Welcome to the October 2007 Newsletter from Connolly Accountants Ltd

This month saw the Chancellor of the Exchequer, Alistair Darling, deliver his first Pre-Budget Report to the House of Commons. Following the Chancellor’s statement, leading business groups have publicly criticised Mr Darling’s plans to abolish capital gains tax taper relief.

Meanwhile, the next stage of the Companies Act 2006 has come into effect and includes developments that will have particular relevance to small businesses.

Capital gains tax reform – bad news for small businesses?

Alistair Darling certainly made an impact with his first Pre-Budget Report, in which he unveiled controversial plans to abolish capital gains tax taper relief. In a bid to simplify the tax regime, the Chancellor revealed his intention to replace varying rates of tax relief with a single flat rate of 18%. However, four of the UK’s leading business groups have now publicly criticised Mr Darling’s proposals, which are set to come into effect from 6 April 2008.

While the Chancellor believes the new measures will ensure that those in private equity pay a ‘fairer share’, many businesses fear the changes will discourage enterprise growth. The Confederation of British Industry (CBI), British Chambers of Commerce (BCC), Federation of Small Businesses (FSB) and the Institute of Directors (IoD), have collectively written a letter to Alistair Darling, expressing their ‘deep concern’ over the proposed plans.   

They said the new rules, which they described as a ‘bolt out of the blue’, would hurt small businesses and discourage the risk-taking which is so crucial to the country’s economic growth.

The four leading business groups have since had a meeting with the Chancellor to discuss the views of business towards the proposed changes. Treasury officials have defended the reforms proposed by Mr Darling, saying the change in policy was aimed at simplifying the tax system.

We can advise you on all your tax planning needs, including how the new rules may affect you and your business. Contact us for further assistance - we will be pleased to help you.


Next stage of the Companies Act comes into effect

This month has been a key date in the implementation of the Companies Act 2006. The Act received Royal Assent in November 2006, and is being introduced in a series of stages up to October 2008. The modifications aim to give companies greater flexibility, while ensuring that company law ‘reflects modern needs’.

From 1 October 2007, changes relating to directors’ duties, derivative actions and rules on meetings and shareholder resolutions came into force. The provisions include the following:

  • For the first time the statute sets out the general duties owed by directors to their companies

  • Private companies are no longer required to hold an Annual General Meeting, unless their articles require it

  • Written resolutions will no longer need to be signed by all the shareholders. Instead, the required majority will be similar to that for shareholder meetings – a simple majority of the eligible shares for ordinary resolutions, or 75% for special resolutions.

Further provisions are due to be implemented in April and October next year. The timetable for the scheduled changes is available to view at:
www.berr.gov.uk/bbf/co-act-2006/index.html.


ESSENTIAL TAX DATES AND DEADLINES

Click here for key tax deadlines for the coming month.


QUOTES OF THE MONTH

‘The capital gains tax regime here has continued to encourage investment and enterprise. I now propose reforms to make the system more straightforward and sustainable.’
Chancellor of the Exchequer, Alistair Darling, delivering his Pre-Budget Report earlier this month.

‘The changes to taper relief are a savage blow to entrepreneurs.’
David Frost, Director General of the British Chambers of Commerce, responding to the proposed capital gains tax reforms.


WEBSITE OF THE MONTH

Equality and Human Rights Commission
The official website of the new Commission, with information on individuals’ rights and the legal obligations for businesses.


ON OUR WEBSITE

Business advice at your fingertips
For a range of information on key issues affecting your business, visit our business guides.

The latest tax rates and information
And for the latest tax information, including up-to-date rates and our 2007 Pre-Budget Report summary, visit our tax guides.

Business groups united against supplementary business rates
Three of the UK’s leading business lobby groups have urged the Government to rethink its plans to introduce a new 'tax burden' on businesses.
Click here for the full story

Employment figures reach record high
The Office for National Statistics has confirmed that a record number of people are now in employment.
Click here for the full story

Single equality commission is launched
The new Equality and Human Rights Commission has been launched, replacing the three previously separate commissions with a single independent body.
Click here for the full story

New rules to guarantee savings
Chancellor Alistair Darling has outlined plans to extend UK savers’ protection following the recent reactions by Northern Rock customers.
Click here for the full story

Increase in Minimum Wage
Over a million workers are set to benefit as the statutory minimum wage increases with effect from 1 October 2007.
Click here for the full story