Protect Your Business

Protect Your Business – Free Business Crime Conference

The event is free to attend although you need to register.

 

Protect your business

Information from :

East Lancashire Chamber of Commerce · Red Rose Court, Clayton Business Park · Clayton-Le-Moors · Accrington, Lancashire BB5 5JR · United Kingdom

 

FREE BUSINESS CRIME CONFERENCE

This free conference brings you the latest information and practical advice to help you protect your business, your employees and your property.

The event has been developed in partnership with key business support organisations and will be opened by the Police and Crime Commissioner for Lancashire, Clive Grunshaw, who is committed to engaging with the business community to tackle the impact of crime on the local economy

 

TOPICS INCLUDE

  • Cyber crime and fraud and how to deal with it if it happens to your business.
  • Crime prevention advice from Lancashire Constabulary and what you can do to better protect yourself, your business, your property, your staff and your data. Business Crime Survey outcomes.

WHY ATTEND?

  • Ensure your business is well protected.
  • Learn about new innovative approaches being developed to tackle the emerging threats to businesses.
  • Work in partnership with other organisations to tackle business crime.

Network with other business owners, business support providers and event organisers.

 

WHEN AND WHERE

10 November 2015: 9.00 am – 1.15 pm

The Best Western Leyland Hotel, Leyland Way, Leyland, PR25 4JX

The event is free to attend although you need to register.

Lunch will be provided.

 

Cyber Risk

Cyber Risk

Derek Rigby

By: Derek Rigby

Cyber Risk is a growing concern to SME business particularly those conducting some or all of their business online.

Shellshock virus

At Sagar Insurances the instances of theft has dwindled during the past 12 months. Seldom do we see claim for the theft of equipment following a mid-night burglary. However, instances of criminals accessing computer systems to commit

  • fraud,
  • blackmail
  • theft

are on the rise.

Examples are:

  • A company had their computer system hacked and criminals tried to access the company’s online banking system using information stored on the computer.
  • A company had their accounts system hacked and the bank details on their invoice template changed.
  • A company had their telephone system hacked and all outgoing calls were redirected via a premium rate number.
  • A company whose customers predominantly traded online, had their website attacked and were unable to trade until the site had been rebuilt.

There are several ways to make sure you are protected properly but only one will help you put things right if it all goes wrong. The right Insurance policy will help cover

  1. costs of cleaning your system following at attack,
  2. fines that come with a Data Protection breach following the loss of personal data,
  3. loss of income because you are unable to trade whilst your system is down.

Here are some other ways of protecting yourself:

Keep it clean.

Run regular checks for Malware and make sure you’re running the most up to date antivirus software.

Complicated passwords.

Make sure your password is easy enough to remember but complicated enough that no one else can guess it. Mobile devices should always be locked, preferably with a password or pin but at the very least something more than a swipe to the right!

Use secure websites.

Look for a lock somewhere in the browser address line, or make sure the URL begins with “https,” as such sites encrypt log-in information before sending it to the server.

Damian Glynn

Damian Glynn

In a recent publication from Damian Glynn at

VRS Vericlaim

vrs_technical-bulletin_cyber-losses_feb14

He asks:

  • Is there a insured event?
  • Is the incident covered prima facie?
  • Is the incident excluded?
  • How long is it going to be investigated?
  • How will quantum be considered?

Contact us at Sagar for further information

Sagar bottom strip

Contact Details Telephone: 01282 858250

 

National Minimum Wage News

New National Minimum Wage Campaign

By: Lisa Kennery

 National Minimum Wage

HMRC have released a webinar to help employers ensure you are paying at least the national minimum wage. Watch their pre-recorded webinar at https://twitter.com/HMRCbusiness/status/580678155150757888

Warning to all Employers

Supported by The Hair and Beauty Industry

To improve compliance HMRC has launched a National Minimum Wage campaign to drive voluntary behavioural change.

The campaign is an opportunity for employers to check they are paying their employees correctly and ensure any outstanding arrears are paid back to employees.

If employers tell HMRC about National Minimum Wage arrears right away, they won’t:

  • have to pay a penalty (100% of amount owed, up to a maximum of £20,000 per employee)
  • be named publicly on the list of employers not paying National Minimum Wage.

Go to HMRC’s National Minimum Wage campaign for full details.

Supported by the National Hairdressers Federation

As part of this ‘first of its kind’ campaign, HMRC and the Department for Business, Innovation and Skills (BIS), supported by the National Hairdressers’ Federation and the Hair and Beauty Industry Authority HABIA , will work with hair and beauty businesses to help them understand their pay obligations to their employees.

HMRC will provide employers with tailored tools and guidance to check if they are paying the correct amount, and put it right where they are not. Employers who take this opportunity to self-correct will not have to pay penalties, nor will they be ‘named and shamed’. If employers choose not to comply with their NMW obligations, HMRC will take action to ensure that employees are paid what they are owed.

All Employers Who Fail to Pay Minimum Wage

HMRC action to tackle employers who fail to pay the minimum wage identified £3.2 million in NMW arrears involving over 26,000 workers across a range of sectors in 2014/15 alone. The Government is committed to ensuring every employee receives at least the NMW, and HMRC is committed to helping workers to recover any money owed to them.

BIS analysis shows that 42% of businesses in the Hair and Beauty sector do not pay level 2 and level 3 apprentices the correct minimum wage – the highest underpayment rate of any sector. Those paying under the minimum wage now have a chance to put things right. If they fail to do so it could result in their business being publicly ‘named and shamed’ and facing a fine of up to £20,000 per employee.

Named and Shamed

75 more employers have been named and shamed for failing to pay their workers the National Minimum Wage.

Big brands have been named and shamed today for failing to pay the National Minimum Wage – find out why
https://audioboom.com/…/3017800-a-further-48-employers-name…

Between them, the named companies owed workers over £153,000 in arrears, and span sectors including hairdressing, fashion, publishing, hospitality, health and fitness, automotive, social care, and retail.

This brings the total number of companies named and shamed under the scheme, which was introduced in October 2013, to 285 employers, with total arrears of over £788,000 and total penalties of over £325,000.

Business Minister Nick Boles said:

“As a one nation government on the side of working people we are determined that everyone who is entitled to the National Minimum Wage receives it. When the new National Living Wage is introduced next April (2016) we will enforce robustly. This means that the hard-working people of the UK will get the pay rise they deserve.”

Hair and Beauty

There are nearly 55,000 businesses and 250,000 employees in the hair and beauty sector in the UK. The typical hourly rate of pay is £7.11, compared with £11.61 in other sectors. Employees can report under-payment of the NMW at Pay and work rights.

Hair and beauty businesses are being asked to come forward as part of the National Minimum Wage Campaign by:

  • Telling HMRC they want to take part in the campaign
  • Disclosing details of arrears now paid to their workers and confirming that wages worth at least the NMW are now paid to all workers.

For full details including ‘Common mistakes’ and ‘What to do if you haven’t been paying National Minimum Wage’ visit National Minimum Wage campaign.

CIPP commentIt was announced in Autumn Statement 2014 that funding for NMW enforcement activity in 2015-16 would be increased by £3 million. So whilst these high level announcements at the time are not directly operational, they do impact our workload in the long term. The Summer Budget 2015 announced that an additional £1 million would be invested to expand HMRCs data analytics and enforcement teams. This new campaign is the first step in expanding HMRCs compliance activities using ‘smart data’ – the new term we shall no doubt become very familiar with.The CIPP are supportive of this initiative. Samantha Mann, Senior Policy & Research Officer says “We believe that when you are responsible for paying employees you should ensure that they are paid ‘on time and accurately’. Additionally, in ensuring that employees receive the pay that they are legally entitled to, employers in business are enabled to compete on a more level playing field.”

