Budget Wish List

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In preparation for tomorrow’s Budget Announcement, our tax team are sharing their Budget Wish Lists…

Andrew would like to see a number of changes that would benefit the North East, including:

  • More funding for graduate placements in the North East
  • Regional NIC holidays to boost employment in the region. This would make it cheaper to employ and would make a real difference to the North East if it was to last a considerable period.
  • Extension of EIS and Seed EIS to give income tax relief for those using their own savings to set up their own business.

Our team will also be providing key summaries and reactions throughout the week – follow us @TaitWalker for live tweets and updates and use the hashtag #Budget2015.

Budget 2015 Predictions

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Prior to Wednesday’s Budget Announcement, our Tax Associate Chris Hodgson shares his predictions…

  • A further increase in the personal allowance from £10,600 to £11,000 for 2015/16
  • An extension of the Annual Investment Allowance to incentivise investment in plant and machinery
  • No change to the rates of Income Tax and Value Added Tax
  • Extension of the Pension Freedoms to people who have already purchased an annuity
  • A reduction in the Lifetime Limit of £10 million for Capital Gains qualifying for Entrepreneur’s Relief

Our team will also be providing key summaries and reactions throughout the week – follow us @TaitWalker for live tweets and updates and use the hashtag #Budget2015.

Want funding for professional advice? Small and medium sized businesses – have you applied for Growth Vouchers? You only have 2 weeks left…

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In January 2014 the Growth Vouchers programme launched a £30m fund aimed at encouraging small businesses to seek professional advice to help address key business issues such as raising finance, managing staffing costs and implementing company pension schemes in line with new Auto Enrolment rules.

The scheme is open to any business based in England that has been running for over one year, has up to 250 employees and has not sought “strategic advice” in the last three years.

However, the programme closes to new applicants on 31st March 2015 – so you only have 2 weeks to apply and benefit from the scheme.

Businesses who wish to apply need to:

  • Be registered in England
  • Have less than 250 employees
  • Be actively selling goods and/or services
  • Have a turnover no greater than €50m or £45m
  • Own 75% or more of their business

Why Growth Vouchers?

Statistically, businesses are more likely to grow and succeed if they have a ‘financial business plan’ in place. However, there are many areas in which an equivalent business plan will also help to generate growth and help to focus the direction of the business. The Growth Vouchers programme recognises this and provides the ability to seek financial support for advice across a range of key business areas.

With the Growth Vouchers scheme, you can receive advice for Finance (e.g. business planning, forecasting), IT strategy, HR and Marketing. Please be aware that the project has to be completed within 90 days of the voucher being awarded.

How to apply?

If you have been looking for advice on any of the subject matters covered and would like funding towards your project, please register now before the opportunity expires at the end of March.

The Growth Voucher application process is online and can be accessed here. Following submission you will be contacted and advised on the next steps (if successful).

Tait Walker is an accredited Growth Vouchers adviser and our Growth Vouchers profile can be viewed on the Enterprise Nation Marketplace.

For further advice and guidance, please contact Alastair Wilson on 0191 285 0321 or email alastair.wilson@taitwalker.co.uk.

Budget Wish List

In preparation for next week’s Budget Announcement our tax team will be sharing their ‘Budget Wish List’. They will also be providing key summaries and live tweets throughout the week – follow us @TaitWalker.

Alastair would like to see a number of changes that would help to benefit the North East, including:

  • An extension of the Annual Investment Allowance to encourage investment in plant and machinery
  • Re-introduction of tax relief for corporates for investment in other corporates (this used to exist as the Corporate Venturing Scheme)
  • Reduction in business rates, in particular for empty property
  • Relief from employers National Insurance for “new” jobs, in particular in sectors such as the technology sector
  • Better use of Enterprise Zones locally to create genuine hotspots of SME growth (e.g. have a “tech sector” enterprise zone)
  • Localised reductions in corporation tax for specific sectors – e.g. reduction in corporation tax in the North East for companies in the offshore supply chain
  • Reduction in employment tax reporting red tape

Collection of Class 2 National Insurance contributions – the new arrangements

Most self-employed people pay class 2 and class 4 national insurance.

Historically, class 4 has been dealt with via the self-assessment tax return but class 2 has been paid either by monthly direct debit or by quarterly payment request. Class 2 national insurance is currently charged at a weekly rate of £2.80.

However, from April 2015 the arrangements for payment of class 2 national insurance will change. Under the new arrangements, class 2 national insurance will be paid along with class 4 national insurance and income tax in the January self assessment payments.

