Welcome to the April 2010 Newsletter from Connolly Accountants Ltd

Consumers were granted a reprieve this month when the Government was forced to scrap three tax rises in the run-up to the General Election. The contentious 10% increase in cider duty was amongst the proposals dropped as ministers sought to rush through the Finance Bill before Parliament was dissolved.

And as Election fever sweeps the UK, business groups have been unveiling their priorities ahead of polling day.

Meanwhile, the start of the new tax year saw some significant changes to tax and employment legislation, including the introduction of the new 50% top rate of income tax. In addition, the investment limit for Individual Savings Accounts (ISAs) rose to £10,200 for all adult savers.


Three tax rises dropped as Election looms

The Government has dropped plans to impose three controversial tax changes in an effort to push through new legislation ahead of the General Election.

Parliament was dissolved on 12 April, forcing ministers to rescind the proposed 10% tax increase on cider after it was met with fierce criticism from opposition parties.

The 10% above inflation tax rise on cider was announced in the 2010 Budget and came into effect at the end of March. However, the increase will now cease on 30 June and prices will be reduced.

The Chancellor also abandoned plans to levy a 50p per month charge on landlines to fund super-fast broadband and the removal of the special tax treatment for furnished holiday lettings.

Ministers are often forced to make concessions in the rush to ensure that bills are approved before Parliament breaks, known as the 'wash-up' period.

While the Conservatives have declared the tax reversal 'a major victory for businesses and consumers across Britain', Labour has insisted that the measures will be re-introduced if the party is re-elected.

Meanwhile, some of the UK's leading business groups have been setting out their priorities ahead of the General Election on 6 May.

Launching its 2010 Election Manifesto, the Forum of Private Business (FPB) has called on the next Government to rebalance UK workplace law in favour of employers.

According to the FPB, small businesses are reluctant to hire new staff as a result of ever-increasing legislation.

Matthew Goodman, FPB Policy Representative, said, 'Many of our members feel that the current burden of employment law weighs disproportionately on their business, creating unreasonable compliance burdens on most small businesses and ruining relationships between employers and employees'.

In addition, the Confederation of British Industry (CBI) is highlighting the need for the Government to set out a 'clear and credible plan' that will return the budget to balance by 2015/16.

Releasing the CBI's 12-point plan for a new administration, Richard Lambert, CBI Director-General, commented, 'Other areas for urgent action include establishing a competitive regime for business taxes so that companies can drive the recovery forward, as well as minimising the scarring effects of youth unemployment'.


New tax year heralds 50% income tax rate

The start of the 2010/11 tax year saw the introduction of a new 50% top rate of income tax for individuals earning in excess of £150,000 a year.

Plans to introduce the new top rate were first announced in the 2009 Budget, in a bid to boost public finances.

However, some business groups have warned that the move will damage business confidence and have a negative impact on investment and innovation.

April also saw a number of other changes to tax and employment legislation, including the introduction of new 'fit notes'.

These replace the traditional sick notes provided by GPs, and allow doctors to specify whether an individual is capable of carrying out any aspect of their normal work. Employers will be expected to take appropriate steps to accommodate their employees' needs.

Eligible employees also have a new right to take up to 26 weeks of paternity leave, if their partner returns to work after the first six months of her maternity leave. However, the right will only apply where: their partner is due to give birth on or after 3 April 2011; they and/or the other adoptive parent receive notification on or after 3 April 2011 that they have been matched with a child for adoption.

In addition, the savings limit for Individual Savings Accounts (ISAs) has risen from £7,200 to £10,200 for 2010/11 for all adult savers, half of which may be saved in cash.

We can help with all your tax and financial planning needs – please contact us for assistance.


ESSENTIAL TAX DATES AND DEADLINES

30 April: Normal annual adjustment for VAT partial exemption calculations (monthly returns).

3 May: Quarterly submission date of P46 (Car) for quarter to 5 April.

19 May: Last day for filing forms P14, P35, P38, and P38A - 2009/10 PAYE returns - without incurring penalties.

31 May: Last day to issue 2009/10 P60s to employees.

For more information on key tax dates and deadlines, visit our 2010/11 Tax Calendar.


QUOTE OF THE MONTH

'With our economy still fragile and the public finances in a dire state, the overwhelming concern is whether a hung Parliament will provide decisive action around the UK's unsustainable deficit.'

David Frost, Director-General of the British Chambers of Commerce, speaks out over concerns that a hung parliament could prove 'detrimental' to UK business


WEBSITE OF THE MONTH

www.bbc.co.uk/election

BBC website dedicated to the 2010 General Election, containing all the latest news and information in the run-up to polling day


ON OUR WEBSITE

Essential information for business owners

For advice on all aspects of owning and running a business, visit our Business Guides.

The latest news and hot topics

Our latest hot topic examines the recent changes to online filing. View the article here.

UK economic growth 'less than expected'
Latest GDP figures have revealed that the UK economy grew by 0.2% in the first three months of 2010, easing fears of a 'double-dip' recession.
Click here for the full story

Nest pension charges could 'alienate savers'
The Government needs to reform its plans for a new workplace pension scheme or risk alienating savers with complicated charges, the Confederation of British Industry has warned.
Click here for the full story

Late payment 'affecting three-quarters of SMEs'
Nearly three-quarters of small and medium-sized enterprises have experienced problems with late payment in the last year, according to a new study.
Click here for the full story

Fuel prices climb to new high
The average price of unleaded petrol has soared to a record high of 120p a litre, new figures have revealed.
Click here for the full story

Online filing changes come into effect
Businesses will now only be able to file and pay certain taxes online, following the introduction of new rules by HM Revenue and Customs.
Click here for the full story