 

The Credit Card Sales Campaign

credit card

The Credit Card Sales Campaign – From: Andrew Stephenson

Do you accept Debit and Credit Cards, are you sure that you have fully declared all your transactions in your return – here’s how to bring this matter to order with HMRC.

Credit Card Trap

The Credit Card Sales campaign provides an opportunity for individuals and companies in business that accept debit and credit cards and have not reflected all transactions in a return, to bring their affairs up to date in a simple, straightforward way and take advantage of the best possible terms. – contact the Pierce Tax Department for further details.
20130926 HMRC logo PF-hmrc-logo_1379417f

Credit Card Sales campaign: your guide to making a disclosure

 

Contents

  1. About the Credit Card Sales campaign
  2. How to make a notification and disclosure to HMRC
  3. Preparing your disclosure
  4. Paying HMRC
  5. After HMRC receives your disclosure
  6. Getting things right for the future
  7. General information

1. About the Credit Card Sales campaign

1.1 Introduction

HM Revenue and Customs (HMRC) believes that its customers want to pay the right amount of tax and so wants to help those that are not paying the correct amount to put that right.

The Credit Card Sales campaign provides an opportunity for individuals and companies in business that accept debit and credit cards and have not reflected all transactions in a return, to bring their affairs up to date in a simple, straightforward way and take advantage of the best possible terms.

If you owe tax on your income you must tell HMRC about any unpaid tax now. You will then have 4 months to calculate and pay what you owe. This guide explains how you can do that.

1.2 The scope of the Credit Card Sales campaign

The Credit Card Sales Campaign is an opportunity open to individuals and companies in business.

Examples could include:

  • a business accepting payments by card that might not have declared all of their income
  • a business that is trading and has not registered with HMRC and accept cards as one of their payment methods.

1.3 Disclosures outside of the Credit Card Sales campaign

You can still make a disclosure and put your tax affairs in order even if you are not within the scope of the Credit Card Sales campaign. You may be eligible under another campaign. To find out whether you fall within any other Campaign you need to check HMRC campaigns or contact the helpline on Telephone: 0300 123 9272.

If your disclosure cannot be made under a current open campaign the terms offered will not be available. However, if you make a full and voluntary disclosure of all unpaid liabilities in these circumstances you can usually expect a lower penalty than HMRC would otherwise seek if they raised an enquiry or compliance check without the disclosure.

For all other disclosures you should telephone the Voluntary Disclosure Helpline on Telephone: 0300 123 1077. This is a helpline specifically designed to help you if you do not fall within the scope of an ongoing campaign but wish to make a voluntary disclosure.

1.4 How to take part in the Credit Card Sales campaign

To take part in the Credit Card Sales campaign you should:

  • tell HMRC that you want to take part in the Credit Card Sales campaign (Notify)
  • tell HMRC about all income, gains, tax and duties you’ve not previously told them about (Disclose)
  • make a formal offer
  • pay what you owe
  • help HMRC as much as you can if they ask you for more information

To benefit from the reduced penalties offered HMRC will take account of the level to which you have helped them and the accuracy of the information you provided.

1.5 What’s in it for me?

Regardless of whether the errors were due to misunderstanding the rules or deliberately avoiding paying the right amount it is better to come to HMRC and admit any failures and or inaccuracies rather than wait until HMRC uncovers those errors.

The Credit Card Sales campaign offers the best possible terms available to get your tax affairs in order. You can take advantage of these by notifying your intention to participate and make a full disclosure and payment.

When you make your disclosure you must tell HMRC how much penalty you believe you should pay. What you pay will depend on why you have failed to disclose your income. If you have deliberately kept information from HMRC you will pay a higher penalty than if you have simply made a mistake.

You may not have to pay any penalty at all but if you do it is likely to be lower than it would be if HMRC finds out you have not paid enough tax.

If you have completed your Income Tax Self Assessment or Corporation Tax Self Assessment tax returns within the appropriate time limits, but have made a mistake when declaring your income, the number of years you will need to pay for will depend on the reasons you are behind with your tax affairs. This can be up to either 4, 6 or 20 years.

If however you do not come forward and HMRC finds later that you are behind with your tax, it may be harder to convince them that it was not a deliberate act. The law allows HMRC to go back up to 20 years and in serious cases HMRC may carry out a criminal investigation.

This is an opportunity to stop worrying about what might happen; have certainty about what you owe and get things right for the future.

1.6 If you have undisclosed liabilities and choose not to disclose

HMRC is targeting tax evasion through Debit and Credit Card Sales and will use information it holds on its digital intelligence systems to identify taxpayers who might not have declared all their income. This will involve HMRC carrying out checks or enquiries to resolve. The customers involved will not then be able to make use of the opportunity offered as part of this campaign Where additional taxes are due HMRC will usually charge higher penalties than those available under the Credit Card Sales campaign. The penalties could be up to 100% of the unpaid liabilities, or up to 200% for offshore related income.

In serious cases HMRC may consider starting a criminal investigation, in line with their [criminal investigation policy[(http://www.hmrc.gov.uk/prosecutions/crim-inv-policy.htm).

2. How to make a notification and disclosure to HMRC

2.1 Notification

You must tell HMRC of your intention to make a disclosure. You need to do this as soon as you become aware that you owe tax on your undeclared income.

At this stage, you only need to tell HMRC that you will be making a disclosure.

You don’t need to provide any details of the undisclosed income or the tax you believe you owe.

You can tell HMRC about a disclosure you will be making:

  • about your own tax affairs or your company’s tax affairs (if you are a director, or company secretary)
  • on behalf of someone else (for example if you are a tax adviser or personal representative)

You can’t include details for more than one person and or company on a disclosure. For example if a husband and wife both have undisclosed income they must complete separate disclosures, each showing the share of the income they need to disclose. A separate notification is required for each person. Similarly if a disclosure is required for a company and for a director, this should be on two separate disclosures.

You can notify:

HMRC will note your details if you telephone or they will send an email if you notify online and agree to an electronic acknowledgement. Please be aware that your form will be sent over an internet channel which does not have security protection. Information you send to HMRC is at your own risk. Later, HMRC will write to you to confirm your unique Disclosure Reference Number to use whenever you contact them about the Credit Card Sales campaign.

You will also be given a Payment Reference Number to use when paying what you owe.

If after you have notified you realise you no longer need to make a disclosure you must tell HMRC by calling the Credit Card Sales Helpline on Telephone 0300 123 9272. If you don’t HMRC will take follow up action to secure a disclosure from you.

2.2 Disclosure

You can do this as soon as you have your Disclosure Reference Number but you must disclose within 4 months of the date you receive your notification acknowledgement.

You can make a disclosure:

  • about your own tax affairs or your company’s tax affairs (if you are a director, or company secretary)
  • on behalf of someone else (for example if you are a tax adviser or personal representative)

You can make your disclosure by:

If you are not submitting your form online you should post the completed disclosure form to:

HMRC Local Compliance Centres Credit Card Sales campaign S0790 Po Box 3900 Glasgow G70 6AA

When you send your disclosure you must pay what you owe.

Please make sure that HMRC receives your disclosure and payment by the date stated on your notification acknowledgement. If you cannot pay what you owe by the deadline given you must have made payment arrangements with HMRC (contact the Helpline Telephone: 0300 123 9272) by that date.

