March 2009 Newsletter

FOREWORD

WELCOME TO PRIME CHARTERED ACCOUNTANTS MARCH E-NEWS.

With the CBI predicting that the UK recession is to deepen further, Prime is committed to providing help and support to businesses during these uncertain times, helping them to come out the other side stronger and leaner than ever before.

We’ve included within this e-news details of how you could possibly increase your company’s access to finance as well as some useful tips on how to use the internet and e-marketing as a cost effective way of promoting your business and generating new sales leads.

In addition we highlight plans by HMRC to make filing VAT returns much more efficient for businesses using their online facility and offer examples of tax planning opportunities for individuals which could result in saving money as we fast approach the tax year end.

If you require further information on any of the articles covered, or just require general help and advice, please do not hesitate to contact us.

Laurence Moore, Chairman, Prime Group

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Business Payment Support Services

According to Government figures, over 60,000 businesses have agreed time to pay tax arrangements with HMRC which total more than one billion pounds.

The Business Payment Support Service, which was introduced last autumn, provides a ‘fast track’ service that offers support to those needing more time to pay their tax bills. Terms can be quickly agreed over the phone.

If you would like to discuss the Support Service in relation to your own tax affairs, please contact HMRC on 0845 302 1435.

Internet link: News Direct press release

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Year End tax planning opportunities

With the end of the tax year fast approaching, it is essential that you have considered the various tax planning opportunities available to you. Click here to view the main tax planning opportunities available which could result in a saving of tax for you.

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Tax Relief threat in drive to go green

April sees the biggest shake up of the company car tax system it has for years as cars will no longer qualify for tax relief based on their value alone; instead it will be determined by how green they are too.

For further information click here.

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Electronic VAT Returns

Following Lord Carter’s recommendation that business tax returns should be universally submitted online by 2012, HMRC has recently announced that it plans to phase out paper VAT Returns with effect from 1 April 2010, and instead, expects all VAT registered businesses with an annual VAT exclusive turnover of £100,000 or more, and all newly registering businesses, whatever their turnover, to submit their VAT Returns online and make payments electronically using a direct debit system. Businesses would have longer to file their return and pay the VAT. This is also available to those businesses required to submit Intrastat returns and EC Sales Lists.

Paper returns will still be an option for the remaining VAT registered businesses, but this will be reviewed in the run up to 2012. Find out more about submitting your VAT return online and how to register for and use the online services here.

Clients seeking VAT repayments, including some very large companies, find that they get repayments more quickly with online returns than they did with manual returns. This seems to mirror the experience of on line direct tax repayment claims.

However you do it – please keep a note of the entries made for future reference.

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Budget Day confirmed

Chancellor Alistair Darling will present his Budget speech at 12.30pm on Wednesday 22 April 2009.

We will upload a summary to our website shortly afterwards.

Internet link: HMRC announcement

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e-Marketing Guide

e-Marketing is a great way of keeping in touch with your customers and prospects and helping you to sell more.

To find out more by e-marketing and how you can increase your sales, download our e-marketing guide here.

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Top tips for getting your website noticed

Today’s successful businesses often use the internet to help them to win new business.

Have you looked at what your competitors are doing on the internet recently? It doesn’t matter what industry you are in, the internet will almost certainly have a part to play.

If you want your web site to produce more business for you then these tips will help.

Click here for 10 tips.

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Over 6,000 small businesses sign up to Twitter every day

An estimated 700,000 small businesses are using the social networking site Twitter, with 6,000 more joining every day, according to a recent O2 survey.

Small and medium-sized businesses are looking to Twitter as a way to cut marketing costs and directly communicate with clients and potential clients.

The poll of 500 small firms found that 17% are already using Twitter, with 25% of these SMEs signing up to the social networking site in the last month.

Nearly a third of those surveyed said they had saved up to £1,000 since signing up and 16% claimed that they had been able to save up to £5,000.

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Why you should consider an EIB loan

In the current economic climate it is more important than ever to ensure that you are doing everything possible to increase your company's access to finance.

The European Investment Bank set up a €15bn fund in September, that the first UK banks signed up to in January, with the sole purpose of lending money to small and medium-sized firms at a discounted rate over the full term of the deal.

UK Banks signed up for the EIB's scheme include; The Royal Bank of Scotland/Natwest, Barclays Bank, Close Brothers, and most recently, Abbey. RBS is borrowing 250m, Barclays 150m and HBOS secured a 250m loan to lend to UK SMEs.

Any small and medium-sized business that employ less than 250 staff and have a viable business plan can apply to any of these banks for access to the EIB loan.

The loan can be for tangible (such as the purchase of real estate) intangible (for example, financing for research and development), or to increase a businesses working capital. EIB finance can be obtained for loans of a maximum of 12 years, and the most money that can be borrowed per loan is €12.5m.

The Federation of Small Businesses (FSB) has urged banks to sign up for the scheme and warned that small business owners must be proactive in approaching their banks.

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Redundancy payments

The notes that follow highlight a few but not all of the considerations that affect redundancy payouts:

Q. Do I pay tax or National Insurance on my redundancy payment?
A. No - as long as the amount does not exceed £30,000 and it is a genuine redundancy payment.

Q. Where can I get impartial advice on my rights if I am made redundant?
A. Try ACAS on 08457 474747 or their website. You could also try Citizens Advice, or find their number in your local phone directory.

Q. What happens if I receive a company car or other goods in lieu of a redundancy payment?
A. Anything you receive other than money is converted to a cash equivalent - if the purpose of the transfer of assets is given to compensate you for your redundancy this cash equivalent forms part of your £30,000 tax free sum.

Q. What happens if my employer cannot afford to pay me the statutory redundancy that I am due?
A. The Redundancy Payments Office will make the payments you are due - ACAS or Citizens Advice should be able to advise you on the application process.

Q. If I receive a terminal bonus or payment for doing extra work leading up to redundancy, is this tax free?
A. No - only genuine payments for redundancy are included in the £30,000 tax free sum.

Q. Do I qualify for statutory redundancy if I have worked for an employer for one year?
A. No - you must have completed 2 years service since age 18.

If you have concerns about redundancy as an employer or employee we would be happy to discuss the issues with you.

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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.