From Taper Relief To Possible Retirement Relief |
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In last month’s enews we reported on the shock announcement in the Pre- Budget Report that capital gains tax taper relief and indexation allowance would be scrapped for disposals on or after 6 April 2008. Since then business leaders have been making representations to the Chancellor, Alistair Darling, to change his mind or to delay the introduction of the proposals which have significant implications for many taxpayers. |
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HMRC Apologise To Child Benefit Customers |
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Following the announcement that HMRC disks, containing an estimated 25 million Child Benefit recipients’ personal and banking information, have gone missing, HMRC have put a letter on their website apologising to all those potentially affected. |
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Changes Ahead For Capital Allowances |
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As you are no doubt aware the system of tax reliefs on expenditure on equipment in your business is a complex one. Broadly when you buy a piece of equipment to use in your business you normally cannot set the full cost against that year’s profits, unless the value of the item is quite small, or a special tax relief applies. |
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PAYE Penalties |
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HMRC had previously issued a significant number of incorrect late filing penalty notices to employers in respect of their 2006/07 PAYE end of year forms P35 and P14. |
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Northern Rock ISA Savers |
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Following the problems at Northern Rock earlier this year, the government has announced that it will allow the people affected to re-invest their money into any cash ISA, including Northern Rock’s, and so restore their tax advantages. |
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2008/09 Allowances Announced |
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The government has published the 2008/09 rates and allowances for income tax, national insurance contributions (NI), the state retirement pension as well as other benefits and allowances. |
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Staff Parties |
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Are you planning a party for your employees? Are you aware of the tax implications? |
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Inheritance Tax Change Welcomed |
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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. |
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Capital Gains Tax Taper Relief To Be Abolished |
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The Pre-Budget speech also included the shock announcement that taper relief for capital gains tax (CGT) will be abolished from 6 April 2008. This announcement took everyone by surprise and it is still unclear in some circumstances how these rules will be applied. There is also much speculation that the proposed changes may not be implemented or may be deferred. |
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Additional Maternity And Paternity Pay And Leave |
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The government had previously announced their intention to extend Statutory Maternity Pay (SMP), Maternity Allowance and Statutory Adoption Pay from the current 39 weeks entitlement to 52 weeks. |
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National Minimum Wage Prosecutions |
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HMRC have issued a warning to employers about their programme of targeted enforcement of national minimum wage (NMW) procedures. The programme, which is now in its third year, was introduced to work with employers and workers to address issues and concerns around the NMW. |
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Company Car Drivers And Fuel |
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The Pre-Budget report also contained an announcement which will affect some company car drivers. |
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Income ‘shifting’ |
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We have previously reported the case of Mr and Mrs Jones who finally won their case in the House of Lords in July this year. You may remember that the profits of Arctic Systems (their company) were paid equally to them by means of dividends. HMRC had tried to have the income assessed solely on Mr Jones rather than between them but failed in their attempt. |
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Wilder Coe LLP Partner Appointed To Speak At Conference In China |
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Robert Coe, senior partner at London based Chartered Accountants, Wilder Coe LLP, has been appointed to host the expert panel speaking at a worldwide accountancy conference in China. |
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Pre-Budget 2007 |
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With Gordon Brown now in the top seat, the eyes of the nation were on Alistair Darling as he delivered his first pre-budget report. The will-they-won’t-they speculation surrounding the election, plus some tax cut promises from the opposition meant that Darling had to deliver some potentially vote-winning changes. |
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Tax Specialist Joins Wilder Coe LLP |
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London-based chartered accountants Wilder Coe LLP have welcomed tax specialist Howard Weintrob as a new partner. |
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Arctic Systems - HMRC Gives Guidance |
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Following the decision in the Arctic Systems case HMRC have provided guidance on how tax returns are to be dealt with following the House of Lords’ decision. |
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Test Case Issue To Resolve Bank Charges Debate |
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The Office of Fair Trading (OFT) is taking a case to the High Court to decide whether or not the level of unauthorised overdraft charges made by banks are legal. According to the OFT, tens of thousands of complaints that these charges are unfair have been received by the County Courts and the Financial Ombudsman Service. |
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HMRC Apologise For Payment Delay |
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HMRC have apologised to small employers, those with less than 50 employees, awaiting their £150 tax-free incentive payment in respect of the 2006/07 tax year. The incentive payment is due where an employer, or their agent, successfully filed their Employer's Annual Return form P35 and the supporting employee forms P14s online. |
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VAT Fuel Scale Charges |
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The VAT fuel scale charge is the output VAT charge payable by VAT registered businesses which allow their employees to claim all the fuel expenses on their company cars and reclaim VAT on the full amount of fuel purchased without making an adjustment for private use. |
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HSE Launch Risk Assessments Factsheets |
