DG Accountancy News

Fathers to be given new paternity rights

2009-10-14T06:38:00.001-07:00

Fathers will gain the right to take six months’ paternity leave under new plans announced by the Government.

The proposals will see parents afforded the right to share a year of parental leave to care for their newborn child, with fathers allowed to take six months off after the mother’s first six months of leave.

The changes will take effect for parents of children due on or after 3 April 2011.

Harriet Harman, Minister for Women and Equality, said the new rights would give ‘families radically more choice and flexibility’ and enable ‘fathers to play a bigger part in bringing up their children.’

But the Government has yet to fix a date for its plans to extend mothers’ maternity leave from nine months to a year.

Commenting on the shared leave proposals, Miles Templeman, Director General of the Institute of Directors, said: ‘We strongly support new paternity leave rights for fathers, providing the Government ensures that the new system is simple for businesses to administer and there is no overall increase in the total amount of paid and unpaid leave parents can take.’

However David Frost, Director General of the British Chambers of Commerce, told the BBC: ‘This is not the time to do it. It is a huge burden to plan for both a male and a female employee being away.’

The Government anticipates that the new rules will have a ‘minimal’ impact on companies and that just one in 137 small businesses are likely to be affected.

HMRC issues new warning over fake emails

2009-10-14T06:37:00.001-07:00

HM Revenue and Customs (HMRC) is warning people to remain vigilant as fraudsters renew their efforts to scam money from unwitting taxpayers.
Emails which appear to originate from a genuine Government source claim that recipients are entitled to a tax rebate in an attempt to coax them into sharing personal information.
Some messages also invite taxpayers to complete a form (in some cases an online form), which demands their credit card details.
Email addresses used by the fraudsters include: tax-inform@hmrc-information.co.uk; online.paper@hmrcpaper.co.uk; office.tax@hmrc.taxreturn.co.uk and securemail@hmrc.gov.uk.
However, HMRC states that it would not inform customers of a tax rebate via email, and is advising taxpayers not to visit the website contained in some of the emails, or to surrender any of their personal or payment details.
A spokesman for HMRC said: ‘The email is a sophisticated attempt at internet fraud and it is very important that anyone receiving it does not reply or provide any personal details whatsoever.
‘We are liaising closely with those agencies working to close down and prosecute those behind these scams. If you are in any doubt about a communication claiming to be from HMRC please contact us.’
Suspicious HMRC emails can be forwarded to phishing@hmrc.gsi.gov.uk.

Banks must disclose 'all offshore account details' to Revenue

2009-10-14T06:36:00.001-07:00

Over 300 banks and financial institutions have been ordered to pass the details of those customers who hold offshore accounts to HM Revenue & Customs (HMRC).
The legal ruling means that HMRC can now issue compulsory disclosure notices to the banks, ahead of its New Disclosure Opportunity (NDO).
The NDO offers people with unpaid taxes linked to offshore accounts or assets a final opportunity to make a complete disclosure, at favourable penalty rates. Those taxpayers who were not contacted by HMRC under the previous Offshore Disclosure Facility (ODF), in 2007, will be offered a penalty rate of 10%. Those who were contacted during the ODF but did not take advantage of the scheme will be offered a 20% penalty rate.
To use the scheme, a notification of the intention to disclose must be made to HMRC between 1 September and 30 November 2009. Those taxpayers notifying on paper can do so from 1 September to 30 November, while those notifying electronically can do so from 1 October to 30 November.

Disclosures can be then made from September 2009 to January 2010 on paper, or from October 2009 to 12 March 2010 electronically.

Once the NDO ends on 12 March, those taxpayers who have failed to come forward will be pursued by HMRC and will face penalties of between 30% and 100%, together with an increased risk of prosecution.

Business issues warning following sick leave ruling

2009-10-14T06:34:00.001-07:00

The Confederation of British Industry (CBI) has warned that a recent landmark ruling on sick leave by the European Court of Justice could leave employers open to abuse by unscrupulous staff.

The ruling means that employees who suffer illness while on annual leave could be entitled to reclassify their time off as sick leave, and be granted annual leave for a different period.

Katja Hall of the CBI said, 'Many firms already take a common-sense and sympathetic approach. But allowing employees to reclassify their holiday as sick leave opens the door to abuse'.

Meanwhile, the Chartered Institute of Personnel and Development (CIPD) warned that the ruling could force employers to abandon occupational sick pay schemes, in favour of statutory schemes.

The CBI is calling for employers to be given the right to ask for a medical certificate, should the ruling become law.

Government to introduce new 'broadband tax'

2009-10-14T06:31:00.002-07:00

Controversial plans to introduce a tax on landlines are set to be become law before the next election, the Government has announced.

Under the scheme, everyone with a fixed line telephone will pay a levy of 50 pence a month.

The 'next-generation fund' will generate up to £175 million a year, and will be used to subsidise the cost of making high speed broadband networks available nationally.

The Government aims to give more than 90% of the country access to next generation broadband, by the year 2017.

Treasury minister Stephen Timms has confirmed that the tax will be included in the next Finance Bill.

However, opponents of the scheme have argued that many consumers have already been hit by recent increases in line rental charges, and are calling for the burden of digital investment to be shared between businesses and consumers.

Raft of new legislation comes into force

2009-10-14T06:31:00.001-07:00

A raft of new regulations, including changes to the National Minimum Wage (NMW), came into force earlier this month.
From 1 October, employers are banned from using tips and service charges to bring the wages of bar and restaurant workers up to the minimum salary.
The change follows a recent case in the Court of Appeal, in which the judge concluded that employers must not take into account tips, gratuities, service charges or cover charges when paying the NMW, unless these are paid to employees through the employer’s payroll.
It came on the same day that the main adult rate of the NMW rose by 7p an hour to £5.80. Workers aged 18-21 are now guaranteed a minimum rate of £4.83 – up from £4.77. For 16 and 17-year-olds, the rate has gone up to £3.57 an hour.
In addition, businesses will now have to abide by new rules set out in the Companies Act 2006.
With the final sections of the Act coming into effect last week, the biggest overhaul of company law is now complete. Key provisions of the Companies Act 2006 include:
Creating separate and simpler model Articles of Association for small companies, reflecting how they operate
Enabling greater use of electronic communications with shareholders, therefore avoiding unnecessary cost and time consuming administration
Making it an offence to carry on business in the UK under a name that gives so misleading an indication of the nature of the activities of the business as to be likely to cause harm to the public.
If you think the new regulations may affect you, please contact us.

Deadline approaching for paper Tax Returns

2009-10-14T06:29:00.002-07:00

Individuals are being reminded that they have until 31 October to file their paper Tax Return.

HM Revenue and Customs (HMRC) is alerting people to the impending deadline, which is now just weeks away.

Those who miss the deadline will need to file electronically, or incur a £100 late filing penalty. Any paper Returns submitted after this date will also miss the deadline for HMRC to calculate the amount of tax owed, meaning the tax will have to be worked out by the taxpayer themselves.

If the tax that is owed is less than £2,000 it can be collected through the individual’s tax code where possible.

Meanwhile, online Returns may be submitted up until 31 January 2010. Once again, electronic Returns submitted after the deadline will attract a penalty, with further charges possible if the Return remains outstanding.

This is the second year that the 31 October paper deadline has been in place. Previously, the deadline for filing both paper and online Tax Returns was 31 January.

It was hoped the change would encourage more people to file their Return online and thus reduce the Revenue’s costs. The new rules marked the most significant reform of the self assessment tax system since its introduction more than a decade ago.
We can help you prepare and file your Tax Return with HMRC – please contact us more information and advice.

Banks to provide 'more clarity' on account charges

2009-10-14T06:29:00.001-07:00

UK banks have agreed to provide clearer information to customers regarding current account charges, and to introduce measures which will make it easier for them to switch accounts.

Under the new measures, which are expected to come into force by 2011, banks will provide an annual summary of account charges, including information on how much customers have been charged for services such as overdrafts.

Bank charges will also be listed more prominently on monthly statements, and banks will make it easier to move direct debit payments to new accounts.

The changes follow a previous report from the Office of Fair Trading (OFT), which criticised the complexity of the information given by banks to their customers.

John Fingleton, OFT chief executive, said that the measures will help to improve customer awareness, and allow individuals to compare the benefits of different accounts in order to obtain better value for money.

'Banks will need to offer more competitive and innovative products and services to attract as well as retain customers', he commented.

Interest rates 'set to remain low'

2009-10-14T06:28:00.000-07:00

Interest rates are likely to remain at a low level for a number of years, a recent report has suggested.

The economic forecast from the Centre for Economics and Business Research (CEBR) predicts that the rate will stay at its current level of 0.5% until 2011, reaching 2% in 2014.

The CEBR also forecasts that the pound is likely to weaken further, with the possibility that it could fall below one euro.

The report makes the assumption that the UK budget deficit will be cut by £100bn over the next parliament, with a combination of £80 billion of spending cuts, and tax rises to the tune of £20 billion.

Douglas McWilliams, CEBR chief executive, said, 'We are likely to see an exciting policy mix, with the fiscal policy lever pulled right back while the monetary lever is fast forward'.

'We are likely to see a major re-rating of equities and property which in turn should stimulate economic growth after a lag'.

The Bank of England has held interest rates at a record 0.5% for seven consecutive months.

Business groups condemn workplace parking tax

2009-08-11T02:51:00.000-07:00

Government plans to impose a tax on firms that provide staff car parking have been criticised by business groups.
The Workplace Parking Levy (WPL), which was recently given the go-ahead by ministers, could see companies with 11 or more parking spaces charged £185 a year for each space.
The WPL will be piloted by Nottingham City Council, although it is not expected to be introduced until 2011.
Transport Minister, Sadiq Khan, claimed the scheme will cut congestion and generate funds to invest in local public transport.
Yet the Forum of Private Business (FPB) described the initiative as ‘scandalous’ and ‘little more than a stealth tax.’
FPB Chief Executive Phil Orford commented: ‘It's the business equivalent to introducing a driveway tax to charge people for parking outside their own homes. This announcement could not come at a worse time for smaller businesses, who are struggling with rising costs on almost every front and trying their best to make it through the recession.’
Meanwhile David Frost, Director General of the British Chambers of Commerce (BCC), said the scheme was a ‘blow to the local business community.’ The BCC estimates that the parking levy could cost firms £3.4 billion every year if it is adopted by every council in England.
However Richard Hebditch, of the Campaign for Better Transport, welcomed the move.
‘The levy will raise vital money to invest in great public transport improvements to help to reduce local traffic problems - which is good news for local businesses and local people.’

