Tax changes to watch out for

If you are unsure of where you stand following the Budget, SmallBusiness.co.uk has teamed up with accountancy firm Mazars to give you an easy-to-use overview to keep the taxman happy and make the most of your allowances.


If you are unsure of where you stand following the Budget, SmallBusiness.co.uk has teamed up with accountancy firm Mazars to give you an easy-to-use overview to keep the taxman happy and make the most of your allowances.

If you are unsure of where you stand following the Budget, SmallBusiness.co.uk has teamed up with accountancy firm Mazars to give you an easy-to-use overview to keep the taxman happy and make the most of your allowances.

Income tax – trading loss

Set off against other profits of year loss or previous year, then against capital gains of year of loss or previous year.

Carry back of up to three years for up to £50,000 of loss sustained in years ending in tax year to 5 April 2009 and 5 April 2010.

Carry forward against profits of trade in later years.

Capital allowances

Plant & machinery:

– annual investment allowance (100 %)

Rate applies to first £50,000 of expenditure (reduced pro-rata for accounting period shorter than a year).

– first year allowance (40 %)

Expenditure incurred this year only, qualifying for the main pool (apart from cars and assets for leasing).

– main pool (20 %)
– special rate pool (10 %)

Long life assets, integral features and some cars.

Environmentally beneficial or energy saving plant and equipment (100%)

This category includes certain low C02 emission cars.

Patent rights and know-how:

– writing down reducing balance (20%)

Research & Development:

– Large companies (130%)
– Small and medium sized companies (175%)

Capped at 7.5 m per R&D project.

Business premises renovation allowance (100%)

Applies to most property vacant for more than 12 months in a disadvantaged area from 11 April 2007.

Industrial and agricultural buildings, hotels:

– writing down straight line (2 %)

Industrial and Agricultural Buildings Allowances are being phased out by 2011.

VAT and indirect tax

Standard Rate:

– up to 30.11.2008 (17.5%)
– 1.12.2008 to 31.12.2009 (15%)
– from 1.1.2010 (17.5%)

Fuel and power (5%)

Conversion/repair of qualifying property (5%)

Registration threshold from 1 May 2009 (£68,000)
Deregistration threshold from 1 May 2009 (£66,000)

Cash accounting upper limit from 1 April 2007 (£1.35 m)
Annual accounting upper limit from 1 April 2006 (£1.35 m)
Intrastat threshold for 2008 (£260,000)

PAYE calendar for employers

Monthly payments
Due 19th of month following end of pay month

Quarterly payments
PAYE payments may be made quarterly where average monthly payments of PAYE, NIC, student loan deductions and deductions from payments to subcontractors, less any tax credit payments total less than £1,500.

End of Year Procedure 2008/2009:

19 May 2009
Filing date for P35 and P14s

31 May 2009-04-28
Deadline for issuing P60s to employees

6 July 2009
Filing date for P11Ds and P9Ds and providing employees with copies or details, and filing date for P11D(b)

19 July 2009
Payment date for Class 1A NIC

19 October 2009
Payment date for tax and Class 1B NIC due under a PAYE settlement agreement (PSA)

National insurance contributions

CLASS 1 – Employees – weekly contributions

Total
Weekly
Earnings
Contracted In
%
Contracted Out
%
up to £110 Nil Nil
£110 – £844 11 9.4
over £844 1 1

Reduced rate for certain married women and widows: 4.85% on earnings between £110 and £844 per week.

CLASS 1 – Employers – weekly contributions

Total
weekly
Earnings
 
Contracted In

%

Contracted Out

Money purchase
%

Contracted Out

Final Salary

%

up to £110 Nil Nil Nil
£110 – £844 12.8 11.4 9.1
over £844* 12.8 12.8 12.8

*£83.68 (money purchase) or £66.79 (final salary) plus in each case 12.8% of excess over £844.

CLASS 1A and CLASS 1B – (Employers only) – 12.8 %

CLASS 2 – Self employed (earnings over £5,075 pa) £2.40 pw

CLASS 3 – Voluntary £12.05 pw

CLASS 4 – Self employed

8% on profits between £5,715 and £43,875.
1% on profits over £43,875.
If also employed, and granted Class 2/4 Deferment, no Class 2 due but 1% on all Class 4 profits over £5,715.