Welcome to the DNB Winter Newsletter 2010
We would like to draw your attention to a few points
which are likely to affect your business in the coming year or so.
CORPORATION TAX
Starting on a positive note, from 1st
April 2011, corporation tax for small businesses will decrease
from 21% to 20%. However, from the 1st of April 2011 it
will also be mandatory for all Corporation Tax payments to be made
electronically; it will no longer be possible to send in a cheque
and payslip in the post to HMRC. This is only 4 months away so
please ensure you have arrangements in place to facilitate
electronic transfer of company funds for this purpose.
Instructions for paying corporation tax to HMRC are given here:
http://www.hmrc.gov.uk/payinghmrc/corporationtax.htm
VAT
From the 4th of January 2011 the standard
VAT rate will rise to 20%. As with previous changes in the VAT
rate, there are certain anti-forestalling measures in place to
prevent fraudulent manipulation of VAT costs. Full details of this,
and other information on how the VAT change can affect your
business, is provided at:
http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-rise-guidance.pdf
NATIONAL INSURANCE & PAYE
From the 6th of April 2011 there will be
increases to National Insurance contributions. Both employees and
employers will pay an extra 1%. Self-employed people will also see
an increase of 1% in their NI contributions. There will also be
some changes to the PAYE bands. The personal allowance will
increase from £6,475 to £7,475.
CAPITAL ALLOWANCES
By April 2012 there will be a marked reduction in the
Annual Investment Allowance from £100,000 to £25,000. For
businesses with any sizable capital investments planned in the next
couple of years, such as new vehicles, this could have a real
effect, and the actual allowances depend on the date of your
accounting year end; so if you are planning on making any large
investments in the next couple of years we recommend you speak with
us in advance to ensure that your relief is maximised.
PENSIONS
In 2014, there will be major changes to the
requirements made on ALL employers with regard to pensions. This
may seem some way off, but the requirements are substantial and will
apply even if you have only a single employee. You could end up
being compelled to contribute 4% of gross salary to an employee’s
pension, so if you have employees it is very important that you see
this coming and devise a financial strategy. If you are the sole
employee of your own company, the regulations will still apply, but
there is an opt-out procedure which can be applied.
TAX INSPECTIONS
Finally, in this time of public sector cuts, HMRC are
effectively being forced to attempt to raise revenue through fines
and penalty interest rather than through compliance and as such are
stepping up their use of casual enquiries, either by letter or
telephone, in an attempt to discover possible businesses that may
prove fruitful in this respect. They may typically ask if they can
come and visit to have a “quick look over” your PAYE or VAT. If you
are the recipient of such a request we recommend you contact us
immediately for advice on your response; particularly if you have
paid your yearly subscription to our Tax Investigation Service, as
it will cost you nothing and may stave off a long and arduous
enquiry. Our latest “casual enquiry” through the Tax Investigation
Service saved our client £600 in fees!
As always, please feel free to get in touch if you
require any further information.
Please note that
all of this information is provisional only and subject to change
after publication. Please do not make any financial decisions based
on the above information without consulting a qualified advisor.
