Reply to: The Budget then

[Sockpuppet]

Well yes. Apart from banks, insurance companies and HMG of course...

You could argue that HMG get the money in the end anyway. So they sort of reclaim it.

[minstrel]

Why can't banks reclaim VAT? They are certainly all VAT registered.

Think there are special rules for banks since they charge very little VAT on their sales.

The whole VAT chain works on the principle that the last person in the chain pays the VAT. As banks don't pay the VAT on their output sales that they are recovering on their input costs they would effectively be robbing the treasury of all the VAT.

[dude69]

Well yes. Apart from banks, insurance companies and HMG of course...

Why can't banks reclaim VAT? They are certainly all VAT registered.

[malvolio]

VAT is reclaimable by all City clients. Irrelevant.

Well yes. Apart from banks, insurance companies and HMG of course...

[dude69]

From the budget:



Likely to impact contract rates in the City?

VAT is reclaimable by all City clients. Irrelevant.

[moorfield]

It's a great time to take as much in divi as possible for your spouse. I haven't anything left to distribute, but for those who have, do it the next 12 months! Not often that you get a 2nd chance.

[EqualOpportunities]

Maybe he was cold.


/IGMC

[gwildfire]

As I unerstand it ,' the laws relating to income shifting' are not in place yet
Why should we therefore abide by it ?

4.69 The Government firmly believes it is unfair that some individuals can arrange their
affairs to gain a tax advantage by shifting part of their income to another person who is subject
to a lower rate of tax. The Government considered the responses received to the recent
consultation and believes that a further period of consultation will ensure that the legislation
in this area provides clarity and certainty for businesses and their advisers. The Government
now intends to introduce legislation through Finance Bill 2009 and will not enact legislation
effective from 6 April 2008.”

Don't forget the S660 rules still apply - for what they are worth.

[sathyaram_s]

Employment Business VAT

From the budget:

4.54 The staff hire concession, which currently allows employment businesses to charge
VAT solely on the margin on their supplies, will be withdrawn by HMRC with effect from
1 April 2009.

Likely to impact contract rates in the City?

[malvolio]

No, it's new legislation, not a change of regulations.

However, how many brolly users spotted the bit about looking at travel expenses I wonder ??? That would be a regulatory change...

[Ruprect]

Could they back date this legislation though? (Sorry for posting here too but I can't find the other thread I posted this question in!)

[Fred Bloggs]

It's a great time to take as much in divi as possible for your spouse. I haven't anything left to distribute, but for those who have, do it the next 12 months! Not often that you get a 2nd chance.

[malvolio]

Give you very good odds it won't be enacted then either: it would take effect in the run up to the next election, not a good time to upset 7m voters...

[Alan @ BroomeAffinity]

The most important part of the budget for contractors, IMHO, was going to be the bringing in to law of the income shifting legislation. This has been postponed for a year but I reckon some people - especially new contractors - will have arranged their affairs in such a way that the income shifting legislation does not affect them - ie, no other shareholders. So, there are probably a load of contractors already paying too much tax and who will probably continue to do so for the next year until the legislation is enacted.

[sidknows]

In his first budget Alistair Darling announced that the government will not be enacting its proposed legislation to combat what it terms as "income shifting". Instead, new measures will be postponed until 2009, pending further consultation to ensure that any legislation will provide "clarity and certainty" for businesses and their advisors.