Business News

09-06-2011

Tax liabilities for eBay Traders

eBay users could be liable to pay tax on their sales, ICAEW has warned.

The majority of sellers online and at car boot sales sell unwanted goods and are unlikely to interest the taxman, the institute said. However, HMRC could target people who trade online. This would include people who sell goods they have bought for resale, sell items they have made themselves, sell or buy items for others on commission or provide a service and receive payment.

Anita Monteith, technical manager of ICAEW's tax faculty, said: "If you are only selling your unwanted possessions you will probably escape being taxed. If you are trading or making a capital gain, however, you might have to pay some tax on your income."

People who sell unwanted personal items online or at a car boot will still have to take capital gains tax, Monteith added.

"You should also remember that even though you may not be classed as a trader and so not liable for income tax on your profits, you may still be liable for capital gains tax. If you are in any doubt you should speak to an accountant or contact HMRC."

09-06-2011

Support announced to help British companies compete on the global stage

Business Secretary Vince Cable, Foreign Secretary William Hague and Trade and Investment Minister Lord Green have launched a new cross-government focus on trade and investment to help the British economy grow.

The UK Trade & Investment (UKTI) Strategy and the Foreign and Commonwealth Office (FCO) seven-point Charter demonstrate the Government’s dedication to supporting international business, championing UK business overseas and attracting investors to the country.

They form a core plank of the Government’s Plan for Growth, and recognise the fact that a new focus on business is needed if the UK is to remain economically competitive in the years to come.

The strategy will see UKTI adopt a more entrepreneurial approach to deliver growth. As part of this UKTI will actively seek out overseas investors, help UK companies expand into overseas markets and work more closely with key British companies. Examples of this approach include:

  • Establishing a new private sector delivery partner with the incentive to attract and retain high value investments.
  • Expanding the Global Entrepreneur Programme (GEP) to win more investment to the UK.

 

The Government is now looking in more detail at how it works with businesses, especially small and medium-sized enterprises (SMEs), and what action can be taken to make this more effective.

The UKTI Strategy signals how the Department intends to become more entrepreneurial in focus by:

  • Bringing more private sector expertise into its relationship with exporters and inward investors
  • Developing new partnerships with key businesses which support SMEs, and using their networks to raise awareness of the benefits of exporting.
  • Creating a new online self-help community for UK SME exporters, so that they can support each other and share experience as they seek to internationalise their businesses. This new development will also provide a continuous feedback loop so that customers can tell us what they think of UKTI.
  • Establishing a new Strategy Task Force, with members drawn from the most innovative UK-based companies, to inform the future direction of both UKTI and ECGD,

 

These actions will help to develop new ways of relating to businesses, with a renewed focus on partnerships with the private sector to boost productivity and improve performance.

09-06-2011

Banks offer discounted small business loans from EU investment pot

Santander and Royal Bank of Scotland are tapping the European Investment Bank to bolster their lending to small businesses in the UK with “discounted” loans.

Santander has secured £150m from the EIB that it will begin lending from today at a 0.7pc discount from its typical business lending rate.

RBS is applying for a third, £300m tranche of funding that it will lend at 0.6pc below its standard rates.

Steve Pateman, head of Santander corporate and commercial banking, said: “Ensuring businesses are able to access affordable investment capital is crucial for the UK’s economic recovery”.

However, the two banks’ decision to apply for EIB cash comes at a time when high street bank lending to small businesses in the UK is declining. The Bank of England (BoE) said lending to businesses with turnover of up to £25m fell 3pc in the year to February.

Small firms, with sales of less than £1m, have been hit even harder, with industry statistics collated by the Business Department indicating a 6pc fall in the year to December.

The EIB plans to lend an additional £27bn to European small and medium sized businesses by the end of this year under a package of measures launched to counter the credit crunch. The UK has been allocated £4bn, according to the Treasury. The EIB said British banks has so far requested £1.8bn (€2bn).

The EIB is able to offer a discounted rate to typical high street bank rates due to its credit rating. Under its funding conditions, the banks must pass on the discount to borrowers.

The money is available to companies with fewer than 250 employees looking for loans of up to £11.2m (€12.5m) to buy assets.

07-04-2011

Mileage rates for using a personal car for business

The Approved Mileage Allowance Payments (AMAPs) set by the Government are to increase.

05-04-2011

New Tax Rates from 6th April 2011

Below is a table of the rates of Income and Corporation Tax and National Insurance which should be implemented from tomorrow, 6th April 2011.

Income Tax allowances2010-112011-12
Personal Allowance £6,475£7,475
Income limit for Personal Allowance£100,000£100,000
Personal Allowance for people aged 65-74 £9,490£9,940
Personal Allowance for people aged 75 and over £9,640£10,090
Blind Person's Allowance£1,890£1,980
Basic rate: 20%£0-£37,400£0- £35,000
Higher rate: 40%£37,401-£150,000£35,001-£150,000
   
National Insurance allowances2010-112011-12
Class 2 rate£2.40£2.50
Class 2 small earnings exception£5,075 per year£5,315 per year
Class 4 lower profits limit £5, 715 per year£7,225 per year
Class 4 upper profits limit£43, 875 per year£42,475 per year
Class 4 rate between lower profits limit and upper profits limit8%9%
Class 4 rate above upper profits limit1%2%
   
Corporation Tax allowances20102011
Small Profits Rate21%20%
Small Profits Rate can be claimed by qualifying companies with profits at a rate not exceeding£300,000£300,000
Main rate of Corporation Tax28%26%
Special rate for unit trusts and open-ended investment companies20%20%

24-03-2011

Budget 2011 - changes for Business

The chancellor presented the 2011 budget on 23rd March.  The main announcements that affect businesses are outlined below. 

