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Its official, in the second quarter April – June 2014 the UK gross domestic product grew by 0.8% and is now bigger than it was before the financial crisis that began six years ago.

The state of the economy always attracts politically biased commentary, but reading between the lines it would appear that we are making steady progress.

Interestingly, most of the growth in the second quarter came from the services sector. In the same period the agricultural sector fell by 0.2% with a similar reduction in the construction sector.

These internal differences in the rate of growth, or lack of it, mirror expectations for the global economy. The current conflict in Eastern Ukraine, the Gaza strip and Syria continue to destabilise economic activity.

Overall the IMF has reduced its growth forecast for the global economy from 3.7% to 3.4%.

The largest upgrade in expectations is for the UK. The IMF now considers that our economy will grow by 3.2% (previous forecast was 2.8%) during 2014.

George Osborne has commented:

"Thanks to the hard work of the British people, today we reach a major milestone in our long term economic plan. But there is still a long way to go – the 'great recession' was one of the deepest of any major economy and cost Britain six years.

"Now we owe it to hardworking taxpayers not to repeat the mistakes of the past and instead to continue with the plan that is delivering economic security and a brighter future for all."

Be interesting to see how this increase in our national economic fortunes spills down to the British people.

Management accounts, produced on a regular basis, will give you and your professional advisor the information you need to manage your business and keep your planned profit growth on-track. They also provide the basic data that you will need to minimise your tax payments and keep your business on track to produce sustainable profits. Additionally, management accounts can be used to:

Keep your bank informed

If your business is constantly pushing towards the top end of its overdraft or loan facilities, your bank manager will be much more sympathetic to your requests for more support if you can provide regular up-to-date accounts.

Plan the purchase of new plant, equipment or vehicles

The tax allowances you can claim for capital purchases can vary significantly. In particular the date on which you buy and the specification of the vehicle or equipment will need to be taken into account. Well worth taking professional tax advice before you make any significant investment in this area.

Plan how you pay yourself

The options you have available to minimise tax and National Insurance on any income you draw from your business depends on the type of business structure you have opted to work with. Self-employed traders will pay tax on their profits regardless of the amount of cash they withdraw for personal needs; directors and shareholders of Limited Companies will pay tax on the amount of salary or dividends they take. Dividends, however, do not attract a National Insurance charge. Each business offers its own opportunities to minimise state deductions and maximise take home pay. You should certainly take advice prior to your year end to make sure you choose the right strategy; waiting until after the year end may close down beneficial options.

In an effort to increase corporate transparency Companies House is to make all of its digital data available free of charge. This will make the UK the first country to establish a truly open register of business information.

As a result, it will be easier for businesses and members of the public to research and scrutinise the activities and ownership of companies and connected individuals. Last year (2013/14), customers searching the Companies House website spent £8.7 million accessing company information on the register.

The change will come into effect from the second quarter of 2015 (April – June).

Business Secretary Vince Cable said:

 “The Government firmly believes that the best way to maximise the value to the UK economy of the information which Companies House holds, is for it to be available as open data. By making its data freely available and free of charge, Companies House is making the UK a more transparent, efficient and effective place to do business.”

 It will be interesting to see how enterprising individuals and companies use the data for business development purposes.

From April 2014 a new investment relief has been created, the Social Investment Tax Relief (SITR). Investments must be in a social enterprise, which means a community interest company, a community benefit society, or a charity. The money raised must be used for the enterprise’s chosen trade or charitable purpose.

In many ways SITR shares characteristics with the SEIS (Seed Enterprise Investment Scheme) and the EIS (Enterprise Investment Scheme). There are, however, some differences in the Income Tax, Capital Gains Tax and investment limits for each scheme.

Another important distinction is that SITR is the only scheme that can apply to certain debt instruments as well as shares.

A summary of the present tax reliefs available under the three schemes are set out below:

 Income Tax

 SITR – 30%, SEIS – 50%, and EIS -30%.

