Business News
Standard Rate VAT
The standard rate of VAT will be reduced from 17.5% to 15% for the period 1 December 2008 to 31 December 2009. The rate will then revert to 17.5%. No changes have been made to the 5% reduced rate or the 0% rate.
Proposed Personal Tax Changes
The government has announced significant changes to the system of personal allowances and tax rates for the next few years. These mainly impact on those with higher levels of income.
Corporation Tax Changes
The main rate of corporation tax which applies to companies with profits of more than £1.5 million fell to 28% from 30% from 1 April 2008.
Taxation of Business Travel
Further details have been provided on the changes to the capital allowance treatment of cars. The changes will have effect from 1 April 2009 for corporation tax purposes and 6 April 2009 for income tax. The special rules that restrict the amount of capital allowances for cars costing more than £12,000 will be abolished.
Discipline and Grievance Code of Practice
Acas (Advisory, Conciliation and Arbitration Service) has made available a revised Code of Practice dealing with discipline and grievance procedures. The Code has been approved by the Secretary of State for Business, Enterprise and Regulatory Reform. The draft guidance will now be put before Parliament for approval.
Pension Forecast
Do you know how much your state pension could be when you retire? The Pensions Service will provide a forecast of this information either by letter or an online email service.
Tougher Penalties for Health and Safety Offences
New legislation under the Health and Safety Offences Act 2008 will increase penalties and provide courts with greater sentencing powers for those who flout health and safety legislation.
Child Trust Fund
According to HMRC data the success of the Child Trust Fund (CTF), the tax exempt long-term savings and investment account for children born on or after 1 September 2002, continues to grow.
Parties for Employees
Are you planning a party for your staff? Make sure you are clear on the tax implications.
The Pre-Budget Report 2008
Chancellor of the Exchequer Alistair Darling has delivered a much-anticipated Pre-Budget Report against a backdrop of economic slowdown and turbulence in the global economy, which has steadily deteriorated since the 2008 Budget on 14 March.
He emphasised that the measures set out were designed to help families and businesses through “economic uncertainty not seen for generations” and to position the UK to take full advantage of a future recovery in the UK economy.
Improvements announced to State Pension Scheme
The DWP announced last week that the Government is proposing an amendment to the Pensions Bill which will allow some people to make up to six additional years of voluntary (Class 3) NI contributions in addition to those permitted under existing time limits.
Intestacy rules
The Ministry of Justice has announced an increase in the amount of the statutory legacy on intestacy. The statutory legacy is the amount which an individual is entitled to receive from the estate of their husband, wife or civil partner where the individual has not made a Will.
Bank of England Reduces Bank Rate by 0.5%
The Bank of England reduced the bank rate by 0.5% to 4.5% with effect from 8 October 2008.
Shopping on the Internet
HMRC have updated their guidance on buying goods on the internet explaining when duty and / or VAT will need to be paid.
Changes to rights during maternity leave
Following changes made to the Sex Discrimination Act and to the Maternity and Parental Leave Regulations, the law on contractual terms of employment during Additional Maternity Leave (AML) changed in respect of women whose babies were due on or after 5 October 2008. The date the baby is due, as shown on the MATB1 certificate (provided by the midwife or doctor at around 20 weeks into the pregnancy) is the relevant date and not the date the baby is actually born.
Gift aid form amended
HMRC have updated their model Gift Aid declaration form for charities and community amateur sports clubs to reflect the reduction in the basic rate of tax from 22% to 20% from the beginning of this tax year.
Entrepreneurs’ relief
The system of capital gains tax (CGT) for individuals and trustees changed radically from 6 April 2008. The changes included the abolition of taper relief and indexation allowance and the introduction of a single rate of CGT of 18%.
Tougher Penalties for Persistent Late Filing of Company Accounts and Returns with Companies House
Late filing penalties are now doubled if accounts and returns for financial years beginning on or after 6 April 2008 are filed late in two successive years.
Mandatory Company Trading Disclosures
From 1 October 2008, new rules are in place to unify and replace the various regulations setting out the trading disclosures that incorporated companies must make to show their legal identity. This is now being monitored by Trading Standards and can result in a £5000 fine.
Paul Smith Wins Top Prize
LRH Wealth Management is celebrating the success of trainee consultant Paul Smith, who has beaten off the challenge of thousands of other competitors to take a top prize in a national fund management contest.
Extra take home pay
For many employed individuals who are checking their payslip this month it should include a welcome bonus of a £60 reduction in their income tax deduction. The reason for this is the increase in the personal allowance which finally took effect for paydays from 7 September. Don’t expect the bonus each month as the effect for October onwards will be a reduction in tax of £10 a month!
CBI forecast
A CBI forecast has predicted a ‘shallow recession’ during the final part of 2008 and that growth in the economy in 2009 will be the lowest since 1992.
Temporary exemption on stamp duty land tax
In a move to help the property market and first time buyers, Alistair Darling has introduced a Stamp Duty Land Tax (SDLT) exemption or holiday for purchases of residential property from 3 September 2008 to 2 September 2009 (inclusive). The exemption effectively raises the current nil rate band of £125,000 (£150,000 in disadvantaged areas) to £175,000 for the period of one year only.
Fake HMRC emails
HMRC are warning taxpayers that they are aware of a high number of emails being sent out offering a tax rebate. The warning confirms that HMRC do not email taxpayers advising them of tax rebates or invite them to complete an online form to receive a rebate.
