We highlighted the main aspects of last weeks mini budget. If you missed it, click here to find out what the mini budget means for your finance. The Chancellor spoke of Stamp duty and how he intends to support 200,000 home buyers from paying any tax on when they buy a house. In England, no stamp duty is paid currently on first £250,000 and for first time buyers, this is increased to £425,000.

The Welsh government have also followed and raised the threshold on Stamp duty here in Wales. Officially known as Land Transaction Tax, this is paid if you buy a property or land over certain price threshold in Wales.

If you already own one or more residential properties, then there are different rules, and you may need to pay the higher residential rates. However, if you’re replacing your main residence, the higher rates may not apply. 

The new Land Transaction Tax thresholds are to come in on 10^th October 2022.

The chancellor Kwasi Kwarteng has claimed that he has made the biggest tax cuts in a generation. So, what is in his mini-budget?

National Insurance

With the cost of living on the rise it is paramount that the Government step in to help. The biggest announcement from this mini budget is the reversal of National Insurance levy that was introduced in April 2022 by ex-chancellor Rishi Sunak. The extra 1.25% increase was going to be used to help fund health and social care. With the latest turnaround, the funding for health and social care will now come from general taxation. 

The reversal means an extra £330 per year for nearly 28 million people and will start from 6^th November 2022. National Insurance is a tax paid by employees, employers and the self-employed. Employees pay National Insurance on their wages as well as income tax, employers pay extra NI contributions for staff, and the self-employed pay National Insurance on their profits.

Income Tax

There are also cuts in basic rate of income tax. Currently at 20% for everyone that earns above the personal allowance, from April 2023 this will be down to 19% Government estimates 31 million people will be getting an extra £170 a year in their pay packets.

45% higher rate of income tax abolished for England, Wales, and Northern Ireland taxpayers and a one single higher rate of income tax of 40% from April 2023.

Corporation Tax

Companies will also benefit as the rise in corporation tax has been cancelled. Corporation tax was due to be increased from 19% to 25% in April 2023, however, now this will not go ahead.

Benefits

Rules around the benefit system have also been changed. Benefits can be reduced if people don’t actively search for job commitments. Around 120,000 more people on universal credit to be encouraged to actively seek more work, the over 50’s to be given extra time to work with coaches to help them in the return to work.

Shopping

Overseas visitors will also benefit as VAT-free shopping to be introduced. This will encourage visitors to spend more while in the UK. Planned increases in the duties on beer, cider, wine, and for spirits have also been cancelled.

Stamp Duty

Stamp duty is paid when people buy a property. No stamp duty is paid currently on first £250,000 and for first time buyers, this is increased to £425,000. This is currently for England, we will have to wait and see what the Welsh Government do for us.

Energy

Energy bills was the one that worried most homeowners. There will be a freeze on energy bills which the government claims will reduce inflation by 5%

Total cost for the energy package to be expected around £60bn for the 6 months from October.

Click here to find out all the other information covered in the mini-budget.

2022 is the year where we move passed the pandemic. We have to think positive. It has been a long and difficult two years. We must pick ourselves up and get back on track. Whatever goals we had, we must try to achieve these, even if we have to tweak our usual processes to create an environment to allow us to progress. 

As April gets closer, the new financial year starts and with it some revised rules and regulations. We talk about the changes in national minimum wage and the introduction of the social levy care. The social levy is a 1.25% charge on National Insurance from April 2022. The rate also affects Employers National Insurance, and the dividend rates will also change in line with the new social care levy of 1.25%

Why is this levy being introduced?

The funds from the social care levy will be used for care homes and funding for pensioners. This includes several reforms to how people pay for adult social care in England, supported by £5.4 billion of investment over the next three years.

The National Insurance contributions rates will decrease back to 2021 to 2022 tax year levels and will be replaced by a new 1.25% Health and Social Care Levy where the revenue will be ringfenced to support UK health and social care bodies.

This will affect us all.

The new rates for National Insurance are below:

Individuals above State Pension age will not be affected by the temporary increase to National Insurance contributions for the 2022 to 2023 tax year but will be liable to pay the levy from April 2023.

National Minimum Wage

As with every April, the Government traditionally bring changes to the national minimum wage rates. Following the advice from the Low Pay Commission, the government will increase the National Minimum Wage from 01 April 2022.

Anyone that does not abide by these rules, can get big fines.

The new rates from 01 April 2022 are below.

Message us on nicola@crossaccountingservice.co.uk if you want to discuss how this will affect you. Our staff from our Cardiff and Bridgend office are always happy to help.

*Please note we will update this in the next few days, after today's Spring Budget announcement

It’s beginning to look a lot like Christmas, and most families up and down the country are looking forward to tucking into their festive turkey in just under a weeks’ time.

But, the turkey itself is not the item on the festive plate that most people are excited about according to new research carried out to discover the most important aspect of Christmas dinner.

Click here to find out

During the pandemic, we have seen an increase in holiday lets. With the restrictions to go abroad, a lot of people have been having a ‘Staycation’ exploring the wonderful options we have in the UK. 

