Current issues you may wish to discuss with us:

Accounting

Are you operating in the service industry? Do you provide your time and advice to clients? If so, the new guidance on work-in-progress may affect you and your tax liability may be about to significantly increase.

Auditing

Has your turnover exceeded £5.6 million if so, you will now need an audit. The good news is if your turnover is less than £5.6 million, it is likely you will not need an audit and will not be subject to the provisions of the new International Auditing Standards.

Pension

Have you looked at your pension arrangements recently? Do the provisions of ‘A’ day affect you?

PAYE

Do you need guidance on the complex pay legislation covering maternity pay, redundancy, and holiday pay? Do you need advice on the operation of the construction scheme?

Bookkeeping

Do you want to become computerised? We are able to offer Sage products at discounted amounts and provide full training and instruction on most accounting software.

Childcare Scheme

Is your company taking full advantage of the Childcare Voucher Scheme? Employees including directors can receive vouchers up to £55 per week to reimburse for childcare.

Corporation Tax Rates

The rates for corporation tax for the year commencing 1 April 2008 are 28% for companies with profits over £1.5m, 21% for companies with profits below £300,000. The marginal rate for profits between £300,000 and £1,500,000 is 29.75%.

Value Added Tax Registration Thresholds

From 1 April 2008, the level of taxable turnover at which a business is required to register for VAT increases to £67,000. The level of predicted future turnover at which a business can deregister also rises to £65,000.

Self Assessment Filing Dates

Radical changes proposed in the Carter report, which was first announced in the 2006 Budget, have since been revised following consultation. The dates for filing the 2007/2008 self-assessment tax returns are to be brought forward for the filing of paper returns to 31 October. The deadline date for on line filing is to remain the same i.e. 31 January, further details will be released.

Life Interest Trusts and Accumulation and Maintenance Trusts

A new regime first announced in the 2006 Budget changed dramatically the Inheritance Tax treatment on these types of trusts created or varied on or after 22 March 2006. Since that date there have been various consultations and amendments. The main change for life interest trusts is that on the creation/additions of/to these trusts in relation to the amounts paid in/transferred in will be treated as a chargeable transfer whether made during life time or on death via a will trust. The main exception to the above is where there is an “immediate post death interest” to a surviving spouse or to a minor on the death of at least one parent subject to various qualifying conditions. Therefore wills may need reviewing and advise taken before a life interest trust is set up or varied. Accumulation and Maintenance Trusts set up on or after 22 March 2006 will be treated the same as discretionary trusts as will trusts in place before 22 March 2006 unless all the beneficiaries take possession absolutely of the trust assets as and when they attain 18 years old, subject to transitional rules for pre 22 March 2006 trusts which ended on 5 April 2008 for accumulation and maintenance trusts, who then enter the new regime and 5 October 2008 for interest in possession trusts.

Offshore Disclosure Facility

Following on from the offshore disclosure facility announced on 17 April 2007 by HM Revenue and Customs for which a full disclosure had to be made by 26 November 2007, they have announced that their offshore compliance group will be writing to a sample group of 5,000 taxpayers for whom they hold offshore details, but whom chose not to disclose, in order to determine whether they should accept their “non disclosures”. If any individual thinks that the above affects them they will need to take specialist advise as penalties will be much higher (at least 30%) and criminal prosecutions may be sought.

Company Vans

No benefit in kind is chargeable to employees using company vans for home to work travel and business use only. Please note that insignificant private use is allowed e.g. a trip to the tip once a year.

Inheritance Tax

Where an individual dies on or after 9 October 2007 and their spouse or civil partner preceded them then HM Revenue and Customs will allow their deceased spouse or civil partners unused nil rate band to be transferred to their estate. It will be important to retain all death forms e.g. a copy of the grant of probate, a copy of the IHT 200, a copy of the will, the marriage certificate etc. to enable the unused nil rate band to be ascertained. This relief is worth up to a maximum of £312,000 for the tax year 2008/2009.

Capital Gains Tax

For disposals on or after 6 April 2008 the capital gains tax regime has radically changed. The major changes are the abolition of taper relief (business and non business) and indexation allowance. Other changes are the abolition of the kink test, the share identification rules and the halving rule for held over gains between 31 March 1982 and 5 April 2008. This has been replaced by a system where the disposal proceeds less the cost of the asset (or March 1982 if acquired before this date) is taxed at 18%, if a profit is made. Entrepreneurial Relief will be available for the disposal of qualifying assets broadly shares in unquoted trading companies, trading businesses and trading assets .The relief available effectively charges capital gains tax at a rate of 10% up to a lifetime limit of one million pounds, after taking account of the annual exemption if this is available.

Non Residents and Domicile Rules

The rules regarding the taxation of UK resident non domiciled individuals have been radically changed, as has the counting of days for the purpose of establishing an individual’s residence status. Broadly where an individual has been resident in the UK for seven out of the last ten years and is aged 18 or over, then they will become liable to UK tax on their worldwide income, unless they elect to pay an annual charge of £30,000. Where the £30,000 charge has been paid then the individual can use the remittance basis for that year. HMRC have set the de minimis limit in respect of foreign income of £2,000. If the remittance basis is used the individual will loss their personal allowance and their capital gains tax exemption. Further changes to the rules are envisaged on there passage through parliament.

Income Shifting

Following the taxpayers victory in the House of Lords, in the case of Jones v Garnett “Artic Systems” HM Revenue and Customs have decided to defer the income shifting rules, which will effectively reverse this decision, until April 2009,to allow for further consultation.