Welcome to the June 2008 Newsletter from Connolly Accountants & Business Advisors

Motoring concerns have dominated this month’s headlines, with fuel prices climbing to unprecedented levels and widespread petrol shortages causing panic at the pumps. In response to the soaring cost of fuel, HM Revenue and Customs has raised its advisory fuel rates. However, there remains growing anxiety over the impact rising fuel prices will have on small businesses nationwide.

Meanwhile, the Government has outlined plans to give 22 million workers the legal right to request time off for work-related training. Ministers hope the new entitlement will instigate a change in attitude amongst employers, whilst advancing the skills and capabilities of the British workforce.

HMRC announces early increase in advisory fuel rates

Staff who drive vehicles for business use can now reclaim higher fuel costs from their employer following an increase in the fuel only advisory rates.

Earlier this month, HM Revenue and Customs (HMRC) raised the rates for petrol cars by between 9% and 15%, depending on the size of the vehicle’s engine, while diesel car drivers can now reclaim between 18% and 21% more.

The advisory rates are traditionally revised twice a year on 1 January and 1 July, but in light of the ‘unusual circumstances’ regarding fuel prices, HMRC has permitted employers to implement them ahead of schedule on 1 June.

While the move will come as a welcome reprieve for many motorists, there are fears that those who drive company cars could still find themselves short-changed, as fuel costs look set to climb faster than mileage rates.

Recent statistics indicate that the average price for a litre of unleaded petrol is currently around 118p, while diesel has reached an average of 131p.

To view the current fuel advisory rates visit: www.hmrc.gov.uk/cars/advisory_fuel_current.htm


Meanwhile, new figures released by the Federation of Small Businesses (FSB) suggest that the rising cost of fuel will make it more difficult for small firms to expand.

In a poll of more than 9,000 small business owners, over 80% said that soaring prices at the pumps would impede the growth and development of their firm and reduce the likelihood of them hiring more staff.

Moreover, almost 40% of respondents claimed that continued fuel hikes may force them to reduce employee numbers over the next 12 months.

‘Small businesses are reaching breaking point and if something is not done about rising fuel prices very quickly then we will have a major economic crisis on our hands,’ warned the FSB’s National Chairman, John Wright.

Rising motoring costs can significantly strain your business and personal finances. However, we can work with you to implement tax-efficient strategies to minimise the burden - contact us today for more help and advice.

Workers to be given right to request training

The Government has this month launched a consultation into plans to give workers in England the right to request time off for training relevant to their employment.

An estimated 300,000 extra people could receive training if the new legislation is implemented as expected by 2010, while 22 million workers would be eligible to exercise the new legal right.

It is thought the proposed entitlement will apply to all employees who have worked for their employer for 26 weeks, with requests likely to be treated in a similar way to those for flexible working.

The suggested reforms would not force employers to grant requests, providing they could justify the refusal on business grounds and discussed the issue with the individual concerned.

Launching the consultation into how the new right will work, John Denham, Secretary of State for Innovation, Universities and Skills claimed that employers who do not train staff
‘run real risks with their businesses.’

‘Investment in skills is key to ensuring we come through with a stronger economy and making sure individuals can make the most of their abilities,’ he said.

‘We need to find new ways to bring the drive for skills into every workplace and to every worker which is why we are consulting on a new right for workers to request time to train.’

Currently one third of employers do not provide training for their staff, leaving eight million employees without any training every year.


Click here for key tax deadlines for the coming month.


'We have the right framework in place to ensure that inflation returns to the target and growth recovers. The stormy waters we are navigating now make for an uncomfortable passage compared with the calm conditions of the NICE [non-inflationary consistent expansion] decade.'
Mervyn King, Governor of the Bank of England, on the testing economic times ahead


Provides a useful guide on employing apprentices as well as details of the placements currently available.


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