October 2009

Points to Ponder!

Welcome to our fifty fifth newsletter issued in October 2009, to keep you up to date with some of the changes in Income tax, National Insurance and VAT along with compliance regulations for businesses, plus other oddments that have caught our eye. If you would like a copy of any past newsletters, please call and we can either send or e-mail them to you or you can find them on our website. To save paper, we shall no longer be carrying forward general items from month to month.

It’s here – our website is live and you are using it. Thanks you

Now everything is running, we would like to offer all our clients some reciprocal advertising. We would like to add your business to ‘Our Clients’ page with a link to your Website and in return would ask that you link us to yours. If you don’t have a website but would like to be on ‘Our Clients’ page, perhaps we could give you some of our cards or leaflets to pass on to your clients?

We Mean Business – Federation of Small Businesses Event
We attended this event, which took place on Thursday 1st October at the Fairfield Halls in Croydon. Our challenge – “Are your reactions fast enough to cope with today’s market?” on the speedway bike, fitted with an electronic reaction tester to see if you would be first out from the tapes, was taken up by 49 people during the day, including the FSB’s Policy Chairman, the Marketing Director of Fairfield Halls and the Business Manager for Crystal Palace Football Club. The results are on our website.

National Minimum Wage

This has increased from 1st October. For workers ages 22 and over, it is now £5.80 an hour, for 18 to 21 year olds, to £4.77 and for 16 to 17 year olds, it has gone to £3.57 an hour.

Business Failure Rate Slows.
So now it’s official, the recession is over – believe that if you will! Although statistics have been published that show the rate of failing businesses has slowed, it hasn’t stopped. In fact, the highest rise in closures in the last quarter has been in the Greater London area. After the last major recession, more businesses closed when the recession was officially over than during it – so what “measurements” are used to make these announcements?

New Penalties for Late In-year PAYE Payments.
Currently, the only penalties for late PAYE payments are at the end of the fiscal year, where any balance unpaid is subject to interest. Providing a payment is made each month, the only way HMRC can judge if it was a full payment is by checking the records. Full details of how they intend to monitor this are to be published soon – watch this space!

VAT change back to 17.5%

This will take place on 1st January 2010, not 31st as originally announced. Anti-forestalling legislation is being put in place to stop advance invoicing to avoid the increase. The pub trade is fighting the date change, as most will be open to see in the New Year. The rate change will involve closing the tills to take a reading at midnight, before starting sales again. So, especially if you are not VAT-registered, please can we have outstanding records as soon as possible?

Change predicted in retirement age.
Pensions minister, Angela Eagle, has announced that the review of the UK retirement age is to be brought forward from 2011 to 2010. It is predicted that it will be raised to 68, but not until 2046. At the moment, employers can insist that workers retire at 65.

Compulsory Pension Schemes

In 2012, every employer will be required by law to auto-enrol their eligible employees in to a qualifying workplace pension scheme. Employees must contribute 4% of a band of earnings called qualifying earnings. The Taxman will add 1% and the employer must add 3%. Every employer must do this, regardless of size. So even if you have just one employee, you must put a scheme in place. Employees can choose to opt out of a scheme, but only after they have been auto-enrolled. The employer will be responsible for ensuring the right amounts are deducted and paid to the pension provider on time. This will be an expensive, time consuming and wasteful exercise – nothing new there then.

£540m tax delayed in the South East.
This is the amount that has been agreed under the new HMRC Debt Management regime. If you are having difficulties paying your tax on time, do contact the special office to make arrangements to pay. We have given the number before, but it is 0845 302 1435, Monday to Friday between 8 am and 8 pm and at the weekend between 8 am and 4 pm.

Shareholder Agreements

A recent article in a business magazine compares these to “Pre Nuptial Agreements”. We prefer to think of them as an insurance policy – once it’s in place you hope you don’t have to call on it. When you start up a business with someone else, you look forward to success, but things can go wrong. If you have an agreement in place, you are able to resolve or dissolve the business issues in line with the terms you set up initially. The agreement can be reviewed as often as you wish and this helps focus on the way the business is run, so has more benefits than you may realise. If you would like help with setting up, or reviewing an existing, agreement, please give us a call.

Traffic Congestion Is Down.
So there is some good news! However, the decline in traffic has been linked with the job losses and the economic down-turn. It will be expected to increase again as the economy improves. However, more people are working from home, others are using public transport and some have started walking.