Business News
Pension savings hit by recession
Following the government's plan to raise men's state pension age to 66 by 2016 (2020 for women), and the possibility of future changes being linked to increases in life expectancy projections, now is the time for people to start planning how to make their career or savings last longer.
Management Buyouts Good Option for Exit Planning
Management buyouts (MBOs) could be the answer for business owners who want to exit their company says Halifax accountants, Lambert Roper & Horsfield Limited.
Emergency Budget
George Osborne presented his first Budget on Tuesday 22 June 2010.
Capital Gains Tax Changes
A new rate of Capital Gains Tax (CGT) of 28% will be introduced. For individuals, the rate of CGT remains at 18% where total taxable gains and income, after taking into account all allowable deductions including losses, personal allowances and the CGT annual exemption, are less than the basic rate limit. The new 28% rate will apply to gains or any parts of gains above this limit.
Standard Rate of VAT to Increase
It is proposed to increase the standard rate of VAT from 17.5% to 20% with effect for any supply made on or after 4 January 2011. The rate change does not affect either zero-rated supplies nor those supplies subject to VAT at the 5% reduced rate.
HMRC amend PAYE Penalties Guidance
At the start of the tax year new late payment penalties were introduced for PAYE and other payments due from employers. The new rules apply to almost all employers and contractors, whether they employ one or a hundred employees. The rules apply to monthly, quarterly and annual periods of PAYE starting on or after 6 April 2010.
Keep Proper Records!
HMRC have recently issued a reminder about the various 'toolkits' that they have developed to assist agents when preparing returns. Although the toolkits are aimed at tax professionals, they highlight common errors and the steps that can be taken to reduce those errors.
HMRC Launch Tax Credit Video
Every year, tax credit claimants must renew their tax credit awards by 31 July or their payments may stop. Claimants on ‘nil awards’, and those receiving only the full family element of Child Tax Credit, will receive a statement of their 2009/10 award. If these details are correct no further action is needed and the claims are automatically renewed. However, if the details on the award statement are wrong, claimants must tell HMRC.
Business Link Guidance for Farmers
Business Link has set up a dedicated new online service for farmers and growers. Whether they are starting up or looking to expand and diversify, the service will help:
Maternity Rights for the Self Employed
It appears as though the self employed will become entitled to maternity leave for the first time under new laws introduced by the European Union (EU).
The Budget - 22 June 2010
Chancellor of the Exchequer George Osborne delivered his first Budget less than three months after the final Budget of the last parliament. The Conservative Party had promised an ‘emergency’ Budget during the election campaign, with a view that quicker action was needed to bring down the UK’s record budget deficit. While the recession officially ended in the last quarter of 2009, recovery has been sluggish and Mr Osborne, together with his coalition partners from the Liberal Democrats, has had to balance the need to raise taxes and cut spending with the dangers of provoking a ‘double dip’ recession.
Coalition overhaul pension rules
The Conservative-Liberal Democrat coalition government has pledged to scrap the requirement for investors with pension funds to buy an annuity by the age of 75.
Flexible Working – The World Cup
Acas (the Advisory, Conciliation and Arbitration Service) is advising employers to be ready for the World Cup. Some employees will be expecting their employers to be flexible about working hours so that they can watch matches. Employers may also be worrying about their employees being less productive, hung over or sick following over enthusiastic celebrations.
State Pension Age and National Insurance Contributions
HMRC are reminding employers to take care when deciding whether or not their employees need to pay national insurance contributions (NICs). Employees do not need to pay NICs on reaching State Pension age (SPa). Some payroll software warns employers as women approach age 60 to check their national insurance status as previously women would have been exempt from the employee contribution from age 60. This warning may now be being issued too early.
Budget Date Announced
The new coalition government is settling into office and a date has been announced for the emergency Budget. Chancellor of the Exchequer George Osborne will present the emergency Budget on Tuesday 22 June 2010.
