New tax changes announced:
(Legislation to be included in the Finance Bill 2011)
Enterprise Investment Scheme and Venture Capital Trusts — the rate of income tax relief given under the Enterprise Investment Scheme (EIS) will be increased from 20% to 30% with effect from 6 April 2011, subject to State aid approval.
Company Car Tax Rate 2013-14 — Legislation will be introduced in Finance Bill 2011 to reduce the appropriate percentages by 1% for all vehicles with carbon emissions between 95g and 220g from April 2013. Zero emissions cars will remain at 0% and ultra-low emissions cars with emissions up to 75g will remain at 5%.
Fuel Benefit Charge 2011-12 — Employees and directors who are provided with a company car and who also receive free fuel from their employers are subject to the fuel benefit charge. The cash equivalent of the taxable benefit is determined by multiplying a set figure (currently £18,000) by the appropriate percentage for the car, based on its CO2 emissions (grams per kilometre). This set figure will increase to £18,800 with effect from 6 April 2011.
Approved Mileage Allowance Payments Rates from 2011-12 — Where employees use their own cars for business mileage, they can claim reimbursement from their employers through the approved mileage allowance payments rates (AMAPs). These payments are not treated as taxable benefits. The current higher rate of 40p per mile for the first 10,000 business miles is to be increased to 45p. The rate for mileage over 10,000 miles remains at 25p.
Capital Gains Tax Entrepreneurs’ Relief — The lifetime limit on gains qualifying for entrepreneurs’ relief is to be increased from £5 million to £10 million with effect from 6 April 2011.
Capital Gains Tax Annual Exempt Amount — This will increase to £10,600 with effect from 6 April 2011.
Corporation Tax Rates:
Capital Allowances: Short Life Assets — Businesses incurring expenditure on an item of plant or machinery from April 2011 onwards will be able to make a short life asset election in respect of that item if they expect to sell or scrap it within an eight-year cut-off period. This is an extension from the current four year period.
Research and Development Tax Credits for SMEs — The rate of the additional deduction for expenditure on research and development (R&D) for companies that are small or medium sized enterprises (SMEs) is to increase from 75% to 100% from 1 April 2011, giving a total deduction of 200%.
Supplementary Charge — To help fund fuel duty decreases announced today, the rate of the supplementary charge levied on profits from UK oil and gas production will increase from 20% to 32%.
Bank Levy — The Bank Levy rates will be increased from 1 January 2012 to offset the benefit to banks of the further decreases in corporation tax rates.
Business Rate Discounts in Enterprise Zones — The Government announced the creation of 21 new Enterprise Zones. 100% business rate discount for five years will be offered to businesses located in Enterprise Zones.
Extend Small Business Rate Relief (SBRR) Holiday — The SBRR holiday will be extended by one year from 1 October 2011.
Gift Aid Donor Benefit Limits — The maximum value of benefits that individuals and companies may receive as a result of making a donation to a charity of more than £10,000 under Gift Aid is to be increased from £500 to £2,500. The new limit will be subject to the existing rule that the benefit must not exceed 5% of the gift.
Alcohol Duty Rates — Changes announced today will add:
The changes will take effect on 28 March 2011.
Tobacco — Tobacco duty rates will increase by 2% above the rate of inflation. Duty on hand rolling tobacco will increase by an additional 10%. The Government is also restructuring cigarette duty. Ad valorem duty on cigarettes has been reduced to 16.5% and specific duty has been increased by 25% above inflation. These changes came into effect at 6pm on 23 March 2011.
Fuel Duty Rates — The following changes in fuel duty were announced today:
Vehicle Excise Duty — From 1 April 2011, VED rates will increase by indexation only apart from VED rates for heavy goods vehicles which will be frozen in 2011-12.
VAT: Registration and Deregistration Thresholds — The following changes will be made to the VAT registration and deregistration thresholds from 1 April 2011:
Anti Avoidance Measures – A number of complex anti avoidance measures are to be introduced. In summary the schemes affected include:
Time To Pay — Budget 2011 also confirmed that HMRC will continue its Business Payment Support Service to provide advice and time to pay to viable businesses experiencing temporary financial difficulty.
Tax reliefs to be Abolished – As part of the Governments Tax Simplification process the following tax reliefs are withdrawn from April 2011:
The changes will take effect on 28 March 2011.
Future changes announced:
Income tax and NICs Reform — The Government has announced that it will consult on the options, stages and timing of reforms to integrate the operation of income tax and National Insurance contributions (NICs). If this progresses to legislation, it will be a major reform of the UK tax system.