 Capital Gains Tax

 All three schemes provide potential CGT free gains on the growth in investments, if achieved, provided they are held for the minimum holding period.

 Additionally, gains on the disposal of any asset can be deferred into SITR and EIS (but not SEIS) investments.

 In place of the full deferral relief, investors in SEIS can claim a 50% exemption of the gains reinvested.

 At present the maximum amount that an individual can invest in SITR investments is £1m annually. The equivalent maximum amounts for SEIS are £100,000, and EIS £1m.

 Further, the maximum amounts that the entity can raise are: SITR Euros 200,000 over 3 years (including any other de minimis state aid received), SEIS £150,000 over 3 years, and EIS £5m in any 12 month period.

 Investors considering their investment options should seek professional advice as it may not be immediately clear which would be the best scheme to support their investment needs.

There are a number of VAT schemes that benefit registered businesses. For example:

 Cash accounting

If you are eligible and the scheme is suitable for your business, then using the cash accounting scheme enables you to pay VAT when your invoice is paid and not when you issue the invoice to your customers. You are also restricted when claiming back input VAT on purchases and expenses to the date you pay the bill, not the date you receive the invoice from your supplier.

You can use cash accounting if your estimated VAT taxable turnover during the next tax year is not more than £1.35 million and you can continue to use cash accounting until your VAT taxable turnover exceeds £1.6 million.

Annual accounting

Annual accounting allows you to send in just one return a year. This offers some relief from the chore of submitting quarterly returns. Using the Annual Accounting Scheme, you make either nine interim payments at monthly intervals, or three quarterly interim payments, throughout the year. You only need to complete one return at the end of each year. At that point you must pay any outstanding amount or, if you have overpaid, you will receive a refund.

You can use the Annual Accounting Scheme if your estimated VAT taxable turnover for the coming year is not more than £1.35 million. Your VAT taxable turnover includes any standard, reduced and zero-rated sales and other VAT taxable supplies, but excludes the VAT itself, VAT-exempt supplies and capital asset sales.

Once you are using annual accounting you can continue to do so as long as your estimated VAT taxable turnover remains below £1.6 million.

You can also combine these two schemes. In this way you can have the cash flow benefits of using cash accounting and some relief from the administrative chores by submitting one return a year.

Before making a decision you will need to take advice as not all businesses will benefit.

 1 August 2014 – Due date for Corporation Tax due for the year ended 31 October 2013.

 19 August 2014 – PAYE and NIC deductions due for month ended 5 August 2014. (If you pay your tax electronically the due date is 22 August 2014.)

 19 August 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2014.

 19 August 2014 – CIS tax deducted for the month ended 5 August 2014 is payable by today.

 1 September 2014 – Due date for Corporation Tax due for the year ended 30 November 2013.

 19 September 2014 – PAYE and NIC deductions due for month ended 5 September 2014. (If you pay your tax electronically the due date is 22 September 2014.)

 19 September 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2014.

 19 September 2014 – CIS tax deducted for the month ended 5 September 2014 is payable by today.

Inheritance Tax (IHT) is due when a person’s estate (their property and possessions) is worth more than £325,000 when they die. This is called the ‘IHT threshold’.

The current rate of IHT is 40% on anything above the threshold. The rate may be reduced to 36% if more than 10% of the estate is left to charity.

Who pays Inheritance Tax

Usually the executor or personal representative for the person who has died pays IHT using the funds from the estate.

Trustees are responsible for paying IHT on trusts, which are a way of looking after assets (money, investments, land or buildings) for people. A trustee is a person who looks after the trust.

If you’ve got an inheritance or a gift from someone who has died you only owe IHT if their estate is more than £325,000 and either:

• it says in the will that you should pay Inheritance Tax
• the deceased’s estate can’t pay it

There are certain reliefs from IHT. These include estates that include certain business assets or agricultural property.

