The standard rate of VAT will be reduced from 17.5% to 15% for the period 1 December 2008 to 31 December 2009. The rate will then revert to 17.5%. No changes have been made to the 5% reduced rate or the 0% rate.

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.

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.

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.

Acas (Advisory, Conciliation and Arbitration Service) has made available a revised Code of Practice dealing with discipline and grievance procedures. The Code has been approved by the Secretary of State for Business, Enterprise and Regulatory Reform. The draft guidance will now be put before Parliament for approval.

Do you know how much your state pension could be when you retire? The Pensions Service will provide a forecast of this information either by letter or an online email service.

New legislation under the Health and Safety Offences Act 2008 will increase penalties and provide courts with greater sentencing powers for those who flout health and safety legislation.

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.

Are you planning a party for your staff? Make sure you are clear on the tax implications.

In his Pre-Budget Report this week, Chancellor Alistair Darling announced that the standard rate of VAT will be reduced from 17.5% to 15% on 1 December 2008.

Chancellor of the Exchequer Alistair Darling has delivered a much-anticipated Pre-Budget Report against a backdrop of economic slowdown and turbulence in the global economy, which has steadily deteriorated since the 2008 Budget on 14 March.

He emphasised that the measures set out were designed to help families and businesses through “economic uncertainty not seen for generations” and to position the UK to take full advantage of a future recovery in the UK economy.

The proposed 18% flat rate of capital gains tax has now become a reality following Royal Assent to the 2008 Finance Bill on 21 July. In limited circumstances, however, business owners will still have an opportunity to reduce their capital gains tax on disposals of certain assets to a rate as low as 10%, through the use of Entrepreneurs’’ Relief (‘ER’), which has now become one of the most important tax reliefs available.

The DWP announced last week that the Government is proposing an amendment to the Pensions Bill which will allow some people to make up to six additional years of voluntary (Class 3) NI contributions in addition to those permitted under existing time limits.

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.

The Bank of England reduced the bank rate by 0.5% to 4.5% with effect from 8 October 2008.

HMRC have updated their guidance on buying goods on the internet explaining when duty and / or VAT will need to be paid.

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.

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. 

Late filing penalties are now doubled if accounts and returns for financial years beginning on or after 6 April 2008 are filed late in two successive years.

From 1 October 2008, new rules are in place to unify and replace the various regulations setting out the trading disclosures that incorporated companies must make to show their legal identity. This is now being monitored by Trading Standards and can result in a £5000 fine.

In today’s business world, IT systems are increasingly the foundation of efficiency and profitability as well as helping to create competitive advantage.

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!

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.

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.

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.

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.

National Minimum Wage (NMW) rates are set to rise from 1 October 2008.

The Health and Safety Executive (HSE) are keen to dispel the myth that they are responsible for banning ‘this, that and the other’.

The UK Border Agency is proposing to introduce a new list of shortage jobs in order to better target migration at the needs of British businesses. The proposed list would reinforce the selective approach of the new points based system.

You went into business because you believed your products or services were worth selling.

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.

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.

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.

Salary sacrifice is a complex area which should not be overlooked. HMRC have added some questions and answers on this difficult subject to their website.

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.

HMRC are reminding taxpayers who wish to complete paper self assessment tax returns that the new 31 October 2008 deadline is ‘only weeks away’.

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.

HMRC have issued revised guidance on Charity Challenge Events, including those that qualify for the VAT Charity Fundraising Exemption.

Under the new careless driving laws, which came into effect from 18 August 2008, motorists who kill whilst avoidably distracted at the wheel will face prison.

The government has announced a package of measures to help boost a struggling property market, including raising the stamp duty land tax threshold by £50,000. Brought in for a twelve month period from 3rd September 2008 to 3rd September 2009, a home must now sell for £175,000 before stamp duty is paid.

Your business may have reached a stage where the best way to improve its position in the marketplace is a merger or acquisition.

HMRC have now issued further guidance on the increase in the personal tax allowance which is due to take effect from 7 September 2008.