HMRC defers £3.17bn in tax payments

2009-08-11T02:50:00.000-07:00

HM Revenue and Customs (HMRC) has deferred £3.17 billion in tax to help firms struggling in the recession, according to latest figures.
The taxman has authorised around 177,000 separate deferral agreements under the Business Payment Support Scheme (BPSS), which was introduced in the Chancellor’s Pre-Budget Report last November.
Of the £3bn deferred, £320m forms repeat deferrals. About 60% of deferrals are for three months or less.
In a statement HMRC said it had received approximately 90% of the tax that was due to be repaid under the initiative.
The BPSS allows business owners who are concerned about making their PAYE, VAT, national insurance and corporation tax payments, to contact HMRC to discuss a range of repayment options tailored to their needs.
Firms can call the Revenue’s dedicated advisers on 0845 302 1435 from 8am to 8pm Monday to Friday and from 8 am to 4pm at weekends. Further information is available here.
We can help you manage your business finances – please contact us for more information.

Business urges Chancellor to 'keep up the pressure' on bank lending

2009-08-11T02:49:00.001-07:00

Business groups have welcomed Chancellor Alistair Darling's recent meeting with the British Bankers' Association, regarding a shortage in lending to small businesses.

The Chancellor expressed his concerns that banks are not making sufficient funds available to small firms, and that they may be charging too much for credit.

The Forum of Private Business (FPB) gave a cautious welcome to the Chancellor's comments, but warned that many of the problems being encountered by small firms are a result of the fact that applications are decided by centrally-prescribed criteria.

The FPB believes that applications should instead be considered on a case-by-case basis, by local bank managers.

Chris Gorman, FPB spokesman, said, 'We want to see a return of the old-fashioned relationships between small businesses and their local bank managers in order to improve the flow of finance to firms that deserve it at this crucial time'.

Meanwhile, the British Chambers of Commerce (BCC) called on the banks to be 'transparent and open' about their approach to lending to small firms.

Millions of workers affected by incorrect tax codes

2009-08-11T02:48:00.001-07:00

Millions of workers in the UK are expected to be reimbursed after they were issued with an incorrect tax code.
The National Audit Office has calculated that about 4.5 million employees may have unwittingly had too much tax deducted from their wages. As a result, HM Revenue and Customs (HMRC) may be forced to recompense those affected to the tune of 1.6 billion.

A further 1.5 million taxpayers are thought to have underpaid tax by an estimated £400m.

The Revenue claims that the problems were ‘generated by an increasing number of coding discrepancies caused by changing customer work patterns.’

Latest figures from HMRC reveal that there were 20 million queries about tax codes in March this year – up from 16 million a year ago. However, it anticipates that 77% of the ‘open cases’ it is currently dealing with will be tax neutral.

It added that those affected would be notified that their tax code was changing to reflect the amount of tax they had overpaid or underpaid.

Small business group calls for graduate internship scheme

2009-07-21T11:00:00.001-07:00

The Federation of Small Businesses (FSB) is calling on the Government to create 5,000 new internships for recent graduates, in a bid to tackle soaring levels of graduate unemployment.

The organisation is warning that students graduating this summer are facing the toughest employment conditions in years, with larger companies reducing placements by 28%.

According to research conducted by the FSB, more than 20% of small businesses would be prepared to take on a graduate, while 45% are not aware that they can run internship schemes.

The FSB is calling on the Government to allocate £3m of funding to developing 5,000 graduate internships within small firms.

John Wright, FSB National Chairman, said, 'Graduate unemployment is set to soar to unprecedented levels this year as businesses struggle to make ends meet and cut back on recruiting key university leavers'.

'Small businesses are the sector to create and retain jobs and act as a bridge to formal employment'.

Revenue sees surge in VAT overpayment claims

2009-07-21T10:59:00.000-07:00

UK companies have submitted claims to recoup overpaid VAT to the tune of £8.5 billion, new figures reveal.

HM Revenue and Customs (HMRC) said it had received an ‘unprecedented’ surge in claims from around 13,000 businesses ahead of its end of March deadline.

The sudden influx follows an earlier decision by the Government to give firms up to three years to make an overpayment claim, instead of the six years permitted previously. Following the move, the House of Lords ruled that companies could make any additional backdated claims until the end of March.

To date HMRC has repaid £1.5bn, while a further £4.5bn has been reserved for those claims still being assessed.

Yet Revenue officials stated that about 60% of the claims received had not qualified for a refund.

Commenting, Chas Roy-Chowdhury from the Association of Chartered Certified Accountants, said: ‘The lesson for any Government is that they should not just make changes retrospectively to tax laws without thinking through the consequences.’

Banks ‘lending more to small firms’

2009-07-21T10:58:00.000-07:00

High street banks are lending more to small businesses, according to the British Bankers’ Association (BBA).

New data from the BBA suggests that the amount of money lent to enterprises increased by £153 million in May, while deposits from small firms rose by £250 million.

In addition, more than 45,000 new small business banking relationships were established during the same month, the organisation said.

‘The small business sector saw another monthly increase in its borrowing from the high street banks in May, while reduced trading activities and greater control of liquidity were reflected in increased deposits and little-changed overdraft levels,’ commented David Dooks, BBA statistics director.

However the group’s findings conflict with the official figures released by the Bank of England, which show that new bank lending to enterprises actually fell in both April and May.

Last month Deputy Governor of the Bank of England, Paul Tucker, said that it would be difficult to ascertain whether banks were truly lending more to businesses until later in the year.

He also claimed that lending remained weak and warned banks not to hoard funds until they are sure the worst of the recession is over.

Retirement age 'set to end' as review is brought forward

2009-07-15T04:49:00.000-07:00

The Government has brought forward its review of the default retirement age by a year, prompting speculation that the default could be scrapped.

While most people in the UK retire by the age of 65, 1.3 million continue working beyond this point.

The Government said that it has brought the review forward from 2011 to 2010 because of changing demographic and economic circumstances.

The Trades Union Congress (TUC) has welcomed the news. TUC General Secretary Brendan Barber said, 'It cannot be right that an employer can sack someone simply for being too old. A key challenge as we live and stay active longer is developing the right kind of jobs, support and training for older workers'.

However, the Confederation of British Industry (CBI) described the decision as 'disappointing', arguing that 81% of employers already accept employee requests to continue working beyond the default age.

Katja Hall, Director of HR Policy at the CBI, said, 'Some people can happily work in their existing job beyond the age of 65, but this is not possible for all occupations, and companies with smaller numbers of staff have particular problems adapting jobs to the needs of older workers'.

Employers advised to prepare for swine flu pandemic

2009-07-15T04:48:00.000-07:00

Employers are being offered advice on how to deal with an outbreak of swine flu in the workplace.
With a quarter of the UK’s workforce expected to suffer from the virus at any one time, the Forum of Private Business (FPB) has published guidance on how firms can prepare for the pandemic and the action that should be taken if employees are hit by the illness.
Measures include devising contingency plans which would see key members of staff set up to guide the organisation through the outbreak. The lobby group has also suggested that employees should be fully trained to cover for their colleagues in case of absence.
‘As a business owner, the more that you can put into preparing before a pandemic happens, the better placed your business will be to survive it unscathed,’ said the FPB's Director of Finance and Administration, Nick Palin.
‘I think swine flu is a serious issue and one which needs some careful consideration by small businesses as, with few employees, they could be particularly badly affected.’
Meanwhile, recent reports suggest that the Government is considering plans to allow employees to authorise their own sick leave for up to two weeks as part of a package of measures to contain the virus.

However employers’ groups have warned that some workers will abuse the system by viewing the measure as a ‘freedom pass’ to take 14 days off work when it is not necessary.

Experts have estimated that the swine flu outbreak could cost businesses £1.5 billion every day.

Tax rises could ‘harm UK economy’

2009-07-15T04:46:00.000-07:00

Planned tax rises could pose a ‘serious risk’ to the UK economy, according to a new study by the Institute of Directors (IoD).
1,000 IoD members were asked to rate this year’s Budget measures and their likely impact on the economy on a scale ranging from ‘very positive’ to ‘very negative’.
69% of respondents rated the overall impact of the Budget as negative or very negative.
Unsurprisingly proposed increases in tax were widely condemned, with 84% of participants rating the 0.5% rise in national insurance contributions as negative or very negative.
Government plans to impose a 50% rate of income tax on earnings in excess of £150,000 were also criticised, as was the intended withdrawal of personal allowances at income above £100,000.
Commenting on the results, Richard Baron, Head of Taxation at the IoD said: ‘The Government faces a very difficult fiscal situation, and tax increases may look tempting.
‘But in the real world, people who run businesses of all shapes and sizes believe that tax increases will damage the economy. IoD members, the majority of whom are bosses of SMEs, are deeply worried about the increase in NI. New tax burdens can mean redundancies or businesses going under.’

Revenue tax campaign ‘to target undeclared UK income’

2009-07-08T11:15:00.001-07:00

HM Revenue and Customs (HMRC) may extend its offshore tax campaign to target funds hidden in the UK as well, according to recent reports.

The New Disclosure Opportunity (NDO), which was announced in this year’s Budget, aims to encourage taxpayers with offshore accounts to come forward with details of any undeclared income. However, HMRC has confirmed it will also pursue untaxed funds hidden in the UK.

As an incentive, taxpayers will incur a limited penalty of just 10% of their unpaid tax, rather than the full 100%.

‘They will only receive beneficial terms if they make a full disclosure and if that includes other non-offshore funds, then the terms of the new disclosure opportunity will apply to the other funds as well,’ said a Revenue spokesperson.

The NDO will run from the Autumn until April 2010.

We can help you with all your tax and financial planning needs. Please contact us for further assistance.

New advisory fuel rates published

2009-07-08T11:12:00.000-07:00

HM Revenue and Customs (HMRC) has announced changes to the advisory fuel rates for company cars.

The rates can be used to negotiate dispensations for mileage payments for business travel in company cars, and apply to all journeys taking place in a company car on or after 1 July 2009.

However, as for recent changes HMRC has permitted employers to apply the new rates ahead of this date where they are able and willing to do so.

The rates are intended to reflect average fuel costs, and apply only where employers reimburse employees for business travel in their company cars, or where employees are required to repay the cost of fuel used for private travel.

To view the latest rates visit: www.hmrc.gov.uk/cars/advisory_fuel_current.htm

Cheque guarantee cards to be phased out

2009-07-08T11:11:00.000-07:00

Cheque guarantee cards could become obsolete within the next two years, the Payments Council has announced.

Following a consultation, the Council has confirmed that the Cheque Guarantee Card Scheme may be withdrawn from 2011.

However, it will still be possible to use cheques for other transactions where an accompanying card is not required.

‘The Council believes that alternatives to the guaranteed cheque exist and are widely available, and that a well-planned withdrawal of the scheme will not cause any significant problems for users or acceptors,’ the body said.

It stated that the use of guarantee cards has declined rapidly, falling by 70% in the last five years.

But Jane Vass, Financial Services Policy Adviser at Age Concern and Help the Aged, warned against removing the scheme completely. ‘While we recognise that the use of cheques is dwindling, they are still important for those older people who are uncomfortable with using credit or debit cards.’

