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.
Restricted Tax Relief on Pension Contributions
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.
Personal Tax Changes
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.
Standard Rate VAT
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.
Enhanced Relief for Trading Losses
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).
Capital Allowances on Plant and Machinery
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. Employers will have to record NICs in the following four earnings bands, with the introduction of the Upper Accrual Point:
National Insurance Contributions from April 2009
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.
PAYE changes
'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.
'How to Pay' changes
New Statutory Payment Rates for 2009/10
The new Statutory Payment Rates for 2009/10 have been announced (subject to Parliamentary approval). The new rates are as follows:
New Statutory Payment Rates for 2009/10
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.
New HMRC Penalties
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.
Reduction in the Standard Rate of VAT
Grant for Business Investment in England (GBI)
This grant replaces the previous SFI (Selective Finance for Investment) grant. The aim of the GBI scheme is to encourage capital investment in projects that lead to long-term improvements in productivity, skills and employment.
Grant for Business Investment in England (GBI)
In the Spotlight: John Davison
The spotlight this issue focuses on John Davison, Associate Director at Clive Owen & Co LLP. With almost 17 years service with the practice, he has a lot of knowledge to share on his role in the Business Planning and Development department.
In the Spotlight: John Davison
Accountants put Growth Under the Microscope
One of the leading regional accountancy businesses is branching out in a new direction with the launch of a dedicated forensics team.
Accountants put Growth Under the Microscope
Experts Help Charities Cut Through Red Tape
CHARITIES in the North East can now access specific expertise that can help them comply with the complex regulations they face.
Experts Help Charities Cut Through Red Tape
Forensic Focus
A FORENSIC accountant who has trapped countless fraudsters is warning businesses that they could be the next target as the recession begins to bite.
Forensic Focus
How Reorganising Your Company Can Make Commercial Sense
In recent years, we have acted on behalf of several companies to review, advise and reorganise their ownership structures. Many companies, particularly those which have been trading for a number of years, have diversified from one or two core activities into other areas. A common scenario is the company which has purchased one or more properties as investments. In such circumstances, a scheme of reconstruction can be used to break up an existing business with varied trading activities into separate undertakings.
How Reorganising Your Company Can Make Commercial Sense
New Penalty Regime – Be Prepared and Be Proactive!
You will hopefully be aware of the fact HMRC are introducing a new penalty regime which will apply to all VAT returns rendered with a due date of 1 April 2009 onwards but which will cover not just VAT but Corporation Tax, Capital Gains Tax, National Insurance Contribution (NIC), PAYE and CIS.
New Penalty Regime – Be Prepared and Be Proactive!
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.
Taxation Of Business Travel
Parties For Employees
Are you planning a party for your staff? Make sure you are clear on the tax implications.
Parties For Employees
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.
Child Trust Fund
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.
Gift Aid Form Amended
‘Paper’ tax return deadline 31 October
HMRC are reminding taxpayers who wish to complete paper self assessment tax returns that the new 31 October 2008 deadline is here. They are advising that 'tax doesn't have to be taxing' with an advertising campaign fronted by well known newsreader Moira Stewart.
‘Paper’ tax return deadline 31 October
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.
Intestacy Rules
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.
Shopping On The Internet
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%.
Entrepreneurs' Relief
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.
Changes To Rights During Maternity Leave
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.
Change to Benefits System
NMW Rates to Rise
National Minimum Wage (NMW) rates are set to rise from 1 October 2008. The increased rates will be as follows:
NMW Rates to Rise
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.
CBI Forecast
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.
Licence to Bring in Migrant Workers
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.
NMW Changes
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.
Gift Aid Transitional Relief
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.
Reducing Employers' Administration
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.
HMRC Powers
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.
Report on HMRC's Lost Discs
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.
Professional Subscriptions
£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.
£10,000 VAT Errors
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.
VAT Treatment of Charity Challenge Events
National Minimum Wage and Tips
An Employment Appeal Tribunal has ruled in HMRC's favour in the case of Annabel's Restaurant and Nightclub. The case concerned the payment of tips through a 'tronc', which is an arrangement which sometimes operates in the restaurant industry. The 'tronc' which operates as a separate independent payroll, run by a 'troncmaster' is used by some restaurants as a means of distributing tips or service charges paid by customers. HMRC have argued successfully that where the tips are paid in this way they do not count towards national minimum wage (NMW) entitlement.
National Minimum Wage and Tips
Advisory Fuel Rates
To reflect the increases 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 2008 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.
Advisory Fuel Rates
Employees' Mileage Payments
As you may be aware there is a statutory system of tax and NIC free mileage rates for business journeys in an employee's own vehicle. These mileage payments are known as 'Authorised Mileage Allowance Payments' (AMAP).
Employees' Mileage Payments
Brothers Expand Empire in Style
TWO brothers have launched the latest phase in the expansion of their business empire by opening a contemporary fashion outlet in Yarm.
Brothers Expand Empire in Style
Family's Firm Choice for the Future
North Shields-based family company Tom Swan Builders' Merchants has made a firm choice for its future by dovetailing with North Yorkshire Timber (NYT).
