By Katie Business News 0 Comments

New investment zones within the UK

New investment zones within the UK

The Government is in discussion with 38 local authority areas in England to set up ‘Investment Zones’ in specific sites within their area.

What will the government offer to the new investment zones?

Each of the Investment Zones (IZ) will offer generous, targeted and time limited tax cuts for businesses along with liberalised planning rules to release more land for housing and commercial development.

These will be hubs for growth, encouraging investment in new shopping centres, restaurants, apartments and offices, and creating thriving new communities. The tax incentives under consideration are:

  1. 100% Business Rates Relief– on newly occupied or expanded business premises in IZs.
  2. 100% first year allowance – for companies with qualifying expenditure on assets for use in IZs
  3. Enhanced Structures and Buildings Allowance– to allow businesses to reduce their taxable profits by 20% of the cost of qualifying non-residential investment per year, relieving 100% of their cost of investment over 5 years
  4. Zero-rate employer NIC – on salaries of any new employee working in the IZ for at least 60% of their time, on earnings up to £50,270 per year, with Employer NICs being charged at the usual rate above this level.
  5. Full Stamp Duty Land Tax (SDLT) relief – for land and buildings bought for use or development for commercial purposes, and for purchases of land or buildings for residential developers.

A list of the 38 local authorities taking part in discussions can be viewed in this factsheet – www.gov.uk/government/publications/the-growth-plan-2022-factsheet-on-investment-zones.

Encouraging investment in unlisted companies 

The new Chancellor has given his support to the tax-advantaged Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) and said he sees the value of extending them in the future.

The vision is for the UK to be an entrepreneurial, share-owning democracy.

In relation to the Seed Enterprise Investment Scheme (SEIS), the Treasury have confirmed that they are widening the criteria and will be allowing companies to raise £250,000 under the scheme, 66% more funding than previously.

The SEIS currently provides unconnected investors with an income tax deduction of 50% of the amount invested, up to £100,000 a year. There is also generous capital gains tax relief for the investor.

Need more information?

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

    Dividend rates reduced from 2023/24

    What is a dividend?

    Many director/shareholders of family companies pay themselves a small salary and take the rest of their “pay” in a dividend. With dividends being free of NIC, this would have allowed them to avoid the extra 1.25% NIC charge when it was originally introduced.

    What will change?

    Consequently, the Government added 1.25% to the dividend income tax rates for 2022/23.

    Although the NIC increase is being abolished from 6 November 2022, the additional 1.25% will continue to be applied to dividends paid throughout 2022/23.

    From 2023/24 the dividend income tax rate will however revert to 7.5% where dividends fall within an individual’s basic rate band and 32.5% for higher rate taxpayers. Note that the first £2,000 of dividends continue to be taxed at 0%.

    Need more information?

    Do you need further support with paying a dividend? 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

      Health and Social Care Levy now scrapped

      What was the Health and Social Care Levy?

      It was on 7 September 2021 that we first heard about a new 1.25% Health and Social Care Levy, imposed on employers, employees and the self-employed, coming in from 2023/24. Further, this was to be effectively accelerated into 2022/23 by a 1.25 percentage point rise in National Insurance contributions (NICs). As expected, and despite changes to thresholds earlier this year, the increased NIC rates have resulted in a reduction in take home pay for many individuals.

      What will change about the Health and Social Care Levy?

      The Health and Social Care Levy has now been abolished and will not come in next April. Further, the Government is removing the associated 1.25 percentage point increase in NICs from 6 November 2022.

      What do employers need to do?

      Employers will need to make sure that they update their payroll software in time for this third change in NIC rates and bandings in 2022/23!

      In the case of NIC rates which apply annually, transitional rates will apply to deal with the mid tax-year change. In particular

      • Class 1 employee NIC rates that apply annually (including for company directors) will be set at a main rate of 12.73% and an additional rate of 2.73% for 2022/23.
      • Class 1A NICs on taxable and expenses (if not paid monthly through the payroll) will be set at 14.53% for 2022/23. The same applies to Class 1B NICs for PAYE Settlement Agreements.

      Class 4 NICs paid by self-employed individuals will be set at a main rate of 9.73% and an additional rate of 2.73% for 2022/23

      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.