She continued: ‘It is crucial that these payment methods aren’t lost, unless a wide range of alternatives is available for older people.’

Recession prompts 'dramatic change' in the UK workplace

2009-07-08T11:10:00.000-07:00

The recession has prompted a 'dramatic change' in the nature of the UK workplace, according to a recent survey.

The study of workplace trends, conducted by the Confederation of British Industry (CBI) in conjunction with recruitment experts, revealed that employers and staff are working together to protect jobs and businesses.

Some of the key measures being taken include: introducing more flexible working hours; extra holiday and extended shut-downs; cuts in paid overtime; and freezes in pay and recruitment.

John Cridland, CBI Director-General, said, 'This has been a particularly bruising recession, but one of its most positive and striking aspects has been the commitment of many businesses and their staff to work together to try to trim costs and save jobs'.

The CBI called on the Government to help firms further by improving the availability of credit for investment, and delaying the introduction of additional employment regulation.

New report suggests 'worst of the recession is over'

2009-07-08T11:08:00.000-07:00

The worst of the recession is over, but recovery is not guaranteed, according to the latest report from the British Chambers of Commerce (BCC).

The BCC's Economic Survey for Quarter 2 of 2009 has revealed progress in the manufacturing and service sectors, with most key indicators improving over the last quarter. However, almost all of the critical measures remain weak.

Confidence was shown to have increased noticeably, with turnover confidence entering positive territory for the first time since Q3 2008.

Meanwhile, employment expectations grew in both sectors, but the BCC is still predicting that unemployment will hit 3.2 million by the middle of 2010.

The BCC is warning that despite the positive signs of economic recovery, there must be a continued focus on limiting the impact of the recession, or the economy could dip for a second time.

David Kern, BCC Chief Economist, said, 'The pace of decline in the UK economy is clearly moderating. The worst phase of the recession is over, but serious downward pressures persist across all sectors and regions'.

'Further corrective measures are still needed to support the economy. The marked improvement in confidence, albeit from exceptionally low levels, is welcome. However, these recent gains can only be sustained if the economy continues to stabilise and the recession ends.'

New measures to tackle UK debt

2009-07-08T11:06:00.000-07:00

A raft of measures designed to curb irresponsible bank lending and help protect consumers have been unveiled by the Government.

The plans, which are the subject of a White Paper, include a ban on controversial credit card cheques and the creation of a new body that will help consumers get their money back.

Credit card cheques are similar to personal cheques but banks often charge users higher interest and a handling fee for using them. In 2006 the Office of Fair Trading estimated that consumers could be paying up to an extra £57 million a year in interest and charges by using the cheques rather than a credit card.

The Paper also calls for a review of high-cost credit such as payday loans and doorstop selling, as well as an evaluation of credit card and store card charges.

Under the proposals, customers who have been ripped-off by businesses will be able to receive assistance from a Consumer Advocate, which will represent dissatisfied consumers in court. It is thought the new Advocate will be formed by early next year.

Commenting on the shake-up, Larry Whitty, chairman of watchdog Consumer Focus, said: ‘These are particularly tough times for consumers and these measures will give people stronger rights to take action, backed by tough legislation and a powerful Consumer Advocate.’

However, the British Retail Consortium argued that the new position should ‘not just be a gesture’ and the Advocate should offer practical, independent advice.

Recent figures from the Bank of England show that UK residents owe £233 billion on credit cards, overdrafts and other loans.

Number of UK millionaires halves during the recession

2009-07-03T02:17:00.000-07:00

The number of millionaires in Britain has more than halved in the past two years, new figures reveal.

A report by the Centre for Economic and Business Research (CEBR) estimates that there are now 242,000 millionaires in the UK – down from 489,000 in 2007.

It blamed the decline on the collapse in the housing market, falls in the value of shares and this year’s 70% reduction in City bonuses.

Outlining its findings, the CEBR said a large proportion of the super-wealthy only marginally surpassed the coveted ‘millionaire’ threshold from 2003 to 2007, largely due to soaring property prices.

‘Having just crept over the threshold, most of these people have crept back under it again – many perhaps without ever knowing that they had become millionaires for a temporary period,’ commented Douglas McWilliams, chief executive of CEBR.

However, the group predicts that the number of UK millionaires will begin to rise again in 2011 when the housing market recovers.

Minimum wage to rise from October

2009-05-25T05:32:00.000-07:00

The main adult rate of the UK national minimum wage (NMW) will rise to £5.80 an hour from 1 October, it has been announced.

This week the Government approved the Low Pay Commission’s (LPC) proposal to increase the main rate by 7p, stating the move would benefit almost one million workers.

The statutory rate for 18 to 21-year-olds will increase by 6p to £4.83, while 16 and 17- year-olds are to receive a minimum of £3.57 – up from £3.53.

‘These are very challenging times for the UK and unprecedented economic circumstances for the minimum wage,’ commented the LPC’s chairman, George Bain.

‘We believe that the Low Pay Commission's recommendations are appropriate for this economic climate. They reflect the need to protect low-paid workers' jobs as well as their earnings.’

Despite calls to impose a freeze on the NMW, the move has been largely welcomed by business leaders.

John Cridland, Deputy Director General of the CBI, said: ‘This moderate increase recognises that many businesses are struggling, and helps protect jobs at a time of rising unemployment.

‘The inflation-busting rise some unions had called for would have hit firms hard and put many lower paid workers on the dole.’

The British Chambers of Commerce said it too was pleased with the ‘modest increase’, although maintained that a freeze on the minimum wage ‘would have been more help to business.’

Government to ban using tips to make up staff wages

2009-05-25T05:31:00.002-07:00

The Government is to ban employers from using tips to bring workers' wages up to national minimum wage levels, with effect from October.

The measures follow a consultation on the use of tips, gratuities, service charges and cover charges to pay the minimum wage.

The Government is calling for greater transparency and clarity for customers in bars and restaurants, by means of a new code of practice.

Employment Relations Minister Pat McFadden said, 'When people leave a tip for staff, in a restaurant or anywhere else, they have a right to know that it will not be used to make up the minimum wage'.

'This is a basic issue of fairness. We do not believe employers should be able to use tips meant as a bonus for staff to boost pay levels to the legal minimum.'

Bank injects extra £50bn into ailing economy

2009-05-25T05:31:00.001-07:00

The Bank of England has announced it will pump an extra £50 billion into the economy as part of its quantitative easing programme.

First introduced in March, the scheme effectively involves the Bank printing money to buy Government and corporate bonds. It is hoped the additional cash will kick-start the UK’s economic recovery.

Confirming its decision, the Bank said: ‘The world economy remains in deep recession. Output has continued to contract and international trade has fallen precipitously.

‘The global banking and financial system remains fragile despite further significant intervention by the authorities.’

The latest cash injection means the Bank is on course to print £125bn under the scheme, which will now run for a further three months.

It came as the Monetary Policy Committee kept interest rates on hold at 0.5%, despite a rates reduction by the European Central Bank.

2009 Budget: Darling downgrades economic forecasts

2009-04-27T02:37:00.000-07:00

Chancellor Alistair Darling has downgraded his economic growth forecasts for 2009/10 due to the ‘unexpected severity of the recession’.

Delivering his eagerly-awaited Budget statement earlier today, the Chancellor confirmed that the UK economy has contracted by –1.6% in the last quarter of 2008 and would do so by a similar amount in the first quarter of this year.

Darling told a lively House of Commons that GDP growth for the year as a whole would shrink to –3.5%.

However, the Chancellor went on to stress that he was ‘confident’ the UK economy would recover, predicting growth of 1.25% in 2010 and 3.5% annually from 2011.

But Howard Archer, chief UK economist at IHS Global Insight, warned: ‘We suspect 3.5% is far too optimistic for growth in 2011, especially given the very substantial fiscal tightening that will be required.’

Darling also revealed that Government borrowing would reach more than 12% of GDP, or £175bn, in the next financial year. Total Government debt is expected to rise from 59% of GDP to 79% by 2013/14.

Visit our website regularly for all the latest Budget information.

2009 Budget: The political reaction

2009-04-27T02:36:00.001-07:00

Opposition leaders have given their reactions to the 2009 Budget announcements, following Chancellor Alistair Darling's speech to the House of Commons.

Conservative leader David Cameron said that the Chancellor's speech had revealed the 'utter mess' that the Government had made of the economy.

Arguing that Mr Darling had not taken sufficient steps to control spending, he stated that 'Britain simply cannot afford another five years of Labour'.

'The last Labour government gave us the winter of discontent, this Labour government has given us the decade of debt', he said.

Meanwhile, Liberal Democrat leader Nick Clegg said that the Budget was 'a mish mash of recycled announcements from a Government skilled in raising false hopes and incompetent at delivering real hope'.

He said that the Chancellor had missed an opportunity to deliver 'a people's Budget for the 21^st century', and that the biggest disappointment of the Budget was the failure to fix Britain's 'unfair tax system'.

2009 Budget: The business reaction

2009-04-27T02:35:00.001-07:00

Chancellor Alistair Darling has unveiled a series of measures aimed at tackling the 'unprecedented economic crisis'.

As widely anticipated, growth forecasts for 2009 have been revised down, with the economy expected to shrink by 3.5%; while borrowing forecasts have risen sharply to £175bn. However, despite the economic gloom, the Chancellor asserted that the economy will recover, forecasting growth of 1.25% next year.

Key announcements include the introduction of a 50% income tax rate for those earning more than £150,000 a year, from April 2010.

The stamp duty land tax 'holiday' for residential properties valued at £175,000 or less will be extended to the end of 2009.

Measures for businesses include the introduction of a temporary 40% first year allowance, an extension of help for loss-making companies, and a top-up trade credit insurance scheme.

The Chancellor allocated £1bn to tackle climate change, and announced a commitment to cut UK carbon emissions by 34% by 2020.

The introduction of a 'car scrappage' scheme was also confirmed, offering £2,000 to people who trade in cars that are over 10 years old. Meanwhile, fuel duty will rise by 2p a litre from September 2009.

Other measures include an increase in the child element of Child Tax Credit from April 2010; credits towards the basic state pension for grandparents of working age who care for their grandchildren; and a rise in the annual limit for ISAs to £10,200.

Darling delays full business rates hike

2009-04-01T08:45:00.001-07:00

The Government has scrapped plans to increase business rates by 5% from 1 April.

On Tuesday Chancellor Alistair Darling confirmed that firms would instead pay 2% more this year, while the remaining 3% rise will be spread out over the following two years.

Explaining his decision, Mr Darling said: ‘I am very conscious of the fact that businesses in this country were faced with an increase to business rates of 5% simply because the increase in business rates is linked to the rate of RPI inflation last autumn, last September.

‘But RPI inflation has now fallen to 0% in the last month and it is expected that it will fall further than that.’

