Making
the most of loss relief
07 Oct 2009
Under
concessions offered in the Finance Bill 2009, trading losses for
businesses can now be carried back up to a maximum of three years.
To qualify the losses must be suffered:
1.
For limited companies, during trading periods ending in the two
year period to 23 November 2010, and
2.
For unincorporated, self-assessed businesses, during the tax years
2008 -09 and 2009 -10.
Losses
have to be carried back to the latest year first. For example if
the loss is incurred in the year to 31 March 2010 the first carry
back is to the year ending 31 March 2009 (there is no restriction
on the amount of losses carried back to this year). If losses are
still available after this first set off they can be carried back
a further two years.
However
the carry back to these further two years is capped at £50,000
per year against total profits for companies. For unincorporated
businesses the carry back to the two earlier years is also capped
at £50,000 per year but only against profits from the same
trade.
Readers
might like to contact our tax department
for further information
Travelling
from home to work
07 Oct 2009
For the
latest guidlines from HMRC for both employed & self employed allowances,
click here
Rise in Minimum Wage
01 Oct 2009
As
from 1st October, 2009 there will be an increase in the minimum
wage rates as follows:-
16
to 17 year olds - Increase to £3.57 per hour
18
to 21 year olds - Increase to £4.83 per hour
22
years and over - Increase to £5.80 per hour
We
would remind you that payment of the minimum wage rate is a legal
requirement.
Construction
subcontractors beware!
21 Sep 2009
HMRC
have indicated that they are considering reclassifying self-employed
construction workers as employed. They have actually launched a
consultation process with interested parties.
Reclassified
workers would be taxed through the PAYE system regardless of the
length or brevity of each employment assignment.
HMRC
are convinced that a significant number of construction workers
are taxed as if self-employed even though they are providing their
services to contractors effectively as if they were employees.
HMRC
are calling this status issue "false self-employment".
HMRC plan to introduce legislation to protect income tax and national
insurance revenue that they feel is being lost.
The
consultation document that HMRC have published assumes that these
changes will happen and simply seeks input as to how such changes
should be introduced.
Comments
on this proposal have to be sent to HMRC before the 12 October 2009;
so change, if it is coming, may not be that far away!
What
happens to your pension fund when you die?
21
Sep 2009 For more information >
More
changes at Companies House
21 September 2009
From
the 1 October 2009 a director's home address can be protected
from disclosure. If
you would like take advantage of this new concession you need to
register a service address, which could be your registered office
address, with Companies House. This can be done online www.companieshouse.gov.uk
from the 1 October 2009.
If
you take no action your home address will be taken as your service
address until changed.
Just
a quick reminder that other recent changes include:
1.
You must be aged 16 or over to be appointed as a director.
2.
You no longer have to appoint a company secretary, although you
can do so if you wish.
3.
You no longer need to hold an AGM unless you opt to do so.
Vetting
and Barring Scheme
14 August 2009
It
is to be called the Vetting and Barring Scheme (VBS) and will be
administered by a new public body to be called the Independent Safeguarding
Authority (ISA).
From
July 2010 all new employees can register with the ISA.
From
November 2010 all new employees and volunteers must register before
they start work. Until they have registered they cannot be legally
employed.
Failure
to comply with the new registration demands could possibly result
in custodial sentences for the employee and the employer!
A
range of useful online tools, posters and leaflets can be downloaded
from the ISA web site at www.isa-gov.org.uk/toolkit
or call 0300 123 1111.
Changes
to the Childcare Approval Scheme
August 2009
In
order to qualify for Child Tax Credits (CTC's) the person responsible
for taking care of your children (child) needs to be registered
with the Childcare Approval Scheme.
From
18 July 2009 the Childcare Approval Scheme will no longer exist
and all childcare providers approved under this scheme (for example
a nanny or foster carer working as a childminder) must either become
registered with Ofsted or they will become unregistered providers.
Taxpayers who are affected by this change are advised to check with
their childcare provider to see what they plan to do from 18 July
2009.
It
is no longer possible to claim tax credits unless the childcare
provider is registered with Ofsted from 18 July 2009.
