Budget 2008

Capital Gains Tax Indexation and Taper Relief have now been abolished. Capital Gains are now tax at a flat rate of 18%. The Chancellor has brought in a new Entrepreneurs' Relief which will effectly reduce tax to 10% for anyone selling a trading business. Capital Allowances There is an Annual Investment Allowance of £50,000 for businesses investing in plant and machinery. This means that 100% of the cost of equipment purchased is offset against profits in the year the asset is purchased. For amounts in excess of £50,000 you will continue to be able to claim an annual writing down allowance of 20%. Corporation Tax The small companies rate of 20% increased to 21% from 1 April 2008. This will apply to taxable profits from £0 to £300,000. Income Tax The Chancellor has increased the amount an individual can earn before paying tax to £6,035 for 2008/09. Although the allowance is in force now the impact will not take effect until October if you are paid under PAYE. The basic rate of income tax is now 20% and the starting rate of 10% has been abolished.

VAT Updates

VAT Online Businesses are now able to submit their VAT returns online, saving time and H M Revenue & Customs' postage costs! You can also arrange for your VAT to be collected by direct debit. This gives you an extra 12 days to pay!! If you would like to know more please contact Alison on 01963 351052. VAT Registration The threshold for registering for VAT has increased from 1 April 2008 to £67,000 per year. VAT on Mileage Payments If a company pays petrol money to employees for business miles travelled then companies can claim back a proportion of this money as VAT. Since the 1st January 2006 companies also need to retain a VAT fuel receipt. If you would like to know more about reclaiming VAT please call us on 01963 351052.

Payroll News

National Minimum Wage As from 1 October 2007 the national minimum wage hourly rates are: Aged 22 and over £5.52 Aged 18 to 21 £4.60 Aged 16 to 17 £3.40 Different rules apply to apprentices. Anti-age Discrimination Law Anti-age discrimination laws came into force on 1 October 2006. This affects terms and conditions, transfers, dismissals, redundancy and retirement. Further information is available on www.dti.gov.uk. Tax Credits As from 1 April 2006 HMRC have been paying all tax credit claimants direct meaning no employer should have been paying tax credits through their payroll after 31 March 2006. If you have not received a stop notice for an employee then you should contact HMRC on 08457143143.

Business Support
Guiding Business Success If you would like any advice and help on growing your business, buying or selling businesses, maximising profitability or raising funds then please contact Max on 01963 351052. Max has over 20 years experience of helping businesses achieve their full potential.