According to the Treasury, the tax increases are to:

“Strengthen the environmental incentives for businesses to purchase fuel efficient cars.”

Yet the move is likely to make company vehicles overly expensive for a number of businesses, according to experts. In 2014, cars which produce over 75 grams of carbon dioxide for each kilometre will be taxed at one percent more than at present. The tax charged will increase by two percent in 2015 and 2016. HM Revenue & Customs say that the increase in tax will affect all the drivers of company cars in the UK.

There have been a number of responses given regarding the move. Tax director at PwC, Michael Nagle, believes that the tax increase may lead to companies and employees looking for alternative arrangements. Another response is that the measure has been introduced at short notice, leading to problems for businesses in the short term.

As business owners reach the end of financing arrangements for company cars, accounting services may be necessary to reach the most cost effective and tax efficient solution for future company cars.

Aardman are best known for Wallace and Gromit and other animations with clay figures. The animation company, which is based in Bristol, will now qualify for tax reliefs that are similar to those for UK produced feature length films. Dependent on the budget for production, the company will receive tax breaks of 20 to 25 percent. These tax breaks could be worth up to £700 million annually to the creative industry in the UK. According to the head of broadcast and development for Aardman, Miles Bullough, the tax breaks would transform the industry:

“We have seen a dramatic decline on UK television of home-produced animation and we now have a shot at reversing that trend. The credit will create thousands of UK jobs and our research shows that there will be a long-term financial gain for the UK.”

It is crucial that a business receives any tax reliefs which are available in order to maximise benefits for the company. An accounting firm will have all the latest details of tax breaks, especially following the Budget announcement.

Hugh Grant stars in the latest Aardman film, Pirates! In An Adventure With Scientists.

“I am all for the silicon roundabout, but it should not be a magic roundabout, in which going around it twice means not paying any tax or going round it three times, like Google, means turning a massive profit into a tax loss.”

According to Mr Elphicke, the UK tax system needs to incorporate social responsibility from large corporations, especially large multinational companies based overseas. He went on to use Google as an example, although he admitted that the problem was far more widespread. The reason that Google was used as a case in point according to Mr Elphicke, is that its figures are available to the public.

The recent censure of Google followed accusations by entrepreneur Luke Johnson, who said that by avoiding tax the company wasn’t acting in an ethical manner. However, in response Google said:

“We have an obligation to our shareholders to set up a tax efficient structure and our present structure is compliant with the tax rules in all the countries where we operate.”

Outsourcing to a low cost accountants minimises the company tax bill legitimately, ensuring all tax reliefs, expenses and allowances are claimed when appropriate.

The new cash basis for accounting will be introduced from April 2013, with a government consultation taking place to define the scheme details. This will include the possibility of businesses up to the VAT threshold being eligible, currently £73,000 but likely to be increased to £77,000 in October. According to the government, the proposals will be beneficial for up to three million businesses that will be able to calculate their tax liability and bills in much less time.

However, one accountant considers that the measure may not be a simplification in all cases. For instance, when preparing year end accounts, cash accounting for VAT may not be suitable. The selection of the threshold for VAT was also questioned, rather than the government making businesses with a turnover up to the higher rate threshold for tax eligible. The opposing view is that a business is unlikely to have employees below the VAT threshold, and therefore cash accounting may work.

Concerns may occur when a business requires accounts which are prepared on the accruals basis, perhaps to apply for a bank loan. A small business accountant would have to ensure records were in order before preparation of year end accounts.

The survey, carried out by YouGov on behalf of CardSave, shows how almost a third of shoppers have experienced difficulties making a purchase as a result of retailers only accepting cash payments. As a result of this, seven percent of shoppers have purchased less than they intended, while 22 percent have had to find a cash machine to withdraw the required amount of cash and 16 percent didn’t make a purchase and just left the shop.

Today’s consumer expects to be able to make a purchase using a credit or debit card, carrying minimal amounts of cash for convenience.

The chief executive of CardSave, Clive Kahn said:

“The days when consumers wanted to pay by cash are over. They increasingly expect to pay by card for everything-from small shops to tradespeople such as painters and window cleaners. Small businesses benefit significantly from accepting cards, winning more business, making larger sales and maintaining their competitiveness against major retailers.”

As more than half the public believe that carrying cash will become a thing of the past, future planning to accept card payments is crucial. A small business accountant will include the strategy in future plans.

