With the rising cost of car fuel, any way of saving on motoring costs is welcome. One way of doing this is to make use of the generous tax reliefs available on environmentally friendly cars. Fortunately, there is a growing range of cars with carbon dioxide (CO2) emissions low enough to qualify for tax benefits.

A new way of charging penalties for incorrect tax returns is designed to encourage taxpayers to take care with their tax affairs and comply with all their obligations. HM Revenue & Customs (HMRC) can impose a financial penalty if an error in a tax return or other tax document results in you paying less tax than you should or means you pay the tax in a later period. What is new is that taxpayers will no longer be liable to a financial penalty if they have taken ‘reasonable care’ to get their tax right, but have nevertheless made a mistake.

The government has postponed new laws that would prevent people reducing their tax liability by shifting business income to another person such as a nonworking spouse or civil partner. This may provide some valuable tax planning opportunities.

Should you buy or lease the major items of equipment and vehicles you will need for your business? Both have advantages and disadvantages. This year’s reform of capital allowances, which give tax relief for equipment purchases, may affect your decision.

You will soon be able to correct errors of up to £10,000 in your VAT returns, and in some cases more, without making a specific disclosure. It is tempting to sweep up mistakes without drawing attention to them, but doing so could increase any subsequent penalties and interest charged for the error.

Companies that carry out research and development (R&D) may be entitled to enhanced tax relief.

A quarter of Britain’s small and medium sized firms regard the state of the economy as their biggest current concern, and nearly a third describe the present situation as a fully blown recession, according to a new poll by the Orange SMS Business Jury.