Welcome to our round up of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!
More tax rises on Wednesday?
Over the last year we have learnt that corporation tax will increase in 2023 and that there will be a 1.25% rise in National Insurance Contributions (NICs) from April 2022 paid by employers, employees, self-employed and for those with share dividend income.
Personal allowances have been frozen at £12,570, basic rate at £37,700 and the higher rate at £50,270 until 2026.
Chancellor Rishi Sunak has stated the need to “fix” the nation’s finances as the economy emerges from the COVID-19 pandemic, declaring: “Our recovery comes with a cost.”
On Wednesday we can expect further tax rises to be announced in the Budget to fund the support given for the vaccine rollout, the Furlough and self-employed support schemes.
So what are the tax planning options available for companies and individuals?
For companies it is all about the most tax efficient way of extracting profits such as dividends verses salary, contributions to pensions and receiving tax efficient benefits. Also important is utilising capital allowances and thinking carefully about the timing of expenditure.
For the self-employed, protective claims for tax credits should be considered if profits fluctuate.
If you are married, options are available to fully utilise personal allowances and ownership of income producing assets such as investments and rental properties.
One crafty way for the Chancellor to bring in extra tax revenue without raising headline tax rates would be to limit some of the generous tax breaks that are currently available. He may therefore consider some of the measures suggested by the Treasury Select Committee, or the Office of Tax Simplification (OTS) last year. The Treasury Select Committee specifically drew attention to the cost of pension tax relief (£41 billion in 2019) and CGT private residence relief (£25 billion) so we can perhaps expect further restrictions to those reliefs. The OTS have carried out a detailed review of both CGT and IHT, so we anticipate changes to those taxes to bring in extra revenue. Something to listen out for is a possible change to the CGT rules when assets are transferred on death. Currently assets such as the family home or the family business are transferred at market value at the date of death without CGT being payable. It has been suggested that instead of market value the assets are transferred at the deceased’s base cost, which might be just £100 in the case of shares in the family company. Although there would be no CGT payable at the time the effect would be to create a large potential CGT bill for the next generation.
When it comes to pensions there are rumours yet again that higher rate relief for contributions into personal pensions may be removed and replaced with flat rate tax relief of say 25%. That would encourage basic rate taxpayers to save more in their pension at the expense of those paying tax at 40% or 45%. Higher rate taxpayers with spare cash should perhaps consider putting more into their pensions before Budget Day.
Personal pension contributions remain tax efficient for all. Company contributions to an employee’s pension will attract corporation tax relief and will be free of income tax and national insurance for the employee (up to certain limits). Individuals can claim relief from income tax and national insurance for contributions to personal pension schemes (subject to certain limits).
These are just a few of the options for planning ahead and now is the time to sit down and arrange your affairs to ensure you are as tax efficient as you can be. We would be delighted to work out a plan with you so please contact us.
Working Tax Credit customers must report changes to working hours
HMRC is urging Working Tax Credit customers to check if they need to update their working hours if these have reduced as a result of coronavirus.
During the pandemic, Working Tax Credit customers have not needed to tell HMRC about temporary short-term reductions in their working hours as a result of coronavirus – for example if they were working fewer hours or were furloughed.
If a Working Tax Credit customer’s hours temporarily fell because of coronavirus, they have been treated as if they were working their normal hours.
Customers do not need to tell HMRC if they re-establish their normal working hours before 25 November 2021, but from then, they must do within the usual one-month window if they are not back to working their normal hours shown in their Working Tax Credit claim.
UK government secures COVID-19 antivirals
In view of criticism about the slow roll out of booster jabs and rising numbers of infections and deaths, the UK government has secured COVID-19 antivirals to be rolled out through a clinical study from winter. The deals made by the Antivirals Taskforce are a step in its ambition to secure at least two new effective treatments by the end of the year for those who have either tested positive for COVID-19 or have been exposed to someone with the virus.
