2010 November | McBrides

growth figures adjusted up for 2010, but down for 2011: with the year nearly over is this really good news?
November 29, 2010 by Shirley1
While the predictions from the Office for Budget Responsibility may be good news for George Osborne, the Chancellor, the year ahead looks difficult for SME’s.
Headlines from the OBR report today:
- Growth figures adjusted up for 2010, BUT down for 2011
- public sector jobs losses over the next 4 years revised down from 490,000 to 330,000 BUT
- unemployment expected to rise to 8%
- pace of growth will slow down next year
- house prices expected to fall
Nick Paterno, Managing Partner of McBrides Accountants said : ‘This report today by the OBR will provide more uncertainty and further confirmation that next year will be as tough, if not more so than everyone expected with recovery slower than previous recessions. Growth figures may have been adjusted up for 2010, but the year is virtually over and 2011 nearly upon us; a year when the economy’s not going to grow as much as anticipated, access to finance will still be very restricted and falling house prices will affect consumer confidence. With the public sector contracting, the emphasis will be on private sector growth. We look after a lot of SME’s who’d like to know how the government is going to support them in order to achieve the growth the UK so desperately needs.’

A call to cut employer’s National Insurance contributions:

Nick Paterno said; ‘If the government expects the private sector to pick up on employment then they need some initiatives to assist with that. Employer’s national insurance is a tax on employment. Removing employer’s national insurance contributions for businesses with under 5 employees, and for those SME’s with more than 5 employees, postponing or cancelling the planned 1% increase in national insurance contributions from the 6th April, would bring a much needed boost.’

Notes to editors:

Nick Paterno is available for comment via vikki Rimmer vikki@presscontact.co.uk 07886673412

The OBR was formed by the coalition government in May 2010 and is intended to make an independent assessment of the public finances ahead of each Budget.
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scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK
November 26, 2010 by Shirley1
Subsistence expenses are a common example of expenses which employers choose to reimburse by means of a scale rate payment, rather than reimbursing specific amounts paid out by the employee on the production of receipts, etc. For those employers wishing to cut down on the administrative and reporting costs, obtaining a dispensation from HM Revenue & Customs (HMRC) is rarely possible for an employer with few internationally mobile employees.

Happily, however, HMRC now agree that employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad. Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NIC) for employees who travel abroad, and employers need not include them on forms P11D.

HMRC has recently updated the published rates, which may be accessed here: Benchmark scale rates

Employers may also continue to pay tax/NIC free incidental overnight expenses (currently £10 per night).

Employers are not obliged to use the published rates, of course, but doing so may remove some of the administrative headache.

Read more about scale rate expenses payments in the Employment Income Manual

Further guidance can be found as follows:

EIM05255 What the tables contain
EIM05260 How to use the benchmark rates
EIM05265 Employee staying as guest of a private individual
EIM05270 Employee receiving free meals and accommodation
EIM05275 Employee staying in vacant residential property
EIM05280 Examples

Or, if you would like to discuss your situation in detail, contact our Tax Manager, Bob Warren, by completing the “How can we help?” form on the left hand side of this page.

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hmrc issues profit reminder for the self-employed
November 24, 2010 by Shirley1
Self-employed tax credit claimants are being urged to disclose their total profits for the 2009/10 tax year ‘as soon as possible’.

HM Revenue and Customs (HMRC) is issuing letters reminding self-employed workers of the urgent need to report their income if they are in receipt of tax credits.

It warns that failure to provide the correct details may lead to an overpayment, while supplying incorrect information could result in a penalty.

When they renew their claims, the self-employed can give HMRC an estimate of their income. Where an estimate has been provided, they have until 31 January to inform HMRC of the actual figure.

Exchequer Secretary to the Treasury, David Gauke, said: ‘There is too much error and fraud in our benefits and tax credit systems. These losses are unfair, unaffordable and unacceptable.

‘We have to make every penny count – and that includes going after the cheats at every level. The self-employed have to do their bit by telling us promptly of any changes in their income estimates.’

We can help prepare your accounts for submission to HMRC – please contact us for details.