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The Health and Safety Executive (HSE) has produced a range of risk assessment factsheets for different business sectors. According to the HSE, the example risk assessments aim to show businesses that ‘risk assessments are about identifying practical actions to protect people from harm and injury, not a bureaucratic experience’. |
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VAT Change For Invoices |
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HMRC have issued guidance on changes to the rules regarding the information to be shown on invoices issued from 1 October 2007. Some of the changes are very minor and reflect current normal business practice. However some businesses will need to amend their current invoices to comply with the guidance. |
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Arctic Systems – The Verdict |
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The long running saga of Geoff and Diana Jones and their company, Arctic Systems Limited, has recently been back to the courts for the final time to the House of Lords. |
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HSE Reveals Myths |
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The Health and Safety Executive (HSE) publish a series of myths of the month for businesses. The myth for July, which businesses need to be aware of, is that all office equipment must be tested annually by a qualified electrician. |
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HMRC To Target Bank Accounts |
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HMRC have started a consultation on the way in which they pursue individuals who do not pay their tax liabilities on time. The proposal, which would result in HMRC taking money owed directly from an individual’s bank accounts, would aim to tackle the problem of approximately 200,000 people who are pursued through the courts each year for outstanding tax. |
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Phishing Scams |
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HMRC have been made aware of certain so-called 'Phishing' scams targeting taxpayers in an effort to fraudulently obtain personal information from them. |
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Advisory Fuel Rates |
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HMRC have issued advisory fuel rates for company car drivers. These take effect for all journeys undertaken from 1 August so employers should advise affected employees and update any expense forms as soon as possible. |
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Offshore Disclosure – HMRC Follow Up |
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Recently in enews we reported what has been widely reported in the press as HMRC’s ‘Tax Amnesty’. As previously explained the term amnesty is misleading as it only applies to the penalty that would be charged on undeclared tax relating to the offshore accounts, which HMRC have promised to cap at 10% if a voluntary disclosure is made. |
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Business Disruption – Postal Dispute |
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HMRC have announced that VAT returns and payments that were delayed by postal disputes will be viewed sympathetically. |
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Refund Of Voluntary NICs |
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As previously reported in enews in some limited circumstances individuals who have paid voluntary national insurance contributions (NICs) may be entitled to a refund. |
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Delays In VAT Registration |
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According to HMRC’s website it is currently taking an average of 38 days to process new VAT registration applications. |
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Tax Credits Final Reminder |
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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. |
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Personal Accounts Pensions |
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The government has published details of a new savings scheme which will give all employees the right to a workplace pension with a contribution from their employer. At present employers with five employees have to offer access to a pension scheme but do not have to make an employer contribution. |
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Arctic Systems Decision |
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The long running saga of Geoff and Diana Jones and their company Arctic Systems Limited has been back to the courts last week, this time to the House of Lords. |
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28 Days Holiday Entitlement – But Not Yet |
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A couple of months ago we reported on the government’s proposal to increase the minimum statutory holiday entitlement from the current 20 days (including bank holidays) to 28 days (bank holidays inclusive). The 28 days equates to 5.6 weeks for an employee working a five day week. |
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Face To Face Interviews For Passport Applications |
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From 1 June 2007 first time adult passport applicants will no longer be able to use the fast track application service due to a new requirement which means that they may have to attend a face to face interview. The applications made by these individuals will have to be made through the full application process which takes about six weeks. |
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Safe Driving |
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Not sure what is a sensible driving policy for your business? The Department for Transport (DFT) has set up a new website which contains practical guidance to help businesses comply with their legal obligations. |
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PAYE Online |
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HMRC have issued a reminder to employers concerning their PAYE online service. The online service, which is used by many employers to submit the employer annual returns P35 and P14, is also used by HMRC to issue PAYE notices and reminders back to the employer. |
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Additional Paid Paternity Leave |
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The rules for maternity pay and leave are complex and things may be set to become more complicated for employers and more generous for employees. |
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Health And Safety |
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The Institute of Directors and the Health and Safety Commission (HSC) are asking for help in the production of new, authoritative guidance setting out what is expected of directors. |
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Further National Minimum Wage Penalties |
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Alistair Darling, the Trade and Industry Secretary, has announced that the government is to target employers with new fines if they pay below the National Minimum Wage (NMW). |
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Charities Guide |
