Welcome to the October 2009 Newsletter from Connolly Accountants & Business Advisors

As the latest figures from the Office for National Statistics reveal that the UK economy unexpectedly contracted in the third quarter, businesses have welcomed the news that the Government is delaying the implementation of new employment regulations, in a bid to ease the pressure on firms.

Meanwhile, although the end of the tax year may still be several months away, it is important to make the most of key tax planning opportunities ahead of 5 April. This newsletter includes some handy tips that may help you plan for the year end.

And finally, a reminder that 31 October is the deadline for filing your paper Tax Return. Alternatively, we have until 31 January 2010 to submit your Return electronically. If you would like more information on how we can assist you, please contact us – but don't leave it too late!

Decision to delay new regulations 'good news for the economy'

The Government has announced that it will be delaying the implementation of new employment regulations, in order to ease the pressure on UK businesses.

Among the legislation set to be postponed is the EU Agency Workers Directive, which gives temporary staff the same employment rights as permanent staff after 12 weeks' work.

There had been speculation that the Directive could have been implemented as early as next spring, but it has now been put back until 2011, the latest possible commencement date under EU law.

Launching a consultation on the draft regulations, Business Minister, Pat McFadden, claimed the later enforcement date would give 'recruiters and their clients time to prepare and plan.'

Business and employment groups have welcomed the move. David Frost, Director General at the British Chambers of Commerce, said: 'With these announcements, the Government is sending out a positive message to business. Additional employment legislation would be a real barrier to job creation at a time when unemployment could approach three million.

'Smarter regulation – reducing the burden on business – is opening up as a key battleground between the main political parties. This can only be good news for the UK economy.'

His comments were echoed by Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development (CIPD). 'Implementing the Directive in the early stages of a recovery could have been particularly damaging as firms will be willing to take on temporary workers at an earlier stage than they are willing to commit to permanent appointments.'

The Agency Workers Directive was passed by the European Parliament in 2008. It gives temps equal treatment on basic working and employment conditions, including pay and holidays, as if they had been recruited directly by the hirer after 12 weeks in a given job.

On the same day Business Secretary, Lord Mandelson, confirmed that new laws to give workers the right to request training within small firms would also be postponed.

Tips for the year end

Planning for the end of the tax year is crucial if you want to minimise your tax exposure and make the most of the allowances and opportunities that may be available to you. Here is a selection of strategies that may help you and your business prepare ahead of 5 April.

Reduce the impact of the 50% tax rate

From April 2010 a new top rate of income tax is being proposed – 50% for those earning in excess of £150,000. If you think you might be affected by the change, consider accelerating income into the 2009/10 tax year by paying dividends/bonuses earlier to help mitigate its impact. Or if you are a self-employed business, why not change your accounting date to shift profits into 2009/10?

Maximise your ISA allowance

Make the most of your tax-free Individual Savings Account (ISA) allowance. Remember, since 6 October 2009 those aged 50 and over can invest up to £10,200 (£5,100 in cash). All other adult savers can invest £7,200 (£3,600 in cash) for 2009/10. The higher allowance will be extended to all adult savers from 6 April 2010.

Extract profit tax-efficiently

There are numerous ways of extracting profit from your company, but have you considered some of the alternative options that may be available? These might include the use of tax-free allowances such as mileage payments, and tax and national insurance-free childcare vouchers for parents of young children. Employer pension contributions can also be a tax-efficient means of extracting profit from your company.

Please note, this is just a snapshot of the options that may be available to you, and you should seek our advice before acting on any of the above.


31 October: Last day to file 2009 paper Tax Return.

1 November: Please ensure you are retaining your documents for the 2010 Tax Return.

2 November: Quarterly submission date of P46 (Car) for quarter to 5 October.

For more information on key tax dates and deadlines, visit our 2009/10 Tax Calendar.


'Radical simplification is needed. Startling increases in longevity in recent decades […] mean that it is unrealistic to expect to be able to fund a potential 25 to 30 year retirement from an effective 30 to 35 year working life.'

Graeme Leach, Chief Economist for the Institute of Directors, on why the pensions regime is in need of reform



Includes information on the Car Scrappage Scheme, which was recently extended by the Government.


Interactive tools at your fingertips

Our website contains a range of useful interactive features, including recently updated Companies House forms.

Essential business planning advice

For tips and advice on all aspects of business planning, visit the Your Business section.

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ISA allowance increases for the over-50s
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Government confirms scrappage scheme extension
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