Taxation Dates

1 Jan 2010 VAT standard rate reverts to 17.5%

31 Jan Payment balance of year2008/09 plus

1st payment on account of 2009/10

1 Apr VAT online filing may be compulsory.

5 Apr Tax year-end 2009/10.

Income Tax Returns 2008/09

If not yet in our hands, we need the data urgently to deal with a Return.

Accounts

We should have dealt with, or be dealing with, any Accounts to be dated 30 May 2009, or earlier.

VAT Return Filing and Payment

From April 2010, new businesses and those with an annual turnover exceeding £ 100,000 will have to file and pay electronically. The means of registering for this can be tortuous; early attention to that is recommended. Look for e-filing details on the Revenue website

Companies House Late Filing of Accounts Penalties

The new much more expensive penalty regime is fully in operation.

Visits by HM Revenue & Customs

From April 2010, HM Revenue & Customs officers can make unannounced visits. Occurrence with any of our clients is most improbable, but should one occur, do not agree to it. Contact us.

IR35

Since inception, the IR35 regulations raised revenue amounting to £M9.2. This compares with an original forecast £M220 per annum in National Insurance contributions alone! (Schmidt Report)

Greenhow website

A frequently updated section about possible adverse tax consequences of the Recession has been split into more manageable pages and re-sited under ‘Taxation.’

Joining it there is a paper on general tax saving strategies most of which has been shown in bulletins issued annually before each 5th April.

Other Notes & Comment

@ 9th December 2009

@ Close £ = Euro Î 1.0999

= US $ 1.6219

FTSE 100 = 5,203.89

The Markets

The FTSE dipped just 3 points on the announcement of the Pre-Budget Report and ended down 20 for the day. £ Stirling dropped to a 2 month lowest against the US $, but fared better against Euro Î (which itself suffers over disquiet regarding Greece and Spain ).

Generally, the Pre-Budget Report is not seen as supportive of UK business and its economy. Business creates the wealth upon which tax is derived; the tax on banks, treatment of "non-Doms" and the new 50% Income Tax rate, do nothing to make the country more competitive in which to do business.

£ Stirling exchange rate suffers as a result of no reduction shown planned to government spending scheduled for 2010/11.

If you are an old age pensioner, who plays bingo, lives on state benefits, has an old boiler, runs an electric car (or company van) and generates £ 900 worth of electricity into the national grid, then the 2010/11 Budget should be for you!

The UK Taxpayer

Without any fanfare, but welcome, a new Taxpayer's Charter was published in November. It can be viewed on the HM Revenue & Customs' website.

Tax Avoidance

Taxation law remains highly complicated. It is of concern that some senior tax officers demonstrate a lack of knowledge. Political leaders confusing avoidance with evasion and suggesting that we should pay a "fair share" may be the cause of this.

Scams and HM Revenue & Customs

Generally treat any messages with caution. If you receive an email or SMS text message, apparently from HM Revenue & Customs, asking you to contact any number other than 0845 300 3900, it must be a scam and you should not respond. Instead it should be reported to HMR&C.

GENERAL PRE-BUDGET REPORT FEATURES
This Bulletin is produced rapidly, it could contain errors. Note
that the Pre-Budget proposals are not law until enacted fully by
Parliament. It may be unlikely, but some measures could be
altered by a new government.
Background
Gross Domestic Product is expected to have declined by 4.75%
for year 2009, but will expand between 1.0% and 1.5% in 2010,
thereafter in the medium term, growing by between 3.25% and
3.75% per annum. By 2014-15, as a share of national income,
government debt will be falling, and eliminated by 2017-18.
Consumer Price Index inflation is expected to peak at 3% early
in 2010, then fall back to 1.5% by the end of the year.
Government spending plans for 2010/11 are unchanged, but all
public-sector pay rises will be capped at 1% from 2011, for two
years. It is understood individual government departmental
budgets for 2010/11 are unaltered, no new detail is produced..
Some state benefits are to increase by 1.5%, the state pension
is to increase by 2.5%
A special tax on banks, based upon bonus payments that exceed
£ 25,000 is introduced. A new tax to help fund superfast broad-
band is to be applied to telecom. landlines.
2010/11 Direct Taxes
With a few exceptions, there is no known change to direct taxes.
Comment
As far as direct taxation is concerned, the proposals amount to
what could be the near complete budget for 2010/11.
Government departmental spending details were set before, it
seems regrettable that no real plans are made to reduce them.
The tax on bankers' bonuses was expected, but any such
being retrospective and intrusive are generally reprehensible.
The nature of this one makes the UK a less attractive place in
which to do business.
National Insurance being essentially a payroll tax makes the
proposed increase for year 2011/12 questionable. It is a dis-
incentive to taking on staff and will not help the unemployed.
Tax planning .
With so much detail, there is more time for tax planning before
the tax year end 5 April 2010.
Stamp Duty on property from 1/01/2010
Residential in		Residential/ Commercial
Rate	Disadvantaged Area
0%	up to £150,000	up to £125,000
1%	£150,000 - £250,000	£150,000 - £250,000
3%	£250,000 - £500,000	£250,000 - £500,000
4%	over £500,000	over £500,000