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.

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.

HMRC have issued revised guidance on the system of penalties which they will be able to apply to taxpayers.

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.

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.

The government has announced that foreign nationals who wish to become British citizens will have to earn the right to stay here.

To keep your business running smoothly and efficiently, there will be times when you need specific financial solutions.

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.

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.

For many years, there have been requirements for employers to verify the identity of their workers in order to prevent illegal working.

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).

This year ‘Tax Freedom Day’ fell on June 2. The statistics make interesting reading in that the average UK taxpayer spends more than five months of the year working for the government as opposed to working for themselves.

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.

According to the CBI the average UK office worker spends 95 minutes of their working week surfing the web for personal use. This they estimate costs the economy £10.6 billion a year.

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.

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.

Your business may have reached a stage where the best way to improve its position in the marketplace is a merger or acquisition.

Perhaps you have the opportunity for a management buy-out (MBO), or your business could be an attractive proposition for a management buy-in (MBI).

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.

It has been reported in the Daily Express that tax inspectors are searching social networking sites for potential tax evaders, who may be ‘advertising’ their wealth or assets which may lead HMRC to believe they have ‘hidden’ remuneration.

According to a new survey conducted by Norwich Union Healthcare, 77% of employers believe alcohol is the main threat to employee wellbeing and a big contributor to employee absence.

The government has announced plans to extend the right to request flexible working to parents with children up to the age of 16.

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.

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.

Chancellor Alistair Darling has announced an increase in the personal allowance of £600 and an adjustment to the higher rate threshold (the total of the personal allowance and basic rate limit) as reported in the earlier article, ‘10% tax rate climb down’.

Women pensioners could boost their state pension or even be in line for a windfall payment under special terms.

To keep your business running smoothly and efficiently, there will be times when you need specific financial solutions.

We will explore the options that best suit you and help you to present funding proposals effectively, to help you achieve the best available terms.

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.

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.

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.

Incapacity Benefit and Income Support are to be replaced by Employment Support Allowance (ESA). The change takes effect from 27 October 2008.

With school and college students preparing to start the summer term and sit final examinations, the CBI has published the results of a new annual audit of the nation’s skills.

The Information and Consultation of Employees Regulations 2004 have been extended to cover undertakings with 50 or more employees from 6 April 2008.

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.

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.

M&S have won a landmark victory in the European Court of Justice. 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.

Running a business is a full-time job, so it’s hardly surprising that many owners and managers are often too busy thinking about today to plan ahead for tomorrow.

The National Minimum Wage will rise to £5.73 (£5.52) an hour in October 2008.

In the Pre-Budget Report last October Chancellor Alistair Darling announced a series of changes to the capital gains tax (CGT) regime for individuals and trustees. These changes included the abolition of taper relief and indexation relief and the introduction of a single rate of CGT of 18%. The changes take effect from 6 April 2008.

The government will implement a package of reforms announced in the 2007 Pre-Budget Report subject to certain changes. The measures will take effect from 6 April 2008.

The introduction of the proposed legislation on ‘income shifting’ has been delayed until April 2009.

The employers annual returns P35 and P14 (P60) are due for submission to HMRC by 19 May 2008. There is a tax free incentive payment due of £100 for small employers, those with less than 50 employees, who successfully file their returns electronically.

A reduced 5% VAT rate for ‘over the counter’ sales of smoking cessation products was introduced from 1 July 2007 for a period of one year only. The government has announced that the 5% reduced rate will continue to apply.

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 have issued some additional guidance on filing in year forms online. The guidance concerns online submission of forms P45 and P46.

If you are looking for an accountancy partner that opens the door to new opportunities, you need ags accountants and business advisers.

For many years, there have been requirements for employers to verify the identity of their workers, to prevent illegal working. The legislation was backed up with fines.

In the January issue, we reported on controversial new rules proposed by the government on residence and domicile.

