Business News - April 2010

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Alistair Darling presented his third Budget on Wednesday 24 March 2010.

Most businesses are able to claim an Annual Investment Allowance (AIA) on the first £50,000 spent on plant and machinery. This provides immediate 100% tax relief on qualifying expenditure.

Close companies, generally meaning family and owner managed companies, are subject to special rules in relation to loans or advances made to participators and their associates.

The amount of an individual’s capital gains that can qualify for Entrepreneurs’ Relief are currently subject to a lifetime limit of £1 million. Gains qualifying for the relief are charged at an effective tax rate of 10% rather than the usual rate of 18%.

As previously announced, the nil rate band for 2010/11 will be frozen at the current level of £325,000. This will now be extended to cover the tax years 2011/12 to 2014/15.

At present the Stamp Duty Land Tax rate is 1% for residential property purchases where the consideration is more than £125,000 but does not exceed £250,000.

HMRC are advising businesses that from 1 April 2010 all cheque payments by post will be treated as being received by HMRC on the date when cleared funds reach HMRC's bank account. This change does not affect any cheque payments made by Bank Giro.

In 2009 the government announced changes to employer supported childcare and HMRC have now issued further guidance on the changes.

HMRC have released new guidance for employers about forthcoming changes to EU rules regarding national insurance for people moving around Europe for work. The rules apply from 1 May 2010. To read the guidance in full, please use the link below.

HMRC have the necessary power under existing tax law to publish the details of taxpayers where it is established that they have committed ‘deliberate’ tax offences. HMRC have confirmed that they will apply this provision for tax periods starting on or after 1 April 2010 and for offences which are committed on or after this date.  

From 6 April 2010 the official rate of interest applying to interest-free or low interest loans made to employees will be 4%.  The current rate is 4.75%. Employees are generally liable to tax on a benefit equal to the amount of interest, calculated at the official rate, where the balance of the loan exceeds £5,000 at any point in the tax year. 

The government has announced the latest employment statistics which show the number of people in employment has dropped by 54,000.

Fit notes will be brought into effect from April 2010 and are a replacement for sick notes. The information that doctors will be asked to provide means that instead of giving patients a sick note saying they are too ill to work, they will be able to advise whether a person may be fit for work with some help and support, and what employers can do to assist in this process. Assistance could include a phased return to work, altered hours, amended duties or workplace adaptations.