Business News
Pre-budget Report 2009
Alistair Darling will make his Pre-Budget statement to the House of Commons on Wednesday 9 December 2009 at 12:30.
Online Filing of VAT Returns
HMRC are reminding businesses that new rules on how VAT returns are submitted and payments are made will come into force next year. Paper VAT returns will be phased out from 1 April 2010.
Intrastat Thresholds
HMRC have announced significant changes to the Intrastat thresholds. Intrastat is used to report the movement of goods within the EU over certain thresholds. Those traders with an annual intra-EU trade in goods exceeding the exemption thresholds are required to provide monthly statistical returns (Intrastat Supplementary declarations).
VAT and New Year’s Eve Traders
If you are going to be out celebrating on New Year’s Eve or indeed if your business will be operating over midnight, you will be glad to hear that the government has announced a relaxation of the VAT rules. Pubs, clubs, restaurants and other retail businesses remaining open past midnight on New Year’s Eve will be allowed to continue charging VAT at 15% on their sales until they close or until 6am on 1 January 2010, whichever is the earlier.
Parties for Employees
Are you planning a party for your employees? The good news is that, unlike entertaining customers, the costs of entertaining employees are generally allowable against the profits of the business.
Swine Flu and SSP
Under existing rules for Statutory Sick Pay (SSP) employees can self-certify for the first seven days of their illness and employers cannot ask for medical evidence during this period. There has been no change to this requirement.
First Aid at Work
The Health and Safety Executive are reminding businesses that the guidance for first aid at work changed from 1 October 2009.
Business Rates Bills
The government has confirmed that 60% of business rates will fall next year as a result of revaluation and that it will not collect a penny more of extra revenue as a result of the 2010 revaluation, which is carried out every five years. However, rates bills for some businesses will rise significantly.
Directors’ service addresses
Changes introduced on 1 October mean that every director must provide Companies House with both their usual residential address, and a ‘service address’ for each directorship they hold.
Tips don’t count towards the NMW
As you may be aware the National Minimum Wage (NMW) rates increased from 1 October 2009.
Tax relief on nursery vouchers to be withdrawn
In his speech to the Labour Party Conference, the Prime Minister, Gordon Brown announced an extension of free nursery places, to be financed by the withdrawal of the tax and National Insurance (NIC) exemptions for childcare vouchers.
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.
Paying PAYE on time
HMRC are warning employers that from May 2010 they may have to pay a penalty if they do not pay their PAYE on time. These are generally due each month, on time and in full.
Online payroll starter and leaver forms
HMRC are reminding employers with 50 or more employees that they should now be filing online their starter and leaver information online.
VAT holiday over as rates expected to return to 17.5%
The Government’s one-year VAT holiday will end on 1st January 2010, with rates expected to return to 17.5% from the 15% we have enjoyed all year.
The power of one – making your pension work harder for you
Have you built up a number of different pension plans throughout your working life? Do you find it difficult to keep track of the true value of your retirement benefits? If the answer to these questions is ‘yes’ then there is a solution!
Additional Paternity Leave and Pay
The government has announced its intention to introduce Additional Paternity Leave and Pay for fathers of children due on or after 3 April 2011.
National Minimum Wage Increases
The adult rate of the National Minimum Wage (NMW) increases to £5.80 (£5.73) an hour from 1 October 2009. This is payable to those age 22 and over.
Pay for Apprentices
From 1 August 2009 the minimum wage for apprentices increased from £80 to £95 per week.
Online Filing of Corporation Tax Returns
HMRC have written to half a million companies and their tax agents, to advise them of important changes to Corporation Tax (CT) return filing. The mail-shot contained a new HMRC leaflet on the changes, which will require all company tax returns delivered after 31 March 2011 to be filed online, for accounting periods ending after 31 March 2010. The leaflet explains how, after 31 March 2011, CT returns must be filed online in a specified data format (known as Inline XBRL or iXBRL).
Online Filing of VAT Returns
HMRC are advising businesses that new rules on how VAT returns are submitted and payments are made will come into force next year. Paper VAT returns will be phased out from 1 April 2010.
Liechtenstein Disclosure Facility
HMRC have announced details of the Liechtenstein Disclosure Facility (LDF) which has been introduced to support the reviews to be carried out by the Financial Intermediaries in Liechtenstein to identify those who may have liability to UK tax. The LDF allows people with unpaid tax linked to investments or assets in Liechtenstein to settle their tax liability under this special arrangement.