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A concise guide for small charities has been issued. The Cabinet Office and Charity Commission have launched 'Charities Act 2006 - what trustees need to know', which is being marketed as a concise guide to the biggest shake up of charity law for centuries. The guide is primarily aimed at those running small charities to enable them to make the most of the new laws. |
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New Cash Declaration Rules |
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HMRC have announced new rules applying to people coming to or leaving the UK. From 15 June 2007, people travelling to or from a country outside the European Union (EU) will need to declare any sums of cash of 10,000 Euros or more (or the equivalent in another currency) to HMRC. There is no requirement to declare cash if travel is to or from another EU country. |
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Farepak Ruling |
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Following industry agreement, the new Christmas Pre-payments Authority has been set up to prevent a repeat of the Farepak collapse. The new body will be responsible for overseeing schemes to ring-fence the money of Christmas hamper savers. |
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Reduced Rate Vat For Products To Give Up Smoking |
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‘Over the counter’ sales of smoking cessation products, such as chewing gum and nicotine patches, will be subject to the reduced rate of VAT of 5%. |
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Injury Costs Recovery Scheme |
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The NHS Injury Costs Recovery (ICR) scheme came into force earlier this year and expands the cases where the NHS can reclaim the cost of treating injured patients where personal injury compensation is paid. |
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Home Information Packs Delayed |
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The date for introducing Home Information Packs (Hips) in England and Wales has been put back to 1 August 2007 and will initially apply to homes with at least four bedrooms. |
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HMRC Ask If You Have Anything To Declare |
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It is a common misconception that interest from offshore bank accounts is not subject to UK tax. HMRC have now received information from many banks about offshore accounts and to encourage taxpayers to declare their offshore income HMRC have announced what the newspapers are calling a ‘Tax Amnesty’. |
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Smoke Free Zone |
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From 1 July 2007, as a result of provisions in the Health Act 2006, enclosed public places and workplaces have to be smoke free. This date applies to England only. |
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Minimum Holiday Entitlement To Rise |
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A few months ago we reported on the proposal by the Department for Trade and Industry (DTI) to increase the minimum statutory holiday entitlement from the current 20 days (including bank holidays) to 28 days (bank holidays inclusive). The DTI have been consulting with interested parties and should shortly publish the findings of their consultation. |
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New Vat Rules For Mobile Phones And Computer Chips |
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Following negotiations with other European Community member states the UK Government has decided to implement the reverse charge accounting mechanism on mobile phones and computer chips with effect from 1 June 2007. |
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Penalty Notices For Employers |
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HMRC have recently issued a considerable number of penalty notices to employers for not submitting their 2005/06 employer annual and contractor returns, which were due for submission by 19 May 2006. |
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All Change For Capital Allowances |
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The system of tax reliefs on expenditure on equipment in your business is a complex one. Broadly when you buy a piece of equipment to use in your business you normally cannot set the full cost against that year’s profits, unless the value of the item is quite small, or a special tax relief applies. The cost of more expensive items is written off against profits over a number of years, using the capital allowances system. |
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Corporation Tax Changes |
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The Chancellor has moved to discourage small businesses from incorporating for tax reasons by increasing the tax they will pay on profits up to £300,000, from 19% to 20% with effect from 1 April 2007. The small companies rate will further increase 21% in 2008 and to 22% in 2009. |
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Income Tax Rates |
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There has been a lot of publicity about the announcement that the government propose to reduce the basic rate of income tax from 22% to 20%. This change is due to take effect from 2008/09 and not from 6 April 2007. |
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Construction Industry Scheme |
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Employers End of Year Returns |
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The Employers annual returns P35 and P14 (P60) are due for submission to HMRC by 19 May 2007. There is a tax free incentive payment due of £150 for small employers with less than 50 employees who successfully file their returns electronically. |
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National Minimum Wage Increases |
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The new National Minimum Wage rate of £5.52 (£5.35) an hour from October 2007 has been announced. Other rates rise from £4.45 to £4.60 for 18-21 year olds, and from £3.30 to £3.40 for 16-17 year olds. |
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Consultation on Workplace Disputes |
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The Department of Trade and Industry and has launched a consultation to look at how to improve the way employment disputes are resolved. The consultation follows a wide-ranging independent review. The government has said that it is committed to piloting any new approach to dispute resolution that follows the consultation. |
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Check your State Retirement Pension Entitlement |
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A recent case has once again illustrated the difficulties for people who don’t check their own state pension entitlement and later find out that there are ‘holes’ in their record. |
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VAT Fuel Scale Charges |
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HMRC’s intention is to change significantly the VAT fuel scale charges payable by businesses on the provision of fuel for private motoring for their company car drivers. The system of calculating the output VAT charge on a simple cylinder banded table is withdrawn for the businesses first VAT return commencing after 1 May 2007. |
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Budget 22 March 2007 |
