Corporation Tax Reform: Delivering a More Competitive System
November 29, 2010 by Davenports Tax Team
Filed under Accountancy News
The Government has today published details of its Corporate Tax Reform programme consisting of a series of essential reforms designed to improve the UK’s tax competitiveness. Measures include the introduction of new Controlled Foreign Company (CFC) rules and a commitment to introduce a Patent Box.
The Government wants Britain to be a place for businesses to invest. That is why the June Budget announced the reduction of Corporation Tax for large and small businesses with a cut in the main rate from 28% to 24% over the next 4 years and a reduction in the small profits rate from 21% to 20% from April 2011.
However, the Government recognises that a competitive corporate tax system is not just about rates. That is why the Government has published the document ‘Corporate Tax Reform: delivering a more competitive system’. This document is designed to provide certainty to business over the Government’s plans, as it works with them to deliver this ambitious programme of reforms.
Today’s tax reform announcements include:
- a Corporate Tax Road Map that commits to principles that will underpin these reforms and a clear timetable to deliver these changes, including how the Government will engage with business at each stage of policy development;
- details on how the Government will reform the UK’s outdated Controlled Foreign Company (CFC) rules by introducing more targeted rules in 2012 and how they will apply to financing and intellectual property. As a first step to make the rules more competitive, a package of interim improvements will be introduced in 2011;
- introducing a Patent Box in April 2013 - a 10% CT rate on profits from patents, reaffirming the Government’s commitment to retain and build on the existing Research and Development (R&D) tax credit scheme to create the right environment for innovative companies to prosper
- a commitment to legislate an opt-in exemption for profits earned in foreign branches of UK companies in 2011. Under this more territorial approach, companies in the new regime will no longer be subject to UK CT on their foreign branch profits.
This programme demonstrates the Government’s commitment to a competitive and stable tax system which provides business with the confidence to expand and invest in the UK in the years ahead.
The Exchequer Secretary to the Treasury, David Gauke MP said:
“In recent years, too many businesses have left the UK amid concerns over tax competitiveness. It’s time to reverse this trend. Our tax system was once viewed as an asset. And it needs to be an asset again.
“That is why the Government is prioritising corporate tax reform. Responding to the concerns of business, the UK is headed for a more competitive, simpler, and more stable tax system in the future, creating the right conditions for investment”
Companies House Has a Vision to Become a Fully Electronic Registry
November 25, 2010 by Davenports Tax Team
Filed under Accountancy News
Companies House have recently made the following announcement:
“As part of the journey towards this vision we are today announcing our expectation that by March 2013 the vast majority of our filing services will be digital only. We hope to mandate electronic submission for all incorporations and for filings of annual returns, accounts and the main company changes for the standard company types and corporate entities. This would represent over 98% of the entities on the public register and over 92% of all transactions. For the small number of other corporate entities and transactions we will continue developing electronic services but will not mandate them at this stage. The mandation of services will be subject to an Impact Assessment, consultation with stakeholders and regulations being passed by Parliament.
Digital transactions have a number of benefits for our customers - lower fees, ease of use, increased “right first time” percentage (re-work rates for electronic transactions are less than one sixth of the rate for paper transactions), increased security and reduced fraud, guaranteed delivery and faster processing. The move to digital accounts will bring the potential for new products which will help the company information market and make it easier for accounts data to be used for analysis, comparisons and benchmarking.
Digital services offer significant cost savings over their paper equivalent. Those savings are passed on in full to our customers through lower fees - the statutory fees for our services are set on the basis of cost recovery. Our customers save 25% for electronic incorporation and 50% for electronic annual returns compared to paper-based transactions. The expected savings to our customers from lower fees will be over £2 million based on current filing patterns. “
Class 2 National Insurance Contributions Changes
November 24, 2010 by Davenports Tax Team
Filed under Accountancy News
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Changes to payment dates - Class 2 National Insurance contributions
From April 2011, payments for your Class 2 National Insurance contributions will become due on 31 January and 31 July, the same as a Self Assessment tax bill.
