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July Question and Answer Corner
Newsletter issue - July 08.
Q. I've heard on the radio that my small pension is going to be taxed, but I've never paid tax on it before. Will I have to pay the tax due for all the years I've received the pension in one go?
A. Don't panic. The change in tax treatment only applies to pensions of £1,000 or less per year, which were not previously taxed. If you have one of these small pensions you will not have to pay tax immediately, any tax due will be collected month by month after 6 April 2009 under the PAYE system. No tax will be demanded for small pension payments made before April 2008. It is quite possible that your tax free personal allowance will cover all of your state pension and small private pension you currently receive, so no tax will be due on any of your pensions. Ask us to check this for you.
Q. I receive maintenance from my ex-husband under a court order. Do I have to include this income on my tax return?
A. If the court order, was made after 15 March 1988 the maintenance will not be taxable in your hands, so you don't include it on your tax return. If the court order pre-dates 15 March 1988 your ex-husband may be due some tax relief on the maintenance if he or you were born before 6 April 1935, and in that case the maintenance may in part be taxable, but this is unlikely. A ruling on the particular court order would have to have been obtained from the Tax Office before July 1988, to make any part of the income taxable.
Q. I recently registered for VAT, effective from 1 June 2008, but my business has been running since 1 November 2007. I need to issue a credit note to a customer in respect of services supplied in March 2008. Do I have to include VAT on that credit note?
A. The credit note relates to services you supplied before your business became VAT registered, so you do not add VAT on to the credit note amount. The rule is: the rate of VAT to be used in a credit note is the rate in force at the time of the tax point of the original supply. The tax point for services will normally be the date of the invoice, or it could be earlier if the customer agrees the service has been completely delivered at an earlier date.
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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