If you do not do this you will not be able to make a disclosure under the Credit Card Sales Campaign and will not receive the certainty of terms and conditions within it.

3. Preparing your disclosure

3.1 How to calculate what you owe

Depending on your circumstances this could be simple or complicated and you may want to seek independent professional advice. Although you have 4 months from the date you receive your notification acknowledgement to make your disclosure, you should start gathering together your information and records as early as possible. HMRC cannot provide advice on calculating how much you should pay.

You’ll need to work out the total income for each year you have previously failed to tell HMRC about. You don’t need to include any income in your disclosure that you’ve already declared. This is because tax should already have been paid on this income.

You will then need to deduct the allowable expenses from your total income in order to work out your taxable profit (“income”). Not all of the expenses you incur will be allowable as a deduction. You should not include any expenses in your disclosure that you’ve previously included in a tax return or earlier correction.

Once you have calculated the income you need to disclose, you will need to work out how much tax you owe on that income. The rates of income tax you will pay depend on how much income you earn above your Personal Allowance, which is an annual amount of tax free income.

If you have already received PAYE income and/or told HMRC about some other income and are now disclosing additional income for any year you need to make sure that you take this into account in your calculations.

If you or your partner are receiving or have recently made a claim for tax credits you should still make a disclosure but tick the appropriate box on your disclosure form. The information will be passed to the tax credit office to consider. You will be notified separately of any changes that may be required to the amount of tax credits you receive for the relevant years. If you have made a joint claim for tax credits you may need to tell your partner that the award may be adjusted as a result of your disclosure.

Companies (and other organisations including clubs, societies, associations and other unincorporated bodies.) will need to determine the amount of Corporation Tax to disclose on the understated profit arising from this undeclared income. The rate of Corporation Tax payable will depend on circumstances. You will have to consider notifying Companies House if you have submitted accounts that require amendment.

3.2 If you don’t have all the business records you need to make your disclosure

If your records are incomplete you should make your best estimate of the undisclosed income and gains and use this to make your disclosure. HMRC may ask you to explain how you have worked out any estimates you have used, so you need to keep your calculations.

If you have your bank statements for the period of your disclosure they will probably help. If you don’t have them HMRC recommends you contact your bank as soon as possible to get copies.

If you can’t get copy statements at all, you should work out your income by using more recent statements as a guide to your income and expenditure. HMRC may ask you to explain why you couldn’t get copy statements.

If you have not kept proper business records you should begin to do so immediately. This opportunity is your chance to put things right from now on. If HMRC finds in the future that you have failed to keep appropriate records, they can penalise you up to £3,000.

3.3 Income that should be included in your disclosure

A condition of taking part in the Credit Card Sales campaign is that you include all of the income you have previously not told HMRC about in your disclosure.

You need to tell HMRC about any income that has not been previously declared. The income you need to include in your disclosure will depend on the tax year it relates to and the reason why you have not told HMRC about this income before.

Income earned in either the current tax year or the year prior to the current tax year

Any income received in the current tax year should not be included in your disclosure. If you are not registered for Self-Assessment you will need to register now either for Income Tax or in the case of Companies you must give notice of coming within charge of Corporation Tax.

A tax return or notice to file a tax return will be issued to you shortly after the end of the current tax year. You should report this income on that tax return by the deadline. There are different deadlines for individuals and companies.

The income you received in the year prior to the current tax year will also need to be included on a tax return rather than in your disclosure. If you have submitted the previous year’s tax return you can make an amendment within 12 months of the statutory filing date’

Income tax returns

Income Tax returns usually need to be submitted by either the 31 October or 31 January following the end of the tax year, depending on whether the return is submitted online or not. It is therefore likely that for current and prior year, you will still have time to submit an accurate tax return including this income.

For income tax a tax year starts on 6th April each year and runs to the following 5th April. The current tax year is the year in which the current date falls.

For example if you are registered for Income tax self assessment and if today’s date is 12 November 2014 the current tax year starts 6 April 2014 and ends 5 April 2015. This income should be included on the tax return for tax year ending 5 April 2015 which must be filed online by 31 January 2016 or by 31 October 2015 if submitted in paper form. The income for the tax year ending 5 April 2014 should be submitted on a tax return online no later than 31 January 2015. The income for both years should not be included in the disclosure.

Income tax for tax year ended 5 April 2011 and later years

If you were registered for Self Assessment prior to tax year ending 5 April 2011 and have not submitted tax returns for this or any later year you should complete these and submit them rather than include the years in your disclosure. You will be liable for any penalties that are due for the late submission of these returns.

If you have not been issued with tax returns for tax year ending 5 April 2011 and later or have already submitted them and now wish to report previously undeclared income you can include income for these years in your disclosure. Remember that the income for both the current year and the year prior to that should not be included in your disclosure.

Income tax for tax year ended 5 April 2010 and earlier years

Income for tax years ended 5 April 2010 and earlier can be included in your disclosure.

Company tax returns

A Company’s tax returns should be submitted within 12 months from the accounting period end date. More information can be found on the internet the deadlines and requirements for Corporation Tax.

If your Company Tax returns are outstanding, you should file all outstanding tax returns that are within 4 years from the end of the accounting period. Income for earlier years can be included in your disclosure.

If your Company has come to within the charge to Corporation Tax and if today’s date is 12 November 2014 and your corporation tax accounting period ends on the 31 March 2015, you must pay the Corporation Tax for that period by 1 January 2016 and file your Company Tax Return for that period by 31 March 2016. The profits chargeable to corporation tax for the accounting period ended 31 March 2014 should be submitted on a tax return online no later than 31 March 2015. The profits chargeable to corporation tax for both years should not be included in the disclosure.

HMRC’s internet page Introduction to Corporation Tax will provide you with more information.

3.4 How many years will I need to include in my disclosure?

This depends on why things went wrong.

If you are taking part in the Credit Card Sales campaign you will know why you haven’t previously told HMRC about your income or paid the right amount of tax.

You will need to understand when you should have told HMRC that you were receiving this income as this will have a bearing on the number of years that you will now need to disclose.

HMRC also asks you to decide whether you made an error despite taking reasonable care, whether you were careless, or whether it was something you did deliberately. How much you pay will depend on the answers to those questions.

If you failed to notify HMRC that you had started in business

When you started to receive income, and you are an individual (including individuals within a partnership), the latest you should tell HMRC is 5 October after the end of the tax year for which you start to receive that income. If, for example, you have tax to pay on income in the tax year ended 5 April 2014, you need to let HMRC know by 5 October 2014.

HMRC sends a newly formed limited company form CT41G (Corporation Tax – Information for New Companies) within a few days of the company being registered at Companies House. This form is usually sent by post to your company’s registered office. However, even if you don’t receive this form you must still tell HMRC within three months of your company becoming active, for example by starting business activity or starting to trade. The best way to do this is to use HMRC’s online service.

If you failed to register for a Self Assessment tax return by the appropriate deadline you will have to pay HMRC what you owe up to a maximum of 20 years.

