Welcome to the October 2008 Newsletter from Connolly Accountants Ltd

This month will almost certainly be remembered as a major milestone in the global financial crisis. Following revolutions in the banking sector, a dramatic cut in interest rates and record lows on stock markets worldwide, attentions have now turned to the fate of the UK’s small and medium-sized enterprises (SMEs). With businesses feeling the pressure of the downturn, the Government has announced a raft of measures to support firms through the stormy economic times ahead.

And as the Credit Crunch bites, new research reveals that millions of Britons are reducing – or even cancelling – their pension and insurance payments in an effort to save money.

Self assessment reminder …

Don’t forget, 31 January 2009 is the last day for filing your 2007/08 tax return online. Remember, returns filed after 31 January may attract a penalty, so please collate all the relevant documentation as soon as possible to ensure you meet the deadline. For paper returns the deadline is 31 October.

Government unveils small business support package

With most analysts forecasting a recession within months, the Government has outlined its plans to help small businesses through the current economic turmoil.

As part of the proposed support package, ministers have pledged to settle small enterprise invoices within 10 days to help alleviate the cash flow difficulties caused by late payment.

‘We want everyone in the supply chain to pay their bills more quickly,’ said newly-appointed Business Minister, Peter Mandelson. ‘We want to help smaller businesses to plan for the difficult times ahead [and…] to ensure that they are healthy enough to survive and come out strongly at the other side.’

In addition, firms in England are to be offered free ‘health checks’ to help them identify potential problems at an early stage. SMEs will also receive a skills boost as the Government seeks to prioritise training for eligible employees through its ‘Train to Gain’ initiative. It is hoped the additional training will provide workers with the skills required to weather the downturn.

The support package, worth a reported £350 million, has been largely welcomed by the business community.

‘Small businesses will be glad that the Government is now taking action to help them through these exceptional economic times, through a range of short, medium and long-term measures,’ said John Cridland, Deputy Director-General of the Confederation of British Industry. ‘We look forward to further action being taken in the Pre-Budget Report which supports small and growing firms.’

However, speculation that the forthcoming extension to flexible working may be delayed prompted a more mooted reaction. ‘These reports send out completely the wrong message,’ said Jackie Orme, Chief Executive of the Chartered Institute of Personnel and Development. ‘They assume that flexible working is a burden on business, and the kind of charitable extra that can be cut back in tougher times.’

Conversely, the Federation of Small Businesses claims the possible delay in introduction will provide businesses with ‘respite’ from the increasing ‘burden’ of complex employment legislation.


Pension payments decline as Brits rein in spending

Millions of Britons are risking their financial security in an attempt to recoup costs during the Credit Crunch, new research has found.

According to comparison website uSwitch.com, 42% of consumers have cancelled insurance policies or pension contributions in order to save money in the current economic downturn. Private health insurance and breakdown cover were the first indemnities to be sacrificed, while one in ten people have ceased payments into their pension fund.

However, a spokesperson for uSwitch.com has warned against taking impulsive cost-cutting measures. ‘The potential impact on you or your family finances if you get it wrong could be huge and long lasting, so it’s important to go into it with your eyes wide open. The key thing to consider before cancelling any policy is whether it still meets your needs.

‘You should then look at whether it is cost effective, whether the cover is being duplicated through another policy or a workplace benefit and, more importantly, what the implications are of getting rid of it.’

If you are concerned about your personal finances or would like advice on planning for your retirement, please contact us.


ESSENTIAL TAX DATES AND DEADLINES

Click here for key tax deadlines for the coming month.


QUOTE OF THE MONTH

‘National Small Business Week 2008 demonstrates to small firms that they have a committed group of supporters with the resources available to help them prosper. Together we are capable of making a real difference to the millions of existing small businesses.’
David Frost, Chairman of the British Chambers of Commerce, explains the value of Small Business Week, which was celebrated earlier this month.


WEBSITE OF THE MONTH

www.consumerfocus.org.uk
Official site of the new consumer watchdog, offering help and advice for energy customers


ON OUR WEBSITE

Personal tax information and guidance
Access a variety of information on personal taxation issues by visiting the ‘Your Money’ section of our website .

The latest tax rates and information
And for the latest tax information, including up-to-date tax saving strategies, visit our tax guides.

Businesses to face tougher health and safety penalties
Employers caught breaking health and safety legislation will face tougher penalties under new measures due to come into force in January.
Click here for the full story

Bank of England cuts interest rates
The Bank of England has slashed interest rates by half a percent in an attempt to stabilise the economy and reinvigorate plummeting stock markets.
Click here for the full story

Savings to be guaranteed up to £50,000
The Financial Services Authority has raised the threshold of savings guaranteed if a bank goes bust from £35,000 to £50,000.
Click here for the full story

Merged consumer watchdog goes live
A new consumer watchdog, Consumer Focus, has been launched following the amalgamation of the National Consumer Council, Energywatch and Postwatch.
Click here for the full story

Raft of new business regulations come into force
A plethora of new regulations affecting small businesses came into force earlier this month. Approximately 50 new or amended laws have been implemented as part of the Government’s bi-annual revision of business legislation.
Click here for the full story