| Welcome to our specialist small business advice newsletter. |
| |
|
This month we bring you news about:
- The Chancellor's Pre-Budget Report;
- Things to consider about the changes in the VAT Standard Rate including the implications on computer systems;
- Our usual look at some of the latest news affecting small businesses.
Please contact us if you have any suggestions for topics in future issues. |
| |
To subscribe to our FREE newsletters or change your existing subscriptions please go to http://subscribe.wise.co.uk
|
|
The Pre-Budget Update...
The Chancellor's 2008 Pre-Budget Report announced the following key measures affecting businesses:
- The Value Added Tax (VAT) rate will be temporarily reduced to 15 per cent from 1st December 2008 until 31st December 2009.
- A package of reforms to the taxation of foreign profits, including the introduction of a foreign dividend exemption for large and medium-sized businesses, supported by a worldwide debt cap on interest.
- Employer and self-employed rates of National Insurance Contributions will increase by 0.5% from April 2011.
- Measures to help SMEs including:
- a new Small Business Finance Scheme to support up to £1 billion of bank lending;
- a separate £1 billion guarantee facility to support bank lending to small exporters;
- a £50 million fund to convert businesses’ debt into equity;
- a £25 million regional loan transition fund;
- a new HMRC Business Payment Support Service to allow businesses in temporary financial difficulty to pay their HMRC tax bills on a timetable they can afford;
- more generous tax relief for businesses now making losses and the modification of a number of planned tax reforms, including vehicle excise duty, air passenger duty and deferral of the increase in the small companies’ rate of corporation tax;
- a temporary increase in the threshold at which an empty property becomes liable for business rates. For financial year 2009/10 empty properties with a rateable value of less than £15,000 will be exempt from business rates.
There were a range of implications for individuals including:
- The £600 increase in the Income Tax personal allowance announced in May 2008 will become permanent with a further increase of £130. This suggests that basic rate taxpayers may pay £145 less tax a year in 2009-10.
- Employee rates of National Insurance Contributions will increase by 0.5% from April 2011.
- The Income Tax personal allowance will be restricted to half its value for those with incomes over £100,000 from April 2010.
- A new, higher rate of Income Tax of 45 per cent will be introduced for incomes above £150,000.
more details...
|
VAT Changes...
There will be a temporary reduction in the standard rate of VAT from 17.5% to 15% from 1st December 2008 until 31st December 2009. However, for many businesses implementing this change might cause more problems than it was designed to solve.
Sales and invoices raised after 1st December should normally use the new rate of 15%. However, the following clarifications have been issued by HMRC:
Retail cash sales to consumers (not registered for VAT)
All takings received on or after 1st December should use the new rate of 15% except where:
- a customer pays for something they took away, (or you delivered to them), before 1st December. In this case the sale took place before 1st December and the old rate of 17.5% must be used.
|
Business to Business Sales where a VAT invoice is issued
Invoices issued on or after 1st December should use the new rate of 15% except where:
- Goods or services provided before the end of November and more than 14 days before the issue a VAT invoice, (even if the invoice is dated on or after 1st December), then the sale is considered to have taken place before 1st December and should use the old rate of 17.5%.
- This also applies to goods delivered to customers before 1st December, even if they don't pay you until after 1st December or you don't raise the invoice until after 1st December.
However, for continuous supplies of services you should account for VAT due whenever you issue a VAT invoice or receive payments, whichever is earlier. In these cases, invoices issued or payments received on or after 1st December should be subject to the new 15% rate. |
However, there is one further consideration. If you received payment before 1st December for goods or services that you do not deliver until 1st December or later, then you can choose which VAT rate to apply. If you choose the new lower rate of 15% and you have already issued a VAT invoice at the old rate, you will need to issue a credit note to the customer. You do no need to tell HMRC about it.
For full details see the HMRC Website
|
Implications of VAT Changes on Computer Systems
Obviously the speed with which the VAT changes need to be implemented will have serious implications for users of accounting packages and
eCommerce systems.
Most suppliers will have already issued advice to the users of their packages and we will look at just two examples:
Sage
Sage has issued an email to their users and has provided a number of articles to guide people through the changes they will need to make to their software on 1st December.
They have followed this up with a Sage Accounts VAT Change Utility. This can be downloaded from the Sage Support website from 1st December by users using Sage Instant Accounts version 14. This utility also installs some new reports that will help you to reconcile VAT when the 15% and 17.5% rates both apply within the same VAT Return.
more information is available on the Sage website
|
Actinic eCommerce & Epos Systems
The Actinic eCommerce products (Actinic Catalog, Business & Business Plus) include an easy to use facility for setting up or changing the rate of VAT. However, there is an issue if you try to edit an order that was received prior to the VAT change. In this case Actinic will reapply the new VAT rate to that order even though it ought to remain at the old rate. However, there is a detailed knowledge base article on the Actinic website to guide eCommerce users through the changes and explaining how to avoid the issue if you need to edit historical orders:
Making the change in the Actinic EPOS products is a little more complicated, but once again Actinic has provided a detailed knowledge base article on their website to guide EPOS users through the changes:
for help with making these changes please contact us
|
|
News & Other Updates
Each month we will feature some of the recent regulatory updates or other important news affecting small businesses:
Herts Business Awards
The awards ceremony was held last Thursday night
at Knebworth House. The winner of the Small Business of the Year category was Dinky Dancers, while the winner of the Company of the Year was our very own partner Ultratec! Ultratec provides Data Recovery, Secure Data Destruction & Hardware Recycling Services.
more information...
|
|
Business Link East Briefings
We are presenting one more 2 hour briefing session on "Disaster Recovery - Can You Really Do Without IT?"
To receive a copy of the Business Link Business Briefing brochure please register at www.businesslinkeast.org.uk.
To book, you will need to register with the Business Link online booking system at www.bookevents.org.
|
Breakfast Networking
There's a lot of networking going on in our region, so why not be a part of it?
Please see our Business Events page for details
|
|
Contact us if you would like any further information about the items in this newsletter. Please let us have any feedback you might have, and also let us know if there are any articles you would like
to see covered in future issues by sending an
email to sales@wise.co.uk.  Best regards,
Tim Weaver
Weaver Information Services (Europe) Limited trading as WISE.CO.UK,
Telephone +44 (0) 1438 453013. Email info@wise.co.uk
Registered office 11 Watton Road, Knebworth SG3 6AH.
Registered in England no. 2618391. VAT registration GB 573 1139 51. |
|