New UK Border Agency Controls
The government has announced new measures which should enable resident workers to have every opportunity to fill vacancies before they are offered to workers abroad.
HMRC Warn of more Scam Emails
HMRC have updated their guidance on scam emails as they are aware that a large number of individuals are receiving emails offering tax rebates. HMRC have also confirmed that they would not inform taxpayers of a tax rebate via email, or request that they complete an online form to receive a rebate of tax.
New Disclosure Opportunity
HMRC have provided more details of the New Disclosure Opportunity (NDO) which is due to take place from 1 September 2009 to 12 March 2010. The NDO is for people with unpaid tax connected to offshore accounts and assets and will give the taxpayers one final opportunity to disclose.
Increase in Pay for Apprentices
From 1 August 2009 the national minimum wage (NMW) for apprentices increased from £80 to £95 per week.
‘False Self-Employment’ in the Construction Industry
The government has been looking at the best way to address the issue of what they believe is ‘false self-employment’ in the construction industry. They have concluded, for income tax and national insurance purposes, that they will introduce legislation which deems workers within the construction industry to be in receipt of employment income unless one of three simple, clear and easy to apply criteria is met.
HMRC Warn of more Scam Emails
HMRC have updated their guidance on scam emails as they are aware that a large number of individuals are receiving emails offering tax rebates. HMRC have also confirmed that they would not inform taxpayers of a tax rebate via email, or request that they complete an online form to receive a rebate of tax.
‘Paper’ Tax Return Deadline Looming
For those wishing to complete paper self assessment tax returns, the filing deadline of 31 October 2009 is fast approaching.
VAT Increase to 17.5%
HMRC have issued guidance for businesses dealing with the increase in the standard rate of VAT from 15% to 17.5%. The change takes effect from 1 January 2010. They hope that by issuing the guidance well in advance of the change that businesses will have sufficient time to prepare.
Pension Changes Ahead
Under provisions contained in the Pensions Act 2008 employee pension enrolment and employer contributions are to be made compulsory.
Redundancy Pay
The weekly maximum pay which can be taken into account when calculating statutory redundancy pay is set to increase from 1 October 2009.
Cross-Border VAT Changes 2010
HMRC have issued important updates in advance of the changes in the place of supply of services rules which take effect from 1 January 2010.
Pension Payments
Pension contributions made by an individual are usually paid net of basic rate tax. Where the individual is a higher rate taxpayer further relief is due which significantly reduces the net cost of the contribution.
Rise in Prosecutions for Employing Illegal Workers
Businesses are being warned to undertake more rigorous checks into applicants’ backgrounds as the number of prosecutions for employing illegal workers increased over 500%, according to Giant Precision a business process outsourcer.
Are you complying with the National Minimum Wage Rules?
HMRC are reminding employers that since the beginning of the current tax year automatic penalties have been introduced for those who do not comply with the National Minimum Wage (NMW) Regulations.
Business Payment Support Services
According to government figures, as at the end of April 2009, over 116,000 businesses have agreed time to pay tax arrangements with HMRC to the value of two billion pounds.
Redundancy Alternative
The Confederation of British Industry (CBI) has made a proposal for an 'Alternative to Redundancy' (ATR) scheme which could be introduced as part of a package of measures to reduce job losses.
Starting a new Business
HMRC have amended the form CWF1 which is completed by those individuals who have set up a new business either as a sole trader or as a partner in a partnership. The form is used to notify liability to Class 2 National Insurance Contributions (currently £2.40 a week) amongst other things.
HSE Warning not to be misled over new Law Poster
The Health and Safety Executive (HSE) is warning businesses not to be misled into buying unnecessary and expensive copies of the health and safety law poster. Employers have a duty to display the poster prominently in the workplace or provide employees with a copy of the pocket card version. Both poster and card set out the employer’s and employees’ responsibilities.
Swine Flu Advice for Businesses
The UK has moved from the 'containment' to the 'treatment' phase of swine flu (H1N1) as the number of people catching swine flu continues to rise.
Scrappage Incentive Scheme Successful
According to the Society of Motor Manufacturers and Traders (SMMT) 29,796 vehicles have been registered under the scrappage scheme since it started on 18 May 2009. This accounted for 9.7% of June’s new car registrations a total of 17,014 units. In addition to cars 323 vans were also registered in June under the scheme (1.9% of van registrations).
