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Business News - May 2008
Credit Squeeze
It appears that many businesses are suffering a cash “squeeze” from delayed payment of their invoices as the credit crunch begins to impact on the economy. There are complaints from businesses that some large customers have begun to extend their payment period terms. This is putting a strain on the cashflow of businesses.
Homeworking Costs Increase
From 6 April 2008, HMRC has increased the tax and NIC free guideline rate that employers can pay home working employees without keeping records from £2 to £3 per week.
P11D Deadline Looming
The forms P11D, which report employees and directors benefits in kind and expenses, are due for submission by 6 July 2008 for the year ended 5 April 2008. The process of tracking down the information can take some time so it is important that you don’t leave things until the last minute.
Employment Support Allowance
Incapacity Benefit and Income Support are to be replaced by Employment Support Allowance (ESA). The change takes effect from 27 October 2008.
Skills Gap
With school and college students preparing to start the summer term and sit final examinations, the CBI has published the results of a new annual audit of the nation’s skills.
Employees Entitled to Know More
The Information and Consultation of Employees Regulations 2004 have been extended to cover undertakings with 50 or more employees from 6 April 2008.
Entrepreneurs’ Relief
After business leaders voiced their objections to the abolition of taper relief, the Chancellor introduced a new Entrepreneurs’ Relief (ER). ER may be available for disposals, reorganisations and relevant transactions taking place on or after 6 April 2008.
10% Rate of Income Tax
Since the start of the tax year the basic rate of income tax has been reduced from 22% to 20% and the starting rate of 10% abolished for income except for savings and dividend income.
Marks & Spencer VAT Win
M&S have won a landmark victory in the European Court of Justice. The case concerned whether or not HMRC were correct to limit the amount of VAT they repaid to the company after their chocolate teacakes were reclassified as a cake rather than a chocolate biscuit. The issue of cakes and chocolate biscuits is an important one as it means they are zero rated rather than standard rated. The case dates back many years.
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