The Budget announced a welcome break for new businesses outside the South East, that of a National Insurance Holiday giving new companies the chance to take on employees, the first 10 of which will not have employers NIC due for the first 12 months, giving a potential saving of £50,000 BUT and it is a big but for new businesses. The Budget statements have been released and alluded to the fact that new businesses from 22 June 2010 would potentially qualify but the scheme itself was unlikely to be ready until September – so immediate confusion caused – qualifying companies from 22 June but scheme not ready until September so many new businesses are thinking that the NIC holiday will apply to them if they set up business after 22 June – yes and no – not all companies will qualify (exclusions on fishing, agriculture and mining already mentioned) but the NIC holiday CAN’T start until the scheme officially starts, so even if you set up a company (and are trading) in the period 22 June to official scheme start up you CAN’T apply the NIC holiday, you need to operate the “normal” NIC rules and this may catch out a lot of new businesses. The NIC holiday will start when the scheme officially starts whether it be September of another future date. It is important that companies do not fall foul of this rule as penalties are drachonian. If you are in any doubt contact the employment tax expert

HMRC are planning a massive increase in the take from: tax investigations, employer compliance review, tax enquiries, employment status reviews and CIS reviews, so you have been warned

HMRC plans to seize an extra £4bn in 2010/11 through more aggressive tax investigation work and tougher powers. To achieve such a high yield, HMRC will need to widen the scope of its enquiry work to include marginal cases. This increases the risk innocent businesses are caught up in a massive fishing exercise

Tax investigations can be hugely costly to taxpayers in respect of management time, stress and advisory fees, while much of the tax HMRC claws in through investigations is not tax that has been deliberately evaded, in many cases it is the result of HMRC reinterpreting tax law and this brings in the well known scenario of my pockets are deeper than yours – otherwise known as if an individual or business can’t afford to challenge HMRC’s decision through the tribunals and court system, then HMRC wins.

So you have been warned, take specialist advice before it happens to you