2010 | McBrides

Call for more business support in the New Year
December 29, 2010 by Shirley1
The Federation of Small Businesses (FSB) is calling on the Government to give small firms some ‘breathing space’ during the early part of 2011.

It claims that the recent prolonged spells of cold weather and January’s VAT rise could put small firms under considerable pressure in the New Year.

‘The last thing this Government needs is a wave of bankruptcies and shop closures in 2011, but small firms will find it very difficult to bounce back in the New Year when VAT increases to 20% and the spending cuts start to bite,’ said FSB National Chairman, John Walker.

‘We need to see a co-ordinated effort from Government, banks, local authorities and landlords to give small businesses some breathing space to recover in the New Year.’

To support small firms through what could be a challenging time, the lobby group recommends that:
- HMRC extends its Time to Pay scheme to allow small businesses time to recoup lost takings
- Landlords, especially where the landlord is the local council, should push back rent reviews due in the New Year
- Local Councils should use their powers to grant hardship relief and temporarily reduce business rate bills for those businesses in financial difficulty
- Banks, utilities and insurers should give small businesses some breathing space.
We can help you plan for a more prosperous New Year – please contact us for advice.
Category: latest news, news & eventsComments Off
VAT rise is ‘not temporary’, says Osborne
December 22, 2010 by Shirley1
Chancellor George Osborne has signalled that the new 20% rate of Value Added Tax (VAT), which comes into effect on 4 January, will be made permanent.

Speaking to The Spectator magazine, Osborne said the increase from 17.5% was a ‘structural’ change.

‘The VAT rise is not temporary. It can’t be,’ he told journalists. ‘We are talking about a totally different scale of revenue, and the VAT rise is a structural change to the tax system to deal with a structural deficit.’

The move, which is expected to boost the Treasury’s coffers by £13 billion, could cost the average UK household around £225.

‘Once we can bring some stability to the public finances, we can look at reducing the tax burden on people,’ Osborne continued. ‘But it is a complete mirage to cut taxes one year, then have to borrow the money and put up the taxes later to have to pay for that borrowing.’

However, the Chancellor did indicate that the 50% top rate of income tax would not be a permanent measure.

Category: latest news, news & eventsComments Off
Rising inflation will lead to higher interest rates, warns CBI
by Shirley1
The Confederation of British Industry (CBI) is warning that rising inflation will lead to higher interest rates in the spring.

Predicting that inflation will hit 3.8% in the first three months of next year, the employers’ body said it expects the Bank of England will start to raise interest rates in the second quarter of 2011.

According to the CBI’s latest forecasts, the Bank will increase rates by 0.25 percentage points each quarter before the pace accelerates with rises of 0.5 points by mid-2012.

It is forecasting that interest rates will have reached 2.75% by the end of 2012.

The business group has also downgraded its quarterly growth forecast for the first three months of 2011 from 0.3% to 0.2%.

Ian McCafferty, chief economic adviser at the CBI, said: ‘What is striking is how little we see growth accelerating in 2012. Typically, by the third year of a recovery, growth would be more robust than we expect for either 2011 or 2012.

‘Growth prospects for consumer spending look pretty subdued over the next couple of years. Real take-home pay will be hit further next year; unemployment is not expected to fall very quickly in 2012, and households will most likely face higher mortgage interest rates,’ he added.

Category: latest news, news & eventsComments Off
New measures to ‘ensure EU legislation will not harm UK firms’
by Shirley1
New measures to prevent British firms being unfairly restricted by European legislation have been announced by the Business Secretary, Vince Cable.

The proposals will end the so-called practice of ‘gold-plating’ to ensure that interpretations of European law will not put UK firms at a disadvantage.

‘I want British business to be a powerhouse for economic growth and among the most competitive in the world,’ said Cable. ‘The way we implement our EU obligations must foster, not hinder, UK growth by helping British businesses compete with their European neighbours.’

A statutory duty will also be placed on ministers to conduct a review of domestic legislation implementing a European directive every five years. The Government claims that this will allow businesses to influence any necessary improvements based on their own practical experience of applying the rules.

