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Bulletin No. 44 (6 March 2009) 

Taxation Dates

    5 April 2009       End of 2008/09 Tax Year.

  22 April 2009       Budget Statement.

  19 May  2009      Final Filing date for 2008/09 PAYE data.

Accounts

We should have dealt with, or be dealing with, any Accounts to be dated 31st August 2008 , or earlier. 

 The 2009 Budget

The Budget Statement is postponed to 22nd April, so past the current tax year-end.  This bulletin is produced now, to show what, for the next tax year, is general public knowledge.  As usual, there may be matters that can be dealt with before 5th April, so as to reduce, or postpone, taxation. 

   Consider:

1.           Use of any unused allowances, or standard bands of income, so as to lessen  the chargeable income in 2009/10.

2.           Could any income be better placed before/after 5^th April.

3.           Should any dividend be taken before 5^th April (if profits and tax position allows)?

4.           Payments into Pension funds and ISAs.

5.           If Capital Gains are present, could some loss be realised before 5^th April to bring the gain with the Annual Exemption?  Or, possibly the gain could be split with your spouse – so as to take advantage of two Annual Exemptions.

6.           If no Capital Gains are present, should some be realised – so as to use up the Annual Exemption?

 Budget Detail

The Spring Budget Statement is delayed until 22nd April, probably allowing no time between then and for taking of any action. However, most of the content is known – noted below. Recognition allows for some tax planning, but there may be changes:  

We do know that anti “Income Shifting” legislation is not proposed, yet.  

We do not know:   1. the Value Added Tax Registration threshold, 

                              2. the Capital Gains Tax Annual Exempt Amount, 

                               3. any new details regarding Inheritance Tax.  

One can suppose that the main rate for Corporation Tax will remain at 28%. 

State Pension and Taxation

The State Pension is taxable of course. As is seen on PAYE Notices of Coding, HM Revenue & Customs has access to the detail.  Usually, they get it right, but not always.  It is worth checking - we found an instance where the amount included (a default on an “on-line” Tax Return) was a year’s worth – whereas the actual entitlement was for just 2 months.’

The Recession – possible adverse tax consequences

What the notice on the website really “boils down to” is that if you are facing financial difficulties, you should let us know.  There may be options. 

The Recession - other adversities?

It can be supposed that some “scams,” or other sharp-practices may re-emerge.  One should be on-guard against these. For example: invoices for goods never ordered, telephone calls about a never made promise to support a good cause with an advertisement, etc.  (organisations calling generally earn commission).

   Very recently, a letter was seen offering registration under the Data Protection Act.  Without doubt registration would be achieved, but at £ 135, instead of just £ 35 for completing a simpler official form.

In House

   Tighten up your own controls and procedures, discuss with us, and/or have another look at “In House Fraud and Theft,” in bulletin no. 39.

Companies House   Accounts Filing-Time Allowance

For Accounts beginning on or after 6 April 2008 , the time allowed is to be 9 months (a 1 month reduction, the same as that for HM Revenue & Customs).

Late Filing Penalties

Since 1st February 2009 these have become:

Company:                                  Private    Public           

Up to 1 month late                      £    150   £    750

Up to 3 months late                    £    375   £ 1,500

Up to 6 months late                    £    750   £ 3,000

More than 6 months late              £ 1,500               £ 7,500

HM Revenue & Customs  Advisory Fuel Rates

New rates effective from 1 January 2009 are.

Engine Size                    Petrol    Diesel    LPG 

1400cc or less               10p       11p         7p

1401cc to 2000cc          12p       11p         9p

over 2000cc                  17p       14p       12p

   These can be used in instances where employers reimburse employees for business use in their company cars, or where the employee is required to reimburse the employer for fuel used in private travel.

   Employees are not entitled to use these rates to calculate a deduction if employers reimburse them at lower rates.

HM Revenue & Customs & Scam e-mail

Relatively new are e messages, purporting to come from HM Revenue & Customs.  Do not respond. As with any others, it is important not to visit any suggested website.  Some suggest contacting a telephone number – do not do so, you may be charged £ 6 per minute, as you ‘hold’ for a reply that you never get. (Source ICEAW TAXline).

 Self-Employed Workers

During the recession, to minimise cost, it may be tempting to treat workers as self-employed. It is important to recognise at least basic attributes of the status:

 The worker must “run his own business” take on risks, use his own equipment, act under his own initiative on the assignment, issue an invoice, etc.

 The worker is not obliged to work for the engager who similarly is not obliged to use the particular worker’s services. 

Other Notes & Comment

                @ 5^th March 2009

@ Close £   =    Euro Î1.1258    =    US    $ 1.4117

 FTSE 100  =      3,529.9  

The Markets

Trade on stock markets is nervous with low valuation levels, caused by fears of the unknown extent of the global recession (causing unemployment, reduced general asset and pension fund values).  Also feared are the possible effects of Central Bank actions taken in attempt to counter the recession.

   A positive sign is that UK domestic home values may have become more attractive to buyers. At least by suffering a reduced rate of decline in value.

The 2009 Budget

The main Budget features of what is already known, affects higher earners.  There is an increase of  £ 3,555 per annum to the band of income upon which full National Insurance Contributions (NIC) is to be payable.  A PAYE Upper Accruals contribution point for NIC is also introduced, contributions over which no additional State Pension entitlement is gained.

In the news:  Bank of England (BoE) Base Rate 0.5%

“Quantitative easing” is simply that the BoE will not receive taxes, etc, nor borrow the funds, to cover asset purchases, or loans that it advances against assets. It is supposed that at a future time, the intention is that the money created will be recovered/ cancelled.  If applied as a temporary increase in money supply, in theory, at least, the inflationary measure should counter the recession’s deflationary effects and would help support asset values, without adverse consequences.

   Being targeted initially at government ‘gilt edged’ securities and corporate bonds, effects should be to:

1.       Raise the prices of those securities, reducing their longer-term interest rate yield.

2.       Increase money supply in the general economy (by paying for the purchases).

3.       Allow for monetary cancellation, when the assets are finally sold back to the market.

   Costing BoE nothing, it makes sense that its interest rates should be at, or near, 0% per annum.

To return directly to the greenhow home page click here: [home] or view:   [Bulletin No.40], [Bulletin No. 41],[Bulletin No. 42] , [Bulletin No.43],[Bulletin No.44],[Bulletin No. 45],[Bulletin No. 46],[Bulletin No. 47]

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