Family's Firm Choice for the Future
Tax Credits Renewal
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 have a dip in normal levels of income perhaps due to incurring trading losses.
Tax Credits Renewal
Flexible Working Extention
The government has announced plans to extend the right to request flexible working to parents with children up to the age of 16.
Flexible Working Extention
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.
SMP and Salary Sacrifice Arrangements
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.
Update your Will
Implementation Date for Rights During Maternity Leave
Following changes being made to the Sex Discrimination Act and, later this year, to the Maternity and Parental Leave Regulations, the law on contractual terms of employment during Additional Maternity Leave (AML) is due to change in respect of women whose babies are due on or after 5 October 2008. HMRC had previously advised that this change would be effective for babies due from 6 April 2008.
Implementation Date for Rights During Maternity Leave
No PAYE/NIC or CIS Deduction Payments Due
Even if no PAYE/NICs or CIS deductions payments are due for a given month or quarter, businesses are still generally required to notify HMRC by way of a 'nil' return.
No PAYE/NIC or CIS Deduction Payments Due
Credit Squeeze
It appears that many businesses are suffering a cash "squeeze" from delayed payment of their invoices as the credit crunch begins to impact on the economy. There are complaints from businesses that some large customers have begun to extend their payment period terms. This is putting a strain on the cashflow of businesses.
Credit Squeeze
Benefits in Kind and Expenses in the Payroll
HMRC have published a consultation document on payrolling benefits in kind. The idea is that payrolling benefits in kind would remove the need for employers to complete P11Ds.
Benefits in Kind and Expenses in the Payroll
Homeworking Costs Increase
From 6 April 2008, HMRC has increased the tax and NIC free guideline rate that employers can pay home working employees without keeping records from £2 to £3 per week.
Homeworking Costs Increase
Entrepreneurs' Relief
After business leaders voiced their objections to the abolition of taper relief, the Chancellor introduced a new Entrepreneurs' Relief (ER). ER may be available for disposals, reorganisations and relevant transactions taking place on or after 6 April 2008.
Entrepreneurs' Relief
Don’t Miss Out on Grant Assistance
Are you thinking of investing in plant and machinery and creating or safeguarding jobs during the next six months?
Don’t Miss Out on Grant Assistance
Employment Support Allowance
Incapacity Benefit and Income Support are to be replaced by Employment Support Allowance (ESA). The change takes effect from 27 October 2008.
Employment Support Allowance
P11D Deadline Looming
The forms P11D, which report employees and directors benefits in kind and expenses, are due for submission by 6 July 2008 for the year ended 5 April 2008. The process of tracking down the information can take some time so it is important that you don't leave things until the last minute.
P11D Deadline Looming
File Online if You Missed The 31 October Self Assessment Deadline
If you wish to file a paper (non electronic) tax return for the 2008/09 tax year, it needs to have reached HM Revenue & Customs by midnight on Saturday 31 October 2009 (or be hand delivered by Monday 2 November).
File Online if You Missed The 31 October Self Assessment Deadline
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.
Pre-Budget Report 2009
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.
Tax Credits Renewal Deadline
10% Rate of Income Tax
Since the start of the tax year the basic rate of income tax has been reduced from 22% to 20% and the starting rate of 10% abolished for income except for savings and dividend income.
10% Rate of Income Tax
Productivity Training All Adds Up
Four employees were selected by Clive Owen & Co LLP in July 2007 to undertake leadership development training by specialist provider Leadership Management International (LMI), focusing in particular on improving productivity. The four people in attendance were Carolyn Owers, Marketing Manager; Simon Hook, Manager at the Durham Office; Peter Taylor, Corporate Finance Associate Director; and Peter Edley, Director.
Productivity Training All Adds Up
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.
10% Tax Rate Climb Down
HMRC Warning on Scams
HMRC have updated their guidance on scams. HMRC have become aware of a new ruse to persuade unsuspecting taxpayers to complete a form detailing their bank or credit card details. The form implies that a tax refund may be due and that this will be paid straight into their bank account.
HMRC Warning on Scams
Increase in Personal Allowances
Tucked away in a recent issue of 'Notes for payroll software developers' is a bit more information on the timescale for the increase in the current year's personal allowance from £5,435 to £6,035 and the reduction in the higher rate point from £36,000 to £34,800. These changes mean that basic rate taxpayers will benefit by £120 per tax year whilst the position of higher rate taxpayers will be unchanged.
Increase in Personal Allowances
HMRC Penalties for Errors
HMRC have issued revised guidance on the system of penalties which they will be able to apply to taxpayers.
HMRC Penalties for Errors
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.
Extra Personal Allowances
'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'.
'Paper' Tax Return Deadline Looming
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.
Penalties
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.
Fake HMRC Emails
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.
Temporary Exemption on Stamp Duty Land Tax
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!
Extra Take Home Pay
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.
Corporation Tax Changes
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.
Proposed Personal Tax Changes
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, Ian McCafferty, CBI Chief Economic Adviser, said:
Cut In Interest Rates