Information

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News

Budget and Pre Budget reports

Main items of interest to the majority of small businesses will be:

- Capital Gains Tax reform will small business from 6th April 2008, however proposed income shifting legislation to be delayed until 6th April 2009, see items below.

- new Inheritance Tax rules announced to transfer to a surviving spouse any unused nil rate band. http://www.icaew.com/index.cfm?route=152380

- personal allowances and national insurance rates, please follow tax data information link above.

- basic rate tax band reduces to 20% in 2008/9. The 10% tax band is withdrawn for earned and pension income but remains for savings and dividends.

- annual increases of 1% in the small company rate of corporation tax to 21% from 1st April 2008 and 22% from 1st April 2009.

- first year capital allowance rate of 50% on plant and machinery ends on 5th April 2008 to be replaced with an annual investment allowance of £50,000.

- VAT registration limit increased to £67,000 from 1st April 2008.

- Upper rate of National Insurance to be raised to upper rate tax band from 6th April 2008.

- phasing out of Agricultural and Industrial Buildings Allowances and new rules on integral fixtures.

- annual cash ISA investment amount increased to £3,600.

Arctic Systems/income shifting proposals

H M Revenue and customs lost their appeal to the House of Lords. This was welcome news for husband and wife companies following which new proposed legislation was issued for consultation with a view to becoming law from 6th April 2008, aimed at tackling so called income shifting within members of small family businesses. It has now been announced there will be a further 12 months delay to allow for further consultation.

http://www.icaew.com/index.cfm?route=155229

New CGT regime for individuals

The new main rate of CGT effective from 6th April 2008 will be 18%, from when Taper and Indexation relief will be abolished. A new entrepreneurs relief designed to reduce the effective rate to 10% for the first £1 million of lifetime gains has now been announced.

http://www.icaew.com/index.cfm?route=153963

New CIS scheme update

The new CIS scheme, in operation since April 2007, contains many penalties and risks to Contractors. For more information on how the scheme works, click on the link below for HM Revenue Customs guidance but preferably please contact us for a more detailed explanation. Beware of H M Revenue interpretation on self employed status, it is not law and incorrect. There have been many tax cases on this issue in the last couple of years which detail the current law.

http://www.hmrc.gov.uk/new-cis/keyinfo.htm

VAT error notification

In recent years errors found on the previous 3 years VAT returns could be amended on the next return if the net liability or refund was less than £2,000. With effect from 1st July 2008 the limit is to be increased to £10,000, or 1% of annual turnover up to a maximum of £50,000. Errors above these de minimus limits need to be reported on VAT form 652.

Emission based VAT fuel scale charges to increase again from 1st May 2008

For details of the new charges to apply please follow the link below.

http://www.hmrc.gov.uk/budget2008/bn76.pdf

Latest News:

Budget and Pre Budget reports.

New income shifting proposed legislation to be delayed.

New Capital Gains tax regime.

New CIS scheme update.

New VAT error notification thresholds from 1st July 2008.

Emission based VAT fuel scale charges to increase again from 1st May 2008.

More Info

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Tiverton
Devon
EX16 6PE

Tel: 01884 256363

Fax: 01884 242432

mail@brayaccounts.co.uk