Business leaders have welcomed the move which, according to Government estimations, will benefit one-and-a-half million properties and result in the deferment of £600m.

John Wright, chairman of the Federation of Small Businesses (FSB), said: ‘This is good news for small businesses, as far as it goes. This shows that FSB pressure has finally paid off.’

However, the British Chambers of Commerce (BCC) has expressed concerns over the timing of the eventual increase. ‘Staggering the cost is still an increase and it will be complex,’ warned Kevin Hoctor, head of policy at the BCC. ‘Businesses will still be hit at a time when they have restricted cash-flow and growth.’

Currently the postponement only applies only in England, although the Government has confirmed it will ‘engage with the Scottish, Welsh and Northern Ireland administrations to clarify the situation for ratepayers’ in these areas.

Changes to flexible working will benefit 4.5 million

2009-04-01T08:44:00.001-07:00

Some 4.5 million parents will gain the right to request flexible working when new legislation comes into force next week, according to Government estimations.

On 6 April the right to request flexible working will be extended to parents of children up to the age of 16. Currently only parents with children under six years of age can request flexible hours from their employer.

However the Department for Business, Enterprise and Regulatory Reform estimates that 10 million parents will have the right when the new rules come into effect next month.

Pat McFadden, minister for employment relations, said: ‘This is about balancing work and family life. Extending the right to request will help more parents get the flexibility they need.

‘The business benefits of flexible working are well documented and this remains the case in tougher economic times.’

In the run-up to 6 April the Government is contacting businesses to make sure they know where to find free help and advice.

For more information on the new rules, visit: http://www.direct.gov.uk/en/Employment/Employees/Flexibleworking/index.htm

Taxman can call without any warning

2009-03-30T11:49:00.000-07:00

ATTENTION! Changes to the law come into effect this week that give HM Revenue & Customs the right to check the tax affairs of SMEs (small - medium business') at anytime, without notice.

From Wednesday HMRC will have to power to carry out unannounced inspections of business premises, request tax records, files and assessments even where no tax return has been filed or for no tax return period that has yet to close.

Whatever business you are in we can help you run it more efficiently by taking away from you the tasks that we are best at so that you can get on with what you do best at - running your business!

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DG Accountancy Services provide our clients with sound advice and guidance. To ensure your enquiry is dealt with efficiently, please use our quick and simple enquiry form below. All correspondence is treated in the STRICTEST confidence.

Firms facing business rates hike

2009-03-30T05:57:00.000-07:00

The Government is facing fresh criticism over its plans to abolish business rate relief from next month.

Normally, small businesses struggling to adapt to higher business rates can apply for transitional relief, totalling around £100 million a year. However the scheme will be scrapped from 1 April, leaving tens of thousands of firms with significantly higher rates bills.

The Local Government Association has branded the increase ‘unacceptable’ given that many enterprises are already struggling in the recession, while the Forum of Private Business (FPB) is calling on ministers to reconsider the imminent increase.

All businesses will see their 2009/10 rates bill rise by at least 5% because councils are instructed by the Government to use the Retail Price Index measure at September 2008 rather than the existing 0.1% rate.

According to media reports, some companies could face increases of 1,000% from £190 to £2,200.

‘Increases to rates charges and the spectre of supplementary business rates mean small businesses face another considerable cost burden at a time they can least afford it,’ said the FPB's Chief Executive, Phil Orford.

‘This cannot be justified in an environment of falling sales, deflationary pressure and serious recessionary restrictions.’

CBI calls for confidence-building Budget

2009-03-30T05:56:00.001-07:00

The Confederation of British Industry (CBI) has called on Chancellor Alistair Darling to deliver a ‘confidence-building Budget’ to help Britain through the recession.

In its Budget submission to the Treasury, the lobby group warned that the ‘alarming’ state of public finances rules out the possibility of further fiscal stimulus, as this would undermine business and investor confidence.

John Cridland, CBI Deputy-Director General, said: ‘The public finances have been battered by the cost of rising unemployment and lower tax receipts during the recession. With economic activity expected to contract by 3.3% and unemployment set to reach nearly three million this year, the outlook for the public finances is already alarming.

‘Against this backdrop, a further significant fiscal stimulus is unaffordable and would lead to businesses and households retrenching in fear of higher tax bills in the future.’

The organisation has instead unveiled a package of measures which it claims will underpin confidence, boost competitiveness and safeguard jobs.

These include delaying the increase in employer National Insurance Contributions due in 2011 and smoothing out the volatility of impending rises in business rates.

The group has also called for the introduction of a temporary ‘scrappage’ scheme to encourage consumers and businesses to replace old cars, fridges and washing machines with newer models. It believes the scheme will promote consumer spending while reducing the UK’s carbon emissions.

The 2009 Budget will be presented by Chancellor Alistair Darling on 22 April.

Deflation drives down small business costs

2009-03-30T05:51:00.000-07:00

Deflation is driving down the cost of running a small business for the first time in years, a new study has found.

According to the More Than Business inflation guide, costs fell by nearly 3% in the final three months of last year. The decline has been attributed to the sharp fall in fuel prices, down 18.3%, and raw material costs, down by almost 12%.

Manufacturing costs dropped by 4.3% while contractors saw a 4.5% fall, researchers revealed.

Mike Bowman, head of More Than Business, said the findings were mixed news for business. ‘Small businesses now have to quickly adjust to this deflationary environment with some benefiting more than others.

‘Deflation will come as good news for transport and haulage contractors as they will see fuel costs come down due to a sharp fall in oil prices. However, deflation is bad news for businesses that have their assets tied to property or large amounts of stock already purchased as it will be losing value day by day.’

New legislation to crack down on credit card debt

2009-03-30T05:50:00.000-07:00

The Government is proposing to introduce new legislation which will prevent credit card companies from raising credit limits without this being specifically requested by a customer.

The laws aim to help crack down on spiralling levels of personal debt in the UK. Britons currently owe a total of £53bn on their credit cards.

Government ministers are also seeking to ban companies from sending unsolicited blank credit card cheques, which often carry higher interest charges and do not offer the same protection as credit cards in the event of faulty goods.

Gareth Thomas, Consumer Affairs Minister, said, 'We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited credit card cheques'.

The news follows the publication of recent research which suggests that the average Briton has lost £40,000 as a result of the credit crunch, with a combination of falling house prices and a downturn in the stock market responsible for the loss of around £1.9 trillion of household wealth.

Tougher HMRC compliance regime looms

2009-03-30T05:46:00.000-07:00

Businesses are being urged to prepare for a tougher HM Revenue and Customs (HMRC) compliance checking regime, which is due to come into force next month.

From 1 April HMRC will acquire new powers in relation to compliance checks on individuals and businesses covering the areas of PAYE, VAT, income tax, capital gains tax and corporation tax.

The Finance Act 2008 grants HMRC the right to visit businesses in order to inspect premises, assets and records, and to ask taxpayers and third parties for further documentation.

As part of the changes, new time limits for assessment and claims will apply from the end of the accounting period or tax year. A four year time limit will also apply to taxpayer claims.

The legislation is intended to provide a modern framework of aligned powers for HMRC, while making the tax system 'simpler and more consistent', a spokesperson said.

To help taxpayers understand the new rules, HMRC has published an e-learning package. The guidance can be found at: http://www.hmrc.gov.uk

Government urged to delay VAT increase

2009-03-30T05:44:00.000-07:00

Retailers are urging Chancellor Alistair Darling to delay the increase in VAT scheduled for December.

The Chancellor reduced VAT from 17.5% to 15% in the 2008 Pre-Budget Report, in a bid to boost consumer spending. The higher rate is due to be reinstated on 31 December.

However, the British Retail Consortium (BRC) is arguing that the planned increase will come at the busiest time of the year, and will cost retailers around £90 million to implement.

The organisation has called for the reintroduction to be delayed until at least February 2010.

Stephen Robertson, Director General of the BRC, said, 'Changing VAT rates back to 17.5% at the end of December will soak up a lot of effort at the busiest and most important time of year for most retailers. For some shops post-Christmas sales are 50% above normal – so it's a time when staff should be focusing on serving customers'.

The BRC has also called for a number of other measures to help businesses, including an immediate freeze on all new business rate burdens, and a reintroduction of empty property rate relief.

Government cap ‘undermining’ lending plan, says FPB

2009-03-30T05:42:00.001-07:00

The recently published Enterprise Finance Guarantee Scheme (EFG) is facing renewed criticism amid claims the Government has imposed a ‘cap’ on guaranteed loans.

Launched in mid-January, the initiative provides a 75% Government guarantee on individual loans of up to £1 million to viable businesses with annual turnover of up to £25m.

It is hoped the scheme will thaw the UK’s frozen lending market and get the economy moving again.

However, the Forum of Private Business (FPB) claims that restrictions on EFG lending effectively mean that Government losses from the scheme are capped at just 10%. It fears the ‘cap’ will deter banks from using the scheme to lend to small businesses that they might consider as still high risk.

Phil Orford, Chief Executive of the FPB said: ‘Small businesses need to access finance in order to continue playing this important role in the UK's economy, but this cap flies in the face of what we thought the EFG was trying to achieve – reducing the banks' sense of risk when dealing with struggling yet viable small businesses.’

In a recent poll by the FPB, 2% of respondents said they had seen an improvement in the availability of credit since the beginning of February, while almost one in three (32%) firms had experienced a deterioration.

Last month, Business Secretary Lord Mandelson claimed that some 400 loans worth in excess of £40m had already been lent under the scheme. ‘These figures show the Enterprise Finance Guarantee is already making a difference to businesses,’ he said.

'500 banks could be targeted' in offshore tax amnesty

2009-03-30T05:40:00.000-07:00

Up to 500 financial institutions could be targeted by HM Revenue & Customs (HMRC) as part of its latest offshore tax 'amnesty' drive, according to recent reports.

HMRC announced last October that it would be conducting a second amnesty, allowing tens of thousands of taxpayers the opportunity to pay a reduced penalty by disclosing offshore bank accounts using their offshore disclosure facility.

Prime Minister Gordon Brown recently announced that he intends to spearhead a global crackdown on regulatory and tax havens.

The previous amnesty conducted by HMRC in 2007 targeted the five major UK high street banks, and penalties were capped at 10% of the outstanding tax owed plus interest.

Some experts believe that the second amnesty could involve tougher penalties.

We can help you with all your tax and financial planning needs. Please contact us for further assistance.

Small businesses ‘lose £800 a year’ to fraud

2009-03-04T07:35:00.000-08:00

HM Revenue and Customs (HMRC) has launched a series of online, bite-sized video guides to help new and start-up businesses.

The group of 10 videos, which are fronted by TV presenter Dan Snow, offer advice on a range of tax issues including setting up in business, income tax for the self employed, corporation tax and VAT.

In addition, HMRC will follow the progress of three entrepreneurs as they set up in business in a new video series called ‘The Start-up Diaries’.

