On 1 July 2008 the new Companies Law announced changes in the requirement to have an audit. With increased audit regulation, and more in the pipeline, audit costs will increase and within the next couple of years are likely to cost anything from 2,000 for a small company audit.
In the current financial climate, reducing late payments can become even more critical to your business, and there are certain practices that you can adopt to minimise late payments. Most of these are common sense, but are often overlooked and not followed through because of limited time or resource. The sooner you chase overdue invoices the sooner you will be paid.
The Tax Office have tightened some of the rules on how it manages the island’s tax affairs and what can and cannot be claimed as a tax deductable expense for a range of situations.
The Guernsey income tax office is getting tougher with late payment of tax, late filing of tax returns and deductibility of expenses for home office users and medical professionals; as it sweeps away previously relaxed attitudes to late filings and other tax deductable expenses.
The changes the tax office have made are part of a raft of measures to ensure that all taxpayers are treated equally and that the tax laws are applied consistently. However, changes made to enforce a late filing penalty for tax payers who do not file their returns on time are designed to ensure that all taxpayers bring their paper returns and their payments up to date.
With effect from 1 January 2009 it is necessary to include benefits in kind received by employees in their payslips so that tax and social security is paid on the value of the benefit.
This means that any benefit in kind an employee is in receipt of needs to be declared on a weekly or monthly basis.
The amounts of benefits are included in the booklet produced by the Tax Office, but if you unsure of the amount to declare please give our tax team a call and they will endeavour to assist you.
There are two forms of company year end accounts, audited and audit exempt (known as certified accounts). The type of business you operate and the structure of business ownership determine whether it will need to be audited or not.
Audit exemption removes the cost burden of having outside auditors come into your business after the year end and check the accountants and the work of your accountants has been done correctly.
An auditor has to be a separate organisation, registered to undertake audits, from the accountants who prepared the businesses year end returns.
The auditor works on behalf of the shareholders and is a way for them to check that the business is being run properly by its management team. Of course if owner (shareholder) and manager is the same person or people then an audit may not be necessary.
Audits create for a business an extra layer of cost at the year end. Some years ago small trading companies were allowed to apply for audit exemptions – saving the business the burden and cost of a full audit and replacing it with a simpler certified accountant’s report for the year end.
Certified accounts can only be produced by an accounting firm, like Brehon, which has been registered with and approved by the Guernsey tax office.
Most local companies, trading locally who own and run their own companies will be able to apply for an audit exemption. As a limited company, for example, you will simply have to determine with your accountant whether or not you can be exempt, then pass a motion (resolution for audit exemption) at a company meeting (for example the AGM) and then register the exemption when filing the businesses annual validation at the Company Registry.
To find out how Brehon Chartered Accountants can help your business with accounting, tax or business advisory matters, please ask for a free initial consultation, contact Sarah Hancock on 01481 233009 or email firstname.lastname@example.org