The plans are part of a wider policy by the Government to tackle EU regulation.

Cable added: ‘The new principles are a first step towards working with British business and Europe to make sure that we introduce EU rules in a way that will not harm the UK economy. By cutting red tape that can reduce competitiveness and making sure that businesses are involved in the process both before, and after through five-yearly reviews, we can get the best deal possible for Britain.’

However, the Trades Union Congress (TUC) has criticised the move, arguing that it is a ‘depressing, dangerous and counter-productive policy’.

Category: latest news, news & eventsComments Off
OBR revises up growth in 2010, down in 2011
December 16, 2010 by Shirley1
Unsurprisingly, in it’s November update, the Office for Budget Responsibility (OBR) revised up its economic growth estimate for 2010, taking into account the much better-than-expected growth performance of the UK economy in the second and third quarters of the year. Annual real gross domestic product (GDP) growth for 2010 now looks set to be around 1.8%, compared with the OBR’s June forecast of 1.2%. The current bout of adverse weather sweeping the UK could leave growth falling short of this revised projection, as the snow and ice will derail a substantial amount of business activity towards the end of the year.

To read the full Economic Insight December 2010 monthly briefing from ICAEW’s economic advisers click on the link.

Category: latest news, news & events Comments (0)
Raising VAT threshold would ‘create up to 35,000 extra jobs’
December 15, 2010 by Shirley1
Increasing the threshold at which small firms begin to pay Value Added Tax (VAT) could create an additional 35,000 jobs, new research suggests.

According to a report carried out by the Centre for Economics and Business Research, raising the threshold from £70,000 to £90,000 could save over £700 million in VAT payments and up to £162 million in red tape.

The think tank claims that the money saved could then be used to create up to 35,000 more jobs paying an average wage of £25,428.

The Federation of Small Businesses (FSB), which commissioned the report, said that an increase in the VAT threshold would provide a much-needed boost to small firms by helping to stimulate cash flow and enabling them to take on additional members of staff.

The organisation also warned that the forthcoming rise in VAT to 20% could hit many small enterprises who, unlike big businesses, may not be able to absorb the increase.

Commenting, FSB National Chairman, John Walker, said: ‘The smaller the business, the higher the cost of VAT compliance; this is why the FSB is calling for the Government to increase the threshold at which a business must register for VAT.

‘The potential loss to Government in VAT receipts by increasing the threshold to £90,000 would be more than outweighed by the VAT rise due to come into force in January and would help to put £900 million back into small firms with the potential to create up to 35,000 jobs.’

Category: latest news, news & events Comments (0)
OTS publishes recommendations for reforming UK tax reliefs
by Shirley1
The Office of Tax Simplification (OTS) has published its provisional recommendations for reforming a selection of the UK’s tax reliefs.

After identifying some 1,042 reliefs in the UK tax system, the OTS has released its analysis of 13 of these reliefs and measures them against the review criteria for evaluating their effectiveness and relevance.

The report, which is a prelude to the final report due in the spring, includes details of its recommendations on capital gains tax (CGT), research and development relief and capital allowances.

While the OTS proposes retaining CGT relief, it said that the current rules on the disposal of private residence ‘support the practice of ‘flipping’ main and second homes’. It added that the three-year period in which property owners can elect which house is their main home was ‘questionable’.

Meanwhile, the report claims that research and development tax credits are ‘generally fit for purpose’, although the ‘administrative burdens should be simplified to encourage greater uptake’.

The OTS also suggests that some reliefs should be abolished, including the exemption from benefit charge for late night taxis and the daily income tax relief on the first 15p of luncheon vouchers.

John Whiting, Tax Director for the OTS said: ‘There is still much to do in reviewing more reliefs before we report back to the Chancellor in full. We’ve had to make some hard choices to give us a manageable list or the next stage, but we welcome feedback from those who use the tax system and ask for their thoughts and ideas on how we can simplify it further.’

