited liability for debts a limited company is required to comply with the various rules that apply to it – now mainly contained in the Companies Act 2006. The law includes various provisions to allow businesses and individuals that may wish to do business with a limited company to establish: – the actual legal entity that they will be doing business with, the ownership of the company (as a ‘snapshot’ taken once a year) and the financial standing of the company (again, as a ‘snapshot’ once a year).

    So, the essentials as regards to outwardly visible compliance (call it ‘dealing openly with business partners and potential business partners’ if you prefer) are:

    File (or if you prefer ‘make public via Companies House’) the company’s Annual Return (just a list of the company’s shareholders, officers, addresses, etc, at a certain moment in time) by the legally due date.

    File (or if you prefer ‘make public via Companies House’) the company’s Annual Accounts (a statement of the financial position of the company at a certain moment in time) by the legally due date.

    Include the ACTUAL COMPANY NAME (eg ABC Limited) on all its: business letters, emails, websites, notices, other official publications, bills of exchange, promissory notes, endorsements, cheques, orders for money or goods purporting to be signed by or on behalf of the company, all bills of parcels, invoices, receipts, letters of credit.

    Include the company’s place of registration, its registration number and the address of its registered office on all business letters, emails, order forms and websites.

    Failure to comply with any of these requirements is a criminal offence each time it occurs. Anywhere Ltd is guilty of a criminal offence every time we send an order confirmation through ‘Network’ because we don’t (can’t) include our full company details.

    Many more companies (and sole traders and partnerships) on here are guilty of criminal offences because they make no attempt whatsoever to include the identity of the actual legal entity behind their businesses on their Directory entry, on their invoices or on their order confirmations.

    Laws like the Companies Act and the Business Names Act underpin the way that we do business and are not ‘irrelevancies’ for us (or ‘Network’) to ignore as we see fit.

    Look at your businesses Directory entry. Does it contain the full title of your business: XYZ Couriers Ltd, or: XYZ Ltd t/a ABC Couriers, or: John Smith, or: John Smith t/a J Smith, or: John Smith t/a JS Couriers, or: John Smith and Joan Smith t/a J&J Couriers? No? You’re breaking the law then.

    If this doesn’t seem important to you then think back a couple of years to a certain company/business/person based in Merseyside who seemed to have used 3 or 4 trading names, at least 1 sole trader business and 2 limited companies to confuse the hell out of everyone he/they/it did business with so no-one knew who to chase for money when everything went tits up.

    Openness is the key. our courier ‘Network’ needs to facilitate and enforce it.

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