Budget 2009

To see how this will affect you, check out the BBC’s handy calculator:-

http://news.bbc.co.uk/1/hi/business/8008685.stm

Budget 2009: Summary of key measures 

• The UK economy is forecasted to shrink by 3.5% in 2009. The growth forecast for 2010 is 1.25%, and from 2011 onwards it’s 3.5% a year.
• Inflation will reach 1% by the end of the year. The retail price index will drop by -3.5%.
• Public sector net borrowing is expected to hit £175bn this year (12.4% of GDP), and then £173bn, £140bn, £118bn and £97bn in the years that follow.
• UK net debt stands at 59%, rising to 68% next year and increasing again to 79% by 2013/14
• Income tax will not go up this year for most, however those earning more than £150,000 will see an increase from 45% to 50% from April 2010.
• Fuel duty will be upped by 2% from September, and 1% above indexation every year for the next four years.
• Alcohol and tobacco duties will be increased by 2% from 6pm today.
• Stamp duty holiday on homes under £175,000 will be extended until end of 2009.
• A new car scrapping scheme will offer a £2,000 discount on new cars when vehicles over ten years old are traded in.
• The child element of the Child Tax Credit will increase by £20 from April next year.
• Parents will receive £100 extra in child trust fund vouchers for new babies, taking them to £350.
• State redundancy pay is to rise from £350 to £380 a week.
• Grandparents’ care for young relatives will count towards basic state pension.
• Last year’s increase in winter fuel allowance to be extended for another year.
• Annual ISA limit to be increased from £7,200 to £10,200, half of which can be invested in cash. From this year for over-50s, from next year for others.
• Loss-making companies can reclaim tax paid on profits made in past three years.
• Additional £1.7bn funding for jobseekers.
• From January 2010 everyone aged under 25 unemployed for a year to get offer of job placement or training.
• £260m new money for training and subsidies.
• £250m extra this year to enable 16- to 17-year-olds to stay in education. £400m in next two years.
• Pension tax relief restricted for those on incomes over £150,000 from April 2011. It will be gradually tapered to the same 20% rate received by most people.
• £500m extra support for housing industry.
• £100m for local authorities to build energy-efficient housing.
• £50m to accelerate modernisation of housing for military families.
• Main capital allowance rate doubled to 40% to encourage firms to bring forward investment.
• £750m investment fund to provide financial support to emerging technologies.
• Carbon budget commits UK to reduce emissions by 34% by 2020.
• £435m extra support for energy efficiency measures for homes, businesses and public places.
• £525m new support for offshore wind power projects. Will provide enough electricity for 3.5m households.
• £405m new funding for low-carbon technology projects.
• Most energy-efficient new power stations using combined heat and power to be exempt from climate change levy.

(From accountingweb.co.uk)

Employed or Self-Employed?

Have you decided you would prefer your workers to be self-employed?  In fact, this decision isn’t down to you, but is determined by the facts of the relationship.  Get this right, becuase if you don’t, you (as an employer) could be clobbered with a tax bill for your workers further down the line.  To help you decide what the correct status is, check HM Revenue & Custom’s website, via this link:- http://www.hmrc.gov.uk/calcs/esi.htm

Online Accountants

Online accountancy can only be performed well when used in conjunction with the postal service, I reckon.  Otherwise, your accountant will either have to rely on your bookkeeping – and as a non-professional, you’re unlikely to do a perfect job – or you have to scan and email documents, and how laborious is that?  I use recorded delivery with my clients, which works well.

Small Business Accountants

Accountants are just like any other service industry – it’s all about horses for courses.  A major international practice is ideal for a major international company.  But what if you’re a small business or trader?  Using such an accountancy practice would be a bit like sending a battleship to sink a rowing boat.  And, a very expensive battleship at that.  Surely what you looking for is a practice that reflects you own values and attitudes towards customers?  A small business values every customer irrespective of size.  Its customers have names not account numbers.  It provides a service tailored to suit the customer’s needs, not one size fits all.  If a customer wants evening delivery that’s what they get.

 

And that is exactly the philosophy that underpins Finch Accountancy.  It is a friendly but very efficient service that can be tailored to match you needs.  There is no “Blank cheque” approach to fees.  Everything is carefully costed.  You know want you will pay and you know what you get.  For every new prospective client there is a free one hour consultancy where it is determined exactly what your needs are and how much it will cost.  During this meeting there will be useful tips about actions the clients can take to reduce their accountancy costs.  If all this sounds like what you are looking for call Tessa Finch now.  This could be your first step towards the sort of accountancy service you’ve always wanted – but never found…Yet

Self Employed or Limited Company?

Common Business Structures

Sole trader

• Being a sole trader is the simplest way to run a business.
• You make all the decisions on how to manage your business.
• You raise money for the business out of your own assets, and/or with loans from banks or other lenders
• All profits go to you, and you are taxed on these in your annual self-assessment tax return.
• As well as tax, you need to pay National Insurance Contributions – fixed-rate Class 2, and Class 4 on your profits. 
• As a sole trader, you are personally responsible for any debts run up by your business.

 

 

Partnership

• A partnership is a relatively simple and flexible way for two or more people to own and run a business together.
• In a partnership, two or more people share the risks, costs, and responsibilities of being in business.
• Usually, each partner shares in the decision-making and is personally responsible for any debts that the business runs up.
• Each partner is self-employed and takes a share of the profits, and is taxed on this profit share as shown above for a sole trader.
• Unlike a limited company, a partnership has no legal existence distinct from the partners themselves. If one of the partners resigns dies or goes bankrupt, the partnership must be dissolved although the business may not need to cease.

 

 

Limited liability company

• Limited companies exist in their own right. This means the company’s finances are distinct from the personal finances of their owners.
• Private limited companies can have one or more shareholders.  They are not responsible for the company’s debts (unless they have personally guaranteed a bank loan, for example). However, they may lose the money they have invested in the company if it fails.
• They must have at least one director and a company secretary, who may also be shareholders.
• Companies must be registered (incorporated) at Companies House.
• Annual accounts and an annual return have to be filed with Companies House – this information is available to the public.
• The directors and secretary are responsible for notifying Companies House of changes in the structure and management of the business.
• Profits are usually distributed to shareholders in the form of dividends.
• Companies pay corporation tax and must make an annual return to HM Revenue & Customs
• Company directors are employees of the company and must pay Class 1 National Insurance contributions as well as income tax on their salaries.
• Directors who trade negligently may be personally liable for the debts of the company.

Blog Launched

We are pleased to announce the launch of our Blog. We aim to keep you updated on what’s happening at Finch Accountancy and on the relevant accountancy & bookkeeping news.