Date of issue: 10th June 2003

SMALL BUSINESSES NET £825 FOR FILING TAX RETURNS ELECTRONICALLY

Chartered Accountants Clement Keys, Birmingham is alerting small and medium-sized enterprises to a final incentive which is being offered by the Inland Revenue in return for electronic filing of payroll year end tax returns.

Electronic filing via the Internet is not set to become mandatory for SMEs with up to
50 employees until the 2009/10 tax year. In the meantime, the Inland Revenue is keen to encourage businesses to submit their returns and payments electronically by offering a cash reward of up to £825.

Firms who file their accounts electronically in 2004/05 and 2005/06 will receive £250 for each year's returns. The amount paid by the Inland Revenue reduces to £150 for the 2006/07 tax year and then steps down to £100 and £75 for 2007/08 and 2008/09 respectively.

"The Inland Revenue does not hand out gifts like this every day, so we would encourage businesses to submit their returns electronically and reap the financial rewards on offer," says Phil Cook, head of the specialist tax division at Clement Keys, Birmingham.

"Businesses need to check that their 2003/04 payroll software is capable of producing the relevant files, while those which are currently using a manual system should seriously consider computerising the process," he adds.

The Inland Revenue maintains that electronic filing via the Internet is a secure means of submitting year end returns and will not only cut down on the department's labour-intensive administration but will also speed up tax payments and refunds.

Clement Keys, Birmingham says there is a simple alternative for small and medium-sized companies which are interested in filing returns electronically but do not wish to invest in a computerised payroll resource at this time.

"Businesses with a manual system can still take advantage of this financial incentive from the Inland Revenue simply by outsourcing their payroll facility," says Phil Cook.

"Outsourcing with an agent which has a fully computerised payroll system and is authorised by BACS will mean that they would submit the necessary files and make BACS payments on the client company's behalf. Clement Keys offers this kind of payroll facility via Management Link Ltd a company formed to service the business needs of growing businesses."