Following new legislation, set to be enforced next October, Agency Worker Regulations (AWR) will be streamlined, with umbrella contractors working in a variety of industries in the UK the first to be affected.

The purpose of the AWR is to offer agency workers equal pay and conditions, however the new legislation may mean that contractors could end up costing more and as a consequence, businesses could be put off hiring these temporary staff in the first place.

The Association of Recruitment Consultancies (ARC) has voiced its concerns over the number of employment tribunals that could stem from its implementation. Because of … Continue Reading

The Association of Chartered Accountants (ACCA) has warned today that businesses need to beware of an increase in tax inspections following an announcement by HM Treasury chief secretary, Danny Alexander. He stated that the Government is making £900 million available to tackle individuals, including business owners, who avoid or evade tax.

Tax avoidance is often used as a legitimate means for businesses to use the system to their advantage, reducing the amount of tax they owe by means within the law. Tax evasion is the general term for illegal efforts to not pay tax.

ACCA technical officer, Jason Piper, said that although … Continue Reading

Q. The Taxman has told me I owe him £3,300, and I must pay at least £200 per month or a distraint order will be served. I can only manage to pay £150 per month, so what happens now?

A. A distraint order means tax officers, or bailiffs acting on behalf of the Tax Office, will come to your home or business and ask for full payment. If you don’t pay immediately, they will make a list of your possessions to take away and sell at a later date. They can’t take anything that is not owned by you, or is … Continue Reading

VAT can be very complicated at times! Most goods and services carry VAT at the standard rate, which is currently 17.5% and is due to increase to 20% on 4 January 2011. However, some transactions, such as financial services, are exempt from VAT, and some goods, such as children’s clothes, carry VAT at 0%.

To confuse matters even more, certain services can carry VAT at 5%, or 17.5% or 0%, depending on the circumstances. For example, renovating a house that has been empty for at least two years can carry VAT at 5%, but repairing a roof on another building … Continue Reading

Before the General Election NI was referred to as a ‘tax on jobs’, and essentially it is a tax, as once you have sufficient NI contributions to qualify for state benefits any extra payments will not entitle you to further benefits.

If you have paid in excess of the maximum NI contributions required for the tax year you can reclaim the excess amount. The PAYE system will normally ensure that you will not pay more than the annual maximum on your regular employment. However, if you have two or more concurrent employments in the tax year, or you are employed … Continue Reading

Brendan Barber, general secretary of the Trades Union Congress, warned today that the public will rise up in mass protests, following the governments ‘deeply mistaken’ spending cuts.

Mr. Barber called everyone, not just union members, to join a series of national protests. He said: “The poll tax was a flagship policy and hugely unpopular. As a result, all over the country ordinary people were deeply opposed to it. Once the [Government's] cuts start to bite, you’ll start to see a similar reaction. The poll tax offended the British people’s basic sense of what’s fair. So will the spending cuts.”

Speaking ahead of … Continue Reading

Some of you have, or will be getting, a letter in the post from HMRC detailing some good or bad tax news. Following a tax code blunder 4.3 million happy people will be getting a rebate, leaving 1.4 million to face a demand for extra payments, which will be deducted from their pay packets at around £100 a month from next April.

While this is unfair to the unlucky 1.4 million – ultimately this is HMRC’s mistake – what it does flag up is a general apathy when it comes to understanding tax. A recent survey conducted by HSBC shows that … Continue Reading

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