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News

News

Budget Report 2015

Chancellor George Osborne used his final Budget statement of this Parliament to announce that "Britain is walking tall again". There are many things to be positive about:

Economy

The economy grew 2.6% in 2014 – faster than any other advanced economy. The Office for Budget Responsibility (OBR) has revised up its 2015 growth forecast to 2.5% (up from 2.4% at the Autumn Statement in December 2014 and 2.3% a year ago).

Employment

Unemployment fell by 102,000 in the 3 months to January 2015 and the employment rate is 73.3% - the highest level since comparable records began in 1971. The OBR predicts that unemployment will fall from 5.7% at the end of 2014 to 5.3% this year.

Inflation

Falling world food and oil prices mean that that the OBR has revised down its inflation forecast to 0.2% for 2015. Osborne confirmed that the consumer price index inflation target remains at 2%.

National debt

The Chancellor plans to use funds from bank sales, lower interest charges on government gilts and a smaller welfare bill to pay down the national debt.

Against this backdrop, the Chancellor promised a Budget that "does more to back businesses and make work pay". However, with a general election less than 2 months away, it is not certain how many of the new measures will make it into law before the
dissolution of Parliament.

The following report summarises the announcements made by Chancellor George Osborne during the 2015 Budget on Wednesday 18 March 2015.

Download the full Budget Report 2015


Budget Report 2014

The economic backdrop to Chancellor George Osborne’s fifth Budget statement was decidedly more positive than it was when he moved into Number 11 in 2010.

The economy grew by 1.8% in 2013, three times more than the Office for Budget Responsibility predicted at the Budget in March 2013. The OBR has now upgraded its growth forecast for 2014 to 2.7% and to 2.3% for 2015.

Employment grew by 105,000 in the quarter to January 2014, driven by a surge in selfemployment, and the unemployment rate is down to 7.2%.

But it isn’t all good news. Inflation fell to 1.9% in January this year but average pay grew by 1.4% in the three months to January.

Also, the value of exported goods fell by 1.1% in the three months to January 2014, hardly the sign of an export-led recovery. In February, the Chancellor himself admitted to business leaders in Hong Kong that “Britain is not exporting enough.”

George Osborne also told his audience in Hong Kong that the UK’s economic recovery was not yet secure or balanced. He said that his 2014 Budget would be “… a budget where we must confront our problems and deal with some hard truths.”

He also echoed this sentiment in his Budget speech, saying that he had “… never shied away from telling the British people about the difficult decisions we face.”

Download the full Budget Report 2014


Tax Planning – Rules for Companies

When it comes to tax planning, running a limited company is a tax efficient way to deal with your income.

However, it is important to stick to certain rules so that HMRC can easily see that you work for your limited company, and not for one of your customers!

Here are some important tips to help avoid being caught by the IR35 legislation;

  • When making a 'linked-in' profile, remember to show that you are a Director of your limited company, not that you hold a position within your customer's company
  • When having business cards and stationary printed, again remember you are a Director of your limited company
  • Businesses need to promote themselves in order to win new business and new contracts, so advertising costs should be part of the company's regular expenditure
  • If possible, you should avoid using a 'work' email address – you should be contacted via an email account that your company uses rather than an address tied in with your customer's company
  • Keep documentation relating to any bad debts that your company has incurred (correspondence as well as the sales invoices to be written off)
  • Make sure the company has its own bank account, it is important not to receive the company's money in your personal bank account
  • Send invoices prior to receiving payment, showing the payment terms that you have negotiated with your customer – keep copies of all sales invoices on file
  • All businesses should consider having Professional Indemnity Insurance and having this insurance is a distinction between your company and an employee
  • If the company has business premises separate to the customer's office and the director's home address, this helps to show that the company is independent

Read about the changes recently brought in to amend the IR35 rules.

This article is a general one that should be useful to anyone with a limited company, however for more specific advice you should contact us directly.


Paying Employees

Follow up to the new payroll legislation – RTI – the trial period has commenced now.

We have now run one month for participators under the new scheme for payroll, which has been put in place by HMRC.