Commenting on the new service, Snow said: ‘We've broken the information down into small video chunks, so that people can access exactly what they need to know. Hopefully this makes the new videos really useful for people and businesses.’

The Revenue has also published a free guide for small businesses to complement the guidance available online. The videos and guide can be downloaded for free from the Business Link website at www.businesslink.gov.uk/taxhelp.

We can help with all your accounting and book-keeping needs – please contact us to discover how your business could benefit from our services.

HMRC launches online tax help for small firms

2009-03-04T07:34:00.000-08:00

Businesses urged not to cut back on pension payments

2009-03-04T07:33:00.000-08:00

The UK Pensions Regulator has advised businesses not to cut back on pension contributions as a result of the current economic downturn.

In a statement to employers, the watchdog acknowledged that current economic conditions are of real concern to employers, and advised that those employers who sponsor final salary pension schemes need to be 'reassured that the current scheme funding regime is flexible enough' to cope with the impact of an economic downturn.

The Regulator is calling on for all unsecured creditors to be treated equitably, and warns that pension schemes should not be disadvantaged.

David Norgrove, Chairman of the Pensions Regulator, said, 'There is no reason why a pension scheme deficit should push an otherwise viable employer into insolvency. But the pension scheme recovery plan should not suffer, for example, in order to enable companies to continue paying dividends to shareholders'.

Employers who are concerned about an existing recovery plan are advised to discuss the matter with their pension scheme trustees.

Business condemns sick leave ruling

2009-03-04T07:30:00.001-08:00

Employees are entitled to accrue holiday pay while on long-term sick leave, the European Court of Justice (ECJ) has ruled.

Staff may also carry their leave over into another year if they are too ill to take it, the ECJ said. Furthermore, workers who are laid off during a period of sick leave should be entitled to payment in lieu of the annual leave they have accrued to the date of dismissal.

The case, which was brought to the Court by employees at HM Revenue and Customs, is expected to return to the House of Lords in the UK for a final hearing later this year.

However critics have raised concerns over the timing of the judgement.

‘This is a cost which many employers, especially smaller firms, can't afford, particularly in the economic climate,’ warned Fraser Younson, head of the employment group at lawyers Berwin Leighton Paisner.

The Confederation of British Industry (CBI) described the decision as ‘a real blow’ to firms during the recession.

‘Businesses themselves also suffer when staff take sick leave, and we had hoped that a compromise could have been achieved over unused holiday time,’ said Katja Hall, the CBI’s director of HR policy.

‘Instead, at a time when the economy is struggling, this judgment will ensure that staff are away from the workplace for longer. And it will create a headache for HR departments, who will have to review their policies and contracts.’

Government cap ‘undermining’ lending plan, says FPB

2009-03-04T07:28:00.000-08:00

'500 banks could be targeted' in offshore tax amnesty

2009-03-04T07:27:00.001-08:00

Business group calls for national minimum wage freeze

2009-03-04T07:23:00.000-08:00

The British Chambers of Commerce (BCC) has called for a freeze in the national minimum wage in 2009.

The call forms part of the BCC's new strategic framework for economic recovery, and follows the Low Pay Commission's recent decision to delay its recommendations for this year from February to May, to allow the Commission access to additional economic data.

Other measures outlined in the BCC's recovery plan include:

A reintroduction of Empty Property Rate Relief
A reduction in the rate of small companies' corporation tax
A reversal of the planned increase for national insurance contributions in 2011
The automation of Small Business Rate Relief
The creation of Enterprise Zones, where businesses in specific areas will benefit from a simplified planning regime and tax exemptions
A reintroduction of the Temporary Short Time Working Compensation Scheme
Assisting exporters to exploit opportunities in the increasingly competitive position of sterling

David Frost, BCC Director General, said, 'Collectively, we need to be looking at what sort of economy we want to see in the future and importantly what action will need to be taken to get us there. This recovery plan should act to foster growth in the short-term and lay the foundations for economic stability in the long-term'.

The recovery plan can be downloaded here.

Tax refund scam

2009-03-02T06:01:00.000-08:00

I wanted to alert you to phishing emails that are going around stating that HMRC have received your tax return and have calculated a refund. To claim the refund it asks you to click on a link which appears to be an HMRC link.

Please ignore these emails. HMRC are aware of these and are also warning people on their website. I have forwarded HMRC the one that I received today and HMRC have responded as below:

Thank you for notifying HM Revenue & Customs of the suspicious email you received. We recommend that you delete the e-mail immediately without responding. It is important that you do not visit any website detailed within it. Can I suggest that you block the sender of the emails on your account which should stop you receiving any further messages.

There are a number of fraudulent e-mails that are currently circulating across the globe encouraging customers to visit a website where personal security and/or credit card details are then requested. Some of these websites have the ability to capture your personal details and you should therefore treat them as suspicious.

Up to date details of our web security and scams can be found at http://www.hmrc.gov.uk/security/spoofs.htm

If you are due a refund HMRC will write to you at your home address and not by email.

Regards
Debbie

EU to cut mobile phone charges

2008-10-13T07:26:00.000-07:00

Consumers could soon be charged less for using their mobile phone, under new plans being debated in the European Parliament.

In a proposed ‘shake-up’ of the mobile phone tariff structure, the EC said it wants to slash operators’ charges for handling calls by 70%. Brussels is also scheduled to vote on proposals to impose a limit on roaming costs for text messages which, if approved, could become effective next July.

Additionally, voice calls would fall from 36 to 27 pence a minute and customers would be able to set limits on data downloads.

In a joint statement the UK telecoms regulator, Ofcom, and the Department for Business, Enterprise and Regulatory Reform (BERR) welcomed the EC’s intention to cut phone bills.
However, it warned that the proposed changes could disadvantage lower spending pay-as-you-go consumers. The organisations fear that such users may be burdened with higher costs for receiving calls as phone companies attempt to recover lost income from customers.

Pension scheme membership declines

2008-10-13T07:19:00.000-07:00

The popularity of final salary pension schemes has dipped once again, the Office for National Statistics (ONS) has claimed.

According to new figures, the number of people paying into a scheme in the private sector fell from three million in 2006 to 2.7 million in 2007.

However, membership of final salary schemes in the public sector increased slightly to 5.2 million. Overall 8.8 million people paid into employer schemes last year, down from 9.2 million in 2006.

The availability of final salary pension schemes has continued to decline over recent years, with many employers opting to close such schemes on the grounds that they are too expensive to finance.

Just 57% of final salary scheme members in the private sector were in schemes still available to new joiners, the ONS said.

We can help you plan for a comfortable retirement – please contact us for more information.

Banks lending to small firms despite ‘credit crunch’

2008-10-13T07:16:00.000-07:00

Despite the current economic turbulence, new figures suggest that many of the major high street banks are still lending to small businesses.

According to data released by the British Banking Association, term lending actually grew by 11% to £44 billion in the 12 months to June 2008.

Overdraft borrowing also increased to £9.2bn – a rise of 3% on the previous year.

Meanwhile, the statistics show that 543,000 new small business banking accounts were opened during the same period.

Commenting on the findings, BBA Statistics Director, David Dooks, said: ‘Banks are still providing finance to support small businesses in the slowing economy, despite the impact of the credit crunch on lenders.

‘These figures reflect the economic climate for the small business sector, with borrowing continuing to expand, but deposit growth slowing.’

He continued: ‘In the face of weaker trading conditions, businesses are using all the cash they generate, while those seeking finance are generally taking fixed rate structured loans or using previously agreed facilities.’

Late payment causing cash flow difficulties for small firms

2008-08-05T03:37:00.000-07:00

Large organisations are ‘abusing’ small businesses’ trust by failing to settle invoices quickly, the Federation of Small Businesses (FSB) has claimed.

According to the lobby group, new evidence suggests that smaller firms are being forced to wait for up to 100 days before receiving payment for goods or services.

Delays in payment, along with last-minute changes in terms and conditions, can create significant cash flow difficulties for many businesses.

John Wright, FSB National Chairman, warned that small firms are reluctant to confront large corporate organisations over the issue.

‘Big companies appear to be aware that small businesses are afraid of taking them on over payment terms and are abusing their power as a result,’ he said.

‘At a time when small businesses are finding it difficult to deal with a slowing economy and rising costs, it is shocking that large companies think it is acceptable to use them as an unofficial source of credit.’

Meanwhile, a recent study by the Forum of Private Business reveals that late payment is a growing problem for small and medium-sized enterprises, with almost 82% of respondents reporting an increase in the number of customers that are paying late.

Under the Late Payment of Commercial Debts Act 2002, businesses have a statutory right to charge interest for the late payment of commercial debt, at a rate of 8% above the Bank of England’s reference rate.

We can work with you to tackle late payment before it becomes an issue for your firm – please contact us for more information.

Consumer watchdog calls for bank account reform

2008-08-05T03:36:00.001-07:00

The Office of Fair Trading (OFT) has called for a major shake-up of current bank accounts, claiming that they do not work well for consumers.

Following its inquiry into personal bank accounts, the OFT said that many consumers do not know their account’s interest rate or how much they pay in bank charges.

Moreover, the complexity of the market, combined with a shortage of attractive offers from banks, means there is little incentive for consumers to switch providers, the OFT declared.

‘Personal current accounts are a vital gateway to effective participation in the economy. But this market is not serving consumers well,’ said OFT Chief Executive, John Fingleton.

‘Consumers lack the information they need to choose the best deal, and this in turn weakens the banks' incentives to compete.’

The watchdog is now calling for significant changes to address the flaws inherent in the £8bn industry.

However, the British Bankers’ Association (BBA) said it was ‘disappointed’ with the OFT’s report, arguing that the figures do not accurately reflect the cost of offering accounts to customers.

Research shows there are approximately 64 million accounts in the UK, of which 54 million are thought to be active.

The OFT believes banks earned the equivalent of £152 per active bank account in 2006 - that is more than savings and credit cards combined.

2p fuel duty increase is postponed

2008-08-05T03:35:00.000-07:00

Chancellor Alistair Darling has confirmed that a 2p rise in fuel duty scheduled for later this year will be postponed.

The annual rise in petrol tax had already been deferred from March until October and was widely expected to be scrapped due to the escalating price of oil.

In a statement to the House of Commons, the Chancellor said: ‘The global credit crunch and sharp rise in world oil prices have pushed up prices at the pump. Today's decision will help motorists and businesses get through what is a difficult time for everyone.’

Darling told the BBC that he intends to review the issue again in the Budget, insisting that it is the ‘right thing to do’ to help drivers and businesses.

Motoring groups have welcomed the announcement.

AA president Edmund King said: ‘We are delighted that the Chancellor has seen common sense. Many motorists have endured months of misery and this is a welcome piece of good news for them.’

However, the RAC argues that more action needs to be taken: ‘[The delay] does not go far enough. We would like to see the Chancellor not just postpone future rises but actually cut fuel duty.’

