The material on this website is for information only
and is not intended as any recommendation or endorsement of any products or companies mentioned. We are not licensed by the FSA to give financial advice, and none of the material on this website constitutes or is intended to constitute financial ...
News
As two of the common cancers affecting men and women – Prostate and Ovarian cancer - are the focus of March awareness campaigns, AIG outlines how its unique Cancer Cover insurance policies provide vital financial and emotional help when it is needed most.  
Chartis Direct has launched a new Heart Attack and Stroke insurance policy, which gives cash payouts on diagnosis of either a heart attack or stroke.  There is a choice of cover level, giving £15,000, £25,000 or £50,000 on diagnosis.
A new survey has revealed that £454.60 is the average amount of money that people would lend to a friend suffering from a long term illness such as cancer. This equates to just less than a week’s extra pay, based on average gross weekly earnings of £458*.
A leading debt management company is reporting a rise in the numbers of its customers who cite loss of sleep as a direct result of debt anxiety as a major catalyst for contacting the company for help.
Annual average household expenditure is estimated to be £35,978. The corresponding figure for a household where the main occupant is 65 – 74 is £23,711 and £15,139 where they are aged 75 and over
Have you met...
Latest Members:


ini7a


GoodShoutStudio


Frankie


Nwinslade


barnetboy8


DomKnowles


Granny2B

 

What would you like to see in the budget?

What would you like to see in the budget? I'm sure some would like changes that would increase their income but with the Government's purse looking rather short of ready cash how likely is that.

This is what FRANCESCA LAGERBERG, HEAD OF TAX, at the big accounting firm GRANT THORNTON thinks the budget will look like:

"With an election looming next year this has to be the make or break Budget for Chancellor, Alistair Darling. However, with public finances stretched to the limit, rescue packages to support the banking industry and the UK's gross domestic product nose-diving, the Chancellor will require more than economic acumen to get the public finances back in order.

"The Chancellor has now conceded that he will have to revise his economic forecast for 2009-2010 alongside his forecasts for government borrowing and that his Pre-Budget Report (PBR) predictions were wrong. With the recession now in full kilter, Darling will be hard pushed to hand out any significant tax benefits. His focus is more likely to be on how financial stability can be restored to the UK and allaying fears for the distressed state of the public finances.

BUSINESS TAXES

VAT. "We would like to see the cash accounting threshold increased to include businesses that have an annual turnover of £10 million. At present, a business is eligible for cash accounting if the turnover is no more than £1.35 million however we believe  this benefit should be extended to more businesses during these difficult times. In addition to the obvious benefit of only having to account for output tax when payment has been received from a customer, cash accounting means that the business will not suffer from VAT bad debts.  

"We would like to see the Chancellor rethink the date for reinstating the VAT rate back to 17.5%. It is due to revert back at the end of the year (as set out in last year's PBR) but this would be hard for retailers who will have post-Christmas sales on their mind and will not welcome the administrative distraction of having to alter prices. Equally anyone affected by the VAT package changes in January 2010 (broadly those with cross-border trading) will not welcome another significant issue to deal with.

"The Chancellor needs to give a clear steer on this issue on Budget day to give certainty and clarity for all those affected.

Tax havens. The outcome of the G20 summit has highlighted the global move towards making  tax information more transparent across borders. It will be interesting to see what the Chancellor has to say on this issue in terms of further detail and how the clampdown will be enforced. The key is to provide greater clarification and guidance as to what the changes really mean and to obtain comfort that there will be no unreasonable administrative burdens placed upon corporate entities.

Tax simplification for businesses. "Businesses find the corporate taxation system in the UK complicated and not always as competitive as its neighbours so, at a time when the UK is desperate to attract foreign investment back into the country, the Chancellor should look at ways to improve the corporate taxation system. While the Chancellor attempted to address the issue of simplification for smaller corporates at last year's PBR, and is proposing to introduce an exemption for foreign dividends for large and medium sized businesses, the Government still needs to look at further ways of reducing the tax burdens and legislation for businesses.

"Businesses find the tax structure in the UK too complex and that is arguably why so many multi national companies (MNCs) are moving their holding companies away from the UK. We need to bring investment back into the economy and simplifying business taxation would provide the incentive to large MNCs to choose the UK as a location for their holding companies.  

