Philip Hammond kicked the Autumn Statement into touch by delivering his first and last Autumn Statement.  He maintained that Britain was ‘Open for Business’ by focusing on productivity and prioritising high value investment into infrastructure & innovation. This will help Britain maintain it’s position as the fastest growing major economy in the world.

But what do today’s announcements mean for you and your business?

 

Business Costs

Fuel Duty

It was announced that the Fuel Duty rise for next year will be cancelled for the seventh year in a row.  This should be good news for businesses with high fuel costs such as transport & haulage companies.

Capital Allowances on New Technologies

In addition to the reduced cost of motoring for conventional vehicles, the Chancellor announced beneficial changes to the Capital Allowances regime on items such as electric cars.  The Government reinforced its support for green motoring by excluding these vehicles from the changes to salary sacrifice schemes for employees.

Insurance Premium Tax

Today’s announcement increases this stealth tax from 10% to 12% from 1st June 2017. This increases the cost of running your business and making sure it’s appropriately covered. 

VAT Flat Rate Scheme

A new 16.5% rate comes into force 1st April 2017 for businesses with limited costs, such as consultants, professional service firms and contractors.  This means that these businesses overall cost burden will increase.

Corporation Tax

The Chancellor committed to follow the business tax roadmap previously announced by George Osborne by confirming Corporation Tax would continue to fall to 17% by 2020.  This gives UK SMEs a degree of certainty and confidence over the next few years.  

It also maintains the UK position as the lowest Corporation tax rate in the EU, other than Ireland and helps maintain the attractiveness of Britain as a low tax economy.  This is important in the context of the USA proposals to reduce their Corporation Tax from 35% to 15%.  Once Britain has exited the EU, there may be more flexibility to reduce Corporation tax further to maintain UK competitiveness.

 

Employing People

Salary Sacrifice

Salary sacrifice options will be restricted to Government approved expenses such as Pensions, Childcare, Cycle to Work Scheme and Ultra Low Emission Cars.  This gives business owners less flexibility in remunerating and incentivising key employees in order to retain them and will likely result in businesses having to pay higher salaries to staff in order for them to maintain their standard of living.

National Living Wage

From April next year, the National Living Wage will rise from £7.20 to £7.50.  The Chancellor has once again increased employment costs for SME businesses. 

 

National Insurance

Today the Chancellor announced an alignment of National Insurance Contributions for both employers and employees.  From April 2017 the NI threshold will be £157 per week.  There will be no cost to employees but this again means more costs for businesses of £7.18 per annum per employee. 

 

Funding

Research & Development

Funding for Research & Development will be increased by an extra £2bn up to 2021.  This funding will be available for both universities and businesses and will apply to projects such as robotics, artificial intelligence and industrial bio technology.

To ensure the UK tax system is strongly pro innovation, the Government will also review the tax environment for R & D to look at ways to build on the introduction of the above the line R & D tax credits.  Our experience from our client base is that this is a very valuable relief for innovative small businesses and any improvement in this is good news for businesses.

Exporting

The Chancellor announced doubling support for exporting as the government looks to make it easier for British companies to trade abroad. This extends the export credit guarantee and increases the pre-approved currencies for which UK Export Finance offers support from 10 to 40.   It looks like the Chancellor is hoping more economic support will get businesses shipping around the world. Although these are positive changes, business owners still need to be aware of how to access this support.

 

With uncertainty around Brexit, it seems that the Chancellor is trying to build in maximum flexibility to be in a position to react to anything that occurs from the uncertainty that this presents.  He seems to have delivered a ‘Steady as You Go’ statement and with his announcement of future Autumn Budgets and less changes in the new Spring statement, Philip Hammond seems to be doing less ‘tinkering’ to enable businesses to get on with doing business.

An area where a considerable number of companies in Swindon, Wiltshire and the surrounding areas are missing out is Research and Development (‘R & D’). There are potentially significant tax savings available if R&D expenditure is identified and appropriate claims made to HM Revenue & Customs.

In many cases, an additional uplift on tax-allowable R & D expenditure of 125% (130% from 1 April 2015) can be claimed.

However, R&D is not confined to the laboratory and people in white coats. The key word is ‘development’. R&D often occurs as part of the work you already perform on a day to day basis.

Here at Haines Watts Swindon, Wiltshire, we’ve submitted significant claims for companies saving corporation tax and also producing back dated claims in order to generate cash repayments.

We have secured cash refunds in the region of £50 to £70k per annum in a number of cases and total refunds of up to £230k per annum in others!

So why has your accountant not mentioned this before?

This relief is not automatically given by HM Revenue & Customs and a report is required in order to gain the relief. Many accountants have stayed clear of this significant relief due to a lack of expertise in this field or they have engaged external consultants to deal with it.

What costs can qualify?

•    Staff costs
•    Consumables
•    Subcontractor payments
•    Overheads

Example R&D Sectors:

•    Manufacturing
•    Architecture
•    Engineering and Electronics
•    Injection Moulding
•    Software
•    Offshore
•    Life Sciences

Expertise & Experience

In the past 12 months alone the Haines Watts specialist R&D team have successfully claimed in excess of £20million additional tax deductions for clients which has resulted in more than £4million in cash being refunded by HMRC. We are proud to say we have a 100% success rate on our claims and operate under a contingent fee arrangement.

Contact

Please contact one of our tax specialists Mike Lloyd (This email address is being protected from spambots. You need JavaScript enabled to view it.) or Martin Gurney  (This email address is being protected from spambots. You need JavaScript enabled to view it.) at Haines Watts Swindon, Wiltshire if you would like further information or a no obligation free meeting. Telephone 01793 533838.

It seems that the world today is all about deadlines.  Some imposed by our clients, some by regulations and the laws of the land and many simply imposed by ourselves.

The problem with deadlines is that when you miss them it can be expensive.

If you are brave enough to be in business, then there will be deadlines for the Inland Revenue and if you are company, at Companies House as well.  Make no mistake, if you miss those deadlines it will cost you money.

HMRC, for example, will fine you £100 automatically if you are late filing your personal tax return by 31 January.  It doesn’t matter if there is any tax due or not, it is an automatic fine.  On top of that, if you don’t pay the tax on time, they will charge you interest and if you don’t pay the tax due for the previous tax year within one month of that deadline, they will charge you a 5% surcharge and another 5% if it is still outstanding in July.

For a limited company, it is much the same.  The deadline for paying corporation tax is nine months and one day after the year end.  If you don’t pay it on time, HMRC will charge you interest.  The company’s Tax Return is due within twelve months of the year end.  If you are late, they will charge £100.

If you, like many people in business, are an unpaid tax collector when it comes to VAT and you are late filing your Return or paying over the VAT due, then you will be charged interest and penalties which go up on a sliding scale.  As these are based on an increasing percentage of the tax due, these can be very expensive.

Again, if you are a company (or a limited liability partnership) you have to file accounts at Companies House within deadlines.  This is normally nine months after the company’s year end and if you are one day late they will charge you a penalty of £150.  If you are over a month late, that goes up to £375, over three months £750 and over six months £1,500.  If you are late two years on the trot, those amounts double!

 So, the very simple moral of this is be organised, give yourself time and don’t be late!