Normally, the payment or reimbursement of expenses or the provision of a benefit in kind is taxable on the employee. However, particularly with expenses, it may well be that the employee is entitled to tax relief personally on the same amount. In order to obtain the relief, the employee would have to write to HMRC or fill out a tax return.

HMRC have announced that they have started sending penalty notices where their records show that they have not received 2006/07 forms P35 and P14 (the employer’s annual return and end of year summary). Similar penalties are also being issued where 2006/07 form CIS36 (the contractor’s annual return) is outstanding.

The government has announced up to £37m of funding to prevent work place disputes unnecessarily going to employment tribunals. The measures are part of a package designed to simplify the dispute resolution system.

It will come as little surprise that, once again, an HMRC online system crashed an important time of year. This time it was the self assessment online service that was disrupted on 31 January 2008 and 1 February 2008.

The limits on payments and awards made to workers in certain employment rights cases rose from 1 February 2008.

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.

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.

This new product provides an innovative and flexible approach to unsecured business finance.

Our partner is offering unsecured funding for company payroll, PAYE and NI. You can have 60 days rolling credit on your monthly salaries, with a provision to allow for a growth in payroll.

In the Pre-Budget Report in October 2007 the Chancellor, Alistair Darling, announced a series of changes to the capital gains tax (CGT) regime for individuals and trustees. These changes included the abolition of taper relief and indexation relief and the introduction of a single rate of CGT of 18%. The changes take effect from 6 April 2008.

Following the Pre-Budget Report announcement that HMRC would be reviewing the rules on residence, HMRC have issued some draft legislation which is expected to take effect from 6 April 2008.

From 15 December 2007, the Money Laundering Regulations 2007 require certain businesses to have systems in place to prevent money laundering and report suspicious transactions. These regulations replace the previous ones which have been in force since 2004.

HMRC are running a series of workshops on the online completion of end of year PAYE returns. You can use the link below to see when sessions are running in your area. 

HMRC have apologised for a problem that they have identified with the self assessment tax return. The problem apparently only relates to tax returns submitted prior to 31 October 2007 where the taxpayer asked for any unpaid tax to be collected directly rather than by a restriction in their tax codes for 2008/09.

The Health and Safety Executive (HSE) have announced that they will run a workplace slips, trips and falls campaign in February and March this year.

HMRC have advised that they are about to issue PAYE tax codes to employees for the 2008/09 tax year.

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.

A major change to Chancellor Alistair Darling’s plans for a controversial shake-up of the capital gains tax regime has been welcomed by Dudley accountants, ags,  as a respite for businesses.

There is a myriad of cash flow solutions available to UK businesses. Each comes with its own pros and cons, but very few share the characteristics of our partner’s purchasing service.

The proposed changes announced in the Pre-Budget Report to the capital gains tax (CGT) system are radical. Taper relief for CGT will be abolished for disposals on or after 6 April 2008. Other changes to the CGT system include introducing a flat rate of CGT of 18% and abolishing indexation, an allowance for inflation.

To reflect the increases in fuel prices, HMRC have issued new advisory fuel rates for company car drivers. These take effect for all journeys undertaken from 1 January 2008 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.

According to a government report, cuts in ‘red tape’ are saving UK businesses and third sector organisations more than £800 million per year.

Chancellor Alistair Darling announced in his Pre-Budget speech a change to the way in which the inheritance tax (IHT) nil rate band of £300,000 can be used for married couples and civil partners.

In November’s enews we reported on proposed changes to the capital allowances system and HMRC have now issued a 91 page document including draft legislation.

A new Employment Bill will, if enacted, impose tougher penalties on employers and dispute resolution procedures will be simplified. The overall effect of the Employment Bill is to strengthen and clarify key aspects of employment law. It was introduced and had its first reading on 6 December 2007 with the aim of receiving Royal Assent by summer 2008.

In the Pre-Budget Report the government announced a package of reforms affecting the personal tax rules on residence and domicile.

You may well remember that the Arctic Systems case involved a husband and wife who owned a company 50/50 and, broadly, took the profits out by way of dividends, again 50/50.