If you have taken reasonable care

If you registered for a Self Assessment tax return by the appropriate deadline, have taken care to make sure your tax affairs were correct but you have still paid too little, you will only have to pay HMRC what you owe for a maximum of 4 years. This means you:

  • will need to make sure that your tax affairs for the current and later tax years are accurately reported on tax returns by the appropriate deadlines
  • will need to make sure that your tax affairs for the year prior to the current tax year are reported on the tax return that was issued to you for that year by the appropriate deadline
  • have to complete the disclosure form and pay HMRC what you owe for the 3 years prior to this

If you were careless

If you registered for a Self Assessment tax return by the appropriate deadline but you have paid too little because you were careless, you will have to pay HMRC what you owe for a maximum of 6 years. This means you:

  • will need to make sure that your tax affairs for the current and later tax years are accurately reported on tax returns by the appropriate deadlines
  • will need to make sure that your tax affairs for the year prior to the current tax year are reported on the tax return that was issued to you for that year by the appropriate deadline
  • have to complete the disclosure form and pay HMRC what you owe for the 5 years prior to this

If you deliberately misled HMRC about this income

If you have deliberately paid too little tax you will have to pay HMRC what you owe for a maximum of 20 years.

3.5 Other liabilities you should include in your disclosure

Other Income liabilities including non- business income

You must include all income and gains in your disclosure where you have paid too little tax. This may include:

  • investment income not taxed before you receive it, for example, interest
  • taxed income where additional tax is payable.
  • Income from property or land rental etc (less the expenses relating to that income) however, if your only undeclared income is from residential letting you should use the Let Property campaign to disclose this.

Loans to directors – Corporation Tax Act 2010, Section 455

If you’re a company director and take money out of your company that’s not a salary or a dividend – over and above any money you’ve put in – you’re classed as having received the benefit of a director’s loan. If this applies, the company may have tax to pay.

When you pay off a director’s loan on which your company has paid Corporation Tax, your company may be able to reclaim that amount of Corporation Tax paid, you should contact the campaign helpline.

However, if you are disclosing on behalf of a company that is entitled to claim relief under Section 458 CTA 2010 Telephone: 0300 123 9272 immediately for an appropriate offer letter.

Capital Gains income

You must disclose all capital gains which you have not previously declared. For example, capital gains made on the disposal of investments, such as land, property, shares, stocks, bonds, goodwill.

A company will include its Chargeable Gains on its Company tax return.

Employer income

If you employed anyone, you may have to pay some tax and national insurance contributions (Pay As You Earn) in respect of what you paid to your employees. You need to include this on your disclosure form.

3.6 Other potential liabilities you can tell us about in your disclosure

You cannot provide details of the liabilities below on your disclosure form however please tick the relevant box in the other potential liability section of the form and follow the guidance contained within the disclosure form and below. The campaigns team will liaise with the relevant department to confirm you successfully resolved any issues regarding these liabilities.

VAT issues

If you want to make a disclosure of a VAT matter because:

  • you have exceeded the VAT threshold and need to register, then you can either use HMRC’s online services or make a postal application Most applications for VAT registration can be completed online but there are some circumstances where a postal application is required. For all standard registration applications, please send your completed form to the VAT Registration Service, Crown House, Birch Street, Wolverhampton, WV1 4JX
  • you have made an error on a VAT return you have submitted then you can correct certain errors, subject to conditions, by adjusting your VAT Return. Please refer to Notice 700/45 (July 2013) “How to correct VAT errors and make adjustments or claims”)
  • if you do not meet the conditions for making adjustments on the return then the adjustment must be made in writing. You can notify any error in writing including those eligible for adjustment on a VAT return. The simplest way is to use form VAT 652 ‘Notification of Errors in VAT Returns’

You can include the details in a letter instead and post to the:

VAT Error Correction Team HMRC Regian House James Street Liverpool L75 1AD

Class 2 National Insurance Contributions (NIC)

If you are self-employed but have not yet registered to pay Class 2 NIC you need to do so immediately so you do not lose out on future benefits.

Trusts, Inheritance tax and tax during Administration Periods

If you wish to make a disclosure of Inheritance Tax, trust or administration period liabilities please write to HMRC at

Trusts and Estates Risk Team Ferrers House PO Box 38 Castle Meadow Road Nottingham NG2 1BB

Tax Credits

What if you or your partner are receiving or have recently made a claim for Tax credits?

You should still make a disclosure but also tick the appropriate box on the disclosure form. The information will be passed to the Tax Credit office to consider. You will be notified separately of any changes that may be required to the amount of Tax credits you receive or have received for the relevant year(s).

If you believe you may have liabilities for any other taxes and or duties not mentioned above please ring the helpline for assistance.

3.7 Interest

HMRC charges interest from the date tax is due until the date it is actually paid. Interest is calculated on a daily basis. Any additional tax that is included in your disclosure will be late and so will attract an interest charge. If you fail to include the correct interest your disclosure will be rejected as it will be incomplete.

To assist individuals there is a 6 year tax, interest and penalty calculator and a 19 year interest and penalty calculator available to help you establish the correct amount of interest due. It should only be used if your tax affairs are straightforward and you are entitled to only basic personal allowances

Companies can refer to HMRC interest rates to establish the amount of interest payable.

3.8 Penalties

HMRC charges penalties on any additional tax due as a result of you having:

  • sent HMRC an incorrect tax return
  • not told HMRC that you have started to be liable to tax

HMRC does not charge interest on these penalties unless they are paid late.

The penalty is a percentage of the additional amount due. Penalties can be up to 100% of the tax liability. However, for the Credit Card Sales campaign, if you submit an accurate voluntary disclosure, the rates are usually 0%, 10% or 20% depending on the circumstances. Higher penalties of up to 200% can be charged for an offshore liability.

Penalties that apply to offshore income and gains depend on the category that the offshore territory falls into. This includes your disclosure. Penalties that apply to offshore can be higher. Please contact the helpline if your disclosure includes an offshore matter.

The tables below show the penalty HMRC will charge if you:

  • do take part in the Credit Card Sales campaign
  • don’t take part and HMRC later find that you have not told them about all your income and paid enough tax

Although the rate of the penalties will vary depending upon your circumstances, they will usually be lower if you take part in the Credit Card Sales campaign than they would be if you do not.

If you haven’t declared the correct tax payable to HMRC despite taking reasonable care with your tax affairs, you will not pay any penalties at all. HMRC does not expect many people’s circumstances to fall within this category.

If you haven’t paid enough tax despite taking reasonable care with your affairs or there is anything else you think HMRC need to consider concerning the penalties you have to pay, please phone the helpline before making your disclosure.

Penalty if you come forward in this Credit Card Sales Campaign

Penalties for making an inaccurate return

Circumstance Tax Years up to year ended 5 April 2008 or Accounting period ending on or before 31 March 2008 Tax years ending 5 April 2009 and later years or Accounting period beginning on or after 1 April 2008
You sent HMRC a return showing less tax payable than the correct amount because you had been careless No penalty No penalty
You sent HMRC a return knowing it showed less tax payable than the correct amount (You may have to pay penalties of up to 100% of the tax due if you tried to conceal the inaccuracy) 20% of the tax due 20% of the tax due

Penalties for failing to tell us about your liability to tax

Circumstance Tax Years up to 5 April 2009 or Accounting periods ending on or before 31 March 2010 Tax years ending 5 April 2010 and later years or Accounting periods ending on or after 1 April 2010
You started trading, made a gain, started letting property, or received other untaxed income and did not tell HMRC that you needed to make a return, but you weren’t deliberately trying to keep the information from HMRC 10% of the tax due 10% of the tax due or 0% if you advise HMRC within 12 months from when the tax first became unpaid
You deliberately failed to tell HMRC you had started trading, made a gain, started letting property, or received other untaxed income and needed to make a return. (You may have to pay penalties of up to 100% of the tax due if you tried to conceal the failure). 20% of the tax due 20% of the tax due

Penalty if HMRC finds out you have not paid enough tax

Please note higher penalties of up to 200% can be charged in relation to inaccuracies involving offshore matters.