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Government borrows record £10.3bn in October
by Shirley1
The UK Government borrowed £10.3bn last month, up from £10.1bn in the same month last year and a record high for October.

The figures from the Office for National Statistics (ONS) show that borrowing since the start of the financial year has now reached £83.8bn.

The rise in October borrowing came despite signs that the improving economy was boosting the tax take, with corporation tax revenues up 29% and VAT receipts also higher.

The UK’s budget deficit has widened by another £7.1bn, and net debt is now £845.8bn, representing 57.1% of gross domestic product.

However, the ONS revealed downward revisions to borrowing in August and September, down to £14.1bn and £15bn respectively. The revisions suggest that the Government remains on track to come within the £149bn borrowing forecast for the 2010/11 financial year.

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Shoppers reminded of consumer rights over festive period
by Shirley1
With online Christmas shopping expected to reach its peak this week, the Government is alerting people to their consumer rights.

According to the Department for Business, Innovation and Skills (BIS), many shoppers are unaware of their entitlements when purchasing goods over the internet, while around 75% do not know that there is an extra 7-day cooling off period when buying online.

In addition to the cooling off period, the BIS is reminding consumers of the following:
- Goods must fit the description that they are given
- Products must be of satisfactory quality – you have the right for the goods you buy to be safe, work properly and be free from defects
- Anything that is sold must be suitable for its purpose
‘What I want are confident consumers who can stand up for their rights and get a good deal,’ said Consumer Minister Ed Davey. ‘This is especially important when times are tight and everyone wants to make sure they have value for money.’

‘A savvy shopper that has done their homework before hitting the shops will not only be able to pick up the best bargains but will also be able to resolve any problems with their purchase quickly,’ said Michele Shambrook, operations manager for helpline Consumer Direct.

It estimated that £6.4 billion will be spent online over the festive period, accounting for 17p in every pound spent.

For more information visit: www.consumerdirect.gov.uk
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mcbrides tax club – 23 November 2010
November 23, 2010 by Shirley1
2010 has certainly been a busy year with a General Election, a Budget, an Emergency Budget and an upcoming Spending Review. To say that it has undoubtedly heralded significant tax changes would be an understatement! With this in mind, can you afford not to keep up to date with the alterations to the tax landscape as they unfold?

The McBrides Tax Club is designed to provide business professionals and intermediaries with a plain speaking update on tax developments, as well as the opportunity to network with fellow professionals.

If you are interested in attending Tax Club please complete and submit the form on the left-hand side of this page.

Date: 23 November 2010

Location: Nexus House, 2 Cray Road, Sidcup, Kent DA14 5DA

Time: 5.30-7.00pm

Cost: £50 (including VAT)

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economic growth surprises on the upside for the second consecutive quarter
November 19, 2010 by Shirley1
Preliminary estimates from the Office for National Statistics (ONS) show the UK economy grew at a quarterly rate of 0.8% in Q3 2010 – much higher than analysts had been expecting. This is the second consecutive quarter that economic growth has surprised on the upside, and suggests the recovery to date has been more resilient than expected. Growth was across the board, with services, manufacturing and construction industries all growing this quarter. Moreover, the ONS data belied a host of short-term economic indicators – such as claimant count measure of unemployment and the latest housing market data – which pointed to a stumbling, rather than a robust recover.

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

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Government in talks to impose tax on new offshore accounts
November 17, 2010 by Shirley1
The UK Government is entering into talks with three tax havens in an attempt to claw back billions of pounds in undeclared funds from British citizens.

The three new tax havens involved in the talks have not been identified, but the Financial Times has reported that Jersey, Guernsey and the Isle of Man had all denied being approached by the Treasury.

The Treasury is hoping to raise £10bn over the next five years by imposing taxes on new deposits in foreign tax havens.

A deal signed in August 2009 with Liechtenstein was aimed at targeting £3bn in offshore accounts belonging to 5,000 British taxpayers, and Switzerland is soon expected to introduce a tax on new deposits by British citizens.