Advisory Fuel Rates
To reflect the changes 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 July 2009 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.
HMRC New Disclosure Opportunity
HMRC have announced some details of the New Disclosure Opportunity (NDO) which is due to take place this autumn. In order to encourage taxpayers to disclose an undeclared offshore account the penalty level has been set at 10%. HMRC hope that the low penalty will encourage taxpayers to come forward. HMRC are currently liaising with various banks to obtain details for offshore account holders.
HMRC PAYE Services Interruption
HMRC are advising taxpayers and employers that, as part of its ongoing plans “to improve customer service and efficiency”, they are in the process of changing the way they process PAYE records. In order to make all PAYE records available on one computer system they are undertaking a major IT upgrade.
Tax Credits Renewal Deadline
Tax credits are state benefits which are generally available to lower income families. However, entitlement to the credits is significantly increased where individuals pay for childcare or suffer a drop in normal levels of income perhaps due to incurring trading losses or redundancy.
Employees Accrue Holiday Pay while on Sick Leave
The House of Lords has ruled in the case of Stringer v HMRC that workers who are refused holiday pay while on sick leave can make a claim to an employment tribunal for an unauthorised deduction from wages (under the Employment Rights Act 1996).
Extra Paternity Leave put on Hold
Proposals to introduce six months’ paid paternity leave for new fathers have been put on hold by the government in the light of the current economic climate.
HMRC Warn of Fraudulent Email
HMRC are warning that an email is currently being sent to some taxpayers advising them that HMRC have “approved them to receive monies”. Apparently the email states that this is as a result of an HMRC program on 15 June 2009.
Digital Britain
The government has published its report Digital Britain which sets out the government’s plans for the UK to be at the forefront of the global digital economy.
Corporation Tax Return Guide
HMRC have published revised guidance on the completion of the corporation tax return form CT600.
One in Five Businesses Admit Data Protection Breaches
A survey of over 500 SMEs carried out by the British Standards Institution (BSI) has found that nearly one in five businesses has unwittingly breached the Data Protection Act (DPA) at least once.
National Minimum Wage Increases
The adult rate of the National Minimum Wage (NMW) will rise to £5.80 (£5.73) an hour in October 2009. This is payable to those age 22 and over.
Tips and the National Minimum Wage
HMRC have won their case in the Court of Appeal as to the treatment of tips and service charges for bar and restaurant workers.
UK Opt Out on 48 Hour Working Week
The ability of UK employers to allow employees to opt out from the European Working Time Directive is set to continue. This means that, where employees wish, they will still be able to work more than 48 hours a week.
Financial Services Compensation Scheme
The Financial Services Authority (FSA) have provided a table listing the largest UK deposit takers. The list shows how the Financial Services Compensation Scheme (FSCS) limits would apply for most customers but is not a complete list of deposit takers covered by the FSCS.
P11D Deadline Looming
The forms P11D and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2009, are due for submission to HMRC by 6 July 2009. 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.
Landlords and Gas Safety
Landlords letting property equipped with gas appliances need to ensure that they comply with the law relating to gas safety. As a landlord it is their responsibility to ensure that any pipe work, appliances and flues provided for tenants are maintained in a safe condition.
Furnished Holiday Lettings
The Budget 2009 contained announcements about significant changes to the rules for furnished holiday lettings (FHL) but those who are affected may have to act fast.
HMRC Warn of Email Scam
HMRC are warning that they have become aware that a large number of individuals are receiving emails offering tax rebates. These emails, which are being sent from HMRC Tax Refunds Online and HMRC Tax Refunds On-line, are not genuine.
Vehicle Scrappage Scheme
The vehicle scrappage or discount scheme is a voluntary scheme for motor dealers. Participating dealers will give buyers a £2,000 discount off the purchase price of a new car or small van in exchange for scrapping their old qualifying vehicle which must, amongst other criteria, be registered on or before 31 August 1999.
Personal Tax Changes
The Chancellor has not only brought forward proposals which were to take place in 2011, he has also made changes to his original announcements.
Restricted Tax Relief on Pension Contributions
Pension contributions made by an individual are usually paid net of basic rate tax. Where the individual is a higher rate taxpayer further relief is due which significantly reduces the net cost of the contribution.