Penalties for making an inaccurate return

Circumstance Tax Years up to year ended 5 April 2008 or Accounting period ending on or before 31 March 2008 Tax years ending 5 April 2009 and later years or Accounting period beginning on or after 1 April 2008
You sent HMRC a return showing less tax payable than the correct amount because you had been careless No Penalty Between 15-30% of the tax due
You sent HMRC a return knowing it showed less tax payable than the correct amount. (You may have to pay penalties of up to 100% of the tax due if you tried to conceal the inaccuracy). Up to 100% of the tax due Between 35-70% of the tax due

Penalties for failing to tell us about your liability to tax

Circumstance Tax Years up to 5 April 2009 or Accounting periods ending on or before 31 March 2010 Tax years ending 5 April 2010 and later years or Accounting periods ending on or after 1 April 2010
You started trading, made a gain, started letting property, or received other untaxed income and did not tell HMRC that you needed to make a return, but you weren’t deliberately trying to keep the information from HMRC Up to 100% of the tax due Between 20-30% of the tax due or 10% if you advise HMRC within 12 months from when the tax first became unpaid
You deliberately failed to tell HMRC you had started trading, made a gain, started letting property, or received other untaxed income and needed to make a return (You may have to pay penalties of up to 100% of the tax due if you tried to conceal the failure). Up to 100% of the tax due Between 35-70% of the tax due

You may have to pay penalties of up to 100% (200% for offshore related income) of the tax due if you tried to conceal the extent of the undeclared tax. If this applies to you please call the helpline on Telephone: 0300 123 9272.

If HMRC thinks that you have not included the right penalty in your disclosure, they may reject it.

Individuals can use HMRC calculators to help you calculate the interest and penalties due on the income you are including in your disclosure.

If you are making a multiple year disclosure, you should include all years in a single calculation and not calculate each year on a separate, individual basis.

Use the tax and interest calculator (PDF 69K) to calculate what you owe going back 6 years. This will also help you in calculating the tax you owe. It should only be used if your tax affairs are straightforward and you are entitled to only basic personal allowances.

Use the 19 year calculator (PDF 143K) if you need to include more than 6 years in your disclosure. This will help you to calculate the interest and penalties you owe for the last 19 years. This calculator is for interest and penalty calculations only and will not help you calculate the income tax due.

Companies can refer to Corporation Tax rates and HMRC interest rates to establish the amount of tax and interest payable. Penalties can be calculated by reference to the tax understated and applying the appropriate penalty percentage as shown in the above table. Suggested steps to calculate the amount to be included in the disclosure are:

  • step 1 – Calculate additional Corporation Tax liability
  • step 2 – refer to Interest table
  • step 3 – apply correct interest to liability calculated in step 1
  • step 4 – Apply appropriate penalty to liability calculated in step 1

When HMRC checks your disclosure they will consider whether the penalty you have applied is reasonable. There is a space on the disclosure form where you can provide an explanation to assist them in reaching their decision. HMRC may need to contact you to ascertain the reasonableness of the penalty if no explanation is provided. If HMRC think the penalty applied is too low they may need to carry out a further check of your tax affairs. For example, HMRC may find it difficult to accept, without further enquiry, that someone in business for many years, earning significant amounts without telling HMRC, has not done this deliberately.

3.9 The Declaration

This is a very important part of your disclosure. You should only complete the declaration once you are certain that the disclosure is correct and complete and that you understand why you have been asked to include penalties in your disclosure.

3.10 The Offer

It is a condition of using the Credit Card Sales campaign that you make an offer for the full amount of everything you owe. The offer, together with HMRC’s acceptance letter to you will create a legally binding contract between you and HMRC. There is a letter of offer included in the disclosure forms which you should complete.

However, if you are disclosing on behalf of a company that is entitled to claim relief under Section 458 CTA 2010 Telephone: 0300 123 9272 immediately for an appropriate offer letter.

4. Paying HMRC

4.1 When you will have to pay

Unless you have contacted HMRC to agree additional time to pay, you should send your payment at the same time as you send your disclosure, but no later than the 4 month deadline given on your notification acknowledgement letter.

4.2 Payment Methods

Whichever way you pay, please make sure that you quote your Payment Reference Number. HMRC accepts payment by a range of methods but recommends that you make your payment electronically. Electronic payments are more efficient, secure and safer than payment by post.

4.3 If you cannot pay the full amount

HMRC expects you to pay what you owe when you make your disclosure.

If for some reason you cannot pay the full amount, you will need to let HMRC know as soon as possible and before you send in your disclosure. To do this, you should contact the helpline on Telephone: 0300 123 9272 Lines are open Monday to Friday 9:00am to 5:00pm.

When you phone, HMRC will want to talk to you about your current financial position so they can tell you what they think you should pay and when. To help HMRC decide, you will need to tell them:

  • your Disclosure Reference Number
  • how and when you intend to pay HMRC what you owe
  • what your current weekly/monthly income and outgoings are
  • what you own, including your home, other property/land, vehicles, investments, money in the bank etc
  • what you owe, including mortgages, loans, credit cards

If you cannot pay the full amount do not submit your disclosure or payment until you have spoken to HMRC.

5. After HMRC receives your disclosure

5.1 Accepting your disclosure

HMRC anticipates that the vast majority of disclosures will be accepted. If after checks HMRC is satisfied that you have made a full disclosure, they will accept it as quickly as possible.

5.2 Acknowledging your disclosure

When they receive your disclosure, HMRC will send you an acknowledgment as soon as possible. HMRC will then consider the disclosure under the terms of the Credit Card Sales campaign. If you haven’t received an acknowledgement within 2 weeks of sending your disclosure, please telephone the Credit Card Sales campaign Helpline on Telephone: 0300 123 9272.

HMRC expects most disclosures to be self explanatory but they may need to contact you or your tax adviser to clarify any points. You may also be asked to provide evidence of your circumstances to satisfy HMRC that your disclosure is complete. Your full co-operation is one of the conditions of using this opportunity and failure to co-operate may jeopardise acceptance of your offer.

5.3 Considering your disclosure

HMRC will review all disclosures. If after those checks are completed HMRC decide to accept your disclosure they will send you a letter accepting your offer. If HMRC cannot accept the disclosure they will contact you. If following their enquiries HMRC finds that a disclosure is materially incorrect they will seek significantly higher penalties. It is also possible that in exceptional circumstances an incomplete disclosure may be considered under HMRC Criminal Investigation Policy. In such cases the material in the disclosure could be used as evidence.

5.4 Disclosures that are unlikely to be accepted through the Credit Card Sales campaign

Certain disclosures are unlikely to be accepted under the Credit Card Sales campaign.

Disclosures that are found to be materially incorrect or incomplete when checked by HMRC are unlikely to be accepted under the Credit Card Sales campaign.

Also unlikely to be accepted are disclosures from customers where HMRC has opened an enquiry or compliance check before the customer has notified their intention to submit a disclosure under the campaign. Those who want to disclose liabilities under these circumstances should tell the person conducting the enquiry. A full and early disclosure will influence the amount of penalty HMRC seeks in the ongoing enquiry or investigation.

Instances involving disclosures where HMRC believes the money that is the subject of the disclosure is the proceeds of serious organised crime are not likely to be accepted. Examples of this include VAT fraud, VAT bogus registration fraud, organised tax credit fraud and instances where there is wider criminality (such as an ongoing police investigation).