If
a childcare provider does not intend to register with Ofsted, an
alternative registered provider would need to be used in order to
be able to claim or continue claiming the childcare element of tax
credits.
VAT Updates from HMRC
-
for the last updates visit our Bookkeeping
page
Making
the most of Capital Allowances 2009-10
August 2009
If
you are thinking of investing in assets that qualify for the Annual
Investment Allowance (AIA) during 2009-10 it is worth bearing in
mind the additional relief you can claim to take advantage of the
40% First Year Allowance (FYA) that is available for one year to
5 April 2010 (1 April 2010 if you trade as a company.)
For
most businesses the only assets that do not qualify for the AIA
or the FYA are motor cars. Although don't forget that if you buy
a car with CO2 emissions under 110g/km a special 100% allowance
can be claimed.
The
AIA allows you to write off 100% of qualifying expenditure during
2009-10 up to a total spend of £50,000.
But
what happens if you spend more than £50,000? Let's say you
invested £80,000 during 2009-10 in assets that qualify for
the AIA and FYA. You would be eligible to claim the maximum £50,000
AIA and a 40% FYA on the excess. This would make your potential,
combined claim £62,000, or an overall 78% tax write down in
one year.
Even
if the claims created net tax losses in 2009-10 this may enable
your business to recover some of the tax paid in the previous three
years.
Please
call if you need more information on this topic, particularly, does
your intended investment in new equipment qualify for these reliefs?
Paternity
leave extension deferred
July 2009
The
UK Government had planned to give fathers the right to claim up
to 6 months paternity leave from April 2010. Because of the economic
slowdown, they have decided not to bring the changes in that soon.
As a result fathers are still only entitled to two weeks leave which
is usually taken immediately after the baby is born. For more click
here
HMRC
changed bank account details
03 July 2009
Taxpayers
who currently make bank payments direct to the Accounts Office at
Shipley and Cumbernauld should note the following bank account change.
The
new bank account details are:
Accounts
Office Shipley
-----------------------
Account Name: HMRC Shipley
Sort Code: 08 32 10
Account Number: 12001020
Accounts
Office Cumbernauld
---------------------------
Account Name: HMRC Cumbernauld
Sort Code: 08 32 10
Account Number 12001039
If
you use online banking and have stored templates to make payments
to Shipley or Cumbernauld, make sure you change them to include
the new account details set out above.
Full
details of the change can be found on the HMRC website www.hmrc.gov.uk/payinghmrc
Company
cars - new advisory fuel rates
02 July 2009
These
are the rates you would use to calculate the petrol cost of your private
motoring, if you pay this back to your employer to avoid the fuel
based benefit in kind charge. Employers can also use the figure to
isolate the petrol cost of car mileage claims in order to recover
an appropriate amount of VAT - businesses still need to retain fuel
receipts.
Some
of the rates have been reduced in light of slightly lower fuel prices
at the pumps. The figures are arranged as engine size first, followed
by three rates (pence per mile), for Petrol, Diesel and LPG.
1400cc
or less: 10p, 10p, 7p
1401cc
to 2000cc: 12p, 10p, 8p
Over
2000cc: 18p, 13p, 12p
Petrol
hybrid cars are treated as petrol cars for this purpose.
The
fuel rates are usually reviewed twice a year effective 1 January
and 1 July although may change more often where there is significant
fluctuation in fuel prices
Car
benefit changes
01 June 2009
A
number of changes to the tax calculations for company cars have
been announced over the last few months and during the Budget. For
the current 2009/10 tax year please note the following changes:
Disabled drivers who are required to drive an automatic car as their
company car will be allowed to use the list price of an equivalent
manual car when calculating the company car tax benefit
The requirement for a new P46 (car) form is withdrawn where an employee’s
car is returned and replaced with another car.
From
2010/11 the lower threshold for CO2 emissions figure will be reduced
to 130g/km (from 135g/km).