Should the treatments be approved by the UK’s medicines regulator, thousands of NHS patients will be able to access the treatments to prevent the infection from spreading and speed up recovery time. The two new antivirals are expected to be given to those most at risk from the virus, helping reduce the severity of symptoms and ease pressure on the NHS over winter.
Working in Europe?
As travel returns to a more normal environment, the UK government has started a campaign to remind business travellers of the rules for travel to an EU country, Switzerland, Norway, Iceland or Liechtenstein.
As well as the actions all travellers need to take, there are extra actions if you are travelling for business. Business travel includes activities such as:
- travelling for meetings and conferences
- providing services (even with a charity)
- touring for art or music
- taking goods to sell
If you are travelling to an EU country, Switzerland, Norway, Iceland or Liechtenstein for less than 90 days in a 180-day period, you may be able to do some things without getting a visa or work permit, for example going to a business meeting. You may need a visa, work permit or other documentation if you are planning to stay for longer than 90 days in a 180-day period, or if you will be doing any of the following:
- transferring from the UK branch of a company to a branch in a different country (‘intra-corporate transfer’), even for a short period of time
- carrying out contracts to provide a service to a client in another country in which your employer has no presence
- providing services in another country as a self-employed person
Check the entry requirements and rules of the country you are visiting to find out if you need a visa or work permit.
The government also gives advice on professional qualifications, earning money in the EU, insurance and taking goods and cash into the EU.
Coronavirus: Film and TV Production Restart Scheme
The Film and TV Production Restart Scheme makes direct compensation available to eligible pre-existing and new productions that incur costs caused by coronavirus-related losses, such as abandonment or filming delays from illnesses amongst the cast and crew.
Eligible productions will receive compensation for costs caused by coronavirus delays up to a value of 20 per cent of the production budget, with the abandonment of productions due to coronavirus to be covered up to 70 per cent of the production budget. There will be a total cap of £5 million on claims per production.
The funding is available to all productions made by companies where at least half of the production budget is spent in the UK.
You must make an application via the appointed third party administrator, Marsh Commercial.
You can download the claim form from their website. Once complete, email your form along with all supporting documentation to mailto:[email protected].
Future claims made under the scheme can be backdated to 28 July 2020.
The registration deadline for this scheme is 23:59 GMT on 30 April 2022, and claims will be able to be submitted up to 23:59 GMT on 30 September 2022 for losses incurred up until 23:59 GMT on 30 June 2022.
Circular economy for SMEs – innovating with the NICER programme
Innovate UK, part of UK Research and Innovation, is investing up to £1 million in circular economy innovation projects.
This funding forms part of the UKRI National Interdisciplinary Circular Economy Research programme (NICER), enabling SMEs to engage with and benefit from access to expertise at five research centres via collaborative research and development (CR&D) activities.
The aim of this competition is to support feasibility studies, industrial research and experimental development that address the challenges of transitioning to a circular economy. This competition closes at 11am on 8 December 2021.
Your proposal must demonstrate how you will create a step-change in the adoption of circular economy approaches.
The project must:
- have total eligible costs between £50,000 and £100,000
- start no earlier than 1 April 2022
- end by 31 March 2023
- last between 9 and 12 months
- carry out all of its project work in the UK
- intend to exploit the results from or in the UK
Submit your Kickstart Scheme vacancies
Applications to the Kickstart Scheme are closing soon. After 17 December 2021 you will not be able to apply for a new Kickstart Scheme grant or add more jobs to an existing grant agreement
You can submit your Kickstart Scheme vacancies after you have received a successful outcome to your online Kickstart Scheme grant application below.
Moving the Welsh Economy Forward
The Welsh Government will pursue a progressive economic policy that focusses on better jobs, narrowing the skills divide and tackling poverty, Economy Minister, Vaughan Gething, said last week.
