In the UK, the standard rate of VAT (T1) is to change to 20% from 4 January 2011.  As with the changes over the previous two years, Fusion Accounts users will need to do nothing!

The new VAT rate will be available for your financial transactions from 7 December 2010 for any transactions that you are preparing now that require the new rate.

From 4 January, unless you indicate otherwise, all products having a 17.5% rate will be changed to a 20% rate as will any other defaults using this rate.

For more information on the rate change please refer to HMRC.

The new UK coalition Government has, as expected, announced huge public spending cuts aimed at reducing the country’s massive debt. Did you know that the UK has one of the biggest budget deficits in Europe? The cuts will total £6.24bn in this financial year alone and we thought it would be interesting to gauge the differing opinions about the impact they might have on small businesses.

Some organisations foresee strong private-sector-led recovery

Organisations such as the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC), the Federation of Small Businesses (FSB) and the British Retail Consortium (BRC) have cautiously welcomed the Government’s actions. They believe that reducing the budget deficit will help to rebuild confidence in the economy and kick-start recovery.

Richard Lambert, director general of the CBI said, “"We have been calling for a strong focus on deficit reduction to underpin the UK's fiscal credibility and position us for a strong private-sector-led recovery”.

What about help for small businesses?

To give economic recovery a boost, the Government has committed to:More...

HMRC have issued detailed guidelines on penalties for late payment of PAYE deductions due for a period starting on or after 6 April 2010 for:

• monthly or quarterly PAYE (Pay As You Earn)
• student loan deductions
• Construction Industry Scheme (CIS) payments
• Class 1 National Insurance contributions (NICs)
• annual payments of employers' Class 1A NICs
• annual PAYE Settlement Agreements (PSA) payments
• PAYE determinations or charges raised

These penalties will be up to 4% of the total amount that is late for a given tax year.

Full details can be found on HMRC’s web site.