Small companies rate change. "We ask that the Government further delays the planned increase in the small companies' rate of corporation tax to 22%. The rate increase was scheduled to come into force in April 2009 and it was announced at the PBR that the increase would be delayed until April 2010. Grant Thornton would like to see the increase delayed until April 2011. This will allow small companies to get back on an even keel before this rate increase is enforced. Steady cash flow management is essential for businesses in these uncertain economic times and an increase in the rate of corporation tax is another burden that small companies can live without.

Greater relief for losses. "An extended relief for £50,000 of trading losses was announced in last year's PBR. The extension applies to losses arising in the 2008/09 tax year for unincorporated businesses and for losses incurred in accounting periods ending between 24 November 2008 and 23 November 2009 for companies. After the unrestricted one year carry back of trading losses, the remaining loss of an unincorporated business can be carried back against profits of the same trade, profession or vocation to 2005/06 and 2006/07 too, but for companies, the extended £50,000 three year carry back is against all profits (i.e. not restricted to trading profits).

"This is a good first step but it would  be better for there to be greater consistency between the application of the rules for unincorporated businesses and companies. Most importantly the restrictions for unincorporated entities may be less helpful to businesses that face their worse losses in late 2009.  

Change to the tax year end. "We would like to see the tax year end in the UK changed to 31 December so that it is in line with the rest of Europe. The current tax year end is 5 April for income tax, capital gains tax and inheritance tax. Corporation tax is generally driven by accounting dates, which some businesses also adopt for VAT purposes. However, changes in rates and thresholds for corporation tax and VAT are normally introduced with effect from 1 April each year. The current April year end in the UK is based on feudal law and seems anachronistic in this day and age. Aligning the tax accounting year with other countries would make the UK an even more attractive place to invest.  

PERSONAL TAXES

Push on savings. "Interest rates are at an historic low after the Bank of England has made consecutive cuts to the bank rate since October. Falling interest rates provide little incentive to savers and this cannot be sustainable in the long term.

"We would like to see a rise in the current ISA savings threshold from £7,200 to £9,000. At present, an annual maximum of £7,200 can be invested in these tax-efficient products, up to £3,600 of which is allowed in a cash ISA. The expanded threshold would help to alleviate the impact of the reduction in interest income for savers caused by falling interest rates following recent cuts in the interest rate by the Bank of England.

Stimulus in the property market. "The housing market is currently at the peril of rising rates of unemployment brought on by the economic downturn.

"The temporary reduction in stamp duty land tax has not yet been enough to bolster the market. We would like to see a package of measures to stimulate the property market which would include more support and help given to first time buyers, more availability of mortgages to first time buyers, a reform of Stamp Duty Land Tax including the abolition of the 'slab system' that causes artificial price ceilings around the thresholds and greater protection for those with mortgages.

Review of personal allowances and thresholds. "Following last year's above inflation increase in the income tax personal allowance to pacify those who lost out from the abolition of the ten per cent income tax rate, the starting points at which income tax and national insurance contributions (NICs) are paid are out of sync.

The income tax personal allowances levels are set to be worth £6,475, rising to £9,490 at age 65 and to £9,640 for those 75 and over in the 2009/10 tax year. National insurance contributions will be payable from a lower threshold of £5,715 per annum or £110 per week. The income tax personal allowance for the under 65s and the NICs primary threshold are not set to be realigned until April 2011. Tax credits start to be withdrawn at yet another different income threshold of £6,420. This leads to a range of confusing marginal tax rates for individuals with income around these levels. Alignment would simplify the system.

"As well as not being aligned, all of these figures are much lower than someone working 37 ½ hours a week on the minimum wage would earn* and it seems preposterous that the minimum wage suffers a tax liability.

Withdrawal of personal allowance. "The Chancellor announced in last year's PBR that from April 2010, the income tax personal allowance will be reduced in two stages for those with gross incomes above £100,000 and £140,000. This creates an effective rate of income tax of 60% in small bands of income above these thresholds.

"Not only will people be keen to undertake planning, for example by making pension contributions to ensure that their income does not fall within one of these narrow bands, it will also prove an administrative headache as PAYE coding notices will simply not be able to cope with this mechanism of withdrawal. Given the amount of lobbying that has been happening on this point, we hope that the Chancellor will come up with a sensible alternative at the time of the Budget."


* A person working 37 ½ hours per week on the minimum wage of £5.73 an hour would earn £11,173.50 per annum.

Advertise with us  |  Privacy  |  Terms & Copyright                                                                                     Website maintained by USP Networks