The Fizz! Blog

The power of headlines

The same story was presented today as:

Telegraph - "1.2 million owe tax after HMRC error"

Accountancy Age - "PAYE reconciliations show sharp improvement"

The latter is much the fairer headline.  HMRC are supposed to check each year whether those on PAYE who don't have to submit a tax return have underpaid or overpaid tax.  Over the last few years they've done a horrible job of this.  For 2010/11 they seem to have done miles better.

The existence of a lot of people who didn't pay the right amount of tax via PAYE doesn't in itself constitute an error on the part of HMRC.  Sometimes they just don't have sufficient information to sort someone's tax out until after the year's finished. That's completely normal.

So, on this occasion, HMRC are right and the Telegraph headline is wrong - though it should be noted that the content of the Telegraph story doesn't really match up to the headline, being more even handed.

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Adwords can work

We meet quite a lot of people who tell us that they've tried Google Adwords and it hasn't worked out for them.  Google Adwords, in case you don't know, is paid, click-through advertising.  You pick some search terms (say Plumber Aylesbury) and if anyone searches for that on Google then there's a chance an ad for your business (which you've written) will appear.  If the searcher clicks on it and comes to your website, you pay.

Pretty often, when we look at the website of the person who's told us Adwords doesn't work, it's not very good.  The thing is, it's really a three-step process:

1. Get someone to click on your ad
2. Impress them with your website
3. Impress them personally when they get in touch

Blaming or criticising Adwords when your website isn't up to scratch - or is inconsistent with the kind of click-throughs that you're getting - is missing the point.  It's like telling people to get lost when they phone up and then blaming Yellow Pages.

The further problem is that there are a ton of Adwords consultants in the market now, and some of them are so keen to get business that they'll encourage customers to launch into an Adwords campaign without making sure that steps 2 and 3 are going to work as well.

So, Adwords can work, but - as with any marketing - make sure that you're going to be able to successfully manage the whole process - clicks aren't worth anything in isolation.

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Penalties for late tax returns much harsher this year

For some years now, the penalty for filing your personal tax return after the 31 January deadline has been £100.  If you've no tax to pay, that's been reduced to nil.  Many people have therefore felt little or no need to meet the deadline.

For the tax year ended 5 April 2011, the penalties are much harsher if a return is submitted after 31 January 2012.  Firstly, the £100 won't be reduced at all if there's little or no tax payable.  Secondly, once your return is three months late a further penalty of £10 a day will also kick in.  On top of that, if you're six months late or more there are further penalties - potentially up to 100% of the tax due.

Most of our customers are really efficient and get us the information and documents we need in good time, and so we're already submitting plenty of tax returns for last year.  But we always get calls from some potential clients in January, prompted by the impending deadline, and it seems pretty likely that in January 2012 the increased punishment for lateness will mean more of those than usual. And for firms that are used to doing a lot of their personal tax work in January, with the knowledge that a few returns slipping into February is not disastrous, this time round it could be much more fraught.

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