By Katie Business News 0 Comments

£1 Million annual investment allowance is here to stay

Overview of the Annual Investment Allowance

The £1 Million annual investment allowance is here to stay. You can claim capital allowances when you buy assets that you keep to use in your business, for example:

  • equipment
  • machinery
  • business vehicles, for example vans, lorries or cars

These are known as ‘plant and machinery’.

You can deduct some or all of the value of the item from your profits before you pay tax.

What are the changes to the Annual Investment Allowance?

The Government will continue to support business capital investment by keeping the level of the 100% Annual Investment Allowance (AIA) at £1 million.

This deduction is available to unincorporated businesses as well as limited companies if they invest in new or second-hand equipment.

We are, however, expecting the temporary 130% ‘super-deduction’ for company expenditure on qualifying new equipment to come to an end on 31 March 2023.

Need more information?

Do you need further guidance on the Annual Investment Allowance?We offer a wide range of services which are unique to your business! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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    By Katie Business News • Tax Advice • Tax News 0 Comments

    Off-payroll working lives to see another day

    The 23 September Fiscal Statement included the unexpected news that the “off-payroll working” (OPW) rules would be scrapped from 6 April 2023.

    These rules were introduced for public sector employers from 6 April 2017 and then extended to large and medium-sized private-sector organisations from 6 April 2021.

    It has now been announced that the OPW rules will continue to apply. Affected organisations will continue to be required to determine whether or not a worker providing services via their personal service company (PSC) would be classed as an employee if they were working directly for the organisation. If so, then PAYE and NICs need to be deducted from the supplier payments made to the PSC. Employers’ NICs also need to be paid.

    Where a PSC supplies services to a small private-sector organization, the ‘IR35’ rules also continue to apply. These effectively require the PSC, rather than the service-acquiring organisation, to ensure compliance.

    Need more information?

    Do you need further guidance on the off-payroll working rules?

    We offer a wide range of services which are unique to your business.! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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      By Katie Business News • Tax News 0 Comments

      National Insurance Contributions rate change goes ahead

      The legislation to abolish the 1.25 percentage point increase in the rate of National Insurance Contributions (NICs) paid by workers, employers and the self-employed was already in progress when the U-turns were being made.

      The reduction therefore continues to go ahead and the rate of NICs on salary payments made on or after 6 November 2022 reduces to 12% for employees on earnings between £1,048 and £4,189 a month and 2% on earnings thereafter. Employer contributions will reduce to 13.8% on earnings in excess of £758 per month from 6 November 2022.

      As National Insurance Contributions for company directors and the self-employed is based on annual earnings and profits, the rates for 2022/23 are now to be based on a proportionate or average rates.

      The rate of NICs for company directors will be set at 12.73% on earnings between £11,908 and £50,270 and 2.73% on earnings thereafter. Class 4 NICs payable by self-employed individuals will be 9.73% on profits between £11,908 and £50,270 and 2.73% on thereafter.

      Employers will need to make sure that they update their payroll software so that the correct amount of NICs are paid on salary payments made after 5 November 2022.

      Need more information?

      We offer a wide range of services which are unique to your businesses who are just getting going! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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        By Katie Business News • Tax News 0 Comments

        Government U-turns to steady the financial markets

        Government U-turns to steady the financial markets

        In his Fiscal Statement delivered on 23 September 2022, the previous Chancellor, Kwasi Kwarteng, introduced a Growth Plan including the tax cuts promised by Liz Truss in her Conservative Party leader campaign.

        However, the tax cuts were broader than expected and were being funded by increased borrowing. Furthermore, the plan was not accompanied by a report from the Office of Budget Responsibility (OBR), who normally scrutinise the Governments fiscal plans.

        The combined effect of this spooked the financial markets resulting in U-turns, a change in Chancellor, and then, on 17 October 2022, a reversal of nearly all of the earlier fiscal statement measures.

        Days later, the prime minister resigned, and we have since seen Rishi Sunak become leader of the Conservative Party.

        To say this has been confusing is an understatement!

        What can we expect next. Will there be more Government U-turns?

        In particular, we are now expecting the new Chancellor, Jeremy Hunt, to deliver an Autumn Statement and OBR report on 17 November 2022 (instead of 31 October 2022).

        Need more information?

        Are you confused by all of the Government U-turns? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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          By Katie Business News • Tax News 0 Comments

          Chancellor scraps planned cut to 45% income tax rate

          What and why are there changes? 

          The Chancellor has confirmed that the government will not proceed with abolishing the 45% income tax rate as first announced in the fiscal event of 23 September 2022. There has been a lot of changes since then.

          Kwasi Kwarteng has branded the policy to scrap the additional rate of income tax ‘a distraction’ from the government’s wider Growth Plan, backtracking after facing mounting pressure within his own party and a week of volatility in the markets.

          The abolition of the 45p rate was announced as part of a government package of measures that sought to reward enterprise and grow the UK economy. However, this particular policy, which would cut income tax for individuals earning over £150,000 from 6 April 2023, has proven controversial.

          It is assumed therefore that the additional rate for dividends in 2023/24 will be 38.1%, following the 1.25 percentage point reduction in the other tax rates for dividends from 6 April 2023 announced on 23 September.

          As the trust income rate usually mirrors the highest rate of income tax, it is anticipated that the trust income tax rate will also remain at 45%.

