Small family-owned businesses to be penalised this April

The Government is planning to launch a new Family Business Tax in this year’s Budget, which it claims is intended to tackle “income shifting”.

Please take a few moments to tell them why they should reconsider their plans, and forward this blog post to anyone you think might also be concerned at the new tax rules.

Remember - if you own a business jointly with a family member or anyone else, this will affect you: don’t miss your opportunity to do something about it.

The new laws, due to come into force from April 6th 2008, will:

• mean a significant tax rise for jointly-owned businesses where profits are distributed equally between a husband and wife (or other family members / civil partners) and the recipients make differing contributions to the business - in some cases, even business owners who are not related to each other will be hit

• deny married couples who are equally exposed to the risks of running a business the right to an equal share in the rewards if the business is successful

• penalise people who followed the Government’s long-standing advice to set up businesses jointly

• make it impossible for businesses to self-assess their tax bills, and leave them perpetually looking over their shoulder in fear of an aggressive investigation by HMRC, in which they will have to prove that they have done nothing wrong

• be totally inconsistent with divorce law, as couples will be entitled to equal shares in the value of the business in a divorce, but not to equal shares in the profits while they are married

• be totally inconsistent with capital gains tax rules, as couples will be entitled to equal shares in the proceeds from business when it is sold, but not to equal shares in the profits when they own it

• reverse the independent taxation of spouses in respect of couples who own businesses, even though the Treasury’s consultation paper does not explain what has changed that would justify this reversal

• impose crushing burdens on small businesses who will have to record every contribution made to the business, simply to defend themselves against an attack from the Revenue - that time could be better used generating wealth for the economy

• fail to recognise that dividends or other profit distributions are a reward for taking risk and are not simply income comparable to a salary.

Take Action

Please sign the petition on the 10 Downing street website:
http://petitions.pm.gov.uk/IncomeShifting1

The petition asks the Prime Minister to abandon the current plans to introduce a new “income shifting” tax on family businesses.

Please also consider writing to your MP on the subject and asking them to support Early Day Motion 714 against the proposals. Advice on how best to go about it is available from the PCG here:
http://www.pcg.org.uk/cms/index.php?option=com_docman&task=doc_download&gid=367

There is further information about the “income shifting” Family Business Tax at www.familybusinesstax.co.uk.

The above information is taken from the Professional Contractors Group (PCG) membership mailing, and is reproduced with permission.

Windows Vista SP1: Ready, but not available yet?

Microsoft yesterday announced that Vista Service Pack 1 was RTM’ed (Release to Manufacturing), but there it will not be available until mid-March.

The release of Vista Service Pack 1 coincides with the release of Windows Server 2008, which as it happens, shares 95% of the same code base with Vista.

Dissapointing Vista sales figures in 2007 indicated that there would be a late 2007 release date for Vista’s first Service Pack. Vista SP1 will resolve many of the common issues reported by customers during Vista’s public first year, including security, performance and API improvements as well as the usual par-for-course plethora of slipstreamed and updated drivers to support third party hardware.  Microsoft will be hopeful that the large corporations who normally wait until the first service pack before considering putting a new operating system into production will now consider a migration to Windows Vista SP1. A further interesting change is in response to anti-competitive charges made at Microsoft from Google to improve access to the operating system for search.  The latest code changes made up to the end of December required regression testing through January and after a substantial beta test period, the Service Pack is now finished.

It may be a Microsoft first, the release of a product that we won’t be able to get hold of for a least a month, but Microsoft’s plan is to release Service Pack 1 for download in mid-March and then to follow it up in April with a push out to all customers via Automatic Update.

With the substantial improvements in performance and reliability; it’s a shame that we don’t have the RTM Service Pack available to us all yet. It is not clear what Microsoft are waiting for. In the meantime, I’ll be keeping a close eye on the news and I’ll let you know when Service Pack 1 is available!

Windows Server 2008 is now available

Last month I posted a popular article on building your own small and energy efficient home or small office server. Late last night (UK time), Microsoft released the next generation of their popular “Windows Server” platform.

Windows Server 2008 makes massive improvements on the architecture of Windows Server 2003, and shares 95% of the code base with Microsoft’s desktop product, Vista.

Windows Server 2008. Available Now.

Windows Server 2008 inherently supports virtualisation. Virtualisation technology lets you run multiple “virtual” operating system platforms on a single host, much in the same way that VMWare and Virtual PC already do. Only now, Virtualisation is built in as part of the platform. The possibilities are exciting - it will be possible to run multiple “servers” and “computers” from a single server machine. It is also possible to split the tasks of a server into several instances - for example one virtual server OS for running Exchange, and another for running a web server and another for running a local database and file server.

This is good news for Internet web hosts too. It will be easier to set up and maintain a shared hosting service using secure virtual machines running integrated with the host server OS.

Windows Server 2008 is Microsoft’s preferred server partner for Vista workstations. Although Vista will work with other server platforms, Microsoft claim that Server 2008 is much faster with Vista.

Windows Server 2008 also supports Windows Media Connect. This means that if you wanted to run Windows Home Server and Microsoft Exchange, you now can. Either run Windows Home Server virtualised or abandon Windows Home Server completely in favour of Windows Server 2008. Note that Windows Home Server is built on Windows Server 2003.

Getting Server 2008

It is likely that hardware channel partners such as Dell and HP will start to ship Server 2008 with their Windows Server offerings in the very near future. It is also likely that they will continue to ship Windows Server 2003 (particularly for Small Businesses) for at least the remainder of 2008.

If you can’t wait to order Server 2008 with your new server and you have a valid MSDN Subscription, you can obtain Server 2008 from MSDN Subscriber Downloads:

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I don’t know when Server 2008 will hit the software reseller channels as a standalone software purchase. I imagine it would not be far off.

Server 2008 can be run as an upgrade from Server 2003, but bear in mind that this is a tricky path which might not be possible depending on which release candidate, service pack and server software that you have installed.

What about Small Business Server?

In addition to the usual “Standard” and “Enterprise” versions, Windows Server 2003 shipped in several additional flavours. One of which we have found incredibly popular, “Small Business Server 2003″. It is Windows Server 2003 is based on the “Standard” version and bundled with pre-installed Exchange, Fax Server and easy to use Server Tools. Microsoft have said that there will be a “Small Business Server 2008″, due for release by Q3 of 2008. We hope that this time there won’t be so much confusion

What about Vista SP1?

Vista SP1 was RTM today (Release To Manufacturing). However it won’t be available to the public (or even MSDN Subscribers) until mid-March. Usually when Microsoft releases a product to RTM it is almost immediately available (or within 24 hours at the latest). Microsoft plan to push Vista SP1 out to customers desktops (if customers have elected to receive these updates) automatically by Windows Update in April.

I am planning to migrate all server platforms (SQL Server, Exchange, Web Server and File Server) from Server 2003 to Server 2008. I will probably blog about this later

If you have any comments or questions, feel free to ask them; the comment box below.

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