News Archive 2008
VAT changes come into effect
1 December 2008
The standard rate of VAT has dropped as from 1 December from 17.5 per cent to 15 per cent.
The cut will remain in place until the end of next year.
Richard Dodd of the British Retail Consortium (BRC) said that the actual impact on prices in the shops would be a reduction of 2.1 per cent.
Mr Dodd commented: “Most retailers, especially major retailers, will be passing this reduction on, but I think they won’t necessarily all be taking the 2.1 per cent off the price.
“Some will concentrate the reduction in a more targeted way, reducing certain items by more. Some may also reduce the price at the till, rather than reducing the price displayed on the shelves.”
Help small firms pitch for public contracts, says FSB
28 November 2008
The Federation of Small Businesses (FSB) has called on the government to implement the recommendations of a report on giving small firms a fairer opportunity to win public contracts.
The Glover review, which was set up by the Chancellor in this year’s Budget, has put forward proposals that would improve the access small firms have to government contracts, increase the channels of communication between government and small businesses, and simplify the process of winning public contracts.
Small businesses to get loans direct from government
18 November 2008
With banks still apparently reluctant to free up credit, the government is to lend money directly to small enterprises.
Regional Development Agencies (RDAs) will be able to provide loans of up to £250,000 to small firms.
Welcome for government’s small business support package
22 October 2008
The business community has welcomed the government’s announcement of a series of measures designed to help smaller firms survive the economic downturn.
The main focus of the support package is on cashflow, access to finance and staff training.
The government has committed itself to working with NHS trusts, local authorities and other public sector employers in England to extend to them a supplier payment target of 10 days, a proposal that has already been agreed by central government and has secured the signature of England’s Regional Development Agencies (RDAs).
Businesses in England are to be offered free ‘health checks’ through the Business Link support service as a way of identifying any possible problems and of giving advice.
Recharges to clients and customers – when to add VAT?
10 October 2008
It seems that this subject has been causing confusion for the whole 35 years we have had VAT in the UK.
The fundamental question that any supplier of goods or services should address is: do the goods or services I am recharging to my client/customer form part of my supply? If the answer is ‘yes’, the goods or services being recharged have the same VAT treatment as the main supply. If the answer is ‘no’, it is possible they could take their usual VAT liability, e.g. zero- rating for books, aids and adaptations for people with disabilities; exemption for insurance and financial services, or they could be treated as disbursements, which are outside the scope of VAT.
Another helpful way of deciding the correct treatment is to ask: to whom is the relevant supply made, which is subsequently recharged? Is it to the person making the recharge, or to the ultimate customer?
As with any principles, the best way to understand them is through examples.
Businesses missing out on rate relief due to ‘guidance confusion’
1 October 2008
Many small businesses could be losing out on millions of pounds of rate relief because local authorities are failing to follow government guidance.
Under the Small Business Rate Relief Scheme (SBRRS), eligible businesses in England can claim as much as 50 per cent off their rates bills provided their property has a rateable value of less than £5,000.
New business support programme goes on trial
24 September 2008
Government plans to introduce a new, simplified system of business support are being piloted through a select number of local authorities.
The Business Support Simplification Programme (BSSP) was announced during the Budget 2006. The aim is to reduce the number of publicly funded business support schemes from over 3,000 to less than 100 by 2010.
Going green can save firms money
5 September 2008
Businesses that make regular use of the NetRegs website, which offers advice on environmental issues, are saving as much as £58 million a year between them, the government has claimed.
NetRegs provides guidance on how best to run an environment-friendly business and to comply with environmental laws affecting firms.
A survey commissioned by NetRegs suggested that firms which use the site at least once a week save up to £5,000 a year in costs.
Increase in personal allowances
26 August 2008
In response to concerns about the abolition of the ten per cent band of tax a further increase in the basic personal allowance was announced in May of this year. To give time for the adjustment to be legislated for and for preparations to be made to inform employers, the increase and the related change to the higher rate threshold will be implemented after September 6.
