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July 2010<= /p>

SUMMER NEWSLETTER

= Companies House

If you operate a = limited company you are probably aware of the increased late-filing penalti= es already. The new regime represents a massive increase on the previous le= vels and will no doubt make a significant contribution to Companies House c= offers. Limited company accounts are now due to be filed 9 months after the= end of the accounting period. If they are late the penalties are as follow= s:

Up to 1 month lat= e = £150

2 to 3 months lat= e = £375

4 to 6 months lat= e = £750

More than 6 month= s late &n= bsp; £1,500

If the accounts a= re late two years in succession, the penalties in the second year will be d= ouble the above amounts.

These figures onl= y apply to private companies. The penalties for public companies are much h= igher. All the information you need about running a limited company can be = found at www.companieshouse.co.uk.

Another Budget Summary

Following the general election and appointment of a new Chancello= r of the Exchequer, George Osborne presented his emergency budget on 22nd J= une. Designed to tackle the massive amounts of national debt, only time wil= l tell how successful the new measures are. Here is a brief summary of the = key features that are most likely to affect you.

With effect from next April the basic personal allowance will inc= rease to £7,475. The level at which you start to pay national insuran= ce will increase by an amount to be determined later in the year, but the r= ates on employment and self-employment income will go up by 1%.

There will be a special incentive available to new businesses whi= ch will not have to pay employer’s national insurance contributions d= uring their first year in business, subject to a maximum relief of £5= ,000 per employee for up to 10 employees. This is not available to business= es in the South-East of England and is expected to start in September, but = will be available to businesses starting up after 22nd June.

The 18% rate of capital gains tax stays with us, but only for bas= ic rate taxpayers. The rate for higher rate taxpayers (40% or 50%) increase= d to 28% with immediate effect. Entrepreneurs relief, giving an effective r= ate of 10% on business assets, has not changed, but the maximum amount of l= ifetime gains you can claim this on, which increased to £2 million in= March, has been extended to £5 million.

Small companies will pay corporation tax at 20% from next April. = This is a reversal of Alistair Darling’s proposal to increase it to 2= 2%. The main rate of corporation tax applicable to larger companies with pr= ofits in excess of £1.5 million, will fall to 27% next April and by a= further 1% each year until it reaches 24% in 2014.

The final sting in the tail of the emergency budget was t= he increase in the standard rate of VAT. It was widely expected that it wou= ld go up to 20%, although some predicted it would get there in stages. Howe= ver, it will go straight to 20% with effect from 4th January 2011. This wil= l reduce the administrative burden of coping with more than one change, and= at it least gives businesses time to plan ahead.

VAT

The lower rate of VAT will remain at 5% and the percentag= es applying to businesses using the flat rate scheme will increase in line = with the standard rate. Legislation will be introduced to prevent arrangeme= nts to invoice at the current rate where the supply of goods or services do= esn’t actually occur until after 4th January.