It is also possible to reduce any IHT due on death by reorganising your estate while you are alive. This can be done with the use of trusts or by gifting assets. As you can imagine there are complicated rules that set out how these strategies can be used. Additionally, any assets left to your spouse or civil partner (providing they are UK domiciled) are exempt from IHT.

Ever wondered how you can register a trade mark that makes your brand recognisable, for example a logo or a sound?

Registering a trade mark lets you stop other people from using it without your permission. A trade mark registration lasts 10 years and is only valid in the country of registration. You can renew it every 10 years. Company names and domain names aren’t automatically trade marks. Company names are registered with Companies House (so no-one else can register a company with the same name at the same registry). Domain names for internet use are registered with a domain registrar and are similarly protected.

If you want to protect your brand name or image you will have to go through a different registration process.

Register a trade mark in the UK

1. Firstly, you will need to check that your brand qualifies as a trade mark – you can’t change it after you’ve submitted an application.
2. Find out if an identical or similar trade mark already exists – it’s your responsibility to do a thorough search.
3. If a similar mark does not exist you can proceed to register your trade mark.
4. The Intellectual Property Office (IPO) checks your application.
5. The IPO makes your application public to give other people the chance to oppose it.
6. The IPO accepts or refuses your trade mark application – they’ll send you a certificate if they accept it.

If you are establishing a recognisable brand image the last thing you want is a competitor to capitalise on your hard work by plagiarising your trade mark. The best way to protect your investment is to register your trade mark. The IPO website explains how this can be done or you can employ a registration firm to do the form filling for you. https://www.ipo.gov.uk/types/tm/t-applying/t-apply.htm

Last week we published details of who is, and who is not, entitled to payment at National Minimum Wage rates. This week we have listed the current rates of NMW that apply.

There are currently three aged based national minimum wage rates and an apprentice rate, which are usually updated in October each year. The rates that apply from 1 October 2013 are as follows:

• for workers aged 21 years or more: £6.31 per hour
• for workers aged 18 to 20 inclusive: £5.03 per hour
• for workers aged under 18 (but above compulsory school age): £3.72 per hour
• for apprentices aged under 19: £2.68 per hour
• for apprentices aged 19 and over, but in the first year of their apprenticeship: £2.68 per hour

Apprentices aged 19 or over who have completed one year of their apprenticeship are entitled to receive the national minimum wage rate applicable to their age.

Note for employers:

Don’t forget that it’s a criminal offence not to pay someone the National Minimum Wage or to falsify payment records. Employers who discover they’ve paid a worker below the minimum wage must pay any arrears immediately.

HMRC officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers, following a worker’s complaint to them. If HMRC finds that an employer hasn’t been paying the correct rates, any arrears have to be paid back immediately. There will also be a penalty and offenders might be named by the government.

It’s the employer’s responsibility to keep records proving that they are paying the minimum wage – most employers use their payroll records as proof. All records have to be kept for 3 years.

 UK businesses should be aware that the Government are consulting on the possible release of data held by public departments, particularly, HMRC. We have reproduced extracts from a recent press release that sets out the scope of the present consultation.

“The data held by the public sector is among the most useful and valuable anywhere. This is why the UK Government is at the forefront in making a step change in the availability of data held by the public sector, with the potential to deliver significant public benefits.

… some of the customs data that HMRC holds has the potential to be used in ways which could generate real public benefits if made more widely available, without compromising the core principle of taxpayer confidentiality. In particular, the ability for HMRC to share and publish certain export data would enable HMRC to more effectively support and contribute to public and private sector initiatives to help UK exporters compete and prosper in the global market place.

This consultation proposes the release by HMRC of a limited set of exporter data alongside similar data that HMRC already makes available in respect of importers. Release of some exporter data would provide a number of potential benefits such as:

• greater visibility of UK exporters to new customers in the global market place;
• assisting developers to create exporter registers and online shop fronts to advertise and showcase UK exporters and their products;
• enabling those who provide export services to more easily identify their customers;
• helping importers to locate alternative UK suppliers.

There are likely to be further positive uses which emerge only once the data is available.”