Class 2 National Insurance payments for the 2014-15 tax year

Class 2 payments by Direct Debit

Direct Debits for the majority of self-employed people will stop after collections have been made for the 2014-15 tax year. The last collection date for the 2014-15 tax year will be made on 10 July 2015. (Direct Debits for Class 2 national insurance contributions are collected 4 months in arrears.) It may be worth contacting your bank at the end of July to ensure no further direct debits are taken from your account.

Class 2 payment requests

These will be issued as normal in April 2015 to collect all class 2 national insurance contributions to the end of the 2014-15 tax year.

Small Earnings Exception (SEE) Certificates – renewals and applications

Under the new system, the class 2 liability will be determined by the level of profits declared on the self-assessment return. This means that there will be no need to renew or apply for an SEE certificate and all existing SEE certificates will cease to be valid from 11 April 2015.

If the level of profits doesn’t reach a Small Profits Threshold no Class 2 national insurance contributions will be due. The Small Profits Threshold for 2015-16 will be £5,965 ( for 2014/15 the threshold is £5,855).

Self-employed people will be given the opportunity to pay Class 2 national insurance contributions voluntarily to protect entitlement to certain benefits and State Pension.

Class 4 National Insurance

The tax position for class 4 national insurance is unchanged

If your taxable profits are above the lower Class 4 profit limit (£7,965 for 2014-15; £8,060 for 2015-16) you will pay Class 4 contributions of 9% on profits over this limit. You pay Class 4 national Insurance together with your income tax – usually due by 31 January and 31 July each tax year. If profits are high (over £41,865 in 2014-15; £42,385 in 2015-16) then the rate of Class 4 national Insurance falls to 2% on profits over this higher limit.

For further advice please contact Claudine Norden or Dorothy Johnston on 0191 285 0321.

Sources: HMRC and Tax Aid

Want funding for professional advice? Small and medium sized businesses – have you applied for Growth Vouchers? You only have 3 weeks left…

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In January 2014 the Growth Vouchers programme launched a £30m fund aimed at encouraging small businesses to seek professional advice to help address key business issues such as raising finance, managing staffing costs and implementing company pension schemes in line with new Auto Enrolment rules.

The scheme is open to any business based in England that has been running for over one year, has up to 250 employees and has not sought “strategic advice” in the last three years.

However, the programme closes to new applicants on 31st March 2015 – so you only have 3 weeks to apply and benefit from the scheme.

Businesses who wish to apply need to:

  • Be registered in England
  • Have less than 250 employees
  • Be actively selling goods and/or services
  • Have a turnover no greater than €50m or £45m
  • Own 75% or more of their business

Why Growth Vouchers?

Statistically, businesses are more likely to grow and succeed if they have a ‘financial business plan’ in place. However, there are many areas in which an equivalent business plan will also help to generate growth and help to focus the direction of the business. The Growth Vouchers programme recognises this and provides the ability to seek financial support for advice across a range of key business areas.

With the Growth Vouchers scheme, you can receive advice for Finance (e.g. business planning, forecasting), IT strategy, HR and Marketing. Please be aware that the project has to be completed within 90 days of the voucher being awarded.

How to apply?

If you have been looking for advice on any of the subject matters covered and would like funding towards your project, please register now before the opportunity expires at the end of March.

The Growth Voucher application process is online and can be accessed here. Following submission you will be contacted and advised on the next steps (if successful).

Tait Walker is an accredited Growth Vouchers adviser and our Growth Vouchers profile can be viewed on the Enterprise Nation Marketplace.

For further advice and guidance, please contact Alastair Wilson on 0191 285 0321 or email alastair.wilson@taitwalker.co.uk.

Another CASC Update…HMRC will be writing to all CASCs once the new rules finally come into action!

After our latest communication with the CASC team at HMRC we can let you know that from 1st April 2015 (after the new rules finally come into action) HMRC will be issuing letters to all current registered CASCs to highlight the changes, and to highlight that each CASC will need to confirm to HMRC whether or not they intend to remain a CASC.

This letter will provide each club with a summary of the new rules and provide examples and suggestions of ways for clubs to retain their CASC status within the new rules! HMRC will be expecting all CASCs to review their position and provide HMRC with how, as a club, they are going to proceed whether that is to adapt their club to comply or deregister as a CASC.

