News - May

From time to time, we produce information for clients on a number of topical and important issues, some of which can be found below:

Innovation - in threes

There's an old joke that describes two men walking across the savannah in Africa when they spy a hungry looking lion. The lion starts to approach them and they fear for their lives. One of the men takes off his rucksack, produces a pair of track shoes and starts to put them on. His companion is dumfounded – "What are you putting those on for," he asks, "you’re never going to outrun a lion". "No", the first man replies, "but with these I can outrun you!"

Personal Tax Changes

The Chancellor has not only brought forward proposals which were to take place in 2011, he has also made changes to his original announcements.

Restricted Tax Relief on Pension Contributions

Pension contributions made by an individual are usually paid net of basic rate tax. Where the individual is a higher rate taxpayer further relief is due which significantly reduces the net cost of the contribution.

Enhanced Relief for Trading Losses

Under current rules businesses already have a number of mechanisms to relieve trading losses against other income including past trading profits.

Capital Allowances on Plant and Machinery

Additional capital allowances are to be available for expenditure incurred by a business in the 12 month period (starting 1 April 2009 for companies and 6 April 2009 for individuals and partnerships).

Standard Rate VAT

The standard rate of VAT was reduced from 17.5% to 15% for the 13 month period 1 December 2008 to 31 December 2009. HMRC have confirmed that the standard rate of VAT will revert to 17.5% from 1 January 2010.

VAT System for Cross-Border Trading

A package of measures is being introduced to simplify and modernise the VAT system for cross-border trading and to counter fraud across the EU.

Bradford & Bingley Position of Former Shareholders

As you are no doubt aware, shares in Bradford & Bingley plc were taken into public ownership last year. HMRC have issued guidance relevant to former shareholders and employees who were members of employee share schemes.

Change of HMRC Bank Account Details

HMRC bank account details for paying self employed Class 2 and voluntary Class 3 National Insurance Contributions have changed. HMRC have advised that individuals will need to use the new account details when making a payment.

Businesses given more Time to Pay Business Rates

Alistair Darling made a late change to the impact of business rate rises which were due to take effect in England from 1 April 2009.