It is sometimes suggested that Child and Working Tax Credit awards can be maximised if the family’s income is low in one year and high in the next year. The Tax Credit award for the first low year is substantial, and the award is not changed for the second year if the income increase is within £25,000 of the total income for the first year. However, note that this ‘income disregard’ of £25,000 is being reduced to £10,000 from April 2011.

This ‘lumpy’ income pattern can be achieved if you run your own company and take dividends from that company only … Continue Reading

The cycle to work scheme allows employers to lend cycles to their employees tax-free, and in some cases the employees can purchase the cycle at the end of the loan period. However, the Taxman is looking carefully at abuses of this scheme…

- Some employers treat the loan of the cycle to employee as part of the employee’s salary and reduce their cash wages proportionately. This is known as a salary sacrifice, and the arrangement must be agreed with the relevant employee in advance. If cycles are only provided to employees under salary sacrifice arrangements the whole cycle to work scheme … Continue Reading

HMRC is coming down on small businesses this autumn with a barrage of tax investigations.

Abbey Tax, which provides fee protection insurance to firms of accountants, says that the coming months will see an increase in the number of firms being scrutinised by the HMRC.

As part of the government’s move to pay-off the £158 billion budget deficit, these measures are designed to raise some extra funds. Tax inspectors are being asked to bring in as much money as quickly as possible.

With 25 percent of UK SMEs currently exceeding their working capital, according to research from Venture Finance, this couldn’t come at … Continue Reading

According to new research commissioned by HM Revenue & Customs, one in five large British businesses has considered relocating abroad for tax reasons.

The research, conducted by TNS-BMRB, also showed that 64 percent of large companies felt the red-tape burden had increased over the last 12 months. The report indicated that businesses thought HMRC was becoming less transparent in its decision making and 30 percent of large businesses said the tax system was administered had a negative impact on UK competitiveness.

Commissioned by the HMRC under the previous Labour Government, the results are reflective of feelings towards the tax regime at that … Continue Reading

According to the Institute of Chartered Accountants in England and Wales (ICAEW), many small businesses are unable to borrow from banks, because lending criteria is too restrictive.

The banks are countering this claim by saying that demand from small firms has fallen as SMEs concentrate on paying back existing loans.

The annual survey from the National Association of Commercial Finance Brokers (NAFCB) reveals that in the mid-2000s, nearly £20bn was being borrowed, but this went down to under £7bn and now just over that.

Michael Izza, the chief executive of ICAEW, said: “Before the recession, banks were lending to businesses they probably shouldn’t … Continue Reading

This year marks the 40th anniversary of the 1970’s Equal Pay Act, but despite this landmark, things aren’t quite equal yet, but moving in the right direction.

According to the 2010 National Management Salary Survey, conducted by the Chartered Management Institute (CMI) and XpertHR, female salaries increased by 2.8 per cent over the last 12 months, compared with 2.3 per cent for men.

While this sounds like good news for women, as the current male salary is currently £10,031 more than that of a female manager, it will take 57 years before their take-home pay is equal to that of their … Continue Reading

From 2012 the government is set to introduce compulsory workplace pensions, effecting vast numbers of employers, from the largest to the smallest.

The reform will be carried out in stages, so won’t apply to businesses with fewer staff to start with. According to the Federation of Small Businesses (FSB), companies with ten employees or less should always remain exempt as the complicated pension scheme is impractical for these small firms.

Mike Cherry, policy chairman for the FSB, says: “We know that small firms do not feel confident in choosing a pension scheme because of its complicated nature and we are thoroughly … Continue Reading

Under little-known rules, companies that fail to register their energy usage by 30 September will be hit with fines that could reach £45,000.

The Carbon Reduction Commitment (CRC) is requesting that businesses declare their energy usage, with potential charges for every ton of greenhouse gases produced. These payments are expected to average £38,000 a year for medium-sized firms and up to £100,000 for larger organisations. Surveys have shown that thousands of businesses are unaware they are supposed to be taking part, or even that the scheme exists at all.

Under the scheme, any company or public sector organisation that consumes more than … Continue Reading

It’s been very hard for small businesses to borrow money of late, so, in attempt to improve this situation, the UK’s six largest banks have joined forces to examine the viability of increasing lending to SMEs. The taskforce, led by Stephen Green, chairman of HSBC and the British Bankers’ Association, will examine potential obstacles to businesses obtaining loans.

With the five biggest banks making more than £15bn of pre-tax profits for the first half of the year, but showing reduced lending figures, the view of Government is that it’s time they started sharing this around, rather than keeping it to … Continue Reading

For many of us, the working day seems to take over our lives, getting longer and longer (especially if you work for yourself) however, according to new research by the Chartered Institute of Personnel and Development (CIPD) our ‘long hours culture’ may well now be a myth.

In the final quarter of 2009 only four EU countries, Denmark, Ireland, the Netherlands and Sweden, had shorter average working weeks than the UK. This does not mean we’re all getting lazy – the loss of nearly one million full-time jobs and a shift to part-time working since the start of the recession has … Continue Reading