If you agree that your club no longer meets the requirements, HMRC will require you to confirm your agreement and your CASC status will be withdrawn with immediate effect! Alternatively, if you disagree they will require a reply within 30 days stating why you think your club should continue to be treated as a CASC. Remember remaining a CASC is likely to be financially beneficial for your club and so the letter should not be ignored!

These letters will not be issued to your club before 1st April 2015, but once this happens we will happily tell your club what you are likely to need to do!

Alternatively, be prepared before the rules come into action and contact sara.andrews@taitwalker.co.uk or alastair.wilson@taitwalker.co.uk  for a free review of your clubs accounts and memberships structure today!

For further information about your CASC status, please read our guide here.

“Married Couples Tax Break” – new measure launched by HMRC

HMRC launched the registration for the new Marriage Allowance today, which is a tax break for married couples.

It enables married couples or civil partnerships to reduce their overall tax bills, by one member of the marriage/partnership electing to transfer part of their unused income tax allowances to their partner.

This is primarily of use where:

  • Only one member of the marriage/partnership works
  • One person works full time and the other works part time
  • One person has been on sabbatical or unpaid leave (e.g. maternity/paternity leave)

The allowance will operate as a claim, where one person will have to register online with HMRC and the change will be processed via the payroll (by coding). HMRC will confirm the recipient’s change to their Pay As Your Earn (PAYE) tax code.

It may be useful to inform your staff of this new allowance – full details can be found here.

For further advice, please contact Alastair Wilson on 0191 285 0321 or email Alastair.wilson@taitwalker.co.uk.

EBT users – time is running out to utilise the EBT Settlement Opportunity

Do you have an Employee Benefit Trust which is under enquiry from HMRC? If so, now is the time to consider your options in detail.

HMRC are closing access to the EBT Settlement Opportunity (EBTSO) as of 31 March 2015. Through the EBTSO tax liabilities can be settled with HMRC under beneficial terms.

As an added pressure Accelerated Payment Notices (APNs) are now being actively issued by HMRC. These require users of tax avoidance schemes to make upfront payments of tax in case of dispute.

If you have an EBT with unresolved HMRC enquiries regarding the payment of PAYE and INC, being forced to make a payment to HMRC is increasingly likely. With politicians and the media regularly commenting on tax avoidance schemes it appears unlikely that HMRC will reverse their policy of litigating against EBTs.

We recommend taking an informed decision over your next steps:

  • We can help you calculate the likely cost of a settlement compared with payment of the APN and potential litigation.
  • We can consider your particular situation and see whether the settlement cost could be reduced through the use of available tax reliefs.
  • If you decide to utilise the EBTSO we may also be able to help you agree a “time to pay” agreement, which may be more attractive than the APN’s 90 day payment terms.

Given the beneficial terms of the EBTSO it is likely that the cost of settling will be significantly less than the amount due on an APN. We therefore urge you to seriously consider registering interest for the EBTSO before the deadline passes on 31 March 2015.

If you would like more information, please do not hesitate to contact Alastair Wilson, Chris Hodgson or Louise Barker on 0191 285 0321.

If you owned a cash machine full of money would you insure it?

If you owned a cash machine full of money would you insure it?

I’m guessing for most of us the answer would be ‘yes’. Without wanting to end a Friday with doom and gloom, it’s important that we consider the ‘what if’ and the ‘how would I manage if’ questions that we all avoid.

If you were to be made redundant or became seriously ill and subsequently couldn’t work, how long would your savings last?

The latest ‘Deadline to the Breadline Report’ from Legal & General shows how long families would survive with the loss of income from the main bread winner.

The report found that, on average, people could be on the breadline in just 29 days if the bread winner suffered a critical illness, injury or death. This is reduced to only 14 days for working age families (18-64 years old).

Other key findings include that people believe their Deadline to the Breadline is 77 days and 35% of people have no savings. Worryingly, 36% of households do not have a plan in place to cope with possible financial difficulties.

The report also found that a 2% rise in interest rates would move the typical mortgaged household one day closer to the breadline and a 1% rise would mean that households would no longer be able to save each month and would have to rely on savings to make ends meet.

Legal & General have created a Deadline to the Breadline calculator to show your potential situation and it may help you to decide how to better manage your finances.

It is vital that you understand the importance of planning to ensure your family and your wealth are protected. If you’d like to discuss managing your finances with one of our specialists, please contact us on 0191 285 0321 or email advice@taitwalker.co.uk   

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Tait Walker Wealth Management is a trading style of Tait Walker Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority.

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