Changes to the Advisory Fuel Rates from 1 June 2010
To reflect the increase in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 June 2010, so employers using the advisory rates should advise affected employees and update any expense forms as soon as possible.
Child Trust Fund to be cut
The government has outlined plans to make changes to the Child Trust Fund as part of plans to cut £6 billion in expenditure.
Are there VAT Increases Ahead?
The British Chamber of Commerce are predicting that we should expect an increase in VAT to help deal with the country’s budget deficit.
Holiday Entitlement
With signs that spring is finally here many employees will be planning or longing for their summer holidays. Holiday entitlement is one of the complex areas which can cause employee dissatisfaction if not handled correctly, especially for those with part time or irregular hours. Since 1 April 2009 the minimum statutory holiday entitlement has been 5.6 weeks inclusive of Bank Holidays, the equivalent of 28 days for those employees working a five day week. Employers may of course offer more holiday if they wish.
P11D Deadline Looming
The forms P11D, and where appropriate P9D, which report employees’ and directors’ benefits and expenses for the year ended 5 April 2010, are due for submission to HMRC by 6 July 2010. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.
HMRC Warn of Email Rebate Scam
HMRC are warning that taxpayers are being emailed stating that they are entitled to a tax rebate. These emails are being sent from a number of bogus email addresses. They inform recipients that they are entitled to a tax rebate and invite them to complete an online form to receive a rebate of tax
HMRC takes hard line on Time to Pay applications
The number of companies being refused more time to pay tax bills has doubled, new figures have revealed.
Under the bed?
We’re regularly told by experts that we should manage a diverse portfolio of investments for our hard-earned cash, but with the interest rate still remaining incredibly low, some individuals are looking elsewhere for returns. And if you want your investment to come with some added ‘fun’ benefits, it may be worth looking at the alternative categories that are unregulated. These inevitably come with a health warning, as they are certainly higher risk, but property or property developments, unlisted business shares, art & fine wine are such categories, to name just a handful.
Penalty Guidance on Late Payment of PAYE
HMRC have been warning employers for some time that they may have to pay a penalty if they do not pay their PAYE deductions on time. They have now issued more detailed guidance on the way in which the penalties will work. The penalties will apply to PAYE deductions due for a period starting on or after 6 April 2010 include PAYE, Student Loan deductions, Construction Industry Scheme payments, Class 1 NICs, annual payments of employers' Class 1A NICs and annual PAYE Settlement Agreements payments.
National Minimum Wage Rates
From October 2010, National Minimum Wage rates will increase from
- £5.80 to £5.93 an hour for workers aged 21 and over
- £4.83 to £4.92 an hour for workers aged 18 to 20
- £3.57 to £3.64 an hour for workers aged 16 to 17.
Furnished Holiday Letting Reprieve
Getting the Finance Bill 2010 passed between when it was published on 1 April 2010 and the dissolution of Parliament on 12 April was always set to be a heavy load in spite of the fact that there were only 73 clauses and supporting schedules.
HMRC offer Advice on Fraud Emails
HMRC are reminding taxpayers to be vigilant as there have been several reports of scam emails.
P11D Deadline Looming
The forms P11D, and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2010, are due for submission to HMRC by 6 July 2010. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.
VAT and Royal Mail Postage
Some types of postal services offered by the Royal Mail will be subject to VAT from 31 January 2011.
Online Submission of Employers Forms
The employer’s annual returns P35 and P14 (P60) are due for submission to HMRC by 19 May 2010. Broadly all employers must submit their forms online this year. Previously those employers with less than 50 employees could file paper forms.
Budget 2010
Alistair Darling presented his third Budget on Wednesday 24 March 2010.
Annual Investment Allowance Increased
Most businesses are able to claim an Annual Investment Allowance (AIA) on the first £50,000 spent on plant and machinery. This provides immediate 100% tax relief on qualifying expenditure.