In setting out his vision to move the Welsh economy forward, the Minister committed to extending a Team Wales model to offer ‘as much certainty as possible’ for businesses facing a volatile recovery.
He promised a new era of partnership to strengthen regional economic development, a delivery plan to back the everyday economy and wide ranging support for workers in a fast changing economy.
The Welsh Government will work with unions and business to develop it’s ‘something for something’ approach so that Welsh public money is wedded to action on fair work, decarbonisation and skills.
The Minister also started a conversation about the long term demographic challenge facing the Welsh economy. The proportion of the population aged 16 to 64 years old in Wales has been decreasing year-on-year since mid-2008 and could be just 58% of the population by 2043.
The Welsh Government’s approach includes:
- investing in our people, through the Young Person’s Guarantee and a strong employability and skills offer, including apprenticeships
- supporting those furthest away from the labour market to find work. The upcoming Employability Strategy will highlight the support available for individuals, particularly those most impacted by the pandemic and furthest away from the labour market
- accelerating the adaptation to new skills which are required for skilled, secure jobs, not least in the area of low carbon. The current recruitment challenge has also shown there is a need for some quick action on skills in certain sectors
- exploring how we retain our graduates and talent in Wales by building strong linkages with universities, and between universities and businesses
- support start-ups, including graduate start-ups, with possible incentives in some areas
- ensure we have firms grounded in Wales who can provide future opportunities
- Wales can also benefit from the opportunities for far greater remote working and flexible commuting options.
Way to GO Wales – The Government Opportunities (GO) Welsh Public Procurement Conference 2021 is coming to Wales on 30 November.
This virtual conference will celebrate how the procurement community came together to deal with the unprecedented challenges of COVID-19 and will look ahead to how procurement can support Wales in its recovery.
Speakers will come from across the procurement community and include Rebecca Evans, Minister for Finance and Local Government, John Coyne, new Director of Commercial & Procurement, Welsh Government, Jonathan Irvine, Director of Procurement and Health Courier Services, NHS Wales Shared Services Partnership and Malcolm Harrison, CIPS CEO.
The Points-based immigration system and the status of EU citizens
On the 1st January 2021 free movement ended and the UK introduced a new points-based immigration system. The new system treats EU and non-EU citizens equally and has transformed the way in which all people come to the UK to work and study. Anyone coming to the UK to work or study, excluding Irish citizens, will need to apply for permission in advance.
Business Wales and Home Office officials are running a webinar on the 26 October called “An introduction to the new points-based immigration system and an overview of the status of EU citizens”.
This session will cover:
- An introduction to the points-based immigration system
- The skilled worker visa
- How to become a Home Office sponsor
- Student Visa
- Global Talent
- Seasonal workers
- Hong Kong British national (Overseas)
- Visit Visas
- Right to Work checks
- The EU settlement scheme – inc. late applications
- What support is available?
- Q&A with policy officials
Please note a MS Teams link will be sent out on the week commencing 25th October to attend this event.
Blascymru / Tastewales 2021 – Food and Drink for Future Generations
Wales is home to a dynamic food and drink industry, with businesses ranging from micro artisan businesses to larger food companies. These businesses produce a wide range of products from speciality items for niche markets to high volume items for major distribution networks.
Following on from the huge success of the event in 2019, BlasCymru/TasteWales 2021 will bring together producers, buyers and food industry professionals at this signature international food and drink trade event and conference. The 2021 event will be held at the International Convention Centre Wales (ICCW) on 27 and 28 October 2021.
Blas Cymru / Taste Wales 2021 conference aims to inspire delegates to take action in their organisations and their lives to address the challenges and opportunities presented by climate change.
This will be an opportunity to set the scene for future-proofing the Welsh food and drink industry and to continue to set our sights on global development.
By attending Blas Cymru/ Taste Wales 2021 conference, you will have the opportunity to hear from experts from across the food and drink industry; as well as prominent sustainability and climate change writers and presenters.