Disclosures will not be accepted where a person’s inaccuracy or failure was a result of a deliberate action which they then tried to conceal.

An important factor for HMRC in deciding if they will carry out civil or criminal investigations into cases of fiscal fraud is whether the taxpayer(s) has made a complete and unprompted disclosure of any amounts evaded or improperly reclaimed. Whilst HMRC would consider each case on its merits a complete and unprompted disclosure would generally suggest that a civil (rather than criminal) investigation was appropriate.

Also, if you were eligible for any past HMRC disclosure opportunity and you did not disclose at that time, HMRC may find it hard to accept that anything you disclose through the Credit Card Sales campaign was not a result of something you did deliberately. HMRC would expect you to calculate your penalty and the number of years you should pay to reflect deliberate action. If you do not, HMRC may not accept your disclosure. You will be in this category if you have not yet come forward and would have been covered by a previous campaign.

5.5 If you disclose very serious tax problems

HMRC can’t offer immunity from prosecution but an important factor when they are deciding whether to carry out criminal investigations into cases of tax fraud is whether you have made a complete and unprompted disclosure of any amounts evaded or improperly reclaimed.

5.6 If you leave something important out of your disclosure

If after submitting your disclosure you realise you have missed something out, you should immediately contact HMRC to make an amendment. You can do this by contacting the helpline on Telephone: 0300 123 9272 or by forwarding your amendment in writing to the following address:

HMRC Local Compliance Centres Credit Card Sales campaign S0790 Po Box 3900 Glasgow G70 6AA

If HMRC receives information indicating that your disclosure was incorrect, they have the right to look at your tax affairs again. HMRC may write to you about the information they have received and if necessary, will send you assessments to collect any extra tax due. These penalties are likely to be higher than those offered by the Credit Card Sales campaign.

5.7 Information received after disclosure accepted

HMRC will continue to seek new information. They will use it to identify customers where a disclosure should have been made or where the disclosure made is not what was expected based on the information HMRC holds.

5.8 If I disclose this liability could HMRC publish details about me?

In certain circumstances HMRC is able to publish the details of those penalised for deliberately failing in particular tax obligations. If you come forward as part of this campaign you will earn the maximum reduction of any relevant penalties for the quality of disclosure, and HMRC won’t publish your details if you do all of the following:

  • notify HMRC that you are going to make a disclosure
  • make a full disclosure including full payment of tax owed which proves to be both accurate and complete before the deadline you are given for doing so
  • cooperate fully with HMRC if they ask you for any further information

HMRC may include you in a list of deliberate defaulters if you don’t follow these steps.

5.9 As an officer of the company could I be liable to pay a penalty

A company officer or officers may be liable to pay part, or all, of a company’s penalty for a deliberate inaccuracy, failure to notify or wrongdoing but only where the inaccuracy, failure or wrongdoing was attributable to the officer or officers.

And either the officer gained or attempted to gain personally from the offence, or the company is, or is likely, to become insolvent.

6. Getting things right for the future

Once you have submitted your disclosure HMRC expects you to keep your tax affairs in order in the future. This means that you should continue to accurately declare your income and gains for those years that fall after the latest year you include in your disclosure. You should ensure any tax returns that are issued to you are returned with accurate information by the appropriate deadlines.

7. General information

7.1 Help and advice

If you have any questions not covered by this guide please phone the Credit Card Sales campaign Helpline on Telephone: 0300 123 9272. Lines are open Monday to Friday, 9am to 5pm.

Further guidance on Self Assessment for income tax and Self Assessment for corporation tax is also available.

7.2 Customers with particular needs

If you need extra help to deal with the Credit Card Sales campaign Team please get in touch. HMRC can help if:

  • english is not your first language
  • you want a copy of this guidance in Welsh
  • you would like HMRC to use a certain format to communicate with you – for example braille or Text Relay
  • you would like a copy of this guidance in audio or large print

Contact the helpline on Telephone: 0300 123 9272 or +44 300 123 9272 if dialling from outside the UK (Monday to Friday, 9am to 5pm).

If you use Text Relay by Textphone, please dial 18001 + number. If you use Text Relay by Telephone please dial 18002 + number.

HMRC recognises that the above options might not meet the needs of some of their customers. If you believe that you require additional support and advice, you can contact the needs enhanced support services.

7.3 Your rights and obligations

HMRC’s customer charter (called Your Charter) explains what you can expect from HMRC and what HMRC expects from you.

7.4 What if you are unhappy with HMRC’s service?

If you are unhappy with HMRC’s service please phone the Credit Card Sales campaign Helpline on Telephone: 0300 123 9272 or write to HMRC at the address below:

HMRC Local Compliance Centres Credit Card Sales campaign S0790 Po Box 3900 Glasgow G70 6AA

7.5 Privacy and confidentiality policy

The full protection of the Human Rights Act will continue to apply to you and HMRC has a strict policy regarding the privacy and confidentiality of customers’ personal information.

HMRC’s privacy policy in the Personal Information Charter.

7.6 Data Protection Act

HMRC is a Data Controller under the Data Protection Act 1998. HMRC holds information for the purposes specified in their notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

HMRC may get information about you from others, or they may give information to them. If HMRC does, it will only be as the law permits to:

  • check the accuracy of information
  • prevent or detect crime
  • protect public funds

HMRC may check information they receive about you with what is already in their records. This can include information provided by you, as well as by others such as other government departments or agencies and overseas tax and customs authorities. HMRC will not give information to anyone outside HMRC unless the law permits them to do so.

For more information see HMRC’s Data Protection – Information Charter.

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VAT payment discounts

VAT prompt payment discounts

From: Andrew Stephenson

Business are reminded that they only have until 31 March 2015 to take advantage of the current rules on accounting for VAT where a discount for prompt payment is offered.

20130926 HMRC logo PF-hmrc-logo_1379417f

Under the current rules, when an invoice is issued showing details of a discount for prompt payment they only have to account to HM Revenue & Customs for the VAT due on the discounted price whether or not their client or customer takes advantage of it.

 VAT Discount Link

Discounts, vouchers, special offers and VAT

There are particular rules for accounting for VAT on promotions such as multi-buy offers eg, buy-one-get-one-free (BOGOF), coupons, vouchers and manufacturers’ support of retail promotions. If any of your goods or services are discounted, you must charge VAT on the discounted price rather than the full price. If you give away products, you must usually account for, and pay VAT on, the full value or cost of the gift, although there are some exceptions.

From 1 April next year however the rules are changing so that VAT will have to be accounted for on the amount actually received in payment.

If you wish to know more about this contact our senior VAT Manager, Andrew Stephenson.

SECURITY WARNING! – Heartbleed Bug

Security Warning – Heartbleed Bug

From:    Stuart Waddington

An encryption flaw called the Heartbleed bug is already being called one of the biggest security threats the Internet has ever seen. Writing about Heartbleed, security expert Bruce Schneier says “‘catastrophic’ is the right word. On the scale of 1 to 10, this is an 11.”

Heartbleed

The internet has a set of protocols for handling secure website traffic, commonly referred to as SSL (Secure Socket Layer). One common implementation of this protocol is known as OpenSSL which runs on around 66% of the web including popular sites such as gmail and facebook.

Vulnerable versions of the OpenSSL software are now being patched with updates, you can check to see if a site remains vulnerable by using the Heartbleed test website.