Close Company Loan Write Offs
Close companies, generally meaning family and owner managed companies, are subject to special rules in relation to loans or advances made to participators and their associates. Participators primarily means shareholders. Where such loans are written off or released an equivalent amount is treated as a deemed net dividend for income tax purposes.
Entrepreneurs' Relief
The amount of an individual's capital gains that can qualify for Entrepreneurs' Relief are currently subject to a lifetime limit of £1 million. Gains qualifying for the relief are charged at an effective tax rate of 10% rather than the usual rate of 18%.
Inheritance Tax Nil Rate Band Frozen
As previously announced, the nil rate band for 2010/11 will be frozen at the current level of £325,000. This will now be extended to cover the tax years 2011/12 to 2014/15.
Stamp Duty Land Tax And First Time Home Buyers
At present the Stamp Duty Land Tax rate is 1% for residential property purchases where the consideration is more than £125,000 but does not exceed £250,000.
Payment Of VAT
HMRC are advising businesses that from 1 April 2010 all cheque payments by post will be treated as being received by HMRC on the date when cleared funds reach HMRC's bank account. This change does not affect any cheque payments made by Bank Giro.
Employer Supported Childcare
In 2009 the government announced changes to employer supported childcare and HMRC have now issued further guidance on the changes.
National Insurance - New EU Rules
HMRC have released new guidance for employers about forthcoming changes to EU rules regarding national insurance for people moving around Europe for work.
HMRC Will Publish Details Of 'Deliberate' Offenders
HMRC have the necessary power under existing tax law to publish the details of taxpayers where it is established that they have committed 'deliberate' tax offences. HMRC have confirmed that they will apply this provision for tax periods starting on or after 1 April 2010 and for offences which are committed on or after this date.
Official Rate Of Interest
From 6 April 2010 the official rate of interest applying to interest-free or low interest loans made to employees will be 4%. The current rate is 4.75%. Employees are generally liable to tax on a benefit equal to the amount of interest, calculated at the official rate, where the balance of the loan exceeds £5,000 at any point in the tax year.
Employment Rate Falls to 72.2%
The government has announced the latest employment statistics which show the number of people in employment has dropped by 54,000.
Fit Notes
Fit notes will be brought into effect from April 2010 and are a replacement for sick notes. The information that doctors will be asked to provide means that instead of giving patients a sick note saying they are too ill to work, they will be able to advise whether a person may be fit for work with some help and support, and what employers can do to assist in this process.
Making Light Work of Employment Legislation
At Lambert Roper & Horsfield we are constantly looking for ways to help our clients ensure sustainability and enhance profitability.
The Budget 2010
Chancellor of the Exchequer Alistair Darling delivered the last budget of this parliament at a time when the focus has shifted slightly from tackling the recession to how to deal with the large amounts of debt built up in doing so. While the economic data over recent months has been decidedly mixed, most economists agree a recovery of sorts is under way for now, although some fear the economy could slide back into recession unless a credible plan for dealing with the budget deficit is presented. With a general election only months away, normally a ‘giveaway’ budget could be expected, but the state of the public finances has largely prevented this.
Urgent announcement on VAT payments made by cheque
Nick Frost of Lambert Roper & Horsfield, is warning businesses to be aware of the new rules surrounding VAT payments, which come in to effect from April.
Leadership and Management Training Funding
The funding stream is part of the train to gain leadership and management brokerage. The funding is available for senior decision makers in organisations who employ between 5 and 249 employees and have not previously accessed the train to gain leadership funding.
MBO Training Programme
We are delighted to announce details of an MBO Training Programme via our membership of the Corporate Finance Network.
The Tax Health Plan (THP)
HMRC have obtained information from various sources, including NHS trusts, private hospitals and medical insurers and are introducing the THP as an opportunity for medical professionals with tax to pay to get their affairs up to date with the benefit of a fixed penalty.