Payments made by internet/telephone banking, CHAPS, Bank Giro, Post Office or post
You will receive just two payment requests from HM Revenue & Customs (HMRC) in the year (instead of four bills) in October and April, showing payments due by 31 January and 31 July respectively. You do not need to wait until the due date to make payment.
Payment made by Direct Debit
To meet the new due by dates, collection of monthly Direct Debit payments will be delayed by HMRC to bring the payment dates into line. This means that:
- for the first year only, monthly Direct Debits will stop for a short period and then start again
- Class 2 contributions due for April 2011 will be requested from your bank in August 2011
- payments thereafter will be monthly unless you choose to pay 6 monthly from April 2011
A new option to pay by 6 monthly Direct Debit, collected in January and July each year, will be available from April 2011 for those who do not wish to spread their payments.
For those affected by these changes detailed information will be issued via a series of special mail shots in the coming weeks.
Paying your Class 2 NICs by Direct Debit has many advantages
- it is safe and secure
- it is convenient as your payments are taken straight out of your account
- you pay monthly or, if you prefer, from April 2011 six monthly
- payments are always in arrears of your liability
- if you need to claim employment and support allowance for a while your payments will be reduced automatically
- HMRC will tell you in advance about any changes in rates, and what they will be taking from your account
- you can cancel at any time and you have the safeguards of the Direct Debit Guarantee
- depending on the type of bank account you have, it can be cheaper to pay by Direct Debit than by cheque
A Direct Debit is easy to set up - you just need a suitable account at a bank or building society. If you want to pay your Class 2 NICs by Direct Debit follow the link below to find out what to do.
Paying self-employed Class 2 National Insurance by Direct Debit
For more information, contact Davenports to see how we can help, simply complete the quick form belwo and a member of our team will contact you shortly.
HM Revenue & Customs (HMRC) Has Issued a Warning to Anyone Who Hasn’t Yet Sent in Their 2009/10 Self Assessment Tax Return – File Online, or You Could Face a £100 Penalty.
November 10, 2010 by Davenports Tax Team
Filed under Accountancy News
The 31 October paper-filing deadline has now passed, so anyone filing a paper tax return after this date could be liable to a £100 penalty.
If you’re filing your return online for the first time, you’ll first need to register for online filing at www.hmrc.gov.uk/online. You’ll be given a User ID, and an Activation Code will be posted to you within seven working days. Once you’ve received your Activation Code you can file online.
If you’ve filed online before, make sure that you have your User ID and password – it can take seven working days to get replacements, so don’t leave it to the last minute if you need them.
The deadline for online Self Assessment returns is Monday 31 January.
More than 9m Self Assessment returns are sent out by HMRC every year. Last year, 6.4m taxpayers filed their SA returns online and on-time – a record number.
If you need any help or advice on filing your return, it is available from the HMRC website at www.hmrc.gov.uk/sa or from the Self Assessment helpline on 0845 9000 444; alternatively why not contact Davenports to see how we can help, simply complete the form below and a member of our team will contact you shortly.
Taxman Estimates £6.3bn Revenue Write-off
November 1, 2010 by Davenports Tax Team
Filed under Accountancy News
The amount of debt HMRC believes it will not collect rises from £4.5bn to £6.3bn
The level of debts owed to the taxman which the department is prepared to write off has risen by almost 40% according to UHY Hacker Young.
The firm said the amount of expected revenue HM Revenue & Customs now classed as irrecoverable had jumped from £4.5bn to more than £6.3bn in the year to 31 March 2010.
UHY Hacker Young believed the increase in bad debts had been caused by the recession forcing more businesses to keep hold of money they should pay in taxes in order to pay other bills and keep afloat.
Roy Maugham, partner at UHY Hacker Young said: “The Treasury is very hungry for cash at the moment – they have a huge hole in the government’s finances to fill.
“Our concern is this is all going to lead to much more aggressive debt collection tactics in the future against both individuals and businesses.”
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