Previously, HMRC would issue a reminder to an employer regarding the yearly P35 return form in September following the 19th May deadline. This could mean that four months of penalties had built up by this time. An agreement has been reached between various tax bodies and HMRC, including the Institute of Chartered Accountants in England and Wales and the Association of Taxation Technicians. HMRC will now issue a timely reminder to employers who miss the deadline within one month. The letter will inform the employer that a penalty has been incurred and what action can be taken to avoid the outstanding amount increasing.

Businesses that outsource to a small business accountancy won’t have to worry about late filing of the employer return, which prevents an unexpected and unnecessary penalty charge being incurred. For each month, or part of a month that an employer return is outstanding, HMRC charge £100 penalty. This charge will accrue interest if it isn’t paid and the return submitted.

Other improvements made by HMRC include the issue of a reminder to file letters to employers much closer to the deadline. The letters will be issued in March rather than February. Employers will also be told about the filing deadline when they set up a PAYE scheme so that a penalty is avoided.

The move to reduce Corporation Tax and cut the top rate of tax to 45p has been welcomed by business groups, saying that the move will help Small and Medium Enterprises. From April 2013, the reduction from 50p will encourage international investment. However, one of the partners at Lyceum Capital, Andrew Alywin, pointed out that although the highest rate of tax is to be reduced, stamp duty will be increased which will negate possible benefits.

The Seed Enterprise Investment Scheme is to be introduced in April 2012, with individuals who invest in seed companies which fit the criteria being allowed 50 percent tax relief. Investments in companies and individuals by Venture Capital Trusts and Enterprise Investment Scheme will no longer have a limit of £1 million, making it easier for businesses to gain access to capital. The National Loan Guarantee Scheme will also be launched by the Government, providing bank guarantees of up to £20 billion so they can borrow at a lower rate. The banks will be expected to pass on those savings to businesses by giving a rate of interest that is one percent lower.

To discover which aspect of the Budget will affect a business, consult a low cost accountants.

The first employers, including HMRC, will switch to RTI from April 2012, with other employers being phased in between April and October 2013. The Real Time Information system will also support the introduction of Universal Credits. The current arrangements for payroll systems will need to be altered in a number of cases, possibly leading to additional costs incurred.

KPMG conducted a survey of 70 businesses, finding that two thirds haven’t even considered plans to adopt the RTI system, while 18 percent have no awareness of the changes or deadlines. However, 34 percent had significant concerns about the new system. The current payroll is most likely to cause problems, according to KPMG, with over half the businesses surveyed having two PAYE schemes.

Businesses which are yet to plan for the implementation of RTI should approach their small business accountant as soon as possible for advice and a payroll solution.

The members of the group, Harry Styles, Louis Tomlinson, Zayn Malik, Liam Payne and Niall Horan have become directors of their own companies, 1D Media and PPM Music. Their earnings will go through the companies, to have a tax liability of 28 percent, the current rate of Corporation Tax. As individuals earning more than £150,000 are currently charged tax at 50 percent, the move will save 22 percent on income. By becoming directors of their own company, One Direction members could save £220,000 for each £1 million earned.

The boyband members have listed their registered office as an accountant firm in Ireland, Live Wire Business Management. Other artists who have used their accounting services include Westlife, Girls Aloud and Ronan Keating. As One Direction is becoming popular in the United States, careful management of their finances could save them a lot of money in the future.

Any business, whether a builder working as a sole trader or a boy band who become directors of a limited company, should seek advice from low cost accountants to ensure future tax bills will be minimised.

Other matters have also been raised, including reducing fuel duty, annual investment allowances, online filing now being mandatory and allowances for agricultural buildings. John Picken, the vice-president of NFUS, stated that the government would have to create balance between public sector cuts, industry taxation and encouraging growth. He said:

“Agriculture and food are two of the economy’s most promising areas of industry, with production on a strong footing and exports growing steadily. Ironically, however, while opportunities abound, it is difficult for new entrants to get started.”

He further stated that new businesses found it difficult to gain access to tenancies and land, especially when in competition against businesses which are already established. Tax breaks to encourage landowners to lease to new businesses would be effective while costing little, as the cases involved would be minimal.

Transport and the cost of fuel is an issue for all the UK, with Scottish farmers relying on transport to move goods to various areas, many of them remote.

Tax breaks can make a huge difference to any business, with a small business accountant having up to date information of relevant tax schemes and allowances, minimising your tax bill.