Mitchells Chartered Accountants :: Press Releases

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05.08 - Credit Squeeze
05.08 - Homeworking Costs Increase

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Press Releases

May 2008 - CREDIT SQUEEZE

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. There are complaints from businesses that some large customers have begun to extend their payment period terms. This is putting a strain on the cashflow of businesses.

May 2008 - HOMEWORKING COSTS INCREASE

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.

May 2008 - P11D DEADLINE LOOMING

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.

May 2008 - EMPLOYMENT SUPPORT ALLOWANCE

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

May 2008 - ENTREPRENEURS’ RELIEF

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.

May 2008 - 10% RATE OF INCOME TAX

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.

April 2008 - NATIONAL MINIMUM WAGE INCREASES

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

April 2008 - NATIONAL MINIMUM WAGE INCREASES

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

April 2008 - ENTREPRENEURS' RELIEF DRAFT LEGISLATION

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.

April 2008 - UPDATE ON RESIDENCE AND DOMICILE

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.

April 2008 - ‘INCOME SHIFTING’ LEGISLATION DELAYED

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

April 2008 - ONLINE SUBMISSION OF EMPLOYERS FORMS

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.

April 2008 - IMPLEMENTATION DATE CHANGE FOR RIGHTS DURING MATERNITY LEAVE

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 had previously advised that this change would be effective for babies due from 6 April 2008.

March 2008 - THE BUDGET 2008

Alistair Darling has delivered his first Budget as Chancellor of the Exchequer. His focus was very much on stability against a backdrop of economic slowdown and turbulence in the global financial budgets.

His 50-minute speech delivered few shocks as Mr Darling said the government would do everything in its power to keep Britain’s economy strong and inflation low, although there was “green” thread running through the Budget.

View full Budget

March 2008 - UPDATE ON RESIDENCE AND DOMICILE

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

March 2008 - EXPENSES FOR EMPLOYEES

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.

March 2008 - EMPLOYER AND CONTRACTOR RETURNS INTERIM PENALTIES

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.

March 2008 - EMPLOYMENT RIGHTS - STATUTORY LIMITS

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

March 2008 - BENEFITS IN KIND AND EXPENSES IN THE PAYROLL

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.

February 2008 - ENTREPRENEURS' RELIEF

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.

February 2008 - RESIDENCE AND DOMICILE

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.

February 2008 - MONEY LAUNDERING REGULATIONS

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.

February 2008 - PAYE END OF YEAR RETURNS

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.

February 2008 - HMRC PAYMENTS DUE 31 JANUARY 2008

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. It is only possible to collect underpayments via a tax code restriction where you are an employee or company director, with sufficient pay to enable any underpayment up to £2,000 to be collected.

February 2008 - PAYE TAX CODES ABOUT TO BE ISSUED

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

February 2008 - HOLIDAYS

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. The minimum statutory holiday entitlement was raised from 20 days to 24 days per annum from 1 October 2007. This entitlement is inclusive of Bank Holidays.

January 2008 - CAPITAL GAINS TAX REFORM

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.

January 2008 - ADVISORY FUEL RATES

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.

January 2008 - INHERITANCE TAX NIL RATE BAND

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.

January 2008 - EMPLOYMENT BILL

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.

January 2008 - CONSULTATION ON RESIDENCE AND DOMICILE

In the Pre-Budget Report the government announced a package of reforms affecting the personal tax rules on residence and domicile. The government has now published a consultation document which contains further detail on the proposed changes.

January 2008 - INCOME SHIFTING CONSULTATION

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. HMRC attempted to tax the dividends solely on the husband, as he was performing most of the work which generated the profits of the company.

January 2008 - CHRISTMAS PARTY ADVICE

And finally, it wouldn’t be the festive season without some Christmas party advice! The Advisory, Conciliation and Arbitration Service (ACAS) has commented that many businesses find themselves with problems on their hands over the Christmas period, particularly the fall-out from the office party.

2007 - ARTICLES FOR 2007

View Articles in 2007

2006 - ARTICLES FOR 2006

View Articles in 2006

Mitchells Chartered Accountants

Mitchells Chartered Accountants | 41 Rodney Road | Cheltenham | Gloucestershire | GL50 1HX.
Tel: +44(0) 1242 260066 | Fax: +44 (0)1242 263707

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