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Business Alert 31 October 2007 |
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Welcome to Moore Stephens’ Business Alert Service, designed to help you keep up-to-date with business and tax legislation. The service provides details of key changes, issues and opportunities, and includes suggested action and links to more information.
To receive these Business Alerts automatically, email businessalerts@moorestephens.com.
PRE BUDGET CHANGES RUMBLE ON
Business leaders, professional bodies, and even the unions have something to say about the changes planned for capital gains tax. Although the Chancellor’s announcement is a definite simplification, the message is “at what cost?” Business representatives have met with the Chancellor to put the case of those who were hoping to dispose of their business in the future, and who have been worst hit by the reforms. It is imperative that any taxpayer holding investments or business assets considers the impact of the planned changes and is ready for action if no further changes are announced. Some lucky winners may also plan to delay sales until after April 5 to take advantage of the planned low rate of 18%. You have been given several months to act – you will need to move quickly to develop a plan of action.
GREEN CARS
From April next year, company cars which run on bioethanol, or an 85% mixture of bioethanol and unleaded petrol (known as E85) will attract a discount of 2% when calculating then benefit in kind. On an average price company car, this would reduce the benefit in kind by around £350 – 2% of the list price. Those choosing new company cars should be aware of this, and also the new rate of 10% coming into force next year for cars emitting no more than 120g/km of CO2.
CONSTRUCTION SCHEME – REVIEW PROCESS
The new review process for those registered for gross payment under the construction industry scheme is now under way. Under the process (known as TTQT) subcontractors’ compliance record over a 12 month period is reviewed, and if they have breached the rules, they will be reclassified as subject to tax at 20%. This review will happen on an annual basis, but as a random occurrence, so that businesses will not know in which month they are subject to review, as it will vary form year to year. Over the course of a year, all businesses with a gross payment registration will be reviewed. More about this process and the implications can be found on the CIS area of the HMRC website.
We believe the information in this Business Alert to be correct at the time it was sent, but cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein.
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