What is not clear at this stage, is if any sensitive information has been harvested. Lots of software packages began using the vulnerable version of OpenSSL in December 2011, so for two years any website which used this technology was susceptible and the nature of this particular bug prevents site administrators from detecting if their sites were compromised during this time.

At this point there is no indication that hackers knew about the exploit before this week, there have been no confirmed password lists stolen. However, it is still a good idea to change all of your passwords as information could have been harvested from vulnerable websites during this period.

Although changing your password regularly is always good practice, if a site or service hasn’t yet patched the problem, your information will still be vulnerable. It’s worth waiting to make sure that each service you use has patched its servers using the above link before changing your password.

As always a strong password is important and the Heartbleed bug has also highlighted how important it is to use different passwords on each website that you use.

 

IT Warning! Microsoft XP – end of life

IT warning!    Microsoft XP – end of life

By: Margaret Scott

XP – end of life

Windows XP and Office 2003  will go out of support on April 8, 2014.

Microsoft have a support policy giving a minimum of 10 years. XP first appeared in 2001 so it is already 12 years old.

It doesn’t mean XP will suddenly stop working. You can keep using it if you want, but Microsoft won’t be releasing any more security updates so your computer will be at risk.

XP hasn’t got some of the security features in newer Windows versions and can’t support the latest version of Internet Explorer. Web developers struggle writing for XP Internet Explorer versions 6 ,7, 8  and it is difficult for all software providers to make sure their products work on all Windows versions.

For many it may mean purchasing a new computer as well as upgrading software.

My advice would be to start planning now as April is only  6months away.

Here at Pierce we are commencing a rolling program so that all our pc’s and laptops are upgraded prior to April 2014. We are also Microsoft Partners and are installing Office 365 2013 version. Windows 8 isn’t compatible with some of our specialist accountancy software and Windows 8 is certainly a steep learning curve if used directly after XP so most of our staff may retain Windows 7 rather than Windows 8 as their operating system.

Some other end of life dates:-

Windows Vista – April 11 2017

Windows 7 – January 14 2020

Windows 8 – January 10 2023

The History of Windows – quotes from Microsoft

Highlights from the first 25 years  

1975–1981: Microsoft boots up

Getting started: Microsoft co-founders Paul Allen (left) and Bill Gates

It’s the 1970s. At work, we rely on typewriters. If we need to copy a document, we likely use a mimeograph or carbon paper. Few have heard of microcomputers, but two young computer enthusiasts, Bill Gates and Paul Allen, see that personal computing is a path to the future.

In 1975, Gates and Allen form a partnership called Microsoft. Like most start-ups, Microsoft begins small, but has a huge vision—a computer on every desktop and in every home. During the next years, Microsoft begins to change the ways we work.

The dawn of MS‑DOS

In June 1980, Gates and Allen hire Gates’ former Harvard classmate Steve Ballmer to help run the company. The next month, IBM approaches Microsoft about a project code-named “Chess.” In response, Microsoft focuses on a new operating system—the software that manages, or runs, the computer hardware and also serves to bridge the gap between the computer hardware and programs, such as a word processor. It’s the foundation on which computer programs can run. They name their new operating system “MS‑DOS.”

When the IBM PC running MS‑DOS ships in 1981, it introduces a whole new language to the general public. Typing “C:” and various cryptic commands gradually becomes part of daily work. People discover the backslash (\) key.

MS‑DOS is effective, but also proves difficult to understand for many people. There has to be a better way to build an operating system.

Geek trivia: MS‑DOS stands for Microsoft Disk Operating System.

1982–1985: Introducing Windows 1.0

Microsoft works on the first version of a new operating system. Interface Manager is the code name and is considered as the final name, but Windows prevails because it best describes the boxes or computing “windows” that are fundamental to the new system. Windows is announced in 1983, but it takes a while to develop. Skeptics call it “vaporware.”

On November 20, 1985, two years after the initial announcement, Microsoft ships Windows 1.0. Now, rather than typing MS‑DOS commands, you just move a mouse to point and click your way through screens, or “windows.”  Bill Gates says, “It is unique software designed for the serious PC user…”

There are drop-down menus, scroll bars, icons, and dialog boxes that make programs easier to learn and use. You’re able to switch among several programs without having to quit and restart each one. Windows 1.0 ships with several programs, including MS‑DOS file management, Paint, Windows Writer, Notepad, Calculator, and a calendar, card file, and clock to help you manage day-to-day activities. There’s even a game—Reversi.

Geek trivia: Remember floppy disks and kilobytes? Windows 1.0 requires a minimum of 256 kilobytes (KB), two double-sided floppy disk drives, and a graphics adapter card. A hard disk and 512 KB memory is recommended for running multiple programs or when using DOS 3.0 or higher.

1987–1992: Windows 2.0–2.11—More windows, more speed

On December 9, 1987 Microsoft releases Windows 2.0 with desktop icons and expanded memory. With improved graphics support, you can now overlap windows, control the screen layout, and use keyboard shortcuts to speed up your work. Some software developers write their first Windows–based programs for this release.

Windows 2.0 is designed for the Intel 286 processor. When the Intel 386 processor is released, Windows/386 soon follows to take advantage of its extended memory capabilities. Subsequent Windows releases continue to improve the speed, reliability, and usability of the PC.

In 1988, Microsoft becomes the world’s largest PC software company based on sales. Computers are starting to become a part of daily life for some office workers.

Geek trivia: Control Panel makes its first appearance in Windows 2.0.

1990–1994: Windows 3.0–Windows NT—Getting the graphics

On May 22, 1990, Microsoft announces Windows 3.0, followed shortly by Windows 3.1 in 1992. Taken together, they sell 10 million copies in their first 2 years, making this the most widely used Windows operating system yet. The scale of this success causes Microsoft to revise earlier plans. Virtual Memory improves visual graphics. In 1990 Windows starts to look like the versions to come.

Windows now has significantly better performance, advanced graphics with 16 colors, and improved icons. A new wave of 386 PCs helps drive the popularity of Windows 3.0. With full support for the Intel 386 processor, programs run noticeably faster. Program Manager, File Manager, and Print Manager arrive in Windows 3.0.

Windows software is installed with floppy discs bought in large boxes with heavy instruction manuals.

The popularity of Windows 3.0 grows with the release of a new Windows software development kit (SDK), which helps software developers focus more on writing programs and less on writing device drivers.

Windows is increasingly used at work and home and now includes games like Solitaire, Hearts, and Minesweeper. An advertisement: “Now you can use the incredible power of Windows 3.0 to goof off.”

Windows for Workgroups 3.11 adds peer-to-peer workgroup and domain networking support and, for the first time, PCs become an integral part of the emerging client/server computing evolution.

Windows NT

 When Windows NT releases on July 27, 1993, Microsoft meets an important milestone: the completion of a project begun in the late 1980s to build an advanced new operating system from scratch. “Windows NT represents nothing less than a fundamental change in the way that companies can address their business computing requirements,” Bill Gates says at its release.

Unlike Windows 3.1, however, Windows NT 3.1 is a 32-bit operating system, which makes it a strategic business platform that supports high-end engineering and scientific programs.

Geek trivia: The group that develops Windows NT was originally called the “Portable  Systems” team.

1995–2001: Windows 95—the PC comes of age (and don’t forget the Internet)

On August 24, 1995, Microsoft releases Windows 95, selling a record-setting 7 million copies in the first five weeks. It’s the most publicized launch Microsoft has ever taken on. Television commercials feature the Rolling Stones singing “Start Me Up” over images of the new Start button. The press release simply begins: “It’s here.”

