To confuse matters even more, certain services can carry VAT at 5%, or 17.5% or 0%, depending on the circumstances. For example, renovating a house that has been empty for at least two years can carry VAT at 5%, but repairing a roof on another building will generally require VAT to be charged at 17.5%, unless the building has ‘listed’ status when the work may be zero rated if it is an approved alteration.

If you find you have charged VAT at too high a rate to your customer you should refund the excess VAT charged, if this is practical and possible. You also need to correct your VAT returns for the excess VAT paid over to the VAT office.

You can only make a claim for overpaid VAT for VAT periods ending in the last four years, so don’t delay if you find an error that covers several periods.

If you have paid in excess of the maximum NI contributions required for the tax year you can reclaim the excess amount. The PAYE system will normally ensure that you will not pay more than the annual maximum on your regular employment. However, if you have two or more concurrent employments in the tax year, or you are employed and self-employed at the same time, you may pay more NI in the year than the annual maximum.

This ‘lumpy’ income pattern can be achieved if you run your own company and take dividends from that company only every other tax year. In practice there are a number of difficulties as follows:

• Your family may need the cash. If income is not taken as dividends, it will need to be extracted in another form.
• If you take a loan from your company this can create tax charges for you and your company.
• If you deliberately deprive yourself of income to increase a Tax Credit award you can be deemed to receive that income in the appropriate tax year.

• Some employers treat the loan of the cycle to employee as part of the employee’s salary and reduce their cash wages proportionately. This is known as a salary sacrifice, and the arrangement must be agreed with the relevant employee in advance. If cycles are only provided to employees under salary sacrifice arrangements the whole cycle to work scheme may lose its tax exemption, as some employees cannot have their cash pay reduced due the National Minimum Wage rate rules.
• It is quite common for the employee to purchase the cycle from the employer at the end of the loan period. However, the Taxman says that where there is an automatic transfer of the cycle to the employee at the end of the loan period, the tax exemption for the cycle to work scheme is also lost.

If your child is in this position you could point them towards the HMRC web site designed for 16 to 19 year olds:
http://www.taxmatters.hmrc.gov.uk; it covers topics such as NI and how the NI number is important, what is PAYE and self-assessment. There are also quizzes and a teacher’s area including materials teachers can use to explain tax to different age groups of students.
Also, as a parent, you may need to tell HMRC that your child is no longer in full-time education.

Businesses who always receive VAT repayments can ask to complete monthly VAT returns, in which case the first period for which they must submit their VAT return online was 30 April 2010.

Once you start to submit your VAT returns online you will no longer receive a paper form from the VAT office, or any type of paper reminder so the onus is on you to file within the required dates.

If the company chooses not to use one of the approved share or share option schemes and issues shares or options to its employees, there can be some very serious tax consequences, such as:

• The employee is taxed on the value of the shares he receives as if that value was part of his salary.
• The company must pay the employer’s class 1 NICs on the value of the shares issued.

Taxable income and gains after deduction of allowances up to £37,400 are taxed at 18%. Those over the £37,400 limit are taxed at 28% and gains subject to entrepreneur’s relief are taxed at 10%.

The old CGT rate of 18% applies to all capital gains made by individuals and trustees from 6 April 2008 to 22 June 2010 inclusive, irrespective of the amount of the gain or the person’s level of income. Trustees pay CGT at 28% on all gains made on or after 23 June 2010 irrespective of the level of income of the trust.

Alcoholic duty rates on strong cider will reduce from 30 June 2010, back to the levels which were in place before the March 2010 Budget.

A bank levy on bank’s balance sheet values will be introduced from 1 January 2011 at 0.04% , which will rise to 0.07%.

The Government is to consider whether a General Anti-Avoidance Rule would be effective in reducing tax avoidance. It will also examine the following anti-avoidance measures:

• Expand the disclosure of tax avoidance schemes regime to include schemes involving IHT on trusts.
• Block the manipulation of consortium relief.
• Restrict the use of employee trusts, including employer finance retirement benefit schemes (EFRBS).
• Amend Stamp Duty Land Tax due on high value property transactions.