PBR: AccountingWEB members give their views

PBR: AccountingWEB members give their views

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So, what are your thoughts on the Chancellor's Pre-Budget statement?

A series of reheated proposals, old wine in new bottles? Is the PBR merely a political exercise where the government panders to the electorate rather than detailing how it intends to tackle serious economic issues?

Or do you think the statement contained some valuable proposals such as the CGT reforms and new flat rate VAT system for small businesses.
Anne Bennett

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Head of woman
By Rebecca Cave
28th Nov 2001 14:45

Two reasons to worry about the small business
The first is the Carter Review on the provision of payroll services for new and small businesses, which conclueds that the way to help small busiensses deal with the complexity of payroll is to make them use a computerised system. !

I am all for computerised payroll systems, but they are not a solution to payroll complexity. Employers need to understand the system to ensure the information they are putting into software package is correct, and that the software is asking for the right information for each employee (eg is this a student with a repayable loan?).

The Carter report extends its main conclusion by recommending that all large employers should submit their PAYE returns electronically by 2004 and all small employers by 2007. That means that each and every tiny business which employs anyone will have to be online by 2007 to deal with PAYE, or that pass responsibility to a payroll bureau. Can you imagine the small hairdressing salon on the corner submitting its payroll over the internet? I'm sure the software vendors will be rubbing their hands with glee.

Th second worry is the extension of the WFTC to all low paid workers. A fine ideal but it is the employer who has to administer all these benefit payments along with the payroll. What's more it is likely to be the small and medium sized employers who employ people eligible for the various tax credits. Higher paid employees will tend to work for larger companies.

So not only is the admistrative burden getting larger for small employers they will be forced to submit thier PAYE forms electronically, or pay a professional to do it for them - which increases their costs.

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By AnonymousUser
27th Nov 2001 23:47

Budget
Any one know what the limit is going up to for the 10% BANDING in Corp Tax ?

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By gbms
28th Nov 2001 08:42

10 per cent band
Andrew, although the 10 per cent band was mentioned in the Pre-Budget Report as being in line for a widen, there is no mention anywhere as to how much it will be expanded above the current £10,000 limit.

Rumours (and that's all they are) suggest the band could increase to the first £15,000 or £20,000 of taxable profits.

We will have to wait until March 2002 when hopefully all will be revealed.

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By Abacjm
28th Nov 2001 10:56

Browned Off!
Much Ado about Nothing comes readily to mind!
Printing costs incurred by the govt to disburse this budget (not to mention MPS's attendance allowances to be there) will cost more than the average family will gain from it in a year!
Interesting link between pensions and EARNINGS though! Does this mean that if a pesnioner is not earning in retirement, he/she will get NO increase save the (wait for it!) £100 p.a guaranteed! I am sure Prudence could finance the pensioners £100 p.a from the SA fines for late returns collected last year!
Not so much old wine in new bottles, more like yesterday's stew reheated today as mince!
Is also quite staggering how a propsed flat rate of VAT for business can be entertained on the one hand whereas next minute, the Govt's hands are tied in relation to EC regs whereby they have to charge VAT on a toll (tax) to cross the bridge from mainland Scotland to the Isle of Skye. £4.70 (winter rate) one way to pass under a barrier! Why do I live here? How long have you got?

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