	TAXATION RATES, THRESHOLDS, ETC.
		2010/11		2009 /10
		Band £	Rate	Band £	Rate
Corporation Tax
Full Rate		£1,500,000	28.00%	£1,500,000	28.00%
Marginal Relief		300K to 1.5M	11/400	300K to 1.5M	11/400
Small Company			21.00%		21.00%
VALUE ADDED TAX
Standard	Rate
From	To
Before	30/11/08				17.5%
01/12/08	31/12/09				15.0%
01/01/10	Thereafter		17.5%		17.5%
Registration level		Not known		£68,000
Note: Flat Rate scheme rates are also revised from 1 January 2010
Company Vehicles
Car Benefit		Based upon CO2 emissions
Fuel Benefits
Car	CO2 and	£18,000		£16,900
Van	flat rate	£3,000		£3,000
Van - electric	flat rate	0		£3,000
Pension Scheme Allowance
Annual Allowance		£255,000		£245,000
Lifetime Allowance		£1,800,000		£1,750,000
Landline Duty
From 1 October 2010		£0.50	per month	N/A
(added to telephone invoice)
INHERITANCE TAX
Rate			40.00%		40.00%
Single
Amount Exempt		£325,000		£325,000
Married/Civil Partners
Amount Exempt		£650,000		£650,000
The latter is the maximum exemption that could be available upon death
of the previously surviving partner.
National Insurance
The detail shown below is unchanged from 2009/10, but there is to be a change to the primary lower earnings limit amounting to an increase of about £ 8 per month. This does not alter the threshold at which contri- bution is due, but it does increase the amount at which a non-contributor must be paid, to be treated as if contributing.
Year 2011/12
Instead of the previously forecast increase of 0.5% to the rates for this year, the charge for both employer and employee is to be increased by 1% to 13.8% and 12% respectively. However, owing to an increase in thresholds, lower earners should be unaffected.

TAXATION - PERSONAL			Year	Year
			2010/11	2009 /10
MAIN INCOME TAX			ALLOWANCES
Personal, normal			£6,475	£6,475
Age 64 to 74			£9,490	£9,490
Age 75 and over			£9,640	£9,640
Age Income Limit			£22,900	£22,900
Note: The Personal Allowance and the increased age related
allowances may reduce by £ 1 for each £ 2 that income exceeds
£ 150,000, for normal and for age related by the excess income
over the Age Limit.)
Married Couple. There is additional allowance where either
spouse was born before 6 April 1935:-
	Minimum	at 10% of	£2,670	£2,670
INCOME TAX		RATES	Income Band	Income Band
Standard	on first		£37,400	£37,400
within which band:
Earnings, Pensions
and other income		20.00%
Savings (if brought into charge			up to
to tax first, within band)		10.00%	£2,440	£2,440
Dividend		10.00%
Higher	on over:		£37,400	£37,400
Dividend		32.50%
All Other		40.00%
Additional	on over:		£150,000	N/A
Dividend		42.50%		N/A
All Other		50.00%		N/A
CAPITAL GAINS TAX			Exemption	Exemption
Annual			Not known	£9,200
Standard Rate		Not known		18.00%
Certain Business Assets:
Effective Rate		Not known		10.00%
2010/11 National Insurance Contributions
(Standard)		amounts, rates, timings, etc.
Class 1 Employment		Pay	Employee	Employer
On First (monthly)		£476.00	0.00%	0.00%
On Next (monthly)		£3,180.00	11.00%	12.80%
On Above (monthly)			1.00%	12.80%
Class 2	Self-employed		£2.40	flat rate weekly
Small earnings exception			£5,075	per annum
Class 3 Voluntary			£12.05	flat rate weekly
Class 4 Self-employed on profits:			Per annum	Rate
On First			£5,715	0%
On Next			£38,160	8%
On Above			43875	1%

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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