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Gordon Brown has delivered his eleventh, and what is expected to be his final, Budget. This year’s measures contained a few shocks, with the Chancellor’s tax cut provoking an uproarious reaction from Labour and Conservative benches alike. The Budget has been described as ‘substantial’, no surprise if Mr Brown has his eye firmly on Number Ten. But what does the 2007 Budget mean for you, your family and your business? We have summarised the key issues for you here to help you understand how the changes will affect you. |
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Advisory Fuel Rates For Company Cars |
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HMRC have announced new rates for journeys on or after 1 February 2007. |
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Use Of Computers |
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Before 6 April 2006 the first £500 of the benefit in kind charge arising on the private use of employer provided computer equipment was exempt from tax. As the ‘annual value’ benefit in kind on the use of an asset is calculated as 20% of the market value of the asset when first used to provide the benefit, this exemption generally covered any potential benefit in kind. |
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Managing Absence |
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Sickness absence costs businesses a small fortune. The CBI statistics for 2005 suggest the costs are in the region of £495 a year in direct costs for every worker employed. Indirect costs are probably considerably more. |
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Vat Fuel Scale Charges |
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HMRC have produced some of the tables but not the final VAT fuel scale charges which are due to come into effect on 1 May 2007. Businesses will have to use the new scale charges from the start of their first accounting period beginning on or after this date. |
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Cash Accounting Limit Raised |
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HMRC have announced that the threshold for the Cash Accounting Scheme will be more than doubled from £660,000 to £1,350,000 from 1 April 2007. |
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Increased Maternity Pay |
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HMRC have updated their guidance on Statutory Maternity Pay (SMP) due to women whose babies are due on or after 1 April 2007. The important date is when the baby is due not when the baby is born. |
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Implementation Of The Charities Act 2006 |
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The Government has issued the first commencement order which brings into force a number of the Act's provisions with an effective date of 27 February 2007. |
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Changes Required To Websites And Electronic Documents |
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The government has recently issued new legislation extending the requirements for companies and Limited Liability Partnerships (LLPs) to provide certain particulars about themselves on their websites and in electronic versions of all documents. |
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Eu Enlargement – Bulgaria And Romania |
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HMRC have reminded businesses that Bulgaria and Romania joined the EU on 1 January 2007. This means that, from that date, all VAT registered businesses will need to include any trade with these countries in boxes 8 and 9 of their VAT returns. |
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Minimum Holiday Entitlement Set To Rise |
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Jim Fitzpatrick, Employment Minister, has announced the government's proposal to increase workers' holiday entitlement from 20 days per year to 28. |
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Fines For Non Payment Of The National Minimum Wage |
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Trade and Industry Secretary Alistair Darling has announced that employers who refuse to pay the minimum wage could face a £200 fine for every worker they underpay. |
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Homeworking Costs For The Self Employed |
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HMRC have revised their guidance on the deductibility of household expenses for those people who work from home on a self employed basis. This has always been a complex area and case law has meant that the rules were at least very confusing! |
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Construction Industry Scheme |
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In last month’s enews we reported that HMRC had launched their press campaign on the introduction of the new Construction Industry Scheme (CIS) which will be introduced on 6 April 2007. In the Pre-Budget Report the government made two announcements regarding CIS tax rates. |
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Managed Service Companies Attacked |
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In 2000 the government introduced rules to tackle the provision of services through Personal Service Companies (PSCs). These rules have been referred to by the name of the press release of that time, IR35. |
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Air Passenger Duty |
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For those of you planning to fly off in the New Year you should be aware that Air Passenger Duty (APD) rates will be increased from 1 February 2007. |
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Date For Arctic Systems Hearing Announced |
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At last, it has been announced that the Arctic Systems case will be heard in the House of Lords from 5 to 7 June 2007. The case, and the subsequent uncertainty, has now been running for more than two years and it is to be hoped that some sort of finality to this issue can be obtained before the end of 2007. |
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HMRC Email Scam |
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HMRC have issued a warning to taxpayers about an email scam which is a ‘phishing exercise’ that uses bogus emails and websites to trick people into supplying confidential or personal information. |
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Employer Late Filing Penalties for 2005/06 |
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HMRC have announced that they have started sending out late filing penalty notices to those employers who they believed sent in their 2005/06 employer’s annual return forms P35 and CIS36 late. |
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Major VAT Fraud Operation |
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HMRC criminal investigators have arrested 13 people following dawn raids across Europe in an operation targeting multi-million pound VAT fraud. The international operation saw over 300 HMRC criminal investigators deployed across four countries; France, Spain, Germany and the UK. Five people were arrested in the London area, two in Glasgow, three in the Midlands and three in Cheshire. |
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Changes To Business Stationery Rules |
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Changes to business stationery rules apply from the 1st January 2007. |
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