Chancellor George Osborne said: “We are all in this together, and that includes those who try and evade tax. We are in the process of striking a deal with Switzerland and more deals will follow. In total, this will raise many billions of pounds which the previous government failed to do. This is tough but fair.”

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warning over cost of pension changes
by Shirley1
The cost of automatically enrolling employees into a pension scheme could prove to be ‘extortionate’ for many small firms, a leading business group has warned.

The Government has estimated that the changes will cost micro firms with up to four employees £46 per person in administration.

However, the Federation of Small Businesses (FSB) claims that this is a ‘gross underestimation’ of the true cost. It said the changes could cost the average small firm – those with four employees earning an average salary of £25,000 – at least an extra £2,550 per year in administration and pension costs.

From 2012 employers will be required to automatically enrol staff into a pension scheme and business owners must contribute a minimum of 3% of the member’s salary.

Where the employer does not provide such a scheme, employees must be enrolled automatically into the new National Employment Savings Trust (Nest).

Mike Cherry, FSB Policy Chairman, said: ‘It is vital that everyone is able to save for their future but the automatic enrolment scheme is going to cost the smallest businesses dear. While Government has put measures in place to make the enrolment process easier for micro firms, it is going to cost them at least an extra £2,550 a year.

‘The true administrative costs, however, are unknown and could be extortionate,’ he added. ‘We are calling on the Government to publish a proper impact assessment immediately to shed the true light on just how much these changes will cost small businesses.’

The changes will begin to take effect in October 2012, with the largest employers joining first and the smallest joining by September 2016 and contributions from staff and employers will also be phased in.

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McBrides Accountants thank their clients for helping them win in business
November 12, 2010 by Shirley1
McBrides’ Client Celebration held on 11th November 2010, at the Glaziers Hall, London Bridge, saw a wide cross-section of successful SMEs from the South East come together to focus on ‘winning in business’.

The evening was organised by McBrides, the Sidcup-based Accountancy firm who engineered a successful Management Buy-Out in June 2010. McBrides were keen to use the event to thank their clients for the loyalty they showed during the MBO and transition, and to help them focus on achieving their goals in the future.

Jason Leonard OBE, former England International Rugby player, World Cup Winner and still the world’s most capped forward, spoke at the event and shared insights on the essential qualities of ‘a winner’, the secrets of motivating a team, and how the techniques the achieve sporting success can be applied to winning business.

Nick Paterno, Managing Partner at McBrides said of the celebration: ‘The event was a great success and hugely rewarding. We asked Jason Leonard OBE to come and speak about achieving goals and winning in business; something we feel we’ve managed to do at McBrides this year with our Management Buy-Out in the summer. We achieved our goal of taking control of our business, and tonight’s celebration was about rewarding our clients for their loyalty during that time. We truly believe that our clients deserve the very best and we hope the event went some way to demonstrating how much we value our relationships with them and how excited we are about the future. ‘

McBrides also launched their new website with its unique ‘Lifecycle planner’ at the event on Thursday night.

Nick Paterno said of the unveiling; ‘The website has a new look and feel from what’s gone before, reflecting the our renewed focus on owner managed businesses in Kent and the South East.’

Paterno said of the future; ‘It feels great to be in charge of our own destiny and to pass on the benefits of being our own boss to our clients. Our regained independence gives us the ability to respond quickly to help our clients in what remains a very difficult and uncertain economic environment. Clients who receive our payroll services are already seeing the benefits in terms of real savings due to our move to a lower cost base. We will continue to introduce similar initiatives in the future where possible.’

Notes to editors:

Press Contact: Vikki Rimmer vikki@presscontact.co.uk 07886 673 412

Images of the Client Celebration are available from vikki@presscontact.co.uk

Nick Paterno, Managing Partner at McBrides is available for comment.

Over 150 guests attended the McBrides Client Celebration at The Glazier’s Hall, London Bridge.

McBrides Accountants’ new website was launched at the event. The new website has been designed to be of practical use, with weekly updates on all matters to do with business and tax. It also has an interactive business lifecycle planner which provides guidance on the issues facing businesses at every stage of the business lifecycle.

New Website: www.mcbridesllp.com

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