Dear Reader

As small businesses in the United States attempt to make sense of what the healthcare reforms recently passed by the House of Representatives will mean to them, their counterparts in the UK are busy digesting the likely impact of the measures announced in UK Chancellor Alistair Darling’s Budget on Wednesday.

Among the key areas of interest for the UK’s SMEs, micro-businesses, and self-employed entrepreneurs were the agreement reached with Royal Bank of Scotland and Lloyds TSB to increase financing to small businesses (especially important in view of the difficulties that some such businesses have been experiencing in this regard), the creation of an 'UK Finance for Growth' investment corporation, which will provide assistance to small businesses in terms of negotiating the red tape maze, in addition to administering the GBP4bn in other support available to UK businesses (such as a new Growth Capital Fund, which will have a “specific role in providing fast-growing companies with the private capital they need”, according to Darling), a 15% increase in the number of government contracts awarded to SMEs, and the extension of the 'time to pay' scheme for the whole of the next Parliament.

The Chancellor also announced that business rates would be cut for one year from October 2010, that the annual investment allowance would be doubled to GBP100,000, and that entrepreneurs’ relief for Capital Gains Tax would be doubled, to a GBP2m lifetime threshold, under which the lower rate of 10% would be charged.

In the US, meanwhile, although penalty provisions for failing to provide adequate healthcare coverage to employees will only kick in under the Affordable Health Care for Americans Act when a business has more than 50 employees, various other aspects of the reforms are likely, in the view of organisations such as the National Federation of Independent Businesses to impose an additional burden on small businesses.

Of particular concern, according to NFIB are “…the small business insurance tax, (and) the employer mandate targeting the construction industry”. Not to mention the increased paperwork burden!

However, it’s not all bad news for smaller businesses in the US, which, from 2014, will be able to participate in state-run Small Business Health Options Programs (or 'SHOP Exchanges'), buying insurance coverage as a group in order to take advantage of economies of scale.

Tax credits will also be available for qualifying small businesses, and until such exchanges are in place, tax credits are to be available at 35% of insurance costs for businesses with fewer than 10 full time employees (earning less than USD25,000 annually). Slightly larger enterprises (with between 11 and 25 employees, earning an average yearly wage of USD50,000) will also be eligible for credits, albeit at a reduced rate.

Here in PBTG Towers, meanwhile, the news is also somewhat mixed. Having been – temporarily - released from the broom cupboard to provide the hardworking Lowtax staffers with tea, biscuits and hard liquor as they attempt to hack their way through the thickets of the UK budget, progress nevertheless continues on the PBTG short and long profiles, with a further crop of European countries (Poland, Latvia, Lithuania, Bulgaria, and the Czech Republic), and two further long profiles (Switzerland and Dubai) currently underway.

Now, if you’ll excuse me, however, I must return to my tea-making duties, or things may turn nasty here…

Caroline

(PBTG Ed./Tea-Maker In Chief)

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Re-Employment Legislation Takes Effect In Singapore

Wednesday 25/1/2012

The implementation of new rules and support for SMEs and other businesses in Singapore to re-employ older workers, in the face of a rapidly ageing population took effect earlier this month.

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Hong Kong Start-Ups Reached Record Level In 2011

Wednesday 18/1/2012

Figures published by the Hong Kong Companies Registry earlier this month have revealed that the number of start-ups registering in 2011 showed an increase of 6.31% last year on 2010 figures, with a record 148,329 registering over the course of the year.

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ISME Slams Ongoing Jobs Initiative Delay

Wednesday 11/1/2012

The Irish Small and Medium Enterprises Association (ISME) has this month slammed the Republic's government once again for delays in implementing the jobs initiative that was a key post-election pledge.

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UK Small Businesses Concerned By HMRC Spot Check Plans

Wednesday 4/1/2012

Concern has been expressed regarding a ramping up of HM Revenue and Customs' Business Record Checks programme set to take place in April, with many small businesses fearing that the fine which can be imposed if they fail to provide adequate records to support their tax returns may push them into insolvency.

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Latest Comments

Expat Brit

Hi,

I am facing a dilemma and would like to invite any reader to advise me.

I am a Brit who has lived outside UK since 1993- initially in Belgium (5 years) & subsequently in 4 African countries. After a year outside UK, the UK Inland Revenue confirmed my status as ‘non-resident’ for tax purposes and as I have had no income in UK, I have not completed a UK tax return for many years. I visit UK very rarely, normally for one or two weeks per year.

In May 2011, I was made redundent by my employers, who were downsizing. This coincided with a move to retire in the Netherlands, where I now have official residency (my wife is Dutch). I thought that, at 63 years of age, I would be unlikely to find suitable employment; in fact, I have not tried hard and had resigned myself to permanent (but slightly premature) retirement.

However, to my surprise, I have recently been approached (through a mutual acquaintance) by a company that wishes to use my skills on a project in the Isle of Man. The role, if & when confirmed, would see me working for about 10 days a month in Isle of Man, with about 5-7 additional days per month, working from home. Contract will be for about two years. The firm has asked me to confirm if I would prefer to be paid (and therefore be taxed) in Netherlands or Isle of Man, the idea being that I create a self-employment entity for this employment. I have no data on which to base a response. Given Isle of Man's traditional ‘low tax ‘environment, are there any benefits to declaring an income in IOM? Are there any Isle of Man residency implications? Netherlands takes a tax cut on total world wide income, and, as I have never had any contact with the Dutch authorities, I am reluctant to start such a relationship now. Do I have to declare income in both countries, with a breakdown prorata to the time spent in each jurisdiction? Should I declare income to UK Inland revenue?

If anyone has pertinent advice on these points, I’d be grateful to hear them.

TJM @ Eindhoven, NL

T. Dog

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Purchasing investment-link insurance for my staff

Would that count as income tax to my staff? And would that count as expense to my company?Michael

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Irish crisis - effects on small business?

Hi all,

Just wondering if anyone 'on the ground', as it were, might be reading and able to help me...I was considering relocating my hairdressing business from the UK to Ireland before the economy started to go properly belly-up...now, not so much.

Are things as bad as they seem over there, or is it being over-hyped by the media? And is the government still keen to support small business people? Cos if not, I'll look elsewhere...

Thanks,Kate

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Jersey vs. Malta??

Hi, I live in South Africa, and along with 2 business partners (one in South Africa and one in Ireland - all South African citizens though) are setting up a company that designs Smart phone applications. As they will be sold on the various platforms (none of which operate out of South Africa)we have to list our company as operating out of Ireland anyway. As such, we have decided to set up our company in the best tax country and are wanting info on whether Jersey or Malta is best? If anyone has some inside info we would really appreciate it!! Thanks!Mary

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Living in France contracting to Australian company

I am moving full time to France in Jan 2012 where I will be working as a freelance contract engineer to a number of Australian based companies. It is my choice to move to France not a work requirement. I will be renting my house out in Austrlalia and renting a house while I am in France. I hold both EU & Austrlain citizenshiip. I am married with 2 young children. Approx total family income $100k AUD.
Do I pay tax in France or Australia or both ?
Any help or guidance would be much appreciated.France move

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