This is the era of fax/modems, e‑mail, the new online world, and dazzling multimedia games and educational software. Windows 95 has built-in Internet support, dial-up networking, and new Plug and Play capabilities that make it easy to install hardware and software. The 32-bit operating system also offers enhanced multimedia capabilities, more powerful features for mobile computing, and integrated networking.

At the time of the Windows 95 release, the previous Windows and MS‑DOS operating systems are running on about 80 percent of the world’s PCs. Windows 95 is the upgrade to these operating systems. To run Windows 95, you need a PC with a 386DX or higher processor (486 recommended) and at least 4 MB of RAM (8 MB of RAM recommended). Upgrade versions are available for both floppy disk and CD-ROM formats. It’s available in 12 languages.

Windows 95 features the first appearance of the Start menu, taskbar, and minimize, maximize, and close buttons on each window.

Catching the Internet wave

In the early 1990s, tech insiders are talking about the Internet—a network of networks that has the power to connect computers all over the world. In 1995, Bill Gates delivers a memo titled “The Internet Tidal Wave,” and declares the Internet as “the most important development since the advent of the PC.”

In the summer of 1995,  the first version of Internet Explorer is released. The browser joins those already vying for space on  the World Wide Web.

Geek trivia: In 1996, Microsoft releases Flight Simulator for Windows 95—the first time in its 14-year history that it’s available for Windows.

1998–2000: Windows 98, Windows 2000, Windows Me

Released on June 25, 1998, Windows 98 is the first version of Windows designed specifically for consumers. PCs are common at work and home, and Internet cafes where you can get online are popping up. Windows 98 is described as an operating system that “Works Better, Plays Better.”

With Windows 98, you can find information more easily on your PC as well as the Internet. Other improvements include the ability to open and close programs more quickly, and support for reading DVD discs and universal serial bus (USB) devices. Another first appearance is the Quick Launch bar, which lets you run programs without having to browse the Start menu or look for them on the desktop.

Geek trivia: Windows 98 is the last version based on MS‑DOS.

Windows Me: Designed for home computer use, Windows Me offers numerous music, video, and home networking enhancements and reliability improvements compared to previous versions.

First appearances: System Restore, a feature that can roll back your PC software configuration to a date or time before a problem occurred. Movie Maker provides users with the tools to digitally edit, save, and share home videos. And with Microsoft Windows Media Player 7 technologies, you can find, organize, and play digital media.

Geek trivia: Technically speaking, Windows Me was the last Microsoft operating system to be based on the Windows 95 code base. Microsoft announced that all future operating system products would be based on the Windows NT and Windows 2000 kernel.

Windows 2000 Professional

More than just the upgrade to Windows NT Workstation 4.0, Windows 2000 Professional is designed to replace Windows 95, Windows 98, and Windows NT Workstation 4.0 on all business desktops and laptops. Built on top of the proven Windows NT Workstation 4.0 code base, Windows 2000 adds major improvements in reliability, ease of use, Internet compatibility, and support for mobile computing.

Among other improvements, Windows 2000 Professional simplifies hardware installation by adding support for a wide variety of new Plug and Play hardware, including advanced networking and wireless products, USB devices, IEEE 1394 devices, and infrared devices.

Geek trivia: The nightly stress test performed on Windows 2000 during development is the equivalent of three months of run time on up to 1,500 computers.

2001–2005: Windows XP—Stable, usable, and fast

On October 25, 2001, Windows XP is released with a redesigned look and feel that’s centered on usability and a unified Help and Support services center. It’s available in 25 languages. From the mid-1970s until the release of Windows XP, about 1 billion PCs have been shipped worldwide.

For Microsoft, Windows XP will become one of its best-selling products in the coming years. It’s both fast and stable. Navigating the Start menu, taskbar, and Control Panel are more intuitive. Awareness of computer viruses and hackers increases, but fears are to a certain extent calmed by the online delivery of security updates. Consumers begin to understand warnings about suspicious attachments and viruses. There’s more emphasis on Help and Support.

Windows XP Home Edition offers a clean, simplified visual design that makes frequently used features more accessible. Designed for home use, Windows XP offers such enhancements as the Network Setup Wizard, Windows Media Player, Windows Movie Maker, and enhanced digital photo capabilities.

Windows XP Professional brings the solid foundation of Windows 2000 to the PC desktop, enhancing reliability, security, and performance. With a fresh visual design, Windows XP Professional includes features for business and advanced home computing, including remote desktop support, an encrypting file system, and system restore and advanced networking features. Key enhancements for mobile users include wireless 802.1x networking support, Windows Messenger, and Remote Assistance.

Windows XP has several editions during these years:

  • Windows XP 64-bit Edition (2001) is the first Microsoft operating system for 64-bit processors designed for working with large amounts of memory and projects such as movie special effects, 3D animations, engineering, and scientific programs.
  • Windows XP Media Center Edition (2002) is made for home computing and entertainment. You can browse the Internet, watch live television, enjoy digital music and video collections, and watch DVDs.
  • Windows XP Tablet PC Edition (2002) realizes the vision of pen-based computing. Tablet PCs include a digital pen for handwriting recognition and you can use the mouse or keyboard, too.

Geek trivia: Windows XP is compiled from 45 million lines of code.

2006 Windows Vista is released in 2006 with the strongest security system yet.

User Account Control helps prevent potentially harmful software from making changes to your computer. In Windows Vista Ultimate, BitLocker Drive Encryption provides better data protection for your computer, as laptop sales and security needs increase. Windows Vista also features enhancements to Windows Media Player as more and more people come to see their PCs as central locations for digital media. Here you can watch television, view and send photographs, and edit videos.–2008:

Windows Vista—Smart on security

Design plays a big role in Windows Vista, and features such as the taskbar and the borders around windows get a brand new look. Search gets new emphasis and helps people find files on their PCs faster. Windows Vista introduces new editions that each have a different mix of features. It’s available in 35 languages. The redesigned Start button makes its first appearance in Windows Vista.

Geek trivia: More than 1.5 million devices are compatible with Windows Vista at launch.

2009: Windows 7

Windows 7 was built for the wireless world that arose in the late 2000s. By the time it was released, laptops were outselling desktops, and it had become common to connect to public wireless hotspots in coffee shops and private networks in the home.

Windows 7 included new ways to work with windows—like Snap, Peek, and Shake—which both improved functionality and made the interface more fun to use. It also marked the debut of Windows Touch, which let touchscreen users browse the web, flip through photos, and open files and folders.

Geek trivia: Windows 7 was evaluated by 8 million beta testers worldwide before it was released.

2012: Windows 8

Windows 8 is Windows reimagined from the chipset to the user experience. It functions as both a tablet for entertainment and a full-featured PC for getting things done. It introduces a totally new interface that works smoothly for both touch and mouse and keyboard. Windows 8 also includes enhancements of the familiar Windows desktop, with a new taskbar and streamlined file management.

Windows 8 features a Start screen with tiles that connect to people, files, apps, and websites. Apps are front and center, with access to a new place to get apps—the Windows Store—built right in to the Start screen.

Along with Windows 8, Microsoft also launched Windows RT, which runs on some tablets and PCs. Windows RT is designed for sleek devices and long battery life, and exclusively runs apps from the Windows Store. It also comes with a built-in version of Office that’s optimized for touchscreens.

Geek trivia: Power users will notice that Windows 8 has made the detection and correction of file system errors both more transparent and less intrusive.