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

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        By Katie Business News • Tax News 0 Comments

        The new UK government to cut taxes in an attempt to stimulate economy

        The new UK government to cut taxes in an attempt to stimulate economy

        On 23 September 2022, Kwasi Kwarteng, the new Chancellor (the fifth in as many years) delivered a Tax Cutting “Fiscal Event” or Mini-Budget to help boost economic growth. This was in line with promises made by the new Prime Minister Liz Truss when she was campaigning to be elected as new leader of the Conservative Party.

        However, many commentators are concerned that the cost of the growth measures will add significantly to Government borrowing, which will have to be paid for by tax increases in the future.

        What was announced by the new UK government?

        The headline announcements were:

        • The abolition of the 1.25% Health and Social Care Levy.
        • A reversal of the planned increase in corporation tax.
        • A reduction in the basic rate of income tax.
        • The abolition of the additional rates of incomes tax.

        The Government’s bold strategy seeks to stimulate economic recovery and save jobs. Many European countries have introduced windfall taxes on energy companies to help fund support for energy costs. Liz Truss has however categorically rejected such a measure in the UK.

        Why was that not a real budget?

        The normal budget process is for the Office of Budget Responsibility (OBR) to report on the state of the UK economy at the time of the Budget and also assess the impact of the Budget proposals. As there was insufficient time for a full OBR report, the Chancellor’s statement was referred to as a “fiscal event”.

        We still anticipate a ‘real’ Budget later on this Autumn.

        You can find more here about the growth plan 2022.

        Need more information?

        How do you feel about the new UK government?

        We offer a wide range of services which are unique to your business and 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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          Liz Truss, New Prime Minister
          By Katie Business Advice • Business News 0 Comments

          New Prime Minister: How will it affect your business?

          Liz Truss, New Prime Minister

          The new Prime Minister: what changes are taking place?

          The first announcement of the new Prime Minister, Liz Truss, was a plan to freeze energy prices for two years at £2500 for the average home. With the £400 rebate previously announced, takes this to £2100. There will be equivalent help for Northern Ireland. The amount saved by each family will depend on how much energy they use. Households have been urged to reduce their overall usage if they can. This is because of the serious Europe-wide shortage of the natural gas which powers much of the heating and electricity network.

          Liz Truss also said that a fund will be created to support those who are not covered by the cap. More details are expected in the next two weeks.

          How will changes made by the new Prime Minister changes affect your business?

          The reality for many small businesses and households has taken a turn for the worse recently as prices continue to surge.

          Unlike domestic customers, energy bills for businesses are not capped. The rising cost is proving critical for many companies, especially smaller firms. Liz Truss announced that businesses will get an “equivalent support” for a six-month period. However, the UK government have not yet published the unit cost per unit of gas and electricity. After the six-month period, further support will be targeted at “vulnerable industries”. We will update you when further information is available.

          The recession

          The new Prime Minister also has a recession to deal with. The Bank of England has warned that little can be done to stop the UK falling into a recession as the war in Ukraine continues. Its governor, Andrew Bailey, said it would “overwhelmingly be caused by the actions of Russia and the impact on energy prices”. The Bank expects the economy to shrink in the last three months of 2022. This will keep shrinking until the end of 2023.

          What does the recession mean for businesses?

          To address the recession, a taxation policy could be designed by the new prime minister. This will increase economic growth by putting more money in our pockets and allowing businesses headroom to invest. We will keep you informed over the coming weeks if taxation policy changes.

          As with any downturn in the economy, some types of business are more likely to run into cash flow problems, while other types appear to be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is, you can still have problems with cash flow.

          To understand and predict how cash flows in your business, start by performing a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down you might need to take action.

          Talk to us about preparing a cash flow statement and budget so that we can work with you to maximise your business’s resilience over the next two years.

          Need more information?

          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.

          Contact us below

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            By Katie Business News • Tax News 0 Comments

            Diary of main tax events September / October 2022

            Please see below for the diary of main tax events for September/October 2022. If you have any further questions, please do not hesitate to speak to us. The team are on hand to help ensure you meet these deadlines.

            Date What’s Due
            1 September Corporation tax for year to 30/11/21 unless pay by quarterly instalments
            19 September PAYE & NIC deductions, and CIS return and tax, for month to 5/9/22 (due 22 September if you pay electronically)
            1 October Corporation tax for year to 31/12/21 unless pay by quarterly instalments
            5 October 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 October PAYE & NIC deductions, and CIS return and tax, for month to 5/10/22 (due 22 October if you pay electronically)

            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.