From
2011/12 the lower threshold for CO2 emissions figure will be reduced
to 125g/km. In addition, the current £80,000 list price cap
used to calculate the company car tax will be abolished and current
discounts given to cars using alternative fuels (such as bio-fuels
and bioethanol) will be removed.
Car
scrappage scheme starts 18 May 2009
17 May 2009
In
exchange for scrapping your old vehicle and buying a new one the
Government and most car manufacturers will contribute a total of
£2,000 towards the purchase of a new vehicle - the scheme
will run from 18 May 2009
The
scheme will be available to the first 300,000 eligible claimants
or until 28 February 2010, whichever is sooner.
To
qualify the vehicle you are trading in must:
1.)Be
a car or small van weighing up to 3,500 kilograms (kg)
2.)Have
been first registered in the UK on or before 31 August 1999
3.)Either have a current tax disc, or have a current tax disc and
a current Hackney Carriage Licence, or an MOT certificate which
expired no earlier than 14 days before the date of the contract
between the Purchaser and the 4.)Have been registered to you continuously
for 12 calendar months before the order date of the new vehicle
5.)Have a UK address on the registration certificate (V5C) in the
same name as the new vehicle
6.)Have a current MOT test certificate before date of order for
the new vehicle
The
new vehicle you want to buy must be:
.
A car or small van weighing up to 3,500 kg
. First registered in the UK on or after 18 May 2009
. Declared new at first registration in the UK with no former keepers
The
allowance is funded by a £1,000 subsidy from the Department
for Business, Enterprise and Regulatory Reform (BERR) and a further
£1,000 discount paid for by the manufacturer.
In
most cases, VAT cannot be reclaimed on a car purchase even by VAT
registered businesses so the discount will only have the effect
of reducing the car's purchase price. However, certain VAT registered
customers may have to reduce their input tax in respect of the manufacturers'
discount. This will only be the case where VAT can be reclaimed
on the purchase of a car such as for the purchase of a taxi or a
driving instructor's car.
If
you are buying a business vehicle under this scheme please note
the following points regarding a future claim for capital allowances.
.
The £2000 discount reduces the capital cost of the vehicle.
. The vehicle you part exchange, or scrap, is considered to be written
off for tax purposes and the £2000 discount will not be treated
as taxable proceeds of sale.
Updates
from HMRC
01 Jun 2009
Tax
Amnesty
HMRC
have announced a second offshore tax amnesty for holders of overseas
bank accounts. It will be referred to as the New Disclosure Opportunity
and will close March 2010.
Text messages from HMRC
HMRC
are currently exploring new ways of making contact with taxpayers.
This includes HMRC leaving an automated voicemail or sending a text
message. Both of these methods are currently only being used to
ask taxpayers to call HMRC rather than to provide any other specific
advice or information.
If
you receive an automated voicemail message or a text message claiming
to be from HMRC asking you to contact them use the number for your
local office or the telephone numbers on the official HMRC web site
at www.hmrc.gov.uk
HMRC Penalty Regime
22 Apr 2009
To
all our clients,with effect from the 6 April 2009 HMRC have introduced
a new penalty regime, whereby the penalty charged for under declared
income is determined by whether "reasonable care" has
been taken to keep sufficient records, from which to provide a complete
and accurate tax return.
We
wish to advise you that if your records are provided to us at such
a late stage that we are unable to ensure your accounts and tax
return are correct, a penalty may indeed be charged by HMRC if your
return is selected for enquiry.
May
we therefore ask for your assistance in this matter by provided
your books and records to us as quickly as possible after your year
end. Please contact us for further
information.
Bank
of England Reduces Bank Rate by 0.5 Percentage Points to 1.0%
05 Feb 2009
The
Bank of England’s Monetary Policy Committee today voted to
reduce the official Bank Rate paid on commercial bank reserves
by 0.5 percentage points to 1.0%.
Planning
for the tax year end 5 April 2009
03 Feb 2009
If
you are self employed, either a sole trader or in partnership, you
are approaching a key date - the end of yet another tax year.
Due
to the current economic downturn you may recently have experienced
a drop in your profitability, indeed you may be trading at a loss.
If
this is the case please read the check list that follows:
