Autumn Budget - Cheers From Your Town?
Today's Budget recognises the help needed by your local area such as retail and hospitality, with alcohol duty reduction and reform, 50% rates reduction for 1 year, property improvements not affecting your rates for 1 year, plus money directed to areas such regional theatres, community football pitches, cycling infrastructure, local minor roads and to local councils.
Keeping it local tends to favour small businesses who can now try to build on the support and appreciation received during lockdowns. Remember to increase your prices so your business keeps pace with inflation and remains viable. So, what else should you and your business know from today?
Investment - Capital allowances of 100% or 130%
If you invest in your business you'll receive 100% tax relief on purchases up to £1m! This was due to be reduced, but today it has been extended to continue until April 2023. So invest in any machinery, van, computer, for your business and you get a full tax write off in that year, even if you borrow to buy it.
If you're a company, however, you're more likely to want to claim the super-deduction of 130% which saves even more tax and without a £1m cap so nothing changes for you today. Although it's worth noting this is only avaialable for new assets and more restricted types of plant.
Company Research and Development Tax Relief - Restriction and Extension
Good to know the UK spends quite a lot on R&D but I understand the OECD thinks it's not all 'proper' R&D.
One difference in comparison to other countries allowing spend outside the UK will, from April 2023, be restricted to UK spend only. By contrast, as widely requested, qualifying spend will from April 2023 be extended to include data and cloud costs which can form a large part of necessary R&D costs.
Further details will be issued.
Pension Scheme Withdrawal Age Increase - From 55 to 57 Years
Confirming a previous announcement, however, many people will have made plans to take out at least their 25% tax free lump sum at age 55, perhaps to pay off their mortgage. If you don't act before 6 April 2028, you'll have to wait until you're 57.
In the meantime do see if you can benefit from tax relief by making contributions into a scheme.
Landlords, Sole Traders and Partnerships - Tax Year End
Coming in from April 2023 and 2024, look out for this and whether you should change your year end to align with the tax year. Most of you will already use 31 March or 6 April, but if you don't you may find you get a better result making the alignment before 2023.
Personal Capital Gains Tax - Sales of Residential Properties
Where tax is due, UK residents now have 60 days after completion to report and pay the capital gains tax due. The online portal has had some problems so this gives HMRC and the taxpayer time to clear them soon after the transaction.
Underpaid or Failure To Repay Child Benefit, Gift Aid, Pension Charges
As a result of losing a tax case, which they're appealing, it's been made clear today that HMRC can go back at least 4 years and recover any overpaid child benefit, gift aid relief or underpaid pension charges.
The figures can be very large when paid back in one lump sum with costs, so ensure you understand the rules and pay the correct amount on time.
Let us know if you need to know more about these or any other changes announced today.