The rules and regulations facing small companies increase almost daily. From company cars through to using your home for business use, the welter of forms combined with the level of information each company director needs to appreciate is endless. We have asked Wainwright Road-based accountants Crowther Beard to answer some of the most common questions which face Worcester firms.

Q. How will the proposed changes in company van tax affect me?

A. This is a question that faces many small companies where employees use vans to get to and from work, particularly when they have gone straight home from a job.

Where employees are provided with a company van and the employer has restricted its use to home-to-work travel, and any other private use is 'insignificant', there will no longer be a taxable benefit.

Examples of 'insignificant' include taking rubbish to the tip twice a year and slight detours from work to go to the dentist/doctor/shop.

However, using the van to do the weekly supermarket shopping, or using the vehicle to go on holiday or social activities would not be deemed "insignificant".

Where private use is totally unrestricted a taxable benefit of £500, or £350 if the van is four- plus years old at the end of the year, will continue to be assessed.

It is worth noting that from April 6, 2007, onwards where there is unrestricted private use the taxable benefit will increase to £3,000 and if private fuel is provided a further benefit of £500 will arise.

Q. What are the proposed changes in the Construction Industry Scheme next year?

A. There are currently many thousands of workers using the CIS, putting them outside the PAYE payroll system.

Under new legislation due to apply in April 2006 the onus will be on the hirer to satisfy itself that a subcontractor is genuinely self-employed.

The tax exemption certificates and CIS registration cards will go.

All subcontractors seeking payment for construction work will need to register with the Inland Revenue.

On engagement by the contractor, the subcontractor will need to provide detail of identity, including, name, tax reference number National Insurance number or company registration number, which the contractor will check with the Inland Revenue.

The other major obligation on contractors is the new monthly return. This will provide details of all payments made under the scheme, summarising them by the recipient.

Q. VAT Flat Rate Scheme - can I make money from it?

A. Many small business owners appear to have overlooked the VAT flat-rate-scheme (FRS).

This is unfortunate as it could save them time and money compared to using the standard VAT rate/procedure. FRS allows a business to make a VAT payment as a percentage of their turnover. The percentage rate is determined by the type of business - which can range from about five per cent up to 15 per cent. The aim of the scheme is to simplify the way small businesses account for VAT so that they spend less time and money keeping VAT records and calculating the VAT payable to HM Customs and Excise.

Q. What is the use of home provision and how much can I get away with?

A. The easy answer would be to say it depends on the degree to which your home is used as an office.

It will vary from setting out your papers on the corner of the dining -room table for a few hours a month, a spare bedroom doubling as an office in the week and guest accommodation at the weekends, to a dedicated office used for no other purpose.

The more frequent and substantial the uses of facilities at home, the better the case for reclaiming relief on part of the costs. The running costs of the house need to be established to include mortgage interest, rent, insurance, repairs, council tax, heating and lighting etc.

These then need to be apportioned to the office usually by ratio of floor area although heating and lighting costs may be apportioned on the basis of usage.

Q. How long should I keep my business and personal records?

A. For businesses that are not Limited Companies, the basic requirement is that records must be retained for five years from January 31 following the tax year for which the tax return is made.

For companies, the records for an accounting period will normally have to be retained for six years from the end of that period.

Individuals not carrying on a business who are required to complete a tax return will normally have to retain their records for at least 22 months from the end of the tax year to which they relate.