Welcome to the November 2013 Newsletter from Connolly Accountants & Business Advisors

There was some welcome news for business this month as the Government unveiled details of a new Employment Allowance that will give around 1.25 million small firms a national insurance tax cut of up to £2,000. Pledging the Government's allegiance to small businesses, the Prime Minister also launched a new consultation to help protect firms against late payment by large companies.

Meanwhile, controversial plans to offer tax breaks to married couples and civil partners are set to come into effect between 2015 and 2016. Eligible individuals will be able to transfer £1,000 of their personal income tax allowance to their partner, where one is a basic rate taxpayer and the other earns less than the income tax personal allowance.  

A date for your diary! Chancellor George Osborne has confirmed that the 2013 Autumn Statement will be delivered on 4 December. Please visit our website for the latest announcements that could affect you and your business.

New Employment Allowance 'to benefit 1.25 million small businesses'

A new Employment Allowance worth up to £2,000 will benefit some 1.25 million small businesses, while 450,000 firms will be taken out of national insurance altogether, the Prime Minister has confirmed.
Announced in the 2013 Budget, the Employment Allowance will reduce a business's or charity's national insurance contributions (NICs) bill by £2,000 over the course of the year's PAYE payments. Employers will need to confirm their eligibility through their regular payroll process.

According to Government estimations, more than 90% of the benefit of the allowance will go to small businesses with fewer than 50 employees.

Draft legislation on the new allowance was introduced to parliament earlier this month, ahead of its implementation in April 2014.

Speaking to business leaders in the east of England, Mr Cameron said: 'Small business and entrepreneurs are the lifeblood of our economy and this Government is firmly on their side'.

The Prime Minister also pledged to clamp down on late payers, with the launch of a new consultation that will seek to support small firms and address Britain's late payment culture.

As part of the consultation, the Government will examine the effectiveness of the existing Prompt Payment Code and consider whether there is more that can be done to hold companies to the agreement.

The code was set up in 2008 with the aim of encouraging large businesses to pay their suppliers on time. However, many of Britain's biggest companies have still not signed up to the voluntary code, while some signatories are still thought to be stretching payment terms to up to 120 days.

The Government will also consider whether there is a case for further legislation or penalties, along with ways of increasing transparency regarding which firms are good payers and those which are not.

Business leaders have applauded the latest announcements. 'The NICs Employment Allowance will have a positive impact on small firms and the economy when it comes into force next spring,' commented John Allan, National Chairman of the Federation of Small Businesses.

'Our members have said they'll spend the savings on their business, either through investing in the business, increasing wages or taking on staff.'

Meanwhile, Ms Lee Hopley, Chief Economist at the manufacturers' organisation the EEF, said: 'Payment terms can be a major issue for smaller firms, particularly given the financing constraints and uncertainty they face. We therefore welcome further efforts to provide more visibility on current practices and the extent to which particular challenges may be impacting on companies'.

New married couples' tax allowance is confirmed

More than four million married couples and civil partners will be entitled to a new transferable tax allowance, the Government has confirmed.

Under the scheme, eligible spouses and civil partners will be able to transfer £1,000 of their personal income tax allowance to their partner, where one is a basic rate taxpayer and the other earns less than the income tax personal allowance.

The measure is set to come into effect between 2015 and 2016, and will allow the higher earning partner to earn an additional £1,000 before paying income tax, meaning a potential saving of up to £200 a year.

Couples will be eligible from the first year of marriage, and claims for the allowance will be made online.

Prime Minister David Cameron pledged to introduce the tax break when he ran for leadership in 2005 and it was also part of the Conservative election manifesto in 2010. He believes that the transfer will particularly benefit couples where one person does not work or works on a part time basis.

However, Labour said Mr Cameron was 'out of touch if he thinks people will get married for £3.85 a week'.

The confirmation of a married couples' tax allowance is one of a series of recent Government measures, including the announcement by Chancellor George Osborne of his intention to freeze fuel duty until after 2015, subject to sufficient savings being made elsewhere.

We can help to minimise your personal tax bill - please contact us for advice.


1 November
£100 penalty if 2013 paper Tax Return not yet filed. Additional penalties may apply for further delay.

2 November
Submission date of P46 (Car) for quarter to 5 October.


'I am all for a flat simple tax system - it has been shown to raise a lot more money.'

Simon Walker, Director General of the Institute of Directors, calls for a new flat-rate of income tax amid concerns that middle income families are being squeezed by excessive tax rates



An online calculator which allows you to see the effect of the Employment Allowance which comes into effect in 2014


Growing your business
For information and advice on running and developing your business, click here.

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Our latest Hot Topic includes key tips to help you ensure that your business is adequately insured.

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