If you have just started out renting homes or holiday lets, there are a lot of rules for these. HMRC are very strict when it comes to rentals. Replacing items need to be based on a like for like, is the property being improved, all these things need to be taken into consideration 

With self-assessments, we are seeing a lot of husband and wife ownership of property currently that don’t realise that both parties need to complete a self-assessment. If rent is being received or if a property has been sold it all has to be declared regardless of your other income.  

If both parties are named on the land registry, you both need to complete a self-assessment return. Unless you have seen a solicitor to change your set up with land registry, any property with joint names is classed as 50:50 ownership. Even if one person has the most interest in the property, all named people on the land registry will have to send a return to HMRC.

It is important you read up the rules on taking income from property, whether it is long term rental or holiday let ownership. The number of people we see not declaring income and then having the shock of HMRC writing to them asking for back dated returns is increasing.

HMRC do have the full facility to check land registry registers and transfers of land ownership. Backdating these returns can be costly for the owner and cause a lot of unnecessary stress.

We are here if you need to query anything regarding your property ownership.

The chancellor, Rishi Sunak announced the Autumn Budget on Wednesday. A ‘New economy’ as it was branded to help us get through the winter. We digest the budget and give the main highlights and what it means for you. If you did want to read the full budget, please click here 

National Living Wage

There is a lot to get through and one of the notable changes in the Chancellors budget was the increase in the National Living Wage. We will see an increase in pay to £9.50 per hour for anyone aged 23+ from April 2022. That’s an increase of 6% from the current £8.91 and the pay rise worth extra £1,000 for full time workers.

Social Care Levy

A new health and social care levy is to be introduced on all of us. It is a 1.25% charge on 

National Insurance from April 2022.  The rate also affects Employers National Insurance, and the dividend rates will also change in line with the new social care levy of 1.25%

• Employees National insurance will change from 12% to 13.25%

• Employers National Insurance will change from 13.8% to 15.05%

• Sole traders National Insurance will rise from 9% to 10.25%

Dividend rates as follows:

• Lowest rate 8.75% from April 2022

• Mid-rate 33.75%

• High rate 39.35%

From April 2023 the 1.25% social care levy will show as a separate section of the tax rate system. National Insurance will revert to where it was.

Why is this social care levy coming in?

The funds from the social care levy will be used for care homes and funding for pensioners. This includes several reforms to how people pay for adult social care in England, supported by £5.4 billion of investment over the next three years.

The reforms include:

• From October 2023 a cap on personal care costs of £86,000.

• The threshold above which somebody is not eligible for local authority support towards their social care costs (upper capital limit) is increasing from £23,250 to £100,000 from October 2023.

• The threshold below which somebody does not have to contribute towards their care costs from their capital (lower capital limit) is increasing from £14,250 to £20,000.

• If somebody has capital between £20,000 and £100,000 the local authority may fund some of their care, but they may have to contribute up to 20% of their chargeable assets per year (in addition to their income).

• Increasing the amount of income that care recipients can retain after contributing towards their care costs (the Minimum Income Guarantee and the Personal Expenses Allowance) in line with inflation from April 2022.

Corporation Tax

From April 2023 changes to corporation tax are coming in place. The reintroduction of the marginal rate system which has been done away with for several years. 

Corporation tax rates for business with:

• Profit £50,000 or below – 19% rate

• Profit between £50,000 to £250,000 - 25% rate (less marginal relief calculation)

• Profit above £250,000 - 25% rate

Super deduction for purchase of equipment and allowance capital allowances will bring tax relief of 130% applies to incorporated (Limited companies, PLC’s) business only and is in place for two years. 1 April 2021 to 31 March 2023

The £1 million annual investment allowance is still available to every company including sole traders.

Business Rates

A new one year 50% business rates discount for retail, hospitality, & leisure businesses for England. Wales already have a discount in place until April next year. We will have to see what the Welsh government say in December for the updates of business rates in Wales. 

Small business rates relief still apply.

Universal Credit

Universal Credit taper rate is cut by 8%, as of now for every £1 earned, 63p gets taken off. With the new rate cut, for every £1 earned, 55p will be deducted. Allowing lower paid people to keep hold of more benefit when they are working. The target date for this is 1st December.

Alcohol Duty

The tax on some alcoholic drinks such as beer, cider and wine will be slashed. The drinks with lower-level percentage of alcohol will mean a lower rate of tax. This means that next time you go to the pub and order a pint or on a night out, a glass of prosecco, will be a little bit cheaper.

It doesn’t matter if it is UK produced or imported. Tax relief for small brewers that produce under 8% alcohol. 

The budget brings about optimism boosted by prediction of higher growth for the UK after Covid. The Chancellor hit an upbeat tone as he talks up building a “stronger economy of the future”. Again, if you want the full version of the budget, please click here

Bridgend Council has revealed designs for a £1.8 million project that it hopes to build in Porthcawl.

The council wants to develop a new building with community facilities and space for shops and start-up businesses at land on Porthcawl seafront, known locally as 'Cosy Corner'.

Click here to find out more