There has been much speculation about what constitutes an MSC or an MSC provider as where a business is determined by the new legislation to be an MSC provider the rules will apply to all ‘service companies made available by that person’.
One of the most disputed areas is whether a so-called 'Personal Service Company' or limited company is still a viable option. The Treasury have confirmed that a genuine personal service company (PSC) where the worker is usually a Director and controls the finances of the company and how it operates is not caught by the legislation. They also state that PSCs may receive “advice and support” from an accountant or other professional advisor without that amounting to control.
NUMBERWORK AND ITS CLIENTS ARE NOT THEREFORE AFFECTED
Personal Taxes
From 6 April 2008 the basic rate of income tax will be reduced to 20% (previously
22%).
The starting rate of 10% will be removed for earned income and pensions, but will continue to be available for savings income and capital gains. For tax payers whose income is primarily earned or from pensions this further change will reduce some of the benefit received when the basic rate drops in April 2008.
Change to filing date for self-assessment returns
For the year 2007-2008 and subsequent years the filing deadlines are revised.
Paper Returns must be filed by 31 October. The 2007-08 returns must be filed by 31 October 2008. (The present deadline for paper returns is 31 January following the end of the tax year).
Online Returns continue to be due by 31 January following the end of the
relevant tax year so for 2007-08 returns must be filed by 31 January 2009.
Note : Wherever possible we file online for our clients.
Corporation Tax
The small companies rate which applies to annual company profits of up to
£300,000 will increase as follows:
In 2007-2008 - increase from 19% to 20%
In 2008-2009 - increase from 20% to 21%
In 2009-2010 - increase from 21% to 22%
Increased rate of Capital Allowances for small
businesses
The temporary 50% first-year capital allowance on equipment will be extended
for a further year.
Reform of Capital Allowance system proposed
for 2008-2009
From April 2008 it is proposed to abandon the present system of FYAs (first
year allowances) in favour of an Annual Investment Allowance. The scope of
the allowance is subject to consultation. In addition from April 2008 the
annual writing down allowance on “pooled” capital equipment will
be reduced from 25% to 20%.
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