Change to benefits system
From 27 October 2008, in a change to the benefits system, Employment and Support Allowance (ESA) will replace the current state benefits (Incapacity Benefit and Income Support) which are paid to individuals on incapacity grounds. The new ESA will initially only be payable to new claimants.
NMW rates to rise
National Minimum Wage (NMW) rates are set to rise from 1 October 2008.
HSE don’t ban this, that and the other
The Health and Safety Executive (HSE) are keen to dispel the myth that they are responsible for banning ‘this, that and the other’.
Proposed strict new jobs list
The UK Border Agency is proposing to introduce a new list of shortage jobs in order to better target migration at the needs of British businesses. The proposed list would reinforce the selective approach of the new points based system.
Gift Aid Transitional Relief
Charities are entitled to claim a tax repayment in respect of gift aid donations made by individuals. The tax repayment was 22% until 5 April 2008 being the basic rate of tax on payments made through gift aid. As you are no doubt aware the basic rate of tax was reduced to 20% from the beginning of this tax year. In order to compensate charities for this drop in income the government has introduced Gift Aid Transitional Relief which tops up the tax repayment due to the charity until 5 April 2011.
Report on HMRC's lost discs
Alistair Darling has made a statement to Parliament following the Poynter Review, which was commissioned following the loss of the child benefit data discs. The Independent Police Complaints Commission (IPCC) has also issued a report into the circumstances surrounding the loss.
Reducing Employers’ Administration
The Department for Business, Enterprise & Regulatory Reform (BERR), has launched a campaign advising employers on how they can reduce the amount of administration involved in dealing with their employment law obligations. The BERR believe that some employers are routinely over-complying or duplicating work.
NMW Changes
HMRC have announced that some changes to penalties and calculation of arrears of National Minimum Wage (NMW) payments have been delayed to April 2009. The delay is apparently due to the slower than expected passage through parliament of the Employment Bill.
Salary Sacrifice Arrangements
Salary sacrifice is a complex area which should not be overlooked. HMRC have added some questions and answers on this difficult subject to their website.
Penalties
HMRC have published a leaflet on the new HMRC penalties warning tax payers to make sure that their records are sufficient to comply with the new penalty regime. The new legislation covers returns and other documents issued for periods commencing from 1 April 2008 which are due for submission from 1 April 2009.
‘Paper’ Tax Return Deadline Looming
HMRC are reminding taxpayers who wish to complete paper self assessment tax returns that the new 31 October 2008 deadline is ‘only weeks away’.
Licence to Bring in Migrant Workers
The UK Border Agency has started a television campaign aimed at employers to help prepare them for the introduction of the government's new rules for skilled migrant workers which become effective from November 2008.
VAT Treatment of Charity Challenge Events
HMRC have issued revised guidance on Charity Challenge Events, including those that qualify for the VAT Charity Fundraising Exemption.
Careless Drivers
Under the new careless driving laws, which came into effect from 18 August 2008, motorists who kill whilst avoidably distracted at the wheel will face prison.
Stamp Duty Threshold Raised in a Bid to Help Buyers
The government has announced a package of measures to help boost a struggling property market, including raising the stamp duty land tax threshold by £50,000. Brought in for a twelve month period from 3rd September 2008 to 3rd September 2009, a home must now sell for £175,000 before stamp duty is paid.
Extra Personal Allowances
HMRC have now issued further guidance on the increase in the personal tax allowance which is due to take effect from 7 September 2008.
Report on HMRC's lost discs
Alistair Darling has made a statement to Parliament following the Poynter Review, which was commissioned following the loss of the child benefit data discs. The Independent Police Complaints Commission (IPCC) has also issued a report into the circumstances surrounding the loss.
Professional subscriptions
Do you pay any professional subscriptions? If so then tax relief may be due on the subscription as long as the professional body appears on the latest HMRC list. The list includes all bodies approved by HMRC up to 30 May 2008.
HMRC penalties for errors
HMRC have issued revised guidance on the system of penalties which they will be able to apply to taxpayers.
£10,000 VAT errors
Businesses have long been allowed to correct net errors not exceeding £2,000 in their VAT returns. From the first new VAT period commencing on or after 1 July 2008, HMRC have raised the previous limit of £2,000 to a minimum figure of £10,000.
HMRC Powers
HMRC has been busy aligning its own rights and powers following the merger, several years ago, between the two old organisations of the Inland Revenue and HM Customs. This process will take a number of years as the different organisations previously had different powers, from rights to view paperwork and in some cases to rights of access to business premises.
Newcomers must earn the right to stay in the UK
The government has announced that foreign nationals who wish to become British citizens will have to earn the right to stay here.
10% Tax Rate Climb Down
We live in quite amazing times in the world of tax. Over a year ago, in Gordon Brown’s last Budget speech as Chancellor, the so-called ‘abolition’ of the 10% starting rate was announced. The government’s reason for this was, and still remains, the simplification of the tax system.
Take Care What Information you Post on the Internet
It has been reported in the Daily Express that tax inspectors are searching social networking sites for potential tax evaders, who may be ‘advertising’ their wealth or assets which may lead HMRC to believe they have ‘hidden’ remuneration.
SMP and Salary Sacrifice Arrangements
HMRC have published some guidance on the complex area of salary sacrifice and entitlements to both statutory maternity pay and continuing non cash benefits during maternity leave.
Update Your Will
The Law Society has warned that thousands of Wills could need updating as a result of rising care and nursing fees which force the elderly to sell their assets, in many instances their homes, to pay for care. The home is generally the largest asset left to loved ones.