We have found the main differences to be;

  • The information held for each employee needs to be more complete, accurate and up to date.
  • More information about the number hours employees are contracted to work is required.
  • The date that employees are paid is now recorded and therefore more significant.
  • No changes can be made once the submission has been processed – it is not possible to ‘roll back’ last month with a change to the payslips.

As RTI is such a significant change to the scheme, anyone currently processing their own payroll needs to be aware that the software costs are increasing as the program has to collect so much more information each month. Please be aware that you are likely to be charged more for your payroll updates.

It has been possible to keep accountancy costs down by running quarterly and annual schemes up to now, however RTI is a rigid monthly reporting requirement and we may have to change everyone over to having a monthly payroll. We will need to be in contact with employers more regularly so that the data is as accurate as possible.


Child benefit Changes

You may have heard in the media that there are changes coming with regards to child benefit. For people who have taxable income of £50,000 a year or more, your household will lose out on child benefit for all children.

The Institute of Fiscal Studies estimates 1.2 million families will be affected!

There are a couple of ways to avoid losing the benefit if you are an employee earning a little over the threshold – pension contributions or childcare vouchers made via a salary sacrifice can be used to reduce the taxable income which shows on your P60. You will need to speak to your employer directly about this.

If you are self employed or work for an employer not offering salary sacrifice schemes, the only option is to fill in a personal tax return to show the pension or gift aid contributions that bring you under the £50,000 threshold.

Find out more information about the proposed changes.

If you or anyone you know needs advice about planning a way to keep the child benefit, Astons are here to help. Planning will need to be done BEFORE 5 April 2013.


HMRC and Real Time Information

Her Majesty's Revenue and Customs (HMRC) are introducing new payroll legislation. It will affect EVERYONE that pays anyone to work for them, from April 2013.

It is called Real Time Information (RTI) - it affects the way that we submit payroll/PAYE information to HMRC, on your behalf. As with most tax initiatives these days, it is backed up by threats of fines for submitting information late or incorrectly.

In simple terms it will mean that every employer (however small) is going to have to:

  • submit monthly returns to HMRC
  • include all employees (even those with no deductions)
  • keep more detailed and accurate information (for all employees)
  • monitor pay-dates more closely
  • never make a payment to anyone without submitting details
  • pay PAYE more promptly/regularly

Although this seems a burden, the long-term aims are good as HMRC and other government agencies are supposed to be using the new system work together and quicker to improve tax services and go some way to reducing tax evasion and benefit fraud.

As your Accountants we are keen to ensure that we (and therefore, you) are doing all we can, in good time, to be compliant and well-prepared, to ensure the flow of information is reliable and efficient so that we are working together to get the right information, submitted as quickly as possible, and thus avoid the potential fines.

The solution will be letting us take care of running this for you - all you need to do is keep in touch with us regularly, making sure we have everything we need to run the process for you.

How the scheme will be introduced:

  1. 1. You will be sent a letter, by HMRC, 4-6 weeks before you are expected to 'go live' with RTI. This date is not optional and cannot be changed. As soon as you receive this it is imperative that you inform us of the date. Failure to do so may result in a late RTI submission and a subsequent financial penalty.
  2. 2. On the date you are given by HMRC as your go-live date you need to submit an Employer Alignment Submission (EAS). This tells HMRC all about the employees you already have, and who has left in the year.

HMRC should issue more detailS/information to you as your go-live date approaches.

Most important of all - don't worry about the problems, Astons are here to help you - we may just need to be in touch with each other more often about payroll.


Pensions reform, Auto enrolment

We are aware that the pensions reform is being discussed in the media now, and wanted to let you know that we are monitoring the issue so that we can be ready to advise you when it becomes relevant.

The auto enrolment system is being rolled out from October this year, however it is only the biggest employers signing up at the moment and some payrolls will only be part of the new system in 2018.

The scheme is being brought in to deal with the lack of funds available to keep backing a state retirement pension for all, and so both employees and employers will need to be setting aside set amounts to ensure today’s employees have an income on their retirement.

If you would like to look into this issue in more detail, here is a helpful link.

As the issue starts to become more relevant to our clients, Astons will keep you informed.


Websites must be updated!