George Osborne intends to make the UK the best place in Europe to start, finance and grow a business and will implement the following to strive to achieve this: 

Reduce the main rate of Corporation Tax by a further 1 per cent. From April 2011 the rate will be reduced to 26 per cent and by 2014, it will be reduced to 23 per cent 

The VAT registration threshold will increase to £73,000 from £70,000. The deregistration threshold will also go up from £68,000 to £71,000

Implement its Corporate Tax Road Map, including introducing new Controlled Foreign Company (CFC) rules to allow groups based in the UK to compete more effectively with those based overseas, and consult on the Patent Box

Increase the personal allowance for under 65s by £630 in April 2012, with the higher rate threshold unchanged, a further step towards the £10,000 personal allowance commitment

Extend the Enterprise Guarantee Scheme to allow small businesses easier access to funding

Simplify the tax system, responding to the work of the Office of Tax Simplification (OTS), abolishing 43 tax reliefs 

Consult this year on the options for integrating the operation of income tax and National Insurance Contributions (NICs). 

Drop existing proposals for specific regulations which would have cost businessover £350 million a year 

Introduce a moratorium exempting micro-business and start-ups from new domestic regulation for three years from the 1st April 2011 

Implement the proposals of Lord Young’s review of Health and Safety 

Launch a public thematic review to reduce the stock of regulation, with a presumption that burdensome regulations will be removed 

Streamline the system for planning applications and introduce new fast-track planning for major infrastructure 

Reform the Enterprise Investment Scheme (EIS) and Venture Capital Trusts, including raising the rate of EIS income tax relief to 30 per cent from April 2011; 

Increase the SME rate of R&D tax credit to 200 per cent from April 2011 and 225 per cent from April 2012 

Double the lifetime limit for Entrepreneurs Relief to £10 million 

Invest £100 million in science capital development; and launch the first Technology and Innovation Centre in high value manufacturing. 

Extend the limit for capital allowances short life assets election from four to eight years 

Establish 21 new Enterprise Zones 

Fund an additional 80,000 work experience places for young people, ensuring upto 100,000 places will be available over the next two years 

Fund up to 50,000 additional apprenticeship places over the next four years and expand the University Technical Colleges programme to establish at least 24 new colleges. 

Change the underlying indexation basis for direct taxes to the Consumer Prices Index (CPI) from April 2012. For the duration of this Parliament, the annual increases in the employer NICs threshold, the age related allowance and other thresholds for older people will be over-indexed compared to the CPI and will increase by the equivalent of the Retail Prices Index (RPI)

Cut fuel duty by 1 pence per litre on Budget day. The fuel duty escalator will be replaced with a fair fuel stabiliser that increases tax on North Sea oil production when oil prices are high. The April 2011 inflation-only increase will be delayed to January 2012. The April 2012 increase will be delayed to August 2012. The Government will increase the Supplementary Charge on oil and gas production to 32 per cent from 24 March 2011

The Plan for Growth published alongside this Budget, contains four overarching ambitions that will ensure progress is made towards achieving strong, sustainable and balanced growth. The ambitions are to:

·         create the most competitive tax system in the G20;
·         make the UK the best place in Europe to start, finance and grow a business;
·         encourage investment and exports as a route to a more balanced economy; and
·         create a more educated workforce that is the most flexible in Europe.

15-03-2011

New charges for registering a company

Following a review of their processes and services Companies House is implementing changes to some of its fees from 6th April 2011.The changes to the fees will be introduced by amending current secondary legislation and in some cases by changing fees administratively.

NOTE: The fees requiring changes to secondary legislation need Parliamentary approval. Until this approval is given those fees cannot be charged and the relevant prices in this document are only proposed.

Some same day fees for certain services are being increased; in particular these are the same day fees for paper incorporation, certified copies and certificates of incorporation. This is to ensure that demand for these “premium” services will not impact the level of service we are able to offer our standard paper customers.

In addition, Companies House is also introducing a new Web Incorporation service in April 2011. Therefore, a new fee is required and will be included in the revised price list.

Amendments to fees will affect all entities registered at Companies House including Companies, Limited Liability Partnerships (LLPs), Limited Partnerships (LPs), Community Interest Companies (CICs), Overseas Companies, European Economic Interest Groupings (EEIGs) and European Public Limited- Liability Companies (SEs). The changes will also affect searchers of the public register.