Small businesses ‘missing out’ on rate relief
11 August 2008
Many thousands of businesses are failing to take advantage of relief available under the government’s special rates scheme for smaller firms, it has been claimed.
Eligible businesses in England can claim as much as 50 per cent off their rates bills provided their property has a rateable value of less than £5,000.
As the rateable value of the premises rises so the level of relief declines correspondingly on a scale of 1 per cent for every £100 of rateable value over £5,000 and up to £10,000. When the rateable value reaches £10,000, the relief is 0 per cent. Similar schemes also operate in Scotland and Wales.
Mortgage interest can be set against income tax by the self-employed
30 June 2008
The self-employed can take advantage of new guidance from HM Revenue and Customs (HMRC) that allows them to set a range of costs against their income tax.
These costs can include mortgage interest payments, council tax and home insurance.
HMRC warns on tax rebate scam
13 June 2008
HM Revenue and Customs (HMRC) has said that taxpayers should be on the lookout for fraudulent emails that claim the recipient is entitled to a tax rebate.
The emails attempt to persuade people to complete a form revealing details of their bank accounts or credit cards.
HMRC warned anyone receiving a fraudulent email not to complete the form, not to disclose any of their details and not to follow the links.
Bank transfer payment times speeded up
27 May 2008
A new system intended to speed up the time it takes to make cash transfers between bank accounts online or by phone has come on stream.
The Faster Payments Service started on 27 May. The system should see transfers made online and by phone completed on the same day and usually within two hours. Under the old system such transfers could take as long as three days.
Rise in personal tax allowance announced
13 May 2008
The Chancellor, Alistair Darling has announced some of the details of the compensation the government is to offer taxpayers who have been hit by the scrapping of the 10p income tax starting rate.
Mr Darling told the House of Commons that the basic rate personal tax allowance is to rise by £600 to £6,035.
As a result basic rate taxpayers will save £120 annually.
The Chancellor also said that the allowance for higher rate taxpayers would be reduced.
SMEs get free access to public sector contract site
2 May 2008
The government has announced that access to its public sector contract website will be free for the next three months.
Normally there is a charge for firms that wish to look for national contracts outside their local area where there is no fee for the search.
But as from 1 May until 31 July 2008, the www.supply2.gov.uk website is running a trial that allows firms free access to public sector contracts valued under £100,000 for the UK and Northern Ireland.
Timetable set for faster cash transfers
29 April 2008
A new system for speeding up cash transfers via the phone and internet is due to launch on 27 May.
The Faster Payments Service will see cash transfers made over the phone or online completed on the same day rather than in the three days it takes for cheques to clear.
Small businesses reluctant to charge late payment interest
16 April 2008
Small firms are unwilling to make use of rules that allow them to charge interest on overdue invoices.
Although businesses were given the right ten years ago to add interest charges when bills are not settled on time, many do not impose the penalty for fear of losing custom from their bigger clients.
Business tax changes take effect
1 April 2008
This week sees the introduction of several changes to the business tax regime.
Budget 2008: Business support and taxes
12 March 2008
The Chancellor confirmed the cut in the main rate of Corporation Tax from 30 per cent to 28 per cent, effective from April.
However, in 2008-09 the Small Companies rate will increase, as pre-announced, from 20 per cent to 21 per cent.
HMRC announces extra online facilities
6 February 2008
HM Revenue and Customs (HMRC) has announced that customers and agents can now change contact details online.
The additional facility applies to both self assessment and PAYE online customers, and came into effect from 6 February.
Small business owners offered chance to sharpen skills
7 January 2008
Small business managers are being urged to take advantage of a huge expansion of government funded training in order to improve their leadership skills and boost their competitiveness.
The call came from John Denham, Secretary of State for Innovation, Universities and Skills.
The financial backing, which is to rise from £4 million to £30 million annually, comes on stream later in the New Year and provides funding for tailor-made management and leadership training through the government’s Train to Gain scheme.
The training will give employers access to an impartial and independent skills broker to help them identify their basic or higher level skills needs.
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