Newsletter #102 - Income splitting, Selling online, Protecting your website, Capital allowances...

In this week's Business121:

1. Government targets small businesses over 'income splitting'
2. How to Sell Online - A Business Guide
3. Capital Allowances - Changes for 2008/9 tax year
4. 2008/9 rates and allowances
5. The security risks of your business website

Small Business News

6. FSB offers to clear up Chancellor's CGT mess with "Entrepreneur's Relief"
7. Family business taxation proposals slammed by business group
8. Top 10 Christmas Party Tips for small businesses
9. Gap between perception and reality when starting a business
10. Agency Workers Directive - Government blocks proposals
11. Small businesses 'too dependent' on traditional forms of finance

Government targets small businesses over 'income splitting'

We've had the graduated rise in the Small Companies' tax rate, the abolition of Capital Gains Tax taper relief, uncertainty about the "settlements legislation", IR35, and a surge in new legislation over the past few years.

It would appear that the Government still hasn't finished its campaign to "encourage enterprise" in the UK just yet...

The latest threat to the wellbeing of small business people comes in the form of so-called "income splitting" legislation. Now in a consultation period, the legislation is due to go live in April 2008, and is aimed directly at family-owned small businesses.

The Government wants to prevent business owners from sharing their income with other family members in order to reduce shared tax bills. The Government's main aim is to ensure that family members receive a realistic 'market rate' for any income they receive from small businesses.

Currently, family-run businesses can distribute income as dividends to family members who are also employees in order to reduce the amount of tax each has to pay, but under new government proposals this would become illegal.

The new rules would only apply when the income is in the form of distributions from a company (dividends) or partnership profits.

Understandably, business organisations have slammed these latest proposals not only for targeting small businesses (which employ most of the people in the UK) so directly, but also for aiming to tackle one aspect of the tax system in isolation.

The MD of the Professional Contractors Group, John Brazier said, "This measure will impose a horrific burden on hundreds of thousands of small family businesses, which will make it impossible to self-assess tax bills with any certainty."

Matt Hardman, the FPB's Campaigns Manager is also scathing of the Government's action, "Yet again it is smaller firms that are being squeezed for more taxes. The Arctic Systems case should have been the end of it - the highest court in the land decided that this is perfectly legal at the moment, but the Government insists it a 'tax loophole'‚ rather than an incentive to family firms."

You can read more about "income splitting".

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How to Sell Online - A Business Guide
Setting up an online shop is simple and cheap – hence the explosion e-retailers. Because of the way people find goods using search engines such as Google, there are lots of opportunities to sell successfully online. Here are the main areas you need to look at to get your online shop up and running and your online till ringing.

Capital Allowances - Changes for 2008/9 tax year
The system of tax relief on expenditure on equipment in your business is a complex one. From April 2008 there will be changes to the current capital allowances which some businesses may be able to use to reduce business profits and therefore pay less lax.

2008/9 rates and allowances
The government has published the 2008/09 rates and allowances for income tax, national insurance contributions (NI), the state retirement pension as well as other benefits and allowances.

The security risks of your business website
Having a business website isn't just a simple matter of getting something set up and playing with the content every now and then. Because your website represents your business on the internet, that makes it a potential target for hackers. Here’s a look at the main security risks facing your business from its website, and what you can do to stay protected.

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When you're making big decisions, having the best information is vital to success. That's why Sage now offer a selection of free business guides to help you get to grips with key business issues.

Visit our website at http://snipurl.com/Sage_Free_Guides and you'll find a selection of downloadable PDFs to help you with everything from starting your own business to hiring people and surviving your financial year end. In fact, almost everything you need to make any business decision with confidence.
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SMALL BUSINESS NEWS

Small businesses should move money to interest bearing bank accounts
According to a new poll, just 4 in 10 small businesses set aside sufficient funds to cover their corporation tax liabilities. Even when businesses do save correctly, around 44% keep the money in non-interest bearing current accounts, rather than opting to transfer their corporation tax liabilities into a savings account until payment is due.

Still time for Chancellor to mend Capital Gains Tax damage
With the Chancellor under fire from all sides, he can still seize the opportunity to turn the furore over his controversial CGT reforms into a chorus of approval by boosting entrepreneurship and investment according to a leading accountant.

New bank cheque clearance rules will help small businesses
For the first time, after paying in a cheque, business owners can be sure that at the end of six working days, the money has safely cleared and they are protected from any loss if that cheque should subsequently bounce.

Bogus construction self-employment costing Treasury £5bn per year
Enormous amount of money being lost to the Treasury as a result of bogus self-employment, particularly in the construction industry.

Eldest siblings most likely to succeed as entrepreneurs
Interesting new research shows that eldest children are more likely to start up their own businesses than younger children.

** For the latest Small Business News, visit http://www.Bytestart.co.uk **

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