March 2007 Newsletter

VAT cash accounting limits doubled

HMRC have announced that the threshold for the Cash Accounting Scheme will be more than doubled from £660,000 to £1,350,000 from 1 April 2007.

The Cash Accounting Scheme allows eligible businesses to defer paying their VAT over until they have received payment from their customers instead of accounting for and paying VAT when they issue and receive invoices.

Contact Prime on 024 7622 0208 or 0121 711 2468 if you think your business may be eligible to take advantage of this change.

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Statutory maternity pay changes

HMRC have updated their guidance on Statutory Maternity Pay (SMP) due to women whose babies are due on or after 1 April 2007. The important date is when the baby is due not when the baby is born. The changes are significant and include:

• an increase in the maximum number of weeks SMP payable from 26 to 39. There is no change to the number of weeks paid at the earnings related rate being the first six weeks.
• introducing keeping in touch days (KIT). Women can do some work during their SMP payment period and can be paid for the work done without losing entitlement to SMP.
• increasing the notice period for women wishing to change their return to work date from 28 days to 8 weeks.
• increasing the leave entitlement for all pregnant women to 52 weeks regardless of the length of service.

Please contact our payroll team on 024 7655 4321 if we can give you further advice on these or other payroll issues.

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Changes to fuel rates

The Advisory Fuel Rate, the rate at which employers can reimburse employees for fuel used on business trips without incurring tax or national insurance charges, has changed.

It is used when employees have company cars but put their own fuel in and therefore need to reclaim fuel used on business trips, or vice versa when employees are required to reimburse fuel used for private travel in their company car when the employer pays all the fuel bills.

For VAT purposes, these rates are also used to claim back VAT on the fuel element of car and fuel allowances paid to employees.

The rates have been reduced with effect from 1 February. The new rates as shown below with the old in brackets.

If you need any advice about when these should be used contact Sarah Nickols on 02476 554310 or Jan Hornby on 0121 711 2468.

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Deadlines

It’s that time of year again!

P35 forms need to filed by 19th May 2007 – remember the online incentives are still available which we can claim for you. For help, ring Monima Das on 024 7655 4321.

P11D forms need to be filed by 6th July 2007. For help ring Sarah Nickols on 024 7655 4310 or Jan Hornby on 0121 711 2468.

Form 42 needs to be filed by 6th July 2007. For help ring Sarah Nickols on 024 7655 4310 or Jan Hornby on 0121 711 2468.

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Budget

The Budget is on 21st March 2007 following which we will email you a special eNews edition with our summary of the changes which affect business and personal tax matters.  You can subscribe to receive our regular eNews here.

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Tax on computers

Last April an exemption was removed which meant that private use by employees of their employers’ computer is potentially taxable.

However this can still be exempted if any private use is ‘not significant’. HMRC have recently given guidance on their interpretation of this phrase being met when:

• the employer's policy about private use is clearly stated to the employees and sets out the circumstances in which private use may be made; and
• any decision of the employer not to recover the costs of private use is a commercial decision, for example based on the impractical nature of doing so, rather than a desire to reward the employee.

   

This makes it clear that businesses need a written to policy to avoid the possibility of a benefit arising. Please get in touch with Prime on 024 7622 0208 or 0121 711 2468 if you need any help in drafting a policy.

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Staff absence

This can be very expensive for small businesses if not controlled. The Absence Management Toolkit for small business has been launched by CIPD and can be downloaded from their website.

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CIS help for construction companies

In our experience many smaller construction companies are still struggling to prepare for the changes being introduced under the Construction Industry Scheme from 6th April this year and need help to make sure they will comply with the new rules and meet the reporting requirements with the Revenue.

The Prime Paysolve team are therefore offering a telephone help-line service to existing clients and can advise any other construction company on their obligations and where needed put in place the relevant payroll systems and procedures to meet HMRC requirements.

Call Monima Das in the payroll team on 024 7655 4321 if you need help.

Keep yourself informed - subscribe to Prime eNews.

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Disclaimer
This newsletter is published for the information of clients and other recipients of our email newsletters. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this newsletter can be accepted by the firm.