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23/01/2010 by Neil.
Small businesses are to be given flexibility over the introduction of the government’s new compulsory workplace pension scheme.The scheme is to be known as the National Employment Savings Trust (NEST), a change from the original Personal Accounts, and is aimed at employees aged over 22, earning between £5,035 and £33,540 and who do not have an occupational pension scheme.The scheme is to commence in October 2012 when the largest businesses – those employing 120,000 staff or more – will begin enrolling workers.However, smaller firms will join the scheme on a phased basis over the next three years. Start-up businesses formed from 2012 won’t be required to implement a NEST fund until 2016. Auto-enrolment is expected to be fully introduced by 2017.Employer contributions will also be implemented on a staggered schedule. Employers will be required to contribute a minimum of 1 per cent of an employee’s gross salary to the fund as from 2012. That will rise to 2 per cent from 2016 before reaching 3 per cent in October 2017.
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23/01/2010 by Neil.
A new HM Revenue and Customs team has been set up to tackle the problem of employers who breach the rules on the national minimum wage. HMRC’s Dynamic Response Team will be tasked with investigating the most high profile and complicated national minimum wage cases. Particular areas to be targeted are those in which employers use migrant labour to undercut competitors by paying employees less than the minimum wage. The team, which will comprise highly-trained specialist officers, is to be backed by £70 million of government funding.
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01/09/2009 by Neil.
Motorcycles are to be excluded from the definition of cars from April 2009. This means that they will qualify as main pool plant and machinery and willbe eligible for consideration for the following allowances:
• the 100% AIA • the temporary FYA of 40%
• a 20% allowance where neither of the above apply. Where there is part non business use of the asset by a self employedperson, it will have to be placed in a single asset pool and a restriction onany allowances will be made for private use
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27/08/2009 by Neil.
The competitive deals currently available on dealers’ forecourts are tempting a number of you to consider changing your car. The tax allowances on new cars changes dramatically on 6th April 2009 and CO2 emissions affect allowances greatly.
the rules can be summarised as:
2008/09 2009/10
CO2 emissions of 110 g/km or less
First Year Allowance 100% 100%
CO2 emissions of 111-160 g/km
Writing Down Allowance 25% 20%
Annual Cap - Maximum claimable £3000 pa £16,000
CO2 emissions of over 160 g/km
Writing Down Allowance 25% 10%
Annual Cap - Maximum claimable £3000 pa £ 8,000
RULES ON CONTRACT HIRE
These are also changed from 6th April 2009. This particularly affects expensive cars. For example – assuming a new car costing £20,000 with emissions of less than 160 g/km can be contract hired for £5,175 including VAT. Should you buy or lease ?? Possible allowances are:
2008/09 2009/10
Purchase the vehicle
Writing down allowance £3,000 £4,000
Or
Contract hire for £5,175pa
Amount Deductible £3,870 £4,838
(including VAT @ 15%)
*Note that the writing down allowance will reduce in subsequent years in line with the written down value over the vehicle’s life.
It is complex. If you are interested in a new car, ascertain all your options then we can help you pick the best one.
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27/08/2009 by Neil.
The period for which National Insurance contributions will need to have been paid in order to secure a full State Pension will reduce in April 2010.
Meanwhile, the cost of buying extra years will increase from 6th April 2009 from £8.10 to £12.05 per week. So people expecting to retire before April 2010 with a contribution shortfall may benefit from making a top-up payment before 6th April 2009.
The first step is to get a benefits forecast from the Pension Service – Tel. 0845 300 0168
Posted in Practice Information, Technical, Dates and Deadlines | No Comments »
06/08/2009 by Neil.
For many years taxation professionals and anyone who has engaged subcontract labour have been saying that it was the intention of H M Revenue & Customs (and Inland Revenue before it) to have all workers taxed under PAYE. Yet when this point has been put to officers of the department the response has always been that that was not the case. Their intention when undertaking a review of a workers employment status was merely to ensure that the correct employment status was used.Well, as far as the Construction Industry is concerned, that could all be about to change. The Treasury are of the view that there are between 200,000 and 400,000 workers who are working under terms and conditions which are akin to employment but are treated as self-employed and which costs the Treasury some £350m a year. As a result the Treasury issued a Consultation Document on 20 July 2009 in which it set out its proposals to counter what it calls ‘false self-employment’ in the industry.In essence, the proposals are to treat every individual worker engaged to undertake ‘construction operations’ as being in receipt of ‘employment income’ which will be subject to tax and national insurance contributions under PAYE. This will become the default position with only those workers who met one of three criteria being able to continue to be treated as self-employed and paid under CIS. The criteria are:
The subcontractor provides
• Plant and equipment – not just hand tools
• All materials
• Other workers for whom the subcontractor is responsible for paying
This will clearly see the end of self-employed labour-only subcontractors in the construction industry, at least as far as tax and national insurance is concerned.
It is made clear that these are only going to be ‘deeming’ provisions and that any decision to deduct tax and national insurance under PAYE will not confer employment rights on the worker.
Whilst there is no doubt that there have been cases where workers have been reclassified as employees it is a fact that H M Revenue & Customs have been far from successful at the Commissioners and, indeed, the new Tribunals when it has come to defending their view that workers should be reclassified. It would appear in many cases the workers were rightly classified as self-employed. These proposals would appear to be a case of toys being thrown out of the pram as if these proposals are applied to many of the well known tax cases over many years then the decisions that the worker was properly self-employed would be reversed.
