
Tax dodging
We’ll see the screws turned once again on tax avoidance. Watch out for increased penalties for non compliance. Any loopholes involving schemes which turn income into capital are likely to be tightened in time for the introduction of the 50 per cent tax rate on 6 April.HMRC help
The BPSS (Business Payment Support Service) has helped many companies manage their tax cash flow. To date, businesses have been allowed to negotiate and defer payment terms with HMRC – but some consider these to be “soft loans”. HMRC will want businesses to get their tax payments up to date. This will put them under short-term cash pressure so expect some tightening of the criteria to allow firms to “catch up” on payment.Residency status
Gift aid
The higher rate of tax relief to individuals who make gift aid contributions is up for debate. We could see the higher rate scrapped but any change is likely to be hidden away.Tax administration
- Over a third of SMEs called for a portion of civil service salaries to be redirected to help businesses still struggling with low lending in the wake of the credit crunch;
- 28 per cent said the expected National Insurance increase would force them to sacrifice pay rises to staff in order to pay for the measure –19 per cent said they wouldn’t be able to make hires planned for the year;
- 24 per cent of small businesses said they would welcome a tax break to help NEETs back in to employment (potentially worth a huge £238m in tax revenues plus £9.5bn in output to the economy);
- 19 per cent say they would respond favourably to incentives to employ people from Jobcentre Plus; and
- 35 per cent said they would welcome incentives to retain experienced staff over the age of 65.
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