The Budget 2008

12 March 2008
The Chancellors’ first budget on 12th March 2008 was fairly unexciting as most of the changes had been announced in his pre budget report. The main announcements were in respect of the postponement of ‘income shifting’ legislation, (broadly these measures are designed to catch couples/family members who share business profits which have been mainly generated by the efforts of one individual in the relationship), and some refinements to the ‘non-doms’ tax proposals (this legislation covers non-domiciled UK residents). As expected, we had increases in duty on cigarettes and alcohol, with the whisky industry coming under fire with a 55p per bottle increase on all spirits.

In line with the governments recent ‘green’ policies, fuel duty will once again increase by 2p per litre with effect from October, and a new ‘showroom tax’ of up to £950 will be levied on ‘gas guzzlers’ from 2010-2011, with zero rates for the least polluting cars. As an incentive to invest in low-polluting company cars, 100% first year allowances will be extended for 5 years.

The main concerns for most of us in the business community will be how the budget, and the measures announced in the pre-budget report will affect us in the coming year.

For small businesses, the corporation tax rate will increase another 1% to 21% for financial years to 31 March 2009, while the main rate for large companies falls by 2% to 28%. For those businesses with capital spending planned, the first year allowance will be replaced with an annual investment allowance of £50,000 per annum for small and medium sized businesses.

The self-employed will be affected by the extension of the Class 4 national insurance 8% band from £34,840 to £40,040.

Capital Gains Tax changes were the headline change announced in the pre-budget report, and the new flat rate of 18% comes into effect from 6 April 2008. The effect of this change on business owners has been mitigated by the new ‘entrepreneurs’ relief rate of 10% applied to £1million cumulative lifetime total of qualifying gains. Gains in excess of £1million will be taxed at 18%.

A summary of the main rates of taxation for 2008/2009 can be downloaded here.

This article is for guidance only, please contact 23W for advice to apply this to your own circumstances.

Important changes to National Minimum Wage rates and annual holiday entitlements.

from 01 October 2007
If you are an employer, then you must be aware of changes to the national minimum wage and holiday entitlements with effect from 1 October 2007.

The minimum wage rates from 1 October 2007 are as follows:

• Main rate for adults aged 22 and over - £5.52
• Development rate for 18-21 year olds - £4.60
• Development rate for 16-17 year olds - £3.40

The government have announced that all employees will be entitled to 24 days annual holiday from 1 October 2007.

Employees minimum statutory holiday entitlement of 20 days is to rise to 24 days with effect from 1 October 2007, and to 28 days with effect from 1 October 2008.

The measure is intended to ensure that all employees get a minimum of four weeks annual holiday and the equivalent of eight public holidays. It will affect employers who currently include public holidays as part of the 20 day minimum entitlement that all workers have had since the introduction of the Working Time Regulations in 1998.

23W assumes the clients and practice of Lomond Welsh.

09 September 2007
23W have taken on all the clients of Lomond Welsh as from 1st September. The sole proprietor of Lomond Welsh, Lucy Dickson is emigrating to Bratislava with her husband Fred, who is taking a new post with this employer and their daughter Elaine.

This marks the end of a search for the past few months on Lucy’s part to find a suitable home for her clients and to find a practice with similar ethos who would provide similar service and customer care levels.

An informal evening was held to enable Lomond Welsh clients meet Alistair and Alison Marr. The event, which was held at the premises of a client – Whale of a Time, an excellent kids soft play facility on Pollokshaws Road in Shawlands, was attended by around 35 clients. Short speeches were made by Lucy Dickson and Alistair Marr.

Alison Marr commented:
“We are excited about this new development in our practice. As with all our clients we aim to add value to the businesses of the former clients of Lomond Welsh. We aim to make the transition from Lomond Welsh to 23W as seamless and easy as possible.”

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