February Question and Answer Corner

Newsletter issue - February 08.

Q. The Department of Work and Pensions has sent me a pension forecast which shows I've already paid enough national insurance contributions over the 44 years of my working life to receive the full state pension. Do I have to carry on paying class 2 NICs?

A. You must pay class 2 NICs if you are self-employed and have not yet achieved state retirement age, which is currently 65 for men and 60 for women. As you have already worked for 44 years you must be very close to the state retirement age. You don't have to pay class 2 NICs from the week you reach the state retirement age. Alternatively if your self-employed earnings are below the small earnings limit, (£4,635 for 2007/08) you can claim an exemption from paying NICs for the tax year.

Q. I have an order from a customer in Russia for a software licence. Do I have to charge VAT on that sale? Does it make any difference if I send the software on a CD or transfer it by email?

A. A licence to use computer software is always treated as a service even if it is supplied in a medium you can handle, such as a CD. So it doesn't make any difference to the VAT treatment if you supply the software on CD or by email. You should not charge VAT to your Russian customer as the supply of this service to a country outside the EU is outside the scope of VAT.

Q. My company is about to spend £60,000 on replacing asbestos roofs. Is there any special tax relief I can claim to help with these costs?

A. Land remediation relief applies for cleaning up contaminated land in the UK, which covers asbestos removal. If your company did not create the contamination by installing the asbestos in the first place, it can claim 150% of the costs of the clean up against its profits. If this extra deduction creates a loss, and the company can't relieve that loss against profits of the same or an earlier period, it can obtain a tax repayment of 16% of the loss from the Taxman.

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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Booth & Co  |   The Hermitage  |   15a Shenfield Road  |   Brentwood  |   Essex  |   CM15 8AG        Telephone: 01277 224666    |   Email: info@boothandco.co.uk