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

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              By Katie Business News 0 Comments

              Inflation is creating more entrepreneurs

              Inflation is creating more entrepreneurs:

              A need for additional income is motivating people to start their own businesses.

              As UK inflation hits a 40-year high of over 9%, more and more people are starting their own businesses.

              New technology such as online payment systems, digital marketing tools and free online resources are helping to remove the traditional barriers in setting up your own business.

              The number of people setting up their own businesses in the UK skyrocketed in the past 12-18 months and this was largely driven by redundancies and furloughing during the pandemic. As a result, firms such as QuickBooks, Xero and Sum Up are thriving as they are geared towards serving tech savvy, small and medium sized owner-managed businesses.

              Now, as the cost of living has risen so dramatically, a further wave of entrepreneurs are starting businesses in order to generate some extra income. Helpfully, according to a recent survey, the UK is considered one of the best places for entrepreneurs to start a business thanks to its skilled workforce, tax and legal systems.

              The current wave of new entrepreneurs creates opportunities for other businesses that can help startups to get up and running, then grow and develop their new ventures. New entrepreneurs need an array of services such as IT, accounting, tax, banking, premises, logistics, staffing and more.

              Sustainability is a key trend among the small and medium-sized business community in the UK. According to a recent report from the Federation of Small Businesses, 56% of small businesses believe the world is facing a climate crisis and 36% have a plan in place. Sustainability is clearly being taken seriously by entrepreneurs and if you intend to sell your products or services to them, sustainability should be top of your agenda too.

              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.

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

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                By Katie Business Advice • Business News 0 Comments

                Beware of “Rogue” Research & Development Consultants

                Beware of “Rogue” Research & Development Consultants:

                In recent years HMRC have identified and successfully challenged a number of spurious claims for Research and Development (R&D) tax credit relief made by purported ‘R&D Consultants’.

                Many of these claims have been for projects that did not satisfy the criteria for the tax relief and some included overstated expenditure and consequently have been abusing the scheme.

                The R&D rules offer legitimate claims generous tax breaks. For a company that is a Small or Medium-sized Entity (SME), qualifying expenditure attracts a tax deduction of 230% of the amount spent which can then be traded in for a tax refund of 14.5% if the company is loss making. Thus £100,000 of qualifying R&D expenditure would potentially result in a tax refund to a loss-making company of £33,350. Most R&D consultants charge a fee based on the amount of the claim.

                To qualify for R&D relief, the expenditure must be incurred as part of a specific project to make an advance in science or technology. The project must relate to the company’s trade – either an existing one, or one that the directors intend to start up, based on the results of the R&D.

                Further, the company must be able to explain how a project:

                • looked for an advance in science and technology;
                • had to overcome uncertainty;
                • tried to overcome this uncertainty; and
                • could not be easily worked out by a professional in the field.

                In summary, R&D claims are often very worthwhile, but a number of strict requirements must first be met. If you are approached by an R&D Consultant or otherwise believe you may be incurring eligible R&D expenditure, please talk to us and we will help you file a compliant claim.

                Need more information?

                Do you need a trusted Research & Development Consultant for your business? We offer a wide range of services which are unique to you. 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

                  Prime minister candidates and possible tax cuts

                  Prime minister candidates and possible tax cuts:

                  With the departure of Boris Johnson, the contenders as leader of the Conservative Party and Prime Minister (PM) have now been whittled down to the last two – Rishi Sunak and Liz Truss.

                  Whoever wins will need to appoint a new chancellor and we await their tax policies with interest.

                  In the event of Liz Truss becoming PM, we are expecting her Chancellor to call an emergency Budget, with a flurry of tax reductions being announced.

                   

                  In her campaign to win support from Tory members, Liz Truss has suggested that she would reverse the 1.25% Health and Social Care Levy. She would also cancel or reduce the scheduled rise in corporation tax to 25% from 1 April 2023 where company profits are in excess of £250,000 a year.

                  We are not currently expecting an emergency Budget under former chancellor Rishi Sunak. Sunak continues to promise tax cuts in the future, but only when inflation has been brought under control.

                  Need more information?

                  We hope the prime minister candidates will not affect the way we run our businesses.

                  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.

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

                  Contact us below

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