UK businesses hand out customer details

2008-08-05T03:34:00.000-07:00

A new survey has revealed that UK businesses are breaching data protection laws by relaying personal information about their customers to third parties.

According to internet security firm StrongMail UK, an alarming number of marketing firms are prepared to hand out sensitive information to other companies in a bid to boost sales.

The study, which questioned data protection and marketing professionals from 900 firms, found that one in five respondents had given out credit card details, while one in seven would be prepared to disclose information about their clients political allegiances.

One in ten also said that they would divulge details of their customers’ ethnic background and religious beliefs.

Meanwhile, 61% of marketing and data protection executives claimed they had experienced a data breach resulting in the loss of customer information. 90% of these violations were not reported back to the customer.

Commenting on the findings Paul Bates, email marketing expert and managing director of StrongMail UK, said: ‘Businesses have a moral, ethical obligation to keep private, personal customer data safe and secure.

‘They should not be handing it out to third parties in the hope of making a fast buck. If they choose to do this, and then lose customer data, then they should at least be obliged to admit it.’

Carbon footprint scheme for businesses is launched

2008-08-05T03:33:00.000-07:00

Businesses that make genuine reductions in their carbon emissions are to be rewarded under a new scheme launched by the Carbon Trust.

In a bid to inspire enterprises to take action on climate change, the Carbon Trust will award a new certificate to organisations that meet the standard set by the environmental body.

It is the world’s first carbon award scheme that requires a firm to measure, manage and reduce its carbon footprint and actually make real reductions year-on-year.

It is hoped the initiative will improve consumer trust by openly revealing which brands are truly taking action to curb their carbon emissions.

‘Our research shows that not only do consumers currently mistrust business' climate change claims, but that business thinks existing carbon award schemes are confusing and lack credibility,’ said Carbon Trust chief executive Tom Delay.

‘What business and consumers both share is a desire for one, credible way to prove an organisation has not only measured, but actually reduced their carbon emissions year-on-year without the use of offsetting. The Carbon Trust Standard is the only answer to this.’

Business and environmental groups have welcomed the new standard.

Neil Bentley, director of business environment at the Confederation of British Industry, described the measure as ‘an excellent way for businesses to demonstrate they are behaving responsibly.’

HMRC staff cuts will add to small business tax woes

2008-08-05T03:32:00.000-07:00

A proposed reduction in staffing levels at MHM Revenue and Customs (HMRC) could have an adverse impact on many small businesses, a major lobby group has claimed.

The Forum of Private Business (FPB) has raised concerns over plans to cut more than 3,000 Revenue jobs and reduce the number of tax offices across the UK, warning that it may lead to administrative delays for enterprises.

According to critics, the cost-cutting measure could bring more misery and confusion to small business owners when they come to submit their 2007-08 Tax Return.

Statistics reveal that approximately 150,000 self-assessment forms were received in the 24 hours prior to the deadline last year, with the HMRC website processing around 6,000 submissions every hour – more than 100 per minute.

‘While we can all applaud the cost-cutting exercise, HMRC will need to be careful that the reduction of staff, in particular, does not affect the service offered to smaller businesses,’ said the FPB's Policy Representative, Matt Goodman.

‘The demands of running a small business are enough without waiting weeks for your tax papers to make it to the top of the pile.’

UK workers income to fall by 53% upon retirement

2008-08-05T03:31:00.000-07:00

The average UK worker is likely to see their income fall by 53% upon reaching retirement, new research suggests.

According to retirement institute Fidelity International, many workers will see their total income, including state and private pensions, drop to £215 a week - less than someone earning the current national minimum wage.

Meanwhile those saving in defined contribution schemes, where retirement income is tied to contribution levels and investment performance, are expected to receive just 38% of their final salary in retirement.

Despite the apparent gloomy outlook, these latest statistics represent the first improvement recorded in three years.

The study also suggests that those participating in final salary funds face more positive prospects, with members on course to retire on two-thirds of pay after 40 years of service.

Simon Fraser, president of the retirement institute at Fidelity International, said: ‘The move from final salary defined benefit schemes to defined contribution is often accompanied by a review of contribution levels.

‘If this is not corrected, we could see the emergence of a generation of private pension paupers.’

If you would like help planning for your retirement, please contact us.

Loan insurance consumers overcharged by 1.4bn pounds

2008-08-05T03:30:00.000-07:00

Consumers buying Payment Protection Insurance (PPI) are being overcharged by more than £1.4 billion a year, according to the Competition Commission.

A report published by the industry watchdog has found that a lack of competition is allowing many companies to charge higher prices by selling the insurance alongside a loan or other type of credit.

‘The way PPI is sold as an 'add-on' to a loan or other credit product means distributors escape the pressure they should face from competing suppliers,’ said Peter Davis, the Commission’s deputy chairman.

‘Distributors don't appear to compete much with each other on either price or quality of PPI; neither do they appear to do much direct advertising of PPI to win customers from each other,’ he added.

In light of its findings the Competition Commission has outlined several recommendations to improve market conditions. Suggested measures include alerting consumers to other similar products on the market and prohibiting the sale of PPI policies at the time a loan is taken out.

Around 6.5 million PPI policies are purchased every year, generating approximately £5bn of revenue for banks.

Cautious welcome for EU deal on flexible working

2008-08-05T03:28:00.000-07:00

Business groups have ‘cautiously welcomed’ an EU agreement that will enable UK employees to retain flexibility in their working hours, following a meeting in Luxemburg earlier this week.

On 9 June European employment ministers agreed to allow the UK to opt out of an EU Working Time Directive which restricts employees’ working hours to 48 per week. As a result, the cap will be set at a weekly maximum of 60 hours for UK workers.

The Forum of Private Business (FPB) has applauded the move, claiming it will preserve the working flexibility that is vital to the British job market.

‘It is important that, for small businesses in particular, key members of staff are given the freedom and flexibility to put in the hours that are necessary for success. The rewards benefit both business-owners and their employees,’ said the FPB's Chief Executive, Phil Orford.

Business Secretary John Hutton described the ‘landmark’ agreement as ‘a very good deal for the UK.’

‘Flexibility has been critical to our ability to create an extra three million jobs over the past decade. That flexibility has been preserved by ensuring workers can continue to have choice over their working hours in future years,’ he added.

The directive, along with proposals to give more rights to temporary workers, will now go before the European Parliament.

Small business wins landmark family tax case

2007-08-02T10:05:00.001-07:00

The landmark tax case involving the family-run IT business Arctic Systems has finally reached a conclusion, with the House of Lords ruling in favour of Geoff and Diana Jones and against HMRC.

The case of Jones v Garnett (commonly called “Arctic Systems”), which has been running for several years, has centred on the issue of whether Mr Jones's salary was set at an artificially low level, and whether the dividends received by Mrs Jones should have been treated for income tax purposes as Mr Jones's. There have been many twists and turns, as HMRC, having previously lost a unanimous ruling in the Court of Appeal, appealed to the law lords to tax Geoff Jones on dividends paid to his wife.

HMRC had used an old piece of legislation, Section 660, to argue that the dividends paid to one partner were really earned and belonged to the major fee earning partner, a higher rate tax payer. It is a business structure used by thousands of married couples who jointly own a small business. The uncertainty over the case has left thousands of businesses concerned that they too could face large tax demands.

In their judgment, read out to a packed chamber this morning, the Lords ruled that:

The Joneses were creating an arrangement in the nature of a settlement when they subscribed for one share each, and set up their company Arctic Systems Ltd

However, the exemption for gifts between spouses also applied and dividends paid to Mrs Jones were therefore not income arising under a settlement.

No further appeals are possible under UK law, and it seems that HMRC will now have to review its guidance on settlements and on outright gifts.

The opinions of the law lords can be read on the Parliament website:

http://www.publications.parliament.uk/pa/ld200607/ldjudgmt/jd070725/jones%20-1.htm

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Government releases guidance on new holiday entitlement

2007-08-02T10:04:00.001-07:00

The Department for Business, Enterprise and Regulatory Reform (DBERR) has released new guidance on the forthcoming increase in the statutory holiday entitlement.

Under the new regulations, the minimum annual holiday entitlement will be rising to 28 days in England, Scotland and Wales, in two separate phases.

The entitlement will increase to 4.8 weeks in October 2007 (the equivalent of 24 days of leave), and to 5.6 weeks on 1 April 2009 (28 days of leave).

Payment can be given in lieu of the additional days introduced on 1 October 2007, but from 1 April 2009 payment in lieu cannot be provided for anything less than 5.6 weeks, unless a member of staff is leaving.

For staff wishing to carry over unused holiday, this is only allowed for any entitlement above the four week minimum, and additional statutory leave can only be carried over into the following leave year.

Part-time workers will be entitled to the same level of holiday pro rata, and staff working six days a week will be entitled to 28 days of leave from 1 October 2007.

Credit card debt 'could last for 30 years'

2007-08-02T10:02:00.000-07:00

One in 10 credit cardholders only pay their credit card debt by the minimum repayment each month – which could leave millions in debt for up to 30 years – according to price comparison website uSwitch.com.

The group found that about 3.5 million borrowers only repay the monthly minimum. On average, this is set by the credit card companies at 2.6% of the outstanding balance, but for 35 card providers it is just 2%.

uSwitch then calculated that if someone with an average credit card debt of £1,812 repaid their balance at a rate of just 2% a month, it would take 29 years and two months to clear it, and cost them £2,858 in interest. However, increasing repayments to 3% would halve the time taken to repay their debt to just over 15 years and only cost interest of £1,257.

A spokesman for the group said: "In an environment of rising interest rates where personal debt in the UK has reached a staggering £1,325bn, consumers could now finish repaying their mortgage before their credit card. Despite the introduction of 'health warnings' on credit card statements, the implications of making the minimum repayment each month are still not clear enough."

uSwitch is calling on credit card firms to raise their monthly minimum repayments to at least 3%.

Brown's new Government 'must put small firms first'

2007-07-19T04:53:00.001-07:00

As Gordon Brown leaves behind the position of Chancellor of the Exchequer to take up the reins of power as Britain's new Prime Minister, business groups have called on Brown's new Government to promote the needs of small businesses.

A recent study conducted by the Forum of Private Business (FPB) has suggested that the top priority for many small business owners is cutting the tax burden.

91% of respondents called for a reduction in employers' national insurance contributions, while 63% wanted to see a reversal of the increase in corporation tax from 19% to 22%.

Meanwhile, reducing red tape was also a key priority for respondents, with 85% calling for the administration of PAYE and national insurance to be integrated, and 60% calling for a mechanism to monitor the Government's red tape agenda.

Other issues raised by the survey include eliminating unfair competition, improving skills and training, and promoting investment.
Rebecca Leavers, Research Manager at the FPB, called on the next Chancellor to put the needs of the UK's small firms first, saying, 'There are more than four million smaller companies in the UK, employing over half the private sector workforce. They are an integral part of the economy and whoever succeeds Gordon Brown as Chancellor must put them at the forefront of policy'.

