Welcome to the December 2013 Newsletter from Connolly Accountants Ltd

This month saw Prime Minister David Cameron push back the date of the Autumn Statement by 24 hours in order to lead a trade delegation to China. Pressure is building ahead of the event, with both business groups and politicians calling for change. Conservative MPs have suggested raising the stamp duty threshold, while Nick Clegg is urging his coalition partners to increase the personal tax allowance by an additional £500. Alongside this, business groups want the Government to reform business rates and address issues regarding energy and housing.

The Autumn Statement will take place on Thursday 5 December. Visit our website for the latest announcements that could affect you and your business.

Meanwhile, the Bank of England announced that the UK recovery has 'taken hold' and raised its economic growth forecasts for this year and the next. Business Secretary Vince Cable also unveiled details of the Government's new Business Bank, which promises to provide an estimated extra £125m worth of funds to lend to small and medium-sized enterprises.


Speculation mounts as Autumn Statement draws nearer

As the Autumn Statement looms close, a group of Conservative MPs has called for the stamp duty threshold to be raised to £500,000, together with an increase in the higher rate income tax threshold.

Stamp duty is currently payable at an initial rate of 1% on residential properties worth more than £125,000. For homes worth more than £250,000, this rate increases to 3% and then rises in a series of stages to a maximum of 7% for properties worth over £2m.

However, the Free Enterprise Group said that 'stamp duty is a notoriously inefficient tax' and that it should be scrapped for all properties worth less than £500,000, abolishing the 1% and 3% bands.

The latest figures from the Land Registry show that the average property price in England and Wales, (excluding prime central London) had increased by 2.9% to £247,693. Recent reports suggest that many middle-income households are at risk of tripping into the 3% stamp duty band as a result.

The Free Enterprise Group is also urging the Government to raise the higher rate income tax threshold, over which income is taxed at 40%, from £32,010 to £50,000.

The group has also called on Chancellor George Osborne to freeze business rates for a period of three years, echoing the calls of many business groups in their submissions to the Chancellor ahead of the 2013 Autumn Statement on 5 December.

The British Chambers of Commerce (BCC) has urged the Government to freeze business rates for the coming two years, and to completely reform the business rates system by 2015.

Echoing the BCC's call for a business rates overhaul, the Confederation of British Industry has called for a temporary cap on the annual business rates increase at 2%.

The Federation of Small Businesses (FSB) argues that business rates pose a 'significant cost' for small firms, some of which pay more in rates than in rent.

The FSB also wants to see the introduction of reforms that would make it easier for small businesses to get a competitive energy deal, in the face of recent announcements of above inflation price increases by many of the leading energy companies.

John Allan, FSB National Chairman, said, 'For the first time in many years we were able to write to the Chancellor with our proposals for the Autumn Statement against an encouraging economic background. As the economy strengthens, we are only too conscious of the urgency to implement reforms in areas such as business rates, energy and banking'.


The first phase of the Business Bank is unveiled

Business Secretary Vince Cable has announced details for the first phase of the Business Bank, which aims to inject much-needed funding into small and medium-sized British businesses.

The Government's Business Bank will invest £45m in specialist SME lenders: £30m into Praesidian Capital Europe and £15m into BMS Finance, bringing the total lending available to businesses to around £125m. The new Government scheme is expected to start lending in early 2014.

Cable commented that the Business Bank was designed for medium-sized businesses that are growing but finding it difficult to access the finance they need, commenting that this scheme was stepping in and 'plugging the gap that the banks have created because of the decline in bank lending to SMEs'.

'It's very difficult,' he said, 'because they're not big enough for the stock exchange but they've run out of the kind of families and friends who help fund a start-up.'

He spoke at the launch of Business is GREAT Britain, a campaign led by the Department for Business, Innovation and Skills, that further helps to ensure businesses are being supported.

In partnership with successful small businesses, the Business is GREAT Britain campaign will bring together Government advice for SMEs onto one umbrella website.

Cable also announced a new £1m Sector Mentoring Challenge fund, which aims to help businesses get information and advice from others in their own sector, and a £10m synthetic biology start-up fund to help scientists in that area to get their businesses started. 

The Minister for Skills and Enterprise, Matthew Hancock, commented that 'Government has an important role in producing a coherent package of measures to support businesses'. Vince Cable believes that this role has been met, saying, 'we [the Government] have set out a comprehensive package of measures that will address the concerns of small businesses'.

For information and advice on growing your business, please contact us.


ESSENTIAL TAX DATES FOR DECEMBER

30 December
Last day for online submission of 2013 Tax Return for HMRC to collect tax through clients' 2014/15 PAYE code, where they owe less than £3,000.

31 December
Last day for non-EU traders to reclaim recoverable UK VAT suffered in the year to 30 June 2013.

End of relevant year for taxable distance supplies to UK for VAT registration purposes.

End of relevant year for cross-border acquisitions of taxable goods in the UK for VAT registration purposes.

End of CT61 quarterly period.

Filing date for Company Tax Return Form CT600 for period ended 31 December 2012.


QUOTE OF THE MONTH

"British businesses continue to remain pragmatic in the face of ever-escalating confusion from politicians and the media over Europe. The majority of UK firms are determined to see a revamped relationship between the UK and the rest of the European Union, with more powers exercised from Westminster rather than Brussels."

John Longworth, Director General of the British Chambers of Commerce, commenting on their support for renegotiating EU membership.


WEBSITE OF THE MONTH

https://www.gov.uk/business-finance-support-finder

Search the different types of finance available to your business.


ON OUR WEBSITE

Reducing your tax liability
For the latest strategies for reducing your tax liability, visit the Tax Strategies section of our website.

Essential business advice
And for advice on how to make the most of your business, visit the Your Business section of our website.

UK recovery 'has taken hold'
The UK economy is on the mend, with the recovery officially having 'taken hold', according to the Bank of England.
Click here for the full story

Confidence on the rise but businesses 'still cautious about hiring'
British businesses are reluctant to increase their staffing levels in the medium-term, despite recent reports that confidence in the UK economy is strengthening.
Click here for the full story

TUC calls for 'bold rise' in minimum wage
The TUC has called for a 'bold rise' in the national minimum wage next year, in its submission to the Low Pay Commission.
Click here for the full story

New VAT rules 'could treble reporting requirements'
Plans to introduce a standardised VAT return for all businesses across the EU could significantly increase reporting obligations for UK firms, some experts have warned.
Click here for the full story

Data reveals businesses to benefit from new Employment Allowance
New data released by the Government has revealed which UK regions and sectors will benefit from the new national insurance Employment Allowance, which comes into effect next year.
Click here for the full story