It’s been a while since our last newsletter as we all took a breath from the impact of the pandemic and focused on the busy tax return season. As we enter the new tax year and following the spring budget we hope you find the following updates useful.
Payment on account due 31 July 2022
The second payment on account towards the tax year ending 5 April 2022 is due by 31 July 2022.If we are able to submit your tax return before the deadline for the next payment on account, we may be able to reduce it, depending on your overall liability for the year.
Recap on Dividend tax and National Insurance rates
Don’t forget that in the Autumn budget the rate of National Insurance and dividends tax increased by 1.25%, with effect from 6 April 2022.
For example, dividends tax for basic tax rate payers has increased from 7.5% to 8.75% and the higher rate dividends tax increased rom 32.5% to 33.75%.
Claim up to £5,000 with the Employment Allowance
Some good news! For the tax year 2022/23 the Employment Allowance increased from £4,000 to £5,000. You can claim this if you’re a business, and your employer Class 1 National Insurance liabilities were less than £100,000 in the previous tax year.
The claim is made through your payroll provider; if we provide you with payroll services we will ensure the allowance is claimed. If not, please ask if you would like us to check whether your business is eligible and if so, if it is being claimed.
Get a discount of up to £5,000 on software with Help to Grow
Help to Grow: Digital is a UK-wide government-backed scheme that aims to help you choose, buy and adopt digital technologies that will help you grow your business.
Eligible businesses can receive a 50% discount on buying new software worth up to £5,000, alongside free impartial advice and guidance about what digital technology is best suited to boost your business performance. We think the offering is fairly limited but there is a useful questionnaire that will help you to identify your needs.
Help to Grow: Management is a scheme provides small businesses with access to world-class business expertise on everything from leadership and financial management to marketing and digital adoption. This is delivered through leading UK business schools, alongside one-on-one support from a business mentor – and is 90% funded by the government.
To be eligible, you must be a UK-based SME, actively trading for at least one year and have a total of between 5 and 249 employees.
For more information for both schemes and to apply, visit Help to Grow on GOV.UK the content of those courses could be relevant to you!
Business rates relief continues for some…
From April 2022, small retail, hospitality, and leisure businesses benefit from 50% off of their business rates.
The business rates multiplier has also been frozen for another year. This is used to calculate how much business rates they should pay, and it usually rises with inflation each year.
Invest in your business with Super-Deduction and Annual Investment Allowance
To spur business investment, the super-deduction allows companies to cut their tax bill by 25 pence for every £1 they invest in any qualifying machinery and equipment. This can include the purchase of computers, most commercial vehicles and office furniture.
The temporary £1 million limit for the Annual Investment Allowance has also been extended to the end of March 2023. The Annual Investment Allowance allows businesses to spend up to £1 million on qualifying business equipment, and deduct in-year its full cost before they calculate their taxable profits.
Both of these tax breaks remain available for businesses to take advantage of until the end of March 2023, by incurring qualifying expenditure before then.
Please let us know if you would like to discuss any plans to make investment in capital equipment and we can advise on timing and claims.
Online Sales Tax – consultation
The government has launched a consultation into whether they should rebalance the tax burden on in-store retail businesses versus their online counterparts., in the form of an Online Sales Tax (OST). Supporters of the OST claim that in-store retailers face a heavier burden of business rates, while there is no equivalent for online business. It’s still early days, with no details on rates or dates being published but worth keeping up to date with this.
Companies House filing reform
As part of reforms intended to tighten up anti-money laundering processes, Companies House aims to become a fully digital organisation. To increase transparency in annual filings there would no longer be options for abridged or filleted accounts for micro and small companies, removing some of the privacy currently available where no Profit & Loss Account is required to be filed. There is no timeframe yet for these reforms and the proposals are being worked through.
Research & Development Tax Relief
Research & Development tax relief is available where expenditure on technological and scientific advances meet HMRC’s eligibility criteria. Relief is in the form of reduced corporation tax liabilities or a cash credit, where a company is loss-making.
HMRC have announced that there will be more scrutiny of claims for relief on R&D expenditure in future, including more challenge of the innovation being carried out and the requirement for a more comprehensive analysis of the qualifying spend.
If you are wondering whether your business would qualify for R&D relief, please don’t hesitate to ask.
Investment in cryptocurrency assets is becoming increasing popular and we are seeing many more cases when preparing tax returns and company accounts. HMRC are updating their guidance on the treatment of any income and gains from these assets on a regular basis. If you have made investments or are thinking of doing so, we are happy to discuss the tax implications on those…. and don’t forget that you should only invest what you can afford to lose.
We have recently been getting more and more involved around Inheritance Tax and estate planning. The first action that always comes up from those early discussions is that people don’t have a will (or it is out of date from the days that you left your Morris Minor to your cat!). We suggest that you review your arrangements however straight forward or complicated they might be. Please let us know if you want to have a chat about that.
Although we can’t give pension advice, we keep hearing during planning meetings around retirement “I wish I started paying into my pension earlier”. With tax relief available on pension contributions – this could be of an interest to you. Speak to us if you are unsure about the next steps.
That’s all from us at Artema, have a great summer.