Latest Business News

Arrears of Tax – those in business

The Business Payment Support Service (BPSS) - giving people Time to Pay their taxes - including VAT, Corporation Tax, Income Tax and NICs and PAYE is to be continued for those experiencing temporary financial difficulty.

Corporation Tax Rates

The small companies corporation tax rate, which applies to companies with up to £300,000 of profits remains at 21%, until 31 March 2011, when it will rise to 22%.
The main rate of corporation tax, which apply to companies with profits of more than £1.5 million remains at 28%.

Associated Company Rules

Legislation will be included in Finance Bill 2011 to amend the rules governing which companies are associated with each other for the purposes of access to the small companies' rate of corporation tax and marginal small companies' relief. This will be specifically focused on the rights between associated persons, for the purposes of establishing who has control over a Company.

Company Cars

Two changes effective for 5 years from 6 April 2010 to 5 April 2015 have been introduced to the chargeable benefit in kind on company cars and vans: (1) full relief from the chargeable benefit in kind on company cars and vans which cannot produce more than 0gm per km CO2 engine emissions under any circumstances when driven, and (2) a reduction in the chargeable benefit in kind on company cars which have an approved CO2 emissions figure of exactly 75g per km or less.
From April 2012 the graduated table of company car tax bands will be extended down to a new 10 per cent band; all CO2 emissions thresholds will be moved down by 5gm/km so that the 10 per cent band will apply to company cars with CO2 emissions up to 99gm/km.~

VAT

The registration threshold has been increased from 1st April 2010 to £70,000; the deregistration threshold will be £68,000.
- If you are an existing VAT registered business and your turnover is over £100,000 you have been required from 1st January 2010 to file your VAT return on-line. Any new VAT registered businesses (regardless of size) will automatically have to file on-line from 1st April 2010.

Capital Gains Tax

The lifetime limit for Entrepreneurs’ Relief (on sale of qualifying shares, businesses or business property) has been increased from to £1m to £2m of qualifying gains, to be taxed at an effective rate of 10%.
A consultation document on corporate capital gains is currently being considered to simplify the rules on value shifting, the treatment of capital losses after a change of company ownership and degrouping charges.

Capital Allowances

Good news, the annual investment allowance (for which you can claim 100% tax relief) for purchases of qualifying plant and machinery will rise from 6th April (1st April for Companies) £50,000 to £100,000. Also a 100 per cent First Year Allowance (FYA) for business expenditure on new and unused (not second hand) zero-emission goods vehicles is to be brought in as soon as possible in the next parliament.

This budget summary is for general information purposes only. You should seek further specific professional advice before taking any action on the basis of the contents of this newsletter.

GENERAL

Personal Tips & Reminders - As the tax year 5th April 2010 is drawing to a close, if your gross income is in excess of £150,000 and you have dividends from a Company which you control and you have sufficient profits, you may wish to consider an extraordinary dividend payable on or before 5th April, 2010 to take advantage of the 32.5% band rate, rather than paying 42.5% next year.

- If you suspect you may be due a repayment for 2009/10 please pass all your tax bits & pieces to us as soon as possible after 5th April. We can obtain repayments for you quite speedily when we file your return online.

Filing Deadlines

Employer Returns

End of Year (forms P35 & P14) You will be required to file these online on or before 19th May 2010, unless you ceased operating PAYE during 2009-10, in which case if you file by paper you must do so by 5th April, 2010.

In-year forms (including P45 and P46)
If you have 50 or more employees
You are now required to file these in-year forms online. If you still file on paper instead of online, you may have to pay a penalty.
If you have fewer than 50 employees
Under government proposals, employers with fewer than 50 employees will have to file these in-year forms online from 6 April 2011.