Websites for Small Business'

2007-07-19T04:49:00.000-07:00

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Insurance companies consider flood claims

2007-07-19T04:48:00.000-07:00

The insurance industry is to meet with Government ministers to consider how best to deal with the aftermath of the recent floods in the UK.

Prime Minister Gordon Brown has announced a £14m relief package for those affected, while the cost to insurers is expected to be in the region of £1.5bn.

The flooding is believed to have affected 31,200 homes and 7,000 businesses, with the Midlands and northern England the hardest hit areas.

With many people still currently unable to return to their homes, the Government is calling on insurers to deal with claims promptly.

The Association of British Insurers (ABI) said that the meeting would provide an opportunity to update ministers on how the insurance industry has been handling the large number of claims.

However, Nick Starling of the ABI commented, 'The problem with flooding is that the damage is very severe, it takes a long time to deal with, it takes a long time for properties to dry out before you can actually start remedying and rebuilding'.

HMRC plans to take unpaid tax directly from bank accounts

2007-07-19T04:46:00.002-07:00

Money owed to the taxman could be taken automatically from people’s bank accounts, if proposals made by HMRC officials ever become law.

Currently HMRC is required to obtain a court order to seize money owed in unpaid tax, but since about 200,000 people are chased through the courts each year the process is regarded as costly and bureaucratic. The plan would allow HMRC to bypass this requirement.

HMRC claims that the new method would be used as a last resort against persistent and serious defaulters.

However, critics worry that it would mean HMRC acting as “judge, jury and executioner”. They argue that proper safeguards such as rights of appeal must be put in place for people under suspicion of defaulting on tax.

Taxpayers have until the middle of September to respond to a public consultation on the proposals.

Tax return backlog 'approaching 12m'

2007-07-19T04:46:00.001-07:00

HM Revenue & Customers (HMRC) is currently facing a backlog of 11.5 million tax returns from the 2005/06 tax year, according to the latest data.

Figures collected under the Freedom of Information Act have revealed that 32% of people using the pay as you earn (PAYE) system have not yet had their tax payments checked.

A spokesman for the HMRC said that the growth of the economy had led to an influx of workers, leading to an increase in the number of records which needed to be processed.

According to HMRC, the situation is improving and all of the forms for 2005/06 will be processed by this October.

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Business group welcomes new small business minister

2007-07-19T04:45:00.001-07:00

The Federation of Small Businesses (FSB) has welcomed the appointment of MP Stephen Timms as Small Business Minister in the newly created Department for Business, Enterprise and Regulatory Reform.

According to the FSB, the combination of a new department with a stronger focus on reforming regulation, and a new minister with previous experience at the Treasury, should result in small business issues being given more prominence.

The organisation also welcomed the fact that the status of the role as a minister of state had been maintained.

John Walker of the FSB said, 'If the new department does what it says on the tin in terms of regulation, then small businesses and the UK economy as a whole will benefit greatly'.

Concerns raised over supplementary business rates

2007-07-19T04:44:00.000-07:00

Business groups have expressed concern over Government plans to introduce a new tax burden on businesses, in order to pay for infrastructure projects.

Supplementary business rates were proposed by the Lyons Inquiry in March 2007, in order to fund projects which were beneficial to the local business community.

Under the system, local authorities would have the power to raise existing business rate levels.

However, some business representatives are concerned that the plans could damage competitiveness and could make it difficult for some businesses to continue functioning.

Miles Templeman of the Institute of Directors said, 'These changes are a serious concern for the UK business community and a threat to the UK's competitiveness internationally. Rates are a cost levied on property value and have no correlation with a business's profits and hence its ability to pay. Even a small increase in rates could see businesses slip into the red and force the closure of many viable enterprises, damaging local communities'.

Meanwhile, the British Chambers of Commerce has called for businesses to be allowed to vote on the issue, describing it as 'The only way a Supplementary Business Rate will be acceptable to businesses'.

Home Information Packs 'raise significant opposition'

2007-05-04T09:32:00.000-07:00

Home Information Packs 'raise significant opposition'

Plans to introduce new Home Information Packs (HIPs) for people looking to sell their houses have raised concerns from estate agents and legal bodies in recent months, and a House of Lords committee has now called on the Government to take criticism of the scheme seriously.

The packs, which are due to come into force in England and Wales on 1 June, will be mandatory and must contain title deeds, legal searches and an Energy Performance Certificate which assesses the energy efficiency of a property.

The aim of the packs is to make the process easier and faster for people buying and selling a house, and to reduce the number of sales which fall through.

However, some industry bodies have argued that the packs will be of little real use to homebuyers, and have also expressed concerns that there are not currently enough people who are sufficiently qualified to assess the energy performance of properties.

Lord Filkin, Chair of the Lords Select Committee on the Merits of Statutory Instruments, said, 'The comments which we have received from key stakeholder organisations in the housing market are striking in the strength of their criticisms'.

Mike Ockenden of the Association of Home Information Pack Providers has refuted the committee's comments, stating that it had only consulted opponents of the scheme.
HIPs are expected to cost between £300 and £500 on average.

Workers warned over 'pensions poverty'

2007-05-04T09:31:00.000-07:00

Workers warned over 'pensions poverty'

Many UK workers are running the risk of poverty in retirement, according to a new report.
The Fidelity Retirement Index warns that a significant number of workers still have few if any retirement savings, and could find their earnings cut by around a half when they retire.

While members of final salary pension schemes are set to build up around 85% of their working life income in retirement, many members of money purchase schemes will experience a reduction in income of more than 50%.

Simon Fraser of Fidelity said, 'Unless defined contribution plans are brought up to the same quality level of defined benefit schemes, then we will condemn generations of workers to a meagre retirement'.

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Small business banking comes under fire

2007-05-04T09:28:00.000-07:00

Small business banking comes under fire

Banks must do more to improve their service to UK small businesses, says a new report from the Federation of Small Businesses (FSB).

The FSB's review of small business banking surveyed over 4,000 small firms, and found that while services have improved overall, there are a number of key areas where the banks are failing to deliver.

Firstly, the business organisation found that switching accounts, overcharging and poor customer service were major areas of concern, with many small business owners reporting that bank staff did not understand their needs.

Meanwhile, the report also found that the banks are not fulfilling their commitment to the Competition Commission to offer free banking or pay a minimum 2.5% interest on business current accounts.

Mike Cherry of the FSB said, 'The Competition Commission found that the major banks were making £2 billion per year in profits from small business banking. We call on the banks to live up to their undertakings to the Competition Commission or, if they fail to do so, for the regulators to make them'.

The report came as the Office of Fair Trading launched a new study into the charges being imposed by banks on personal banking customers.

Self assessment figures 'hit new record'

2007-02-07T10:10:00.001-08:00

150,000 online self assessment tax returns were received in the 24 hours running up to the 31 January deadline, according to HM Revenue & Customs (HMRC).

Over nine million returns were issued in 2006/07, and of these nearly 2.9 million were filed online, representing a rise of 40%.

At its peak, the HMRC website processed more than 6,000 returns an hour.

However, the event was slightly overshadowed by concerns over possible delays to the processing of tax returns, following confirmation by the Public and Commercial Services union that its members would be implementing a campaign of industrial action to coincide with the 31 January deadline.

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Small business group issues insurance warning

2007-02-07T10:09:00.001-08:00

The Federation of Small Businesses (FSB) is warning that new Government reforms which allow the NHS to recoup treatment costs could lead to a rise in insurance premiums for small firms.

The new scheme, which came into force on 29 January 2007, allows the NHS to recover the costs of treating patients who have been paid personal injury compensation.

While the NHS has already been able to recover costs following road traffic accidents, there is concern that extending the scheme in this way could have a significant impact on employers' liability insurance premiums in the long-term.

Mary Boughton of the FSB said, 'We're not here to defend businesses whose negligence causes accidents in the workplace. But the vast majority of small businesses are conscientious employers and don't deserve to be set back by higher insurance premiums'.

The British Insurance Brokers' Association (BIBA) has advised that small business owners can help to ensure a representative premium by revisiting their Health and Safety procedures.

Steve Foulsham, Technical Services Officer at BIBA said, 'We believe that there is an opportunity for businesses to work with their insurance brokers, to ensure that they have a robust Health and Safety policy in order to minimise the possibility of accidents at work. Insurers will reflect good risk management practices in the premium rates which they offer'.

Chancellor confirms plans to raise school-leaving age

2007-02-07T10:02:00.000-08:00

Chancellor Gordon Brown has confirmed the Government’s intentions to raise the school leaving age in England from 16 to 18.

Speaking in Scotland, Mr Brown suggested that both ‘carrot’ and ‘stick’ measures would be used to ensure young people stay in education or training.

New financial incentives could be introduced, building on the existing education maintenance allowances (EMAs), currently worth up to £30 per week. In addition, he proposed that the Government would consider introducing penalties for those who failed to take up education or training options.

Mr Brown proposed adapting the existing "Train to Gain" scheme to provide work-based training for 16 to 18-year-olds, and reiterated plans to double the number of apprenticeships to 500,000.

Some 267,000 16 and 17-year-olds are currently not in education or training, and in January the Department for Education and Skills announced plans to raise the school leaving age by 2013.

Lone parents benefits come under scrutiny

2007-02-07T09:58:00.000-08:00

Benefit rules have come under scrutiny as the Government seeks to encourage lone parents to return to work earlier.

Currently, single parents can claim Income Support without having to seek work until their youngest child is 16. However, Work Secretary John Hutton has now suggested that the Government will consider measures to cut that age to 12.

With almost half of single parents on benefits, Britain has one of the lowest levels of such employment in Europe. Even in countries with substantial welfare systems such as Denmark and Sweden, up to 80% of lone parents are in work. The Office for National Statistics estimates there are 1.69m such parents with dependent children in the UK.

Mr Hutton claimed that increasing lone parent employment is essential for tackling child poverty, saying: "If we are to eradicate child poverty, then I believe we will also need to go further in challenging existing assumptions about who - and at what point - someone should be in work. We also know the difference that helping lone parents into work can make."

The suggestions were broadly welcomed by both opposition parties, but charity One Parent Families warned that they could affect many parents caring for disabled children.

Mr Hutton has already unveiled plans to get one million incapacity benefit claimants back into work over the next 10 years.

Business responds to Pre-Budget Report

2006-12-16T05:41:00.001-08:00

Business groups have given a mixed response to the 2006 Pre-Budget Report.

Richard Lambert, director-general of the Confederation of British Industry, said:

'The new emphasis on training, skills, planning, transport and intellectual property are all welcome and could make a real difference to the UK's future competitiveness if delivered fully, quickly and intelligently. However, on the critical issue of tax competitiveness, there was silence.'