Enterprise Investment Scheme and Venture Capital Trusts — Subject to State aid approval, legislation will be introduced in Finance Bill 2012 making the following changes to the Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT) which will have effect on and after 6 April 2012:
Inheritance Tax Changes:
Business Premises Renovation Allowance — The Government has confirmed it will extend the allowance for a further five years from 2012.
Review of Non-Domicile Taxation — At the June Budget 2010, the Government confirmed that it would review the taxation of non-domiciled individuals. The Government will introduce the following reforms:
Companies House fees will change on 6th April 2011.
Download the new fees click here
On 17 December 2010 HMRC announced their intention to roll out a programme of Business Record Checks in the second half of 2011. At present they are consulting with professional organisations regarding the scope of their enquiries. This consultation will be completed and the results published by 31 March 2011.
If your business is selected, HMRC staff will visit your premises and ask for access to all your business records. If they feel that there is a significant failure to keep proper records, penalties may be charged and additional tax assessments raised.
Here’s what we know so far:
- Use existing powers to check business records in up to 50,000 cases annually.
- Businesses targeted will have 250 employees or less and turnover below 50m Euros. (At present exchange rates just over £40m)
- Checks to begin in the second half of 2011.
- Impose penalties for significant record keeping failures.
Issues to be resolved by present consultation process:
- Arrive at a clear understanding of record keeping obligations; primarily what records do you need to keep.
- What level of penalty should be levied to bring about the required changes in defective record keeping, and
- Should HMRC allow a “cooling off period”, before penalties are charged, to give businesses time to remedy substandard record keeping.
The consultation is not concerned with whether HMRC should have powers to check business records, these already exist!
If HMRC are aware that your record keeping is defective this will no doubt trigger visits from a number of their departments. You may get additional PAYE/NIC or VAT audit checks for instance.
There are existing guidelines from HMRC on what constitutes satisfactory record keeping that will likely form the basis of their new Record Check processes. As the results of the present consultation become available we will include further information in this newsletter.
At present owners of qualifying Holiday Let property can set off losses from the letting activity against their other earnings. From 6 April 2011 you will no longer be able to do this. From 6 April 2011 you will only be able to carry losses forwards to set off against future holiday let profits.
From a tax planning point of view this offers a short window of opportunity. Any Furnished Holiday Let losses that you make up to 5 April 2011 can be set off against other earnings for 2010-11. This could be an opportunity not to miss as higher rate and additional tax rate payers may receive 40% or 50% of the losses from HMRC as tax refunds.
If you are planning extensive, qualifying repairs to your FHL property(ies) now may be a good time to implement and complete before 5 April 2011.
|The new regional National Insurance Contributions holiday came into effect on 6 September 2010.New businesses set up outside London, the South East and East of England are now eligible for a NIC holiday of up to £5,000 for each new employee they take on in the first year of their business. The scheme will last from 22 June 2010 to 5 September 2013You can claim if your new business started after the last Budget date, 22 June 2010.The following conditions apply:
If you think you may be eligible for this new relief and would like our help applying to HMRC please call.
Proving their marketing strapline of ‘not all accountants are grey’, Morris Cook Chartered Accountants have launched their new website at www.morriscook.co.uk.
As an established firm of Chartered Accountants with over half a century’s experience, Morris Cook, who have offices in Oswestry, Ellesmere, Llangollen and Telford, have a long and successful track record in working with a wide range of growing, diversifying and new start-up businesses.They have always looked to the future and encourage their clients to do the same.
Alongside information on the firm, the new website, which was designed and built by Hunter Bevan Ltd, a graphic design and web development company based near Knockin, allows clients to sign up for Morris Cook’s topical newsletter, keeping clients up to date with legislation and deadlines for filing accounts etc. Visitors can also download a brochure about the range of services offered by the firm.
Senior Partner Andrew Clarke says, “We wanted to work with a local company to develop our website and were pleased to find Hunter Bevan, a fellow member of the Shropshire Chamber breakfast networking club and 4Networking. The new site reflects our fresh approach to accountancy – not just in the compliance work such as completing year end accounts, but in working with our clients to help them to grow and flourish, even when times are tough.”
Hunter Bevan Director, Neil Bevan, says, “Working with Morris Cook proves the power of local networking clubs. If it wasn’t for the Chamber and 4Networking we might never have gained the opportunity to pitch for the business. Over 21% of our business is gained through formal networking and if business owners haven’t tried it, I’d encourage them to give it a go.”
The Shropshire Chamber meets at Oswestry Cricket Club on alternate Thursdays, and 4Networking at The Lord Moreton, Gledrid, on alternate Tuesdays. Either Neil or Andrew would be pleased to tell local business owners more about the opportunities networking can bring to your business.
Pictured: Andrew Clarke and Megan Jones of Morris Cook, launch the new website with Neil Bevan, Hunter Bevan Ltd.