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July Question and Answer Corner
Newsletter issue - July 07.
Q. I'm a driving instructor and operate through a limited company. The Taxman wants to tax me for using my instruction car and fuel as a taxable car benefit. I don't think that's fair as the car is necessary for my business. Is he right?
A. Essentially the Taxman is correct. If you use the instruction car for even one mile of a private journey, there will be an income tax charge. It is irrelevant whether the car is necessary for your business or not. Taxi drivers who run their businesses through limited companies have the same problem. If you can show that you make absolutely no personal use of the instruction car, perhaps because you use another car for all private journeys, the Taxman may be persuaded to treat the instruction vehicle as purely business. However, he may want to see an insurance policy that prohibits private use.
Q. My company has recently applied for gross payment status under the new CIS, but the application was rejected as the Taxman says my personal income tax was paid late for 2005/06. I sent the tax payment on 24 January 2007, so how can this have been late?
A. This is a problem with the new CIS computer system, as one late payment of income tax should not make your application for gross payment fail. The tax office also should have received your cheque before 31 January 2007, the deadline for that payment. Unfortunately your only option now is to appeal against the decision, although in this case the Taxman appears to be completely in the wrong.
Q. My husband has been seconded to the Dubai office of his company for six months, but I won't be joining him, as we don't want to disrupt our children's schooling. Do I need to tell the Taxman?
A. If you are claiming tax credits you do need to tell the Tax Credit Office as soon as possible. You will be counted as a single parent while your husband is away and your tax credits claim needs to be reassessed.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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