The British Chambers of Commerce (BCC) described the Chancellor's economic forecasts for 2007 as 'too optimistic', and called on the Government to show how it can deliver on its promises.

David Frost, director-general of the BCC, said, 'Building upon the Barker, Eddington and Leitch Reviews the opportunity is there to set a course that will enable the UK to meet the challenges posed by a globalised economy over the long term'.

However, Mr Frost added that business would be seeking reassurance that the proposals will not lead to significant tax rises in the 2007 Budget.

Meanwhile, plans to increase Air Passenger Duty and fuel duty have sparked criticism from the transport industry, with the Freight Transport Association warning that the increase in fuel duty 'has nothing to do with reinforcing the UK's efforts to reduce its carbon footprint'.

Pre-Budget Report 'upbeat on the economy'

2006-12-16T05:39:00.000-08:00

Chancellor Gordon Brown has delivered an upbeat account of the UK economy in his 2006 Pre-Budget Report.

The Chancellor announced that Britain will meet both of its fiscal rules in this economic cycle and the next, and revised his economic growth forecasts upwards from 2-2.5% to 2.75%, rising to 2.75-3.25% in 2007.

The key issues covered in the Pre-Budget Report included education and skills, transport, and the environment, with a number of measures of interest to business owners.

The Chancellor announced a series of plans to improve the skills of UK workers, with the target of enabling 90% of adults to have five GCSEs by the year 2020.

Meanwhile, as part of a bid to combat climate change, the Chancellor announced a doubling of Air Passenger Duty, and a rise in fuel duty of 1.25 pence per litre.

Other measures announced in the Pre-Budget Report included the introduction of new tax reliefs for the British film industry, increased penalties for National Minimum Wage failures, and a tightening of intellectual property laws.

Small business makes Pre-Budget demands

2006-12-16T05:38:00.002-08:00

The Forum of Private Business (FPB) has submitted its 'wish list' for small businesses, ahead of the forthcoming Pre-Budget Report.

The business organisation has highlighted four key areas which it feels should be specifically addressed by the Chancellor, as follows:

1. Tax and red tape

The FPB has called for a return of the nil rate starting band on Corporation Tax for the first £10,000 of profits. It also wants to see a simplification of the VAT registration process, and an integration of national insurance with income tax for schedule E taxpayers.

2. The National Minimum Wage

The National Minimum Wage (NMW) has become an increasing burden for smaller firms, according to the FPB, which has recommended that the NMW is linked to the Retail Price Index.

3. Government contracts

In relation to Government contracts, the FPB is urging the Government to open up its contracts to smaller firms, with a percentage of contracts being set aside specifically for smaller businesses.

4. Education and skills

Finally, on the issue of education, the FPB's submission calls for the needs of small businesses to be put 'at the heart' of the proposals within the Education Bill, with a more demand-led Sector Skills structure, and a tax credit for those employees who are not professionally qualified, to enable them to continue with their professional development.

Average household 'pays £200,000' in indirect taxes

2006-12-16T05:38:00.001-08:00

An average UK household will pay more than £211,680 in indirect taxes over the course of a lifetime, a new study has suggested.

According to the insurer AXA, £115,508 of this is spent on VAT.

In addition to this, around £10,000 is spent in the form of stamp duty on houses; while £27,000 goes on vehicle fuel, and a further £8,000 on road tax.

Meanwhile, the annual TV licence accounts for nearly £6,000, and duty on cigarettes and alcohol costs around £35,000.

Colin Nelson of AXA commented, 'Our findings highlight just how much additional tax the average British household is paying for goods and services out of their already taxed income'.

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Date set for the Pre-Budget Report

2006-12-16T05:37:00.000-08:00

Chancellor Gordon Brown will deliver the 2006 Pre-Budget Report to the House of Commons at 12.30pm on Wednesday 6 December, the Treasury has announced.

The Pre-Budget Report (PBR) has taken on an increasing significance in recent years.

It provides an update on the state of the economy and public finances, and sets out key Government policies in the run-up to the Spring Budget.

UK business groups have called on the Chancellor not to raise taxes in the forthcoming PBR, with the British Chambers of Commerce urging the Government to take positive action in the key areas of tax, transport, skills and regulation.

Business group calls for Pre-Budget tax cut

2006-12-16T05:36:00.001-08:00

The British Chambers of Commerce (BCC) has delivered its Pre-Budget Report submission to HM Treasury, calling on the Government to create an infrastructure which will allow the UK to remain competitive on a global scale.

The submission highlights the four key policy areas of tax, transport, skills and regulation, which the BCC believes are crucial to providing the right climate for UK businesses.

On the subject of tax, the BCC is calling for a lower tax burden and a simplification of the tax system.

In particular, the organisation has recommended a reduction in corporation tax, which currently stands at 30%, to bring it in line with the EU average of around 25%. The BCC has also called for a reform of the national insurance system, suggesting that the rules relating to NI should be aligned with those governing PAYE income tax.

The BCC's other recommendations include: improving the transport system by identifying and improving the UK's strategic roads and developing strategic rail freight terminals; boosting skills by mainstreaming enterprise through the curriculum; and reducing the amount of red tape facing UK businesses. According to the 2006 Burdens Barometer, commissioned by the BCC, the cumulative burden of regulations now stands at £50.27bn.

David Frost, BCC Director General, said, 'We are in a period whereby economic growth has been sustained over the long term and we urge the Chancellor to take measures to ensure this continues into the future. We are calling on him to address our four key areas of concern in order to ensure that Britain remains a competitive and attractive place to do business'.

Business welcomes tax pledges

2006-12-16T05:34:00.000-08:00

Business groups have welcomed proposals put forward by the Conservative Party's Tax Reform Commission, aimed at simplifying the UK tax system.

As part of a series of recommendations, the Commission has proposed a number of measures to reduce and simplify business taxation, which include cutting corporation tax.

The Federation of Small Businesses (FSB) said that it would support any proposals to simplify taxes for small businesses.

John Walker, Policy Chairman at the FSB, said, 'Small businesses have far less time and far fewer resources than their big business counterparts to handle complicated tax calculations. If proposals such as these were implemented, small businesses would be freed up to generate more wealth and employment for the UK economy, to which they already contribute over 50% of GDP'.

The Institute of Directors also welcomed the proposals, arguing that the UK tax system is becoming 'ever more burdensome, both in cash terms and complexity'.

However, the Economic Secretary to the Treasury, Ed Balls criticised the plans to introduce tax cuts, arguing that they would not benefit 'ordinary families' and would be detrimental to the public finances.

Chancellor Gordon Brown has also pledged to maintain a 'competitive tax regime and a responsive tax administration' in the UK.

'Protect your identity', businesses warned

2006-12-16T05:33:00.000-08:00

Small businesses must do more to protect their identity, the Federation of Small Businesses (FSB) has warned.

Identity fraud is still a growing problem in UK according to the latest research, which suggests that a quarter of the UK population has been affected by ID theft, or know somebody who has.

The FSB's call coincided with National ID Fraud Prevention Week, which was set up to raise awareness of the risk of ID fraud to individuals and businesses. According to the Government, incidents of identity theft have risen more than five-fold between 1999 and 2005, with ID fraud costing the economy an estimated £1.7bn last year.

David Croucher of the FSB said, 'It is often assumed that identity fraud only affects individuals, but it is becoming increasingly clear that businesses are in danger as well. The livelihoods of the owners and the jobs of 12 million employees are at risk'.

The organisation is calling on small business owners to take the necessary steps to protect their business, including shredding sensitive documents, protecting IT systems, and checking the details of debtors.

Business owners are also advised to be wary of receiving any unexpected requests for sensitive information regarding their business.

Further information on protecting your business can be found on the 'Stop ID Fraud' website (www.stop-idfraud.co.uk).

'Lower taxation or lose business', warns CBI

2006-12-16T05:32:00.000-08:00

Richard Lambert, Director-General of the Confederation of British Industry (CBI), has warned the Government that it must reduce the tax burden on businesses, or it could face an exodus of multinational businesses from the UK.

The CBI chief argued that current levels of corporation tax are 'unsustainable', and will force an increasing number of companies to relocate to more competitive European countries.

Mr Lambert highlighted the fact that many large corporate US organisations now base their European headquarters in Ireland, where the corporation tax rate is 12.5%, compared with 30% in the UK.

Speaking on his 100th day as Director-General of the CBI, Mr Lambert said, 'Compared to the rest of Europe the burden of taxation is rising in the UK at the same time as tax collection has become noticeably more aggressive'.

Landmark age laws come into force

2006-12-16T05:31:00.000-08:00

New legislation outlawing age discrimination in the workplace has now come into force.

Under the Employment Equality (Age) Regulations 2006, which took effect on 1 October 2006, it is now illegal to discriminate against employees on the grounds of their age, without proper justification.

The regulations apply to all individuals in work or seeking work or access to training, to all employers, and to all providers of vocational guidance.

Key measures imposed by the legislation include:

The setting of a default retirement age of 65
The right for employees to make a request to continue working beyond retirement age
A removal of the age limits for unfair dismissal and redundancy rights
A removal of the age limits for Statutory Sick Pay, and Statutory Maternity, Paternity and Adoption Pay.

Employers are urged to ensure that their procedures comply with the new regulations, and do not discriminate against any members of staff, including younger employees, in key areas such as recruitment, training and promotion, employee benefits, pensions, redundancy and retirement.

The pension provisions included in the regulations will come into force on 1 December 2006.

Further information and guidance on the new legislation is available on the Acas website (www.acas.org.uk).

A raft of new employment regulations

2006-12-16T05:24:00.000-08:00

s a raft of new employment regulations come into force, business groups have warned of the impact that the new laws could have on small businesses.

1 October 2006 saw the introduction of a number of significant new pieces of employment legislation, including:

New rights for working parents, under the Work and Families Act
New regulations outlawing age discrimination in the workplace
The latest increase in the national minimum wage, which sees the main adult rate rising from £5.05 to £5.35.

One of the key elements of the new rights for working parents is an extension of the paid maternity leave period from six to nine months, for women who are due to give birth or adopt a child from 1 April 2007 onwards, together with the removal of the qualifying period for extended maternity leave.

Business groups acknowledged the introduction of new measures aimed at helping firms to manage maternity leave, which include new ‘keeping in touch' days, whereby women can work for up to 10 days without it affecting their leave. The period of notice which employees need to give regarding any changes to their planned return to work date has also been increased, from four weeks to eight weeks.

However, Nick Golding, Chief Executive of the Forum of Private Business, warned that the new wave of regulations could still leave smaller businesses ‘holding the baby'.

The Federation of Small Businesses similarly called on the Government to revisit its "family friendly" working practices, warning that small firms are now spending an average of 28 hours a month dealing with regulatory forms.

Meanwhile, the Confederation of British Industry has released a new report to coincide with the introduction of the regulations, which suggests that new employment laws have cost UK businesses £37 billion since 1998.