HMRC New Scam Emails
HMRC have issued a warning about a new scam email which is being sent from ‘HMRC Online Services – test@test.com’ stating that the recipient has one new ALERT message and should log onto their Online Account to read the message.
Employment Rights - Statutory Limits
The limit on the amount of the compensatory award for unfair dismissal is set to decrease from 1 February 2010. The current maximum of £66,200 is to reduce to £65,300, due to the decrease in the retail prices index measure of inflation. This new limit applies where the event giving rise to the entitlement to the payment arose on or after 1 February 2010.
Dispensations - New Online Application Form
HMRC have introduced the facility to apply for dispensations online.
Tax Codes being issued
HMRC are advising employees that between January and March 2010 they will be issuing new PAYE coding for 2010/11. The tax codes should reflect the individual’s personal circumstances and include the tax allowances and reliefs that individuals are entitled to.
Scrappage Scheme
The Vehicle Scrappage Scheme is a voluntary scheme for motor dealers under which participating dealers give buyers a £2,000 discount off the purchase price of a new car (or certain types of small van) in exchange for scrapping their old qualifying vehicle.
Statutory Payments
The new Statutory Payment Rates for 2010/11 have been announced.
Using your own Car for Work
HMRC have updated their guidance on using your own vehicle for work.
Tax Payments
For those making tax and national insurance payments, HMRC are reminding that their bank details changed last year.
We have now found a more practical way of altering sage for the new tax rate from 01.01.10
On sage to change the T1 tax code back to 17.5%, go to Settings, then Configuration. There is a tab at the top called tax codes. Highlight the T1 tax code which should be set to 15% and click edit. Change the rate box to 17.50 and click ok. Click apply not save and then close.
VAT - Compulsory on Line Filing
Halifax chartered accountants Lambert, Roper and Horsfield are reminding business owners that HM Revenue and Customs (HMRC) has updated its online service for VAT ahead of new rules which come into force in April.
Extra National Insurance Burden Ahead
One of the significant announcements in the Pre-Budget Report last month was a further increase in national insurance contributions (NIC) which is to take effect from 6 April 2011.
Special Annual Allowance Charge – New Limits for 2009/10
In the Pre-Budget Report last month, changes were announced to the complex rules for the Special Annual Allowance (SAA) charge which affects those with substantial income who make significant pension contributions. The current rate of the SAA charge is 20% on excess pension contributions. The aim of the charge is to discourage individuals from making significantly higher pension contributions in anticipation of the removal of higher rate tax relief which will occur in 2011.
Bank Payroll Tax
In a move designed to tackle certain remuneration practices that are considered to have contributed to ‘excessive risk taking’ in the banking industry, a temporary bank payroll tax of 50% is to apply to certain bonuses regardless of how they are paid. The tax will apply to the amount of the bonus which exceeds £25,000 for any individual employee and is applicable to banks, building societies and other related financial businesses.
Offshore Disclosure Extension
HMRC is giving taxpayers with offshore investments more time to come forward under the New Disclosure Opportunity (NDO). The registration deadline, which was due to expire on 30 November 2009 has been moved to 4 January 2010 as some banks need more time to contact their offshore customers.
Changes to the Advisory Fuel Rates from 1 December 2009
To reflect the increase in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 December, so employers using the advisory rates should advise affected employees and update any expense forms as soon as possible.
HMRC Warn of more Scam Emails
As the new year gets underway, HMRC are reminding taxpayers to be vigilant as scam emails have been reported.
Tax Relief on Nursery Vouchers
Gordon Brown has revised his proposal to withdraw the income tax and NI exemption on employer-provided childcare vouchers.
Cross-border VAT Changes 2010
HMRC have issued some important guidance regarding the changes in the place of supply of services rules which take effect from 1 January 2010.
Bad Weather Advice
The Institution of Occupational Safety and Health (IOSH) are warning people to be prepared for poor weather conditions when travelling. They have produced a few tips to help ensure that travel, whether it is for work or pleasure, remains safe despite the weather.