As a reminder to all businesses using websites and emails as a part of their trading activities, there are issues to consider when deciding on what is displayed for the public to see and why.

Rules for all websites

Any memberships and affiliations that are listed, must be kept up to date so if your website was written a while ago, you need to check that all the memberships are still current.

If there are any 'prescribed' or 'sensitive' words on the website, you need to be able to justify their use – for example 'King' or 'Dentist' – you must also be aware of trade marks when writing the text.

You need to show the VAT registration number of the business if you are registered.

If you are trading directly with customers you need to state your conditions of sale.

Information legally required on websites for companies

  • Country of Registration (usually "England and Wales")
  • Company name AND all trading names used by the company
  • The company's registered number
  • The company's registered office address
  • The company's trading address
  • If the company has been set up as an investment company this should be stated
  • If the name of one director is shown as part of the statutory information, all directors must be listed

Information that needs to be shown on emails

  • Company and trading names
  • Company's registered number
  • Company's registered office
  • VAT number if applicable

It is always sensible to have a disclaimer at the bottom of business emails stating that the information is confidential and only for the eyes of the addressee.

Please keep this information in mind both when designing your own websites/email AND when looking at other people's websites – it may be that some traders are showing affiliations and memberships which they do not have the rights to display so it is important to double check.


Keeping you up to date

There are a few updates and changes which everyone should be aware of outlined below. If you have any questions or concerns please contact the team at Astons.

National Minimum Wage rates - The adult rate of the National Minimum Wage increases from 1 October 2011

The NMW rates are reviewed each year by the Low Pay Commission and from 1 October 2011:

  • the main rate for workers aged 21 and over will increase to £6.08
  • the 18-20 rate will increase to £4.98
  • the 16-17 rate for workers above school leaving age but under 18 will increase to £3.68
  • the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship will increase to £2.60

Read more on www.direct.gov.uk

Changes to Companies House regulations from 1 October 2011

There are new regulations coming into force on 1st October 2011 relating to Standard Industrial Codes (SIC Codes), Shareholder disclosure as part of the Annual Returns and Overseas Company Mortgages or Charges.

Advisory fuel rates for company cars for journeys on or after 1 September 2011

The following rates are for employees who drive company cars, but provide their own fuel :

Engine size Petrol LPG
1400cc or less 15p 11p
1401cc to 2000cc 18p 12p
Over 2000cc 26p 18p
Engine size Diesel
1400cc or less 12p
1401cc to 2000cc 15p
Over 2000cc 18p

Read more on www.hmrc.gov.uk


Astons had their re-launch day on 30 March as planned, and would like to thank the clients that expressed their support and interest.

HMRC are getting harsher!

6 May 2011

We need to make you aware of the new penalties and fines being introduced by HMRC :

  • There are now penalties for late payments on PAYE throughout the year – up to 4% of the amount which is overdue can be charged.
  • Personal tax returns which are late will no longer have the £100 fine written off if the return shows a refund once completed.
  • If a personal tax return is more than 3 months late, the penalty is £10 per day and by 12 months late it could be as much as 100% of the tax due again as a penalty.

Changes to Corporation Tax administration.

There is a new system in place for filing company tax returns, and as part of the technical change, HMRC have said they will no longer accept cheques for payment of corporation tax!

Corporation tax will now need to be paid 'electronically' using ;

  • Internet banking
  • Telephone banking
  • Direct Debit
  • Debit and Credit cards at www.billpayment.co.uk/hmrc
  • BACS
  • CHAPS

Astons Announce Re-launch

30 March 2011

Although Astons has been in business for 27 years, now, a re-launch has been organised to modernise the image of the firm, with a new logo coinciding with the launch of the new website.

The launch date is 30 March 2011 and Astons Accountants are holding an “open house” in the afternoon with a glass of bubbly for anyone who wants to come along and see it all for themselves on the day.

Anyone attending will also be able to meet the website developers to chat about the whole process.

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We have had a long term relationship with the team at Astons Accountants and have been happy with the services we receive over many years.

S. Allsop, Managing Director
W. H. Allsop & Sons (Builders) Limited, Caddington, Bedfordshire