This seems straightforward, but the Income Tax (Earnings and Pensions) Act 2003, section 319, which provides this exemption defines a mobile phone by reference to ‘telephone apparatus’ which means ‘wireless telegraphy apparatus designed or adapted for the primary purpose of transmitting and receiving spoken messages and used in connection with a public electronic communications service’.

The advent of personal digital assistants (PDAs) caused a problem because they were mobile devices, but HMRC decided that they were not primarily for transmitting and receiving spoken messages and thus were not within the tax exemption.

Time moves on and so does technology, and HMRC have now acknowledged (in Revenue & Customs Brief 02/12) that since the emergence of smartphones in 2007, many PDAs have evolved into these new devices and now fall within the tax exemption.

In the meantime, however, HMRC’s previous advice may have meant that income tax and National Insurance has been paid by employers and employees. In those cases, repayments can now be claimed.

Employers and employees who think they may be affected should read Revenue & Customs Brief 02/12 to check the conditions and, if applicable, claim a repayment – this should be done by 31 July 2012 for the 2007/08 tax year.

The checks, 20,000 of which are planned for the 2012/13 tax year, could result in penalties of up to £3,000 for ‘inadequate record keeping’, a term that HMRC has yet to define.

The Business Record Checks system is now being reviewed after considerable concern was raised over the potential compliance burden it could place on already stretched small and medium sized businesses.

While the added pressure is not welcomed, keeping on top of your business records is essential. Tips on this include ensuring:

• All income is recorded and banked promptly
• All recorded expenses are authorised and valid
• All recorded debts are recoverable
• All your liabilities are identified and recorded when they are incurred

Having an offshore bank account – even an account in the name of your dog – is not illegal, but if the amounts deposited into the account represent income, then this must be declared to HMRC if the owner is resident and domiciled in the UK. Similarly, if the account earns interest then this will also be subject to UK income tax.

HMRC will, of course, be watching for cases where offshore accounts are use to evade tax, but there may be perfectly valid reasons for a UK taxpayer to have an offshore bank account.

A common reason might be if funds are received or are required abroad – perhaps rent from a foreign property and to hold funds for the maintenance of it.

A more technical reason might occur where an individual is resident in the UK, but not domiciled here. Such taxpayers may be taxed on monies that are brought into the UK, so a payment to an account outside of the UK will prevent a remittance being made to this country.

If you have an offshore bank account, do make sure that both your UK and offshore tax obligations are being complied with.

From 1 April 2010 it was compulsory for all businesses with an annual turnover of £100,000 or more to file and pay VAT online, but the latest change will mean that every VAT registered business must do so.

If you do not already file your VAT online, we can set up authorisation to do it for you. Please contact us to find out more.

This is the theory behind the seed enterprise investment scheme (SEIS) and the draft legislation has recently been published on HMRC’s website.

Subject to it coming into force in this year’s Finance Act, and of course to various conditions being satisfied, the SEIS provides attractive tax reliefs for investors in start up or ‘early stage’ companies.

The scheme will run for five years and qualifying investors can obtain tax relief at 50% on the purchase of shares for up to £100,000.

In addition, for the first year of the scheme, i.e. the year ending 5 April 2013, if a capital gain arising on the disposal of an asset is reinvested in shares that qualify for income tax relief under the SEIS then the gain is also relieved from tax. Consequently, the investment can potentially attract tax relief at 78%.

Any gain made on the subsequent disposal of qualifying shares is also free of capital gains tax.

Naturally, as with any scheme that provides attractive rates of tax saving, there are conditions attached and professional advice will be required, but for this could be a very attractive initiative for those investing in start-up companies.

Last year, about 100,000 people phoned departmental telephone helplines for advice on 31 January and without such information they might be unable to file a return. This could constitute a reasonable excuse for a late filing penalty to be waived.

In response, and rather than becoming embroiled in myriad appeals against late filing penalties, HMRC have said that they will not charge a £100 penalty if tax returns are not submitted today, but are filed on 1 or 2 February 2012.

Furthermore, interest will not be charged on late paid tax for these two days.

So, if you have the necessary authorisation code, but have not yet sent the return – which should now be filed electronically, you have a couple of days grace.  If you still don’t manage to file your tax return in the next couple of days, do not think that because you are already late and subject to a penalty that it is safe to forget about it.

Ultimately, HMRC can charge daily penalties for a late tax return and interest and surcharges will accrue on unpaid tax.

Get the return filed and make a new (tax) year’s resolution that you will deal with matters sooner next year.

This sounds rather technical and obscure, but could have important consequences for those who are affected.

Code BR means that the basic rate of tax is operated on a payment so a flat rate of 20% is charged.  By contrast, an 0T code charges tax at rates of 20%, 40% and 50% depending upon the value of the payment (or shares, etc.) received.

Remember that tax paid under the PAYE system is ‘on account’ of the ultimate, correct tax liability which we be calculated after the year end, when any under or overpaid tax will be collected or repaid.

The potential problem with the change of the code to be operated in the above circumstances is that because the payment being made to the employee is in the form of shares rather than cash, some of the shares will have to be sold to pay the tax liability. If the ‘0T’ tax liability is, as will often be the case, higher than the ‘BR’ liability, then more shares will have to be sold. Although, as stated above, any tax overpaid under the PAYE system will eventually be repaid, so that shares can be repurchased, their value may have increased in the meantime and, if so, the employee will have lost out.

Employees who are due to receive shares, etc. when they leave their employment may want to take advice on their tax liability and what might be done to mitigate this.

The tax department seems to have started 2012 along the same lines, announcing a ‘contractual disclosure facility’ that will start on 31 January. Under this amnesty, HMRC will write to those who they suspect of tax fraud giving them a 60-day window to come forward. In return for the department agreeing not to instigate a criminal investigation and prosecution, the suspect will have to:

• tell HMRC about all the tax deliberately evaded, with no exceptions;
• give HMRC details of all the tax evaded within 60 days of being offered the contract;
• sign a statement to say that accurate and complete details of the tax fraud have been provided;
• pay all taxes, duties, interest and penalties due; and
• stop any fraud immediately.

HMRC say that those who have committed a tax fraud will also be able to come forward and ask the department to consider including them within this disclosure facility.

Naturally, conditions apply to this amnesty and in view of the serious nature of the offence, those in receipt of a letter from HMRC, or those who have committed a tax fraud and who are considering the declaration of this, should take professional advice.

A Will allows you to plan, it means that your property and belongings are transferred and divided as you wish. It can also help you to plan to reduce inheritance tax and  allows you to leave part or all of your estate in trust.

All these planning advantages are lost without a Will, in particular, a surviving spouse or civil partner will not automatically receive everything. While a partner where no marriage or civil partnership has taken place may receive nothing.

Dying without a Will is known as intestacy, and the rules vary between England, Wales and Northern Ireland, and Scotland.

We can help you to do this, and our objective view can often work wonders when it comes to taking a step back and re-assessing your goals and how to achieve them.

Points to consider when reviewing your business plan for 2012 include:

1. How did the business perform against last year’s plan?
2. What are your key opportunities and challenges for the year ahead?
3. What have been your biggest successes or failures over the last year?
4. Has the last year seen any relevant changes to your market, competition or customers?
5. Are there any changes that need to be made as a result of the above?

Your business finances, budgeting and forecasting go hand in hand with your business planning, and the following also need to be reviewed in the same light:

• Cashflow projections
• Profit projections
• Balance sheet projections

Reviewing and realism are just two of the keys to efficient planning and growth – we can help you with this – and we want to help you to succeed. Please contact us to find out more.