For more information visit: http://www.companieshouse.gov.uk/toolsToHelp/proposedChanges.shtml

25-02-2011

HMRC launches new online PAYE tools for employers

HM Revenue & Customs (HMRC) has launched a new online resource to help employers with PAYE. The new tools will be automatically updated, and employers will need to use them for the rest of this tax year and beyond. HMRC is also urging employers to sign up for e-mail alerts to stay up to date with new PAYE issues, as hard copies of guidance will no longer be sent out.

 

15-02-2011

Cable reveals plan to boost small business exports

Business Secretary Vince Cable has unveiled new proposals aimed at helping small businesses to export. The strategy outlined in the Government's Trade and Investment White Paper includes plans for the Export Credits Guarantee Department (ECGD) to set up a scheme offering finance to small and medium-sized enterprises for contracts under £1 million, and to extend its short-term insurance to cover a broader range of exports.

 

15-02-2011

First on-line Budget ideas portal launched by the Chancellor

The Chancellor of the Exchequer, George Osborne, has launched the Government’s new online Budget portal allowing businesses to send their ideas for the Budget direct to the desks of the Treasury officials working on the Budget, which will be held on 23 March 2011.

The Chancellor said:

“I want to hear about your brightest and best ideas. Because next month’s Budget will be all about growth. In particular I want to know what businesses, large and small, want from me. So go on-line and tell me what you think.”

The portal is another example of the Government’s commitment to transparency in policy making. It will improve the way businesses, charities and the public sector can communicate with the Government.

It follows on from the October 2010 Spending Review, when over 100,000 members of the public went on line to submit suggestions on how the Government could save money – such as the idea to stop producing National Insurance cards, which will save £1 million a year.

To submit an idea Click Here

06-02-2011

Enterprise UK to close in April

Charities are being invited to apply for a slice of the £0.5 million in cash assets expected to remain after Enterprise UK winds down its activities in April. The future of Enterprise UK, which was set up in 2004 to promote entrepreneurship in the UK and is the organisation behind the Global Entrepreneurship Week initiative, became uncertain earlier this month when the Government cuts saw the withdrawal of the charity's main funding, an estimated £4 million a year provided by the Department for Business. Chief executive Tom Bewick announced the board's decision to close down Enterprise UK entirely on the organisation's website last week.

 

06-02-2011

Small Business Britain unfazed by VAT rise

Research from Intuit, makers of QuickBooks financial management software for small businesses, has found that one month on from the VAT rate increase, small businesses in the UK have been largely unaffected despite widespread media hype. Two thirds (67%) of those surveyed confirmed that overall, the VAT increase has had no impact on their business.
 
Most small business owners (39%) chose to absorb the additional cost of the VAT increase rather than pass it on to their customers. Even when considering all the associated costs including admin, absorbing price increases and loss of revenue, almost 70% of small business owners claimed the VAT increase had cost them less than £350. When asked how much time they spent dealing with the change, 46% of small business owners estimated that they spent less than five hours managing the VAT increase.
 
When asked if increasing VAT is the best way to tackle the national deficit, 44% of small business owners said they agreed with the Government’s decision, followed by 13% who thought that raising income tax would be more effective. When looking for advice on how to manage the change, around one in five (19%) turned to other small business owners for support, and the same number turned to customer support from their accounting software firm to help them make the change.

26-10-2010

UK Economy Grows

The UK economy grew by 0.8% between July and September, according to figures released by the Office for National Statistics.

This figure follows expansion of 1.2% in the second quarter of the year and is better than the 0.4% growth that economists had predicted.

The economy has now expanded for four consecutive months and economic growth over the past six months has now hit 2%, the fastest pace of expansion seen over two consecutive quarters for ten years.

13-10-2010

New Minimum Wage Levels

National Minimum Wage rates are to rise from October 2010, with the minimum rate for workers aged 21 and over rising to £5.93 an hour. And for the first time a minimum wage rate for apprentices has been set.

From October 2010, National Minimum Wage rates will increase from:
  • £5.80 to £5.93 an hour for workers aged 21 and over
  • £4.83 to £4.92 an hour for workers aged 18 to 20
  • £3.57 to £3.64 an hour for workers aged 16 to 17

The rise is around the two per cent mark in each category. As promised, the government has extended the adult minimum wage rate to 21-year-olds from October 2010. Previously the qualifying age for the National Minimum Wage was 22.

The government also accepted a recommendation from the Low Pay Commission (LPC) to introduce an apprentice minimum wage of £2.50 per hour.

The new rate will apply to:

  • apprentices under 19
  • apprentices aged 19 and over, but in the first year of their apprenticeship

22-07-2010

Tax system to be simplified

Chancellor George Osborne has said that he will simply the "spaghetti bowl" of UK tax law to cut the burden on businesses and attract foreign investment.

Osborne is setting up an Office for Tax Simplification to streamline the 11,000-page tax code and is calling for a permanent body to ease the complication of taxes and make life easier for firms.

The new body will initially conduct two reviews - streamlining 400 tax reliefs, allowances and exemptions and simplifying the tax system for small businesses, including a simpler alternative to the controversial IR35 code.

It will advise ministers where the tax system is too complex but it will not look at tax credits, which Mr Osborne said he considered part of the benefits system.

The Chancellor said that Britain had "one of the most complex and opaque tax codes in the world".