          No other changes to the government’s announced measures have been indicated.

          What Will Change, What Will Not

          The additional rate of income tax currently applies at a rate of 45% for income over £150,000.  Although it was originally announced in the Growth Plan that this would be abolished from 6 April 2023, this will no longer be going ahead.

          The Chancellor also announced in the Growth Plan that the basic rate of income tax would be reduced from 20% to 19% from 6 April 2023.  It is understood that this change will still be going ahead, as is the repeal of the Health and Social Care Levy.

          The government has promised further detail regarding its wider economic plans in the upcoming fiscal event on 23 November 2022.

          Need more information?

          Do you need further guidance on the 45% income tax rate? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

          Our fantastic team at A&C Chartered Accountants are here to help.

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            By Katie Business News • Tax News 0 Comments

            £1 million Annual Investment Allowance made permanent

            The £1 million Annual Investment Allowance has now been made permanent.

            An overview

            You can claim capital allowances when you buy assets that you keep to use in your business, for example:

            • equipment
            • machinery
            • business vehicles, for example vans, lorries or cars

            Annual investment allowance

            You can deduct the full value of an item that qualifies for annual investment allowance (AIA) from your profits before tax.

            If you sell the item after claiming AIA you may need to pay tax.

            What you can claim on

            You can claim AIA on most plant and machinery up to the AIA amount.

            What you cannot claim on

            You cannot claim AIA on:

            • business cars
            • items you owned for another reason before you started using them in your business
            • items given to you or your business

            Claim writing down allowances instead.

            The changes to the £1 million Annual Investment Allowance 

            Businesses investing in plant and machinery will welcome the decision to make the £1 million Annual Investment Allowance  permanent. This has been extended several times and was scheduled to revert to just £200,000 from April 2023. Unlike the super-deduction, the Annual Investment Allowance is available to unincorporated businesses as well as limited companies and the equipment does not have to be new.

            Need more information?

            Do you need further guidance on the £1 million Annual Investment Allowance? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

            Our fantastic team at A&C Chartered Accountants are here to help.

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              By Katie Business News • Tax News 0 Comments

              Diary of main tax events October/November 2022

              Below is our diary of main tax events October/November 2022. If you need any more guidance or assistance with these our team are on hand to help.

              Date What’s Due
              1/10 Corporation tax for year to 31/12/21, unless quarterly instalments apply
              5/10 Deadline for notifying HMRC of chargeability for 2021/22 if not within Self-Assessment and receive income or gains on which tax is due
              19/10 PAYE & NIC deductions, and CIS return and tax, for month to 5/10/22 (due 22/10 if you pay electronically)
              1/11 Corporation tax for year to 31/01/2022, unless quarterly instalments apply
              6/11 Ensure PAYE software is updated for the changes in NIC rates, as a result of scrapping the Health and Social Care Levy
              19/11 PAYE & NIC deductions, and CIS return and tax, for month to 5/11/22 (due 22/11 if you pay electronically)

              Need more information?

              We are always up-to-date with tax events and our diary of tax events October/November 2022, are presented to our clients to ensure we never miss a deadline. We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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                By Katie Business News • Tax News 0 Comments

                Government changes to the Company Share Option Plan scheme

                The Government has announced two changes to the tax advantaged Company Share Option Plan scheme. But what are all the Tax and Employee Share Schemes?

                An overview

                If your employer offers you company shares, you could get tax advantages, like not paying Income Tax or National Insurance on their value.

                Tax advantages only apply if the shares are offered through the following schemes:

                What are the changes to the Company Share Option Plan scheme?

                There is currently a maximum employee share option limit based on market value at grant of £30,000. This will be increased to £60,000 for any new options granted from 6 April 2023. Existing options are unaffected by this change.

                There will also be increased flexibility for share options granted from 6 April 2023 due to a removal of conditions around the class of shares used.

                The Company Share Option Plan scheme is available to most UK trading companies as, unlike the Enterprise Management Incentives (EMI) share scheme, there is no size limit, and no restrictions over the nature of the business undertaken.

                Need more information?

                Do you need further guidance on the Company Share Option Plan scheme?

                We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

                Our fantastic team at A&C Chartered Accountants are here to help.

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                  By Katie Business News • Tax News 0 Comments

                  IR35 U-turn announcement

                  IR35 U-turn announcement

                  The much criticised “off-payroll” working rules were introduced for the public sector from 6 April 2017 and then extended to large and medium-sized private-sector organisations from 6 April 2021.

                  The rules replaced the ‘IR35’ rules where workers supplied their services to these organisations via a personal service company (PSC) or other intermediary. The effect was to transfer the, not insignificant, tax compliance burden from the PSC to the service-acquiring organisation.

                  What will the new IR35 U-turn look like?

                  The off-payrolling rules will now be removed from 6 April 2023 and the IR35 compliance burden will revert to resting with the PSC itself. This means the PSC must calculate and pay PAYE and NICs if the worker (often the Director) would be classed as an employee if they were working directly for the service-acquiring organisation. This aligns with the requirements in cases where a PSC supplies services to a small private-sector organisation.

                  Need more information?

                  Do you need further guidance on the IR35 U-turn announcement?

                  We offer a wide range of services which are unique to your business and we work with many contractors. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

                  Our fantastic team at A&C Chartered Accountants are here to help.

                  Contact us below

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