Enhanced Relief for Trading Losses
Under current rules businesses already have a number of mechanisms to relieve trading losses against other income including past trading profits.
Capital Allowances on Plant and Machinery
Additional capital allowances are to be available for expenditure incurred by a business in the 12 month period (starting 1 April 2009 for companies and 6 April 2009 for individuals and partnerships).
Standard Rate VAT
The standard rate of VAT was reduced from 17.5% to 15% for the 13 month period 1 December 2008 to 31 December 2009. HMRC have confirmed that the standard rate of VAT will revert to 17.5% from 1 January 2010.
VAT System for Cross-Border Trading
A package of measures is being introduced to simplify and modernise the VAT system for cross-border trading and to counter fraud across the EU.
Bradford & Bingley Position of Former Shareholders
As you are no doubt aware, shares in Bradford & Bingley plc were taken into public ownership last year. HMRC have issued guidance relevant to former shareholders and employees who were members of employee share schemes.
Change of HMRC Bank Account Details
HMRC bank account details for paying self employed Class 2 and voluntary Class 3 National Insurance Contributions have changed. HMRC have advised that individuals will need to use the new account details when making a payment.
Businesses given more Time to Pay Business Rates
Alistair Darling made a late change to the impact of business rate rises which were due to take effect in England from 1 April 2009.
National Insurance Contributions from April 2009
From 6 April 2009, changes have been made to how employers will have to record National Insurance Contributions (NICs) due to changes to the State Second Pension.
New Statutory Payment Rates for 2009/10
The new Statutory Payment Rates for 2009/10 have been announced (subject to Parliamentary approval).
Changes to SSP for Agency Workers
Following the Court decision in the case of Thorn Baker Limited, the Department for Work and Pensions (DWP) have amended the legislation. This was done to restore the Government’s original policy intention that agency workers who have contracts of less than three months should be eligible for Statutory Sick Pay (SSP) within the first three months of their contract.
Statutory Maternity Leave, Salary Sacrifice and Non-Cash Benefits
Salary sacrifice is a change to an employee’s contractual pay entitlement. It often involves the giving up of some entitlement to pay in return for some other form of benefit, such as employer pension contributions or childcare vouchers. Depending on the sort of benefit involved, tax and/or National Insurance savings can often result for both the employer and employee.
'How to Pay' Changes
During 2009, HMRC will be changing the bank accounts into which businesses and individuals make payments. These changes will be phased in throughout the year but HMRC will keep businesses and taxpayers informed of any changes.
Avoiding and Resolving Workplace Problems
The legislation governing how businesses deal with disputes with their employees is changing from April 2009. The new simpler and more flexible system is intended to save businesses time and money.
PAYE Changes
HMRC have issued a reminder to employers with 50 or more employees that they must send their employee starter and leaver information - P45s, P46s and P46(Pen) for pensions - online from 6 April 2009. As always, failure to comply with these new rules could result in a penalty.
HMRC Warn of Latest Fraud Attempt
HMRC are warning taxpayers of the latest fraud attempt to be reported to them.
Rise in Late Payments to SMEs
According to Bacs Payments Schemes Limited (Bacs) small and medium size enterprises (SMEs) are now owed £25.9 billion. This is apparently due to a 40% increase in overdue payments over the last year.
Budget Day Confirmed
Chancellor Alistair Darling will present his Budget speech at 12.30pm on Wednesday 22 April 2009.
HMRC Announce Self Assessment Filing Record
According to HMRC, a record number of taxpayers filed their 2007/08 self assessment tax returns online. 5.75 million returns were filed online by the 31 January 2009 deadline, beating last year’s by over 50%.
CBI Predict Deeper UK Recession
The latest CBI forecast predicts things are going to get worse for the economy before they get better.
Marks & Spencer VAT Win
Marks and Spencer (M&S) won a landmark victory last year in the European Court of Justice (ECJ). The case concerned whether or not HMRC were correct to limit the amount of VAT they repaid to the company after their chocolate teacakes were reclassified as a cake rather than a chocolate biscuit. The issue of cakes and chocolate biscuits is an important one as cakes are zero rated rather than standard rated. The case dates back many years.
Beneficial Loan Rate
HMRC have announced a reduction in the beneficial loan rate of interest from 6.25% to 4.75% from 1 March 2009. This is the rate of interest which is used to calculate the value of the benefit provided to employees where they receive a cheap or interest free loan from their employer.