Anyone who engages labour only subcontractors should read the Consultation Document, which can be found at:
www.hm-treasury.gov.uk/consult_false_selfemployment_construction.htm and should consider taking up the issue with their accountant or federation. The consultation period finishes on 12 October 2009 and if the Treasury do not receive any negative feedback to the proposals it must be assumed that it will be brought forward into legislation.
CONTRIBUTED BY ANDREW SCRIVENS -CCH TAX CONSULTANT!
Posted in business development, Technical | No Comments »
23/07/2009 by Neil.
The State Pension is still a fundamental part of peoples’ retirement plans. Over the last two years a number of changes to the basic State Pension have been announced. These include:
• increasing the basic State Pension in line with earnings, rather than prices, which means it should rise more quickly each year than it does now. This change will happen from 2012 at the earliest and by 2015 at the latest and will also apply to people currently getting their State Pension or who reach State Pension age before 6 April 2010;
• both paid and credited National Insurance Contributions (NIC) will count towards the basic State Pension in the same way;
• reducing the number of qualifying years needed for a full basic State Pension to 30 for people who will reach State retirement age on or after 6 April 2010;
• any number of qualifying years will give an entitlement to at least some basic State Pension;
• replacing the system of Home Responsibilities Protection with a weekly NI credit for people caring for children or severely disabled people and converting past years of HRP into years of credits.
• changing the way the State Second Pension (S2P) builds up, so that it will provide a simple, flat-rate weekly top-up to the basic State Pension; and
• increasing the State Pension age for both men and women from 65 to 68 in stages between 2024 and 2046.
It is not unknown for errors to occur due to difficulties linking national insurance contributions with pension records. However, there is any easy way to check your current pension entitlement – ask for a pension forecast. If you would like to know more about the changes or ask for a forecast, visit www. pensionsservice.gov.uk
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23/07/2009 by Neil.
Change in intestacy rules in
Where a person dies intestate (ie without having left a Will) the law prescribes how the estate of the deceased is to be divided. The rules are different around the
For deaths on or after 1 February 2009 the limits to be used in
Where the deceased leaves a spouse but no children, the spouse will now receive the first £450,000 plus personal possessions. Anything above that will be split equally with one half to the spouse and the other half to the parents. If there are no parents there is a specified order of relatives to consider. If there are no relatives still alive the surviving spouse will take the whole estate. If there is no surviving spouse (or registered civil partner) but a surviving unmarried (unregistered) partner, they are entitled to absolutely nothing under the intestacy rules. Where the deceased has children they would take the whole estate. If there are no children the estate would pass to the parents etc of the deceased.
It is vital that if you want to direct where your estate will go that you make a valid Will to achieve that.
Posted in Practice Information, Dates and Deadlines | No Comments »
23/07/2009 by Neil.
Many businesses pay more business rates than they need to because they don’t realise they could claim a discount through the small business rate relief scheme (SBRR). This scheme has been poorly promoted by the billing authorities, but it is worth applying for relief as you could reduce your rates bill by up to 50%.
It is the size of the property occupied that determines the discount not the size of the business. Generally business properties in
All business properties pay rates according to their rateable value multiplied by a set multiplier, which is 48.5p for 2009/10. The English SBRR applies a lower multiplier (48.1p for 2009/10) to qualifying properties, plus the following additional reductions:
Rateable value of building Relief givenLess than £5,000 Lower multiplier, then 50% reduction in resulting figure£5,000 - £9,999 Lower multiplier, then 1% reduction from 50% for every £100 of rateable value above £5,000.£10,000 – 14,999 (£21,499 in
Example
Your office has a rateable value of £5,500. You are sent a business rates bill of £2,668 (£5,500 x 0.485) for 2009/10. You apply for the SBRR and receive a refund of 1,213, calculated as follows:
Rateable value at lower multiplier rate: £5,500 x 0.481 £2,645Discount for value less than £5,000: 50%Reduced by 1% x (£5,500 - £5000) 5%Final discount for small property 45% x £2,645 £1,190Final business rates for 2009/10 £1,455
Original rates bill £2,668
Reduction achieved: £1,213
You need to apply for the SBRR from the billing authority that collects your business rates, but you only have to complete one form to cover all the years from 2007/08 to 2009/10. A new claim will be required from April 2010. The extended deadline forclaims for these years is now 30 September 2010.
Vacant properties
If your business property is vacant you can claim an exemption from business rates, but only for restricted periods, known as permitted void periods. From 1 April 2008, the permitted void period is six months for industrial properties, and three monthsfor other commercial properties. Full business rates are due on all empty properties when the permitted void period comes to an end, subject to any SBRR reductions due. However, for just one year from 1 April 2009 all empty properties with a rateable
value of less than £15,000 are fully exempt from business rates.
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23/07/2009 by Neil.
Alistair Darling presented his second Budget on Wednesday 22 April 2009.
Having acknowledged the depth of the recession, he hinted that the Budget measures would enable the
• From 6 April 2010 there will be a 50% top rate of tax for those with taxable income over £150,000 and in the following tax year the government has also announced its intention to restrict tax relief on pension savings for this group.
• A phased reduction of personal allowances for those with income over £100,000 is also due to impact from 6 April 2010.
• The amount which can be invested in an ‘ISA’ account the tax free savings vehicle
is to increase by £3,000 to £10,200.
• The ability to use trade losses through relief in earlier years by both an unincorporated business and a company has been enhanced.
• There is a temporary additional capital allowance on plant expenditure which may benefit those with higher levels of spending on plant and machinery.
• Changes to the rules for Furnished Holidays Lettings Losses and CGT as well as a extension of the furnished holiday lettings scheme to properties in the European Economic Area.
Please contact us for further advice on any matter which may affect you.
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