One of the better issues to have arisen out of the budget I believe. For companies who carry out their own qualifying "research and development" work, the amount of tax credit relief you can receive from the government going forward will be increased.
You may know that certain very tax efficient small cars (Qualifying Low Emission Cars "QUALECS") qualify for 100% tax relief in the year in which a company purchases the vehicle. You may also know that generally it is not tax efficient to have a company vehicle!
With the Coalition Government in place, there have been several changes to tax and employment legislation and it's important that businesses know the current lie of the land. I am positive that these seminars will help business owners understand how they can operate tax efficiently and maximise profit.
I have just been reading details of the new 'education' initiative by HMRC. The scheme is designed to help new business owners by talking them through the main things they need to be aware of and direct them to the relevant page on their online help.
Hundreds of mumpreneurs attended the popular BusinessMums Summit at the Thistle Hotel in Brighton. They visited the Spofforths stand and showed great interest in our range of business support services.
Businesses can claim an annual investment allowance – AIA - for capital expenditure incurred on most items of plant and machinery. However, there is a planned reduction in the AIA - to £25,000 from 1 April 2012 (6 April for unincorporated businesses) and many businesses could have to wait over 25 years to benefit from a full tax relief on new plant.
I have just read that the Office of Tax Simplification (OTS) has completed its review of tax advantaged employee share schemes. The OTS has spent its time considering the special tax reliefs available for government approved share schemes such as Save As You Earn (SAYE) and the Enterprise Management Incentive (EMI) scheme. As a result of their review they have recommended introducing a self-certification process, merging the EMI with another scheme called Company Share Option Plans (CSOP) and harmonising definitions, time limits and modifying certain conditions.
Chancellor George Osborne delivered his third Budget this afternoon and Spofforths is now busy providing media across Surrey and Sussex with comment and analysis. Bryan Elkins, Head of our Tax Consultancy team, is taking part in a number of local radio and newspaper interviews. He will discuss what the Budget means for the average household and businesses.
In his budget the Chancellor announced the introduction of a new cash basis for calculating tax for small unincorporated businesses with a turnover less than the VAT registration threshold of £77,000. Although no details are currently available, the scheme, which is intended to be voluntary, will be introduced in April 2013.
Following the budget announcement on a cash basis accounting method for smaller businesses I have today seen a copy of the consultation document in relation to this. The proposals are that businesses with turnover of less than £77,000 will be eligible to account for their income based on the money received, not invoiced. Once they start using this method of accounting they will be able to continue until their total receipts exceed £150,000 in a tax year. Partnerships will be allowed to use this basis also and where an individual has multiple businesses, the cash basis would only apply if all of their businesses were eligible.
Comments on the proposed simplified expenses has also been included in this consultation. Standard mileage rates for business use of cars or motorcycles, flat rate expenses for use of home as office and also a flat rate adjustment for personal use of a business premises have all been included.
We would like to congratulate our client Turbosound on winning a 2012 Queen’s Award for Innovation, recognised for the development of two acoustic design innovations at the heart of the company’s ground-breaking Flashline loudspeaker system. Five arena-sized systems have been shipped and are already in use on concert tours around the world. This is the third Queen's Award that Turbosound has won in its 30 year history, alongside the Export Achievement Awards granted in 1987 and 1997.
HM Revenue & Customs have recently launched a Business Tax dashboard on their website which allows business owners to access HMRCs information more easily. The Business Tax dashboard brings together information from different tax portals. This will include Corporation Tax or Self-Assessment, VAT (if registered) and PAYE (if an employer). The information will include the amount of tax owed as well as the status of any payments or penalties. It will also allow you to amend contact details, including an email address and will be updated each weekend to reflect payments and returns that have reached HMRC within the last 5 working days.
If you are a personal service company you may be interested to know that HMRC are due to release a new 'business entities test' shortly. This new tool can be used to assess whether or not your company is likely to be at risk of the IR35 rules. By answering a small number of indicative questions you score points and the total score will be reflect whether or not your company is considered to be at a low ,medium or high risk.
I am proud to announce that Spofforths will be sponsoring the GP Practice of the Year category at The News Best of Health Awards 2012. The Awards ceremony, hosted by TV presenter Fred Dinenage, will be held at Guildhall, Portsmouth on 21 September. This award is a wonderful way to say thank you to a GP Practice which has made a huge difference to one patient or the local community.
Following on from my blog last week, HM Revenue & Customs have now released their risk assessment questions in relation to IR35. There are 12 tests ranging from business premises to billing with points being attributed to you based on your answers. The guidance published by HMRC does not confirm whether or not your are caught by the rules governing IR35 but will give an opinion as to whether or not your business is at risk to the legislation. The publication has been heavily criticised by several business groups due to the lack of clarity and fairness in dealing with the issues.h
Following the recent release of the IR35 risk tests issued by HM Revenue & Customs HMRC have been writing to personal service company contractors warning them that they may face investigation under the IR35 tax rule. Where you do not consider yourself subject to the legislation HMRC are asking you to provide evidence and explain how the conclusion has been reached. It is thought that the letters have, so far, been sent to the 'high risk' companies but it is probable that the correspondence will be directed to all relevant companies over time.
The October edition of Sussex Life is now in print and features our Tax Consultant, Jo White, who looks at some key issues that charity treasurers might face. Jo was asked to produce the case study style feature that is sure to benefit those who seek specialist charity advice. You can read the full article which appears on page 277 by clicking here.
Enterprise Management Incentive schemes (EMI) are a great way to reward, retain and incentivise key members by giving them the opportunity to buy shares in their employing company in a very tax efficient way. Under the scheme an employee is given an option to buy shares in the future at a fixed price. Assuming certain conditions are satisfied, it has always been the case that any uplift in value is liable to Capital Gains Tax rather than Income Tax (which would be the case without the EMI scheme), at lower rates of tax.
Whilst many small businesses can benefit from VAT ‘cash accounting’ thereby delaying the payment of VAT due on income to the point it is actually paid, larger businesses with turnover of more than £1.6m must use ‘invoice accounting’.