| Budget
March 2008: Legislation is proposed as follows: Business Tax The Capital Allowance regime will be amended significantly for both limited companies (1 April 2008) and traders from 6 April 2008. The main changes are: 1. An annual investment allowance (AIA) of up to £50,000 calculated on an April to April basis is available for claims on qualifying expenditure. Expenditure over £50,000 will attract writing down allowances. The 50% FYAs for small business will no longer be available from April 2008. 2. The main rate for writing down allowances will reduce from 25% to 20% from April 2008. The old pool of expenditure can be written off in total where it is less than £1,000. 3. Writing down allowances for certain expenditure integral to a building (such as lifts/ thermal insulation/ heating systems etc) will be restricted to 10%. 4. 100% FYAs will continue to be available for new low CO2 emission cars of up to 110KG from April 08, for equipment fuelled by biogas, and for plant and equipment purchased which is energy efficient or water saving technology. The small companies rate for companies is increased from 20% to 21% from the financial year 2008/9 started 1 April 2008. Value Added Tax The VAT registration limit is increased from £64,000 to £67,000, and the deregistration limit from £62,000 to £65,000 from 1 April 2008. VAT errors can be amended on the next VAT Return without informing HMRC if less than the greater of £10,000 or 1% of turnover (maximum £50,000) from 1 July 2008. Standard Rate - 17.5% Lower Rate - 5% Charities Gift Aid reclaimable by Charities has reduced to 20% but HMRC will supplement 'Gift Aid' by a further 2% for a transitional period. Child and Working Tax Credits
The first income threshold is £6,420 up to a maximum income threshold of £50,000 for 2008/9. The first threshold for those entitled to child tax credit only is £15,575. Alcohol/Excise Duties etc
1. A written statement of the main terms of employment should be provided within two months of the start of employment. 2. Paid holidays entitlement from October 2007 is 24 days (part-time paid pro-rata). 3. Employment law requires employers to be fair and take necessary procedures before making a dismissal. HMRC are reviewing the penalty regime for non-compliance by tax payers relating to income tax, CGT, CT, VAT ands PAYE and will be simplifying the time limits and penalties for all of these taxes. Self Assessment 2007/8 You may be able to pay your tax bill by credit card from the Autumn 2008. The deadline for filing paper returns has changed to 31 October 2008 but the deadline for filing electronic tax returns is 31 January 2009. Please contact Yvonne or Ian Sheppard if you would like to discuss in more detail these changes for 2007/08 and whether you can benefit from tax and financial planning. |
Current
Rates of UK Tax
Savings *The starting rate band for savings will be £2,320 for 2008/9 where non-savings income does not exceed that amount. The cash ISA limit will increase to £3,600 in a tax year from 6 April 2008. National Insurance The lower earning thresholds for NI have increased to £90 and £105. The higher threshold band for class 4 NI and Employees class 1 is increased from £34,840 to £40,040 from 6 April 2008 (an increase of over £400 tax a year for self employed traders and high paid employees). Inheritance Tax Legislation will be introduced in the Finance Bill 2008 to allow any IHT nil-rate band unused on a person's death to be transferred to the estate of their spouse or civil partner who die on or after 9 October 2007. The NIL rate band is £312,000 for individuals or a total of £624,000 for married couples and civil partners from 6 April 2008. Non-Domicile Rules Legislation will introduce the £30,000 charge for UK residents who are not UK domiciled. In addition, neither personal nor capital gains tax allowance will be available to non-domiciled individuals with unremitted UK income over £2,000 a year. Capital Gains Tax The taper relief regime will be abolished from 6 April 2008 and the first £1 million lifetime gain on a sale of a qualifying trading business and certain business assets will be charged at 10%, with gains in excess of £1 million and charged at 18%. Non-business chargeable gains will be charged at the flat rate of 18%. The annual capital gains tax exemption is increased to £9,600 per person for 2008/9. National Minimum Wage The minimum wage hourly rates for adults (over 22), youths (18-21) and 16/17 year olds are as follows :-
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