Employment Rights - Statutory Limits
The limits on payments and awards made to workers in certain situations increased from 1 February 2009, where the event giving rise to the entitlement to the payment arose on or after this date. The increased limits affect statutory redundancy payments and compensatory awards for unfair dismissal.
Business Payment Support Services
According to Government figures, over 60,000 businesses have agreed time to pay tax arrangements with HMRC which total more than one billion pounds.
Employment Law Guidance Programme
The Department for Business, Enterprise and Regulatory Reform Employment Law Guidance Programme is designed to help employers save time and money when complying with their employment law obligations.
Changes to the National Minimum Wage from 6 April 2009
The National Minimum Wage (NMW) rules have been with us for some years and require minimum rates of pay for certain workers. The government is now getting tough with those who do not pay the NMW.
Higher Late Filing of Accounts Penalties – Watch Out!
If you run your own company you will no doubt be aware that company law requires all companies to file a copy of their annual accounts at Companies House by their ‘due date’. Penalties become payable if these accounts are filed late.
PAYE Tax Codes about to be Issued
HMRC have advised that they are about to issue PAYE tax codes to employees for the 2009/10 tax year.
Holidays
On returning to work in the New Year, many will be reaching for the travel brochures to plan their next holiday getaway. Now would be a good time to ensure that your employees’ (or your own) holiday entitlement has been correctly calculated, especially as many employees’ entitlement may need to be increased due to a change in the minimum holiday entitlement, which takes effect later this year.
Pay HMRC by Direct Debit
HMRC have announced that they are now able to offer more customers the option of paying by Direct Debit. If taxpayers are registered to use Self Assessment Online, PAYE Online for employers or Corporation Tax Online they can now set up Direct Debit payments online. Taxpayers can also make tax credit repayments by Direct Debit.
Government Help for Businesses
Richard Lambert, CBI Director-General, has given his analysis of the Government’s announcement on lending in the economy.
Reduction in the Standard Rate of VAT
The standard rate of VAT was reduced from 1 December 2008 from 17.5% to 15%. HMRC have published some further frequently asked questions which clarify the correct treatment in several situations.
Health in Pregnancy Grant
Pregnant women are being urged to apply for the new Health in Pregnancy grant of £190.
New HMRC Penalties
There is a significant change in the approach which HMRC will be taking in dealing with tax returns relating to periods starting on or after 1 April 2008, where the return is due to be submitted on or after 1 April 2009.
HMRC Warn about Email Fraud
HMRC are warning taxpayers that recently they have been made aware of the following scams:
Business Payment Support Service
The Business Payment Support Service, announced in the Pre-Budget Report 2008, is designed to meet the needs of businesses affected by the current economic conditions. Any business that is worried about being able to meet tax, National Insurance or other payments owed to HMRC, or anticipates that payments becoming due will cause them problems, can get in touch with HMRC to discuss payment options to help them deal with temporary cash flow difficulties on 0845 302 1435.
Changes to the Advisory Fuel Rates from 1 January 2009
To reflect the reduction 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 January 2009, so employers using the advisory rates should advise affected employees and update any expense forms as soon as possible.
Demand for Advice on Redundancy and Lay-Offs
Acas, the Advisory, Conciliation and Arbitration Service, have reported a sharp increase in the number of businesses and employees seeking advice on redundancy, lay-offs and business transfers.
Cut in Interest Rates
Commenting on the decision by the Bank of England’s Monetary Policy Committee to reduce interest rates by 1% to 2% earlier this month.
VAT - Extension of 14 Day Limit
HMRC have issued further guidance to businesses on the reduction in the standard rate of VAT from 1 December 2008. The guidance clarifies certain issues regarding the ‘tax point’ rules for the date of supply.
Double Up on your Duty Free
Travellers can now bring back more than double the amount of gifts and souvenirs from outside the EU without paying UK duty. The changes are as a result of a proposal that Gordon Brown made to the European Commission in 2004. The government has announced an increase to the allowance for what are known as 'other goods', which includes souvenirs, clothing, electrical goods and perfume.
Capital Allowances on Cars
HMRC have issued some draft legislation and guidance on how the tax relief on business cars, known as capital allowances, will be calculated from April 2009.