The final report setting out recommendations for further reliefs will be submitted to the Chancellor ahead of the 2011 Budget.

Category: latest news, news & events Comments (0)
Call to postpone withdrawal of default retirement age
by Shirley1
The Government is being urged to postpone its plans to scrap the default retirement age (DRA) amid business concerns over the changes.

According to the Confederation of British Industry (CBI), UK firms could face a legal minefield because the Government has still not published details on how the reforms will work.

Earlier this year ministers announced that the DRA will be abolished from 1 October 2011. The proposals allow for a six month transition from the existing regulations, meaning that the changes will begin to take effect from next April.

However, the CBI has warned that employers have not been given sufficient time to prepare for the changes and that the on-going uncertainty could lead to more claims for unfair dismissal. It also wants to see the law on unfair dismissal simplified ahead of the reforms.

‘In certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone,’ said John Cridland, the CBI’s director-general designate.

‘In the majority of cases this will not be an issue, but in a minority it will be a serious problem for all concerned. The Government needs to act fast, and there should be no changes to the retirement framework until these issues are resolved.’

Meanwhile, a spokesperson for the Department for Business said the Government was ‘committed to helping and supporting employers adapt to the change’.

He continued: ‘Our consultation asked what kinds of support are required and we will be publishing our response shortly, but many of the 500 respondents strongly support the plan that we have set out.’

Category: latest news, news & events Comments (0)
New paper-based payment system being considered
December 8, 2010 by Shirley1
Cheques will not be phased out until an acceptable ‘paper-based’ alternative has been found, the Payments Council has said.

With cheques set to be stopped by 2018, the organisation has confirmed that it is looking at a new method of payment to help those who may find it difficult to use the electronic options.

It is thought that a new paper voucher system is amongst the alternatives being considered, while new electronic payment methods may include using mobile phones to send money via a text message.

The move has been welcomed by the Federation of Small Businesses (FSB), which said it was ‘pleased’ that an alternative paper-based system is being explored.

FSB National Chairman, John Walker, said: ‘Cheques are vital to the way many consumers and businesses operate, and with millions of cheques written every day, many small businesses will be disadvantaged – especially in rural areas – if the cheque is to be completely abolished.’

Cheques are thought to have been in use in the UK for around 350 years, but the number of personal cheques in circulation has been in steady decline as many Britons switch to faster electronic methods of payment.

Last year the Payments Council set a target date of 31 October 2018 for phasing out cheques, and the decision will be subject to a final review in 2016.

However, charities such as Age Concern and Help the Aged have expressed concern that the decision will encourage banks and retailers to begin the phase-out ahead of the deadline, placing many older people at a disadvantage.

Category: latest news, news & events Comments (0)
Business criticises tax avoidance changes
by Shirley1
A leading business group has criticised the Government’s plans to introduce a General Anti Avoidance Rule (GAAR), arguing that it ‘would not be in the interest of the Government, taxpayers, or UK competitiveness’.

On Monday the Treasury announced a package of measures aimed at tackling tax avoidance including a study, led by Graham Aaronson QC, to examine the introduction of a GAAR.

However, the Confederation of British Industry (CBI) said that while it ‘acknowledges the nature of the Coalition commitment to consider the introduction of a GAAR’, doing so would bring ‘a very unwelcome element of uncertainty to the tax system.’

Other changes announced by the Treasury include:
- the introduction of legislation to prevent groups of companies using intra-group loans or derivatives, to reduce the group’s tax bill, and,
- addressing schemes where a company does not fully recognise certain amounts in its accounts involving loans and derivatives.
Meanwhile, David Gauke, Exchequer Secretary to the Treasury, has also confirmed that three further measures will be set out in more detail at a later date. These include: addressing the practice of disguised remuneration; stopping investment companies retrospectively changing the currency they prepare their accounts in for tax purposes; and tackling businesses that artificially split the supply of services to reduce VAT.

The Treasury estimates that the measures will raise £2 billion in additional revenue over the course of the Parliament.
Category: latest news, news & events Comments (0)

news & events

how can we help?