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Bulletin No 43 |
Bulletin No. 43 (25 November 2008)
This Bulletin is produced rapidly, it could contain errors. Note the Pre-Budget Report is not law until enacted Parliament.
Taxation
Dates
Accounts
We should have dealt with, or be dealing with, any Accounts to be dated 31st May, or earlier.
‘Income
Shifting’
The putting forward of legislation drafted against business owners from organising family personal income to best advantage is deferred. It will not be put forward in April 2009.
Invoice Numbering
It has always been good practice for invoice numbering to at least contain a sequential series. For those VAT registered it is now mandatory.
IR35 Regulations
The recent HM Revenue & Customs win of the ‘Dragonfly’ case was no surprise. It was a poor one to take to the High Court. However, it confirmed that a limited right of substitution between the company and an agency that was not reflected in the agency’s contract with the client was in-sufficient.
2009/10
Tax Year
Most of the detail, normally to be issued in a March Budget , is now known.
Value
Added Tax
The
Standard Rate is reduced to 15% from 17.5% with effect Monday 1st December. It
will revert to 17.5% from 2010. There are no adjustments to other basic
rates. However, although those on a fixed rate scheme will apply the new
standard rate to their invoices, they will have to use amended payment rates.
Motor
Fuel duties will be adjusted so as to compensate HM Treasury for the lost VAT
revenue on these supplies.
National
Insurance Contributions
For 2009/10, the upper earnings limit for employee contributions will be aligned with the level at which higher-rate tax is paid.
The
measures provide for a rate increase from April 2011 of ½%, for employers,
employees and the self-employed. The income bands at which these are applied
were previously set to increase.
From
April 2011, the earnings threshold at which contributions are first applied is
to be re-aligned with the tax Personal Allowance.
The
Income Tax Personal Allowance
The change made in May 2008 is to be regarded as permanent. The basic allowance will be £ 6,475 for the tax year 2009/10. From 2010/11, the allowance will be subject to reduction for those with gross income above £ 100,000.
Other allowances will increase in line with inflation.
Income
Tax Rate
Rates for 2009/10 will be 10% lower rate (but not applicable in most cases), 20% basic and 40% higher (32.5% dividends), as presently.
From
2011/12 there will be a new additional higher 45% (37.5% dividends) rate for
those with gross income above £ 150,000.
Corporation
Tax
The
1% increase in the small companies rate for this tax to 22%, from
Other
Business Measures
Losses
For
1 year from the announcement, business losses of up to £ 50,000 will be capable
of being carried back for relief for up to 3 preceding years (otherwise 1).
Foreign
Dividends
For
large and medium sized companies foreign dividend receipts will become exempt
from UK Corporation Tax.
Business
Rates
As
a temporary measure, small and medium sized businesses are to be exempted in
respect of empty commercial property with rateable values of less than £
15,000.
Tax
Payments
HM
Revenue & Customs will be more ready to allow time for payments in respect
of all business taxes.
Finance
For
small businesses a loan scheme will be introduced to make loans of £ 1,000 to
£ 1M more affordable and accessible.
Export
Credit Guarantee Department
The department will introduce a temporary guarantee
scheme providing smaller exporters with better access to working capital.
A Savings Initiative
The Saving Gateway is to be introduced in 2010. 50p for each £1 saved will be contributed into accounts for people on lower incomes.
Other
Notes & Comment
@
@ Close £ = Euro € 1.176
= US $ 1.513
FTSE
100 =
4153.0
The
Markets and the Pre Budget Statement
The Chancellor revised the government
General
Comment
The
measures are designed to provide stimulus to the
Whilst giving relief, it may not good news for the longer-term. The
proposals have to be judged in a global context, the exchange value of £
Against a global low asset valuation background, it
may be that it is a good time to invest in assets that you can be sure have
long-term value and prospects.
But, of course, no-one knows when or where
the ‘lows’ are to bottom.
For those who need pension provision, possibly now may be a good time to
start feeding funds into a plan -
Yields on stock-market investments are good, prices may recover – but
it may be very sensible to see that not all is subject also to the performance
of £ Stirling!
Other Matters
The
Recession and taxation
Much to large to form part of a bulletin, on the
website, there is a paper on the possible adverse taxation consequences of
having to terminate a business, or seek another income source.
It can be read at: www.greenhow.net/latest news/
notices.
However, what it all really “boils down to” is that if you are facing
financial difficulties, you should let us know.
There may be options that we can advise you of.
Or, at least we should be able to give an indication of what to expect.
It is the first time that such detail has been posted to the website
before inclusion, or at least mention has been given, in a bulletin. It is a
measure of the general concern about this.
At the same time as a rush of work, caused by the new
filing date for paper Tax Returns, our computer and telecom. Systems were
up-graded. The
latter caused problems and we have had to make use of back-up data whilst the
problems are resolved.
We are working to clear the backlog. For those who delivered records
before 31st October, but for whom the Tax Return date was not met, we will
submit their Returns electronically (for which the final date remains 31st
January). We
do regret the delay.
In
fact, it seems that if a paper return is filed after 31st October but before
31st January, provided all tax due is paid by 31st January, there can be no
penalty.
Bond
Partners Network.
The firm is a member of the above.
This is regarded as on trial, under appraisal, but as and when required,
it should enable access, on clients behalf, to the kind of particular specialist
expertise that may only be offered by larger firms.
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