Pre-Budget Tax Changes

VAT

For businesses which pay VAT under the Flat Rate Scheme remember that the percentage figure you use has changed following the recent increase in the standard rate and you can find your new rate by visiting the HMRC website.

The VAT fraction to work out the Vat element of a VAT inclusive invoice price has also changed to 1/6^th ie. price £120.00 x 1/6^th = £20.00.

2011/12 Income Tax and National Insurance Rates

As usual the details will be posted on our website following the Budget on 23^rd March.

Paying Class 2 NI Contributions

The payment dates are changing to make them more consistent with your half yearly self assessment payments. This means that your direct debits will stop from this April to July and will re-start in August and then they will be taken monthly!

Those people affected should have receive information from the Revenue.

Corporation Tax

From 1 April 2011 the rate for ‘large’ companies will be 27% and for ‘small’ companies it will be 20% on profits.

Furnished Holiday Lets

Under new rules starting in April to qualify for the tax breaks these types of properties must be available to the public for 210 days per year and actually be let for at least 105 days.

Pension Contributions

From April 2011 relief for your contributions will be allowed for tax up to £50,000 per year and any of that allowance not yet used can be used over the following three years.

Tax Code ‘OT’

In certain cases as an employer you will start to be asked by the Revenue to use tax code OT such as when;

An employee begins working for you but does not provide a P45 and does not complete a P46 before their first pay day.
You make a payment to someone after they have left their job.
You are still paying someone as an employee and then you also begin paying them a pension.

The effect of this is that the person is taxed at their ‘top’ rate of tax (which could still be at only 20%.)

Electronic P60’s

For the 2010/11 tax year you can provide your employees with their P60’s electronically instead of on paper and as usual this must be passed to them by 31 May.

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