As the spring of 2024 unfolds, the Government have unveiled their budget, setting the stage for economic policies, social initiatives, and infrastructure development for the upcoming fiscal year. This pivotal moment not only reflects current priorities but also shapes the nation in the months and years to come. In this blog, we delve into some of the top topics emerging from the spring 2024 budget and their potential implications.

National Insurance

The main topic for the budget was the cut in national insurance again. The chancellor reduced the amount of national insurance employees would pay by 2%. The rate going from 10% to 8% in April 2024. It is estimated that the cut would be worth about £450 a year for someone on a £35,000 full-time salary.

It is estimated that around 29 million workers are set to benefit from the change. The rate of 'class 4' national insurance contributions, which is the main rate paid on self-employed profits of between £12,570 and £50,270, will be cut from 9% to 6% from 6 April. This rate had been due to fall to 8% from 6 April, but the chancellor has taken it one step further today. The self-employed will benefit too as the rate is slashed from 9% to 6%.

Housing

The chancellor confirms plans to scrap the furnished holiday lets regime. The initiative gives tax reliefs on properties being rented out to holidaymakers and make renting out to holidaymakers more profitable than to long-term tenants. The move is expected to raise £300m a year for the Treasury, however a blow to furnished holiday lets owners.

The chancellor also announced the government will reduce the higher rate of property capital gains tax. This is a tax paid on the amount of gain when selling a property. Currently the rate is 28% for higher rate earners, but this is being reduced to 24%

Business and Investment

The VAT registration threshold will be increased from £85,000 to £90,000 from the start of April. This change is estimated to help tens of thousands of businesses.

Benefits and Income Support

The Household Support Fund, which helps people struggling with cost-of-living pressures and was due to close in four weeks' time, will continue for another six months.

Full child benefits to be paid to households where highest-earning parent earns up to £60,000 - the current limit is £50,000. The top of a taper to withdraw the benefit will be raised to £80,000 from £60,000 at the moment.

The chancellor also announces a consultation on child benefit rules, to apply it to collective household incomes rather than for individuals from April 2026.

If there is something you want to know more about, you can call us on 02920 653995 or

01656 530063 to discuss.

As the clock ticks towards 01 April 2024, businesses across the nation are bracing themselves for the significant minimum wage increase set to come into effect. With no accompanying support from governments in these challenging times, the burden falls on the shoulders of businesses to adapt and plan effectively.

The Rise of Minimum Wage

As with every year, April 1st marks a pivotal moment as the minimum wage sees a substantial increase. Workers aged 21 and over will be entitled to the National Living Wage where currently it was workers aged 23 and over. While the intention behind such adjustments is to uplift low-wage workers and tackle income inequality, the reality for businesses is starkly different. For many, this hike presents a formidable challenge, with limited government assistance.

We are seeing a lot of restrictions being eased and it is the closest to normality for a very long time. The bonus of the sunshine is something to make the most out of. While we enjoy ourselves and plan for an entertaining summer, we should not forget about business. We should take steps in to planning on how to bounce back stronger.

As the country opens slowly and the opportunity arises to mingle with other business owners, you should make time to try and attend where businesses are likely to be. Nearer the end of 2021, we are likely to see trade fairs taking place, with all businesses on the same boat, getting the business name out there.  

If you do not have the budget or time to be a part of the trade show, then you should try and attend as a visitor. It will be a great way to connect and being a visitor will give you the freedom on your timing as you can leave when you feel like you have made the most out of the day. Who knows, you may even bump into some familiar faces, for a long-awaited catchup.

Our usual go to for these types of events are The Welsh Business Show, Zokit and Introbiz. Some may have updated dates for the events, some may be posting later. Keep an eye out on social media as we are sure there will be a buzz. Click here to look at what is out there with trade fairs https://10times.com/cardiff-uk/business-consultancy/tradeshows

To get your company to achieve the highest levels, you may need a hand by employing staff. This may seem a scary step to take, especially if this will be your first time employing someone. There are many things to consider. Due to the disruption of jobs during the pandemic, the government have introduced a Kickstart scheme. This scheme is to provide funding to create new jobs for 16- to 24-year-olds on Universal Credit.

It does not matter on the size of your business, everyone can apply. The funding will cover:

·        100% of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of 6 months

·        Associated employer National Insurance contributions

·        Minimum automatic enrolment pension contributions

Further funding is available for training and support so that young people on the scheme can get a job in the future.

More info on how to apply, please click here https://www.gov.uk/guidance/apply-for-a-kickstart-scheme-grant

If you already have staff, and are bringing them back in to work, remember the furlough scheme is flexible and available until 30 September 2021. You will have to contribute for any hours worked by your employees. From 1 July 2021, the level of grant will be reduced, and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages.

You can continue to choose to top up your employees’ wages above the 80% for the hours not worked at your own expense. This is completely up to you and not a requirement.

Let us try and finish 2021 strong and push past this pandemic. It has been tough for everyone, but with planning and preparing, we can start looking ahead.

It has been several weeks now since the whole country has come to a standstill. We still have strict restrictions in place, however there is still a lot we can do to ensure our businesses does not just fade away. We have all put endless efforts into our business and now is not the time to just give up. You should still be on social media, promoting your business, so once all this is over, and it will all be over, your business is in the front of everyone’s minds.

Our previous Coronavirus Blog detailed how you could get support from the Government Retention Scheme to the grants that are available. To read our previous blog, please click here https://bit.ly/Covid19interruptionCrossAcc

Bounce Back Loan

There will be support in the form of a bounce back loan which will help you to borrow between £2,000 and up to 25% of their turnover. The maximum loan is capped at £50,000. The government has guaranteed 100% of the loan and there will not be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

To be able to apply for the loan you will have to be based in the UK, have been in business before 1^st March 2020 and your success or development have been impacted by the coronavirus.

You cannot apply if you are already claiming under Coronavirus Business Interruption Loan Scheme or COVID-19 Corporate Financing Facility. If you have already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme. A deadline of 4 November 2020 has been set to arrange with your lender.

The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months and any charges for the loan will be covered by the governments guarantee.

There are several lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the bank’s website. The lender will ask you to fill in a short online application form and self-declare that you are eligible. The lender will decide whether to offer you a loan or another type of finance and you will be responsible for repaying 100% of the amount borrowed.

Self-Employment Income Support Scheme

In line with the Chancellors commitment to help businesses who have been affected by the coronavirus, HMRC have launched the self-employment scheme. You should receive a letter through the post stating that you may be eligible. You will have to go to the HMRC website and complete an eligibility checker to see if you are eligible. You will need your National Insurance number and Self-Assessment Unique Taxpayer Reference (UTR) number.

If HMRC confirm you are eligible, then you will need your Government gateway and user ID and password, if you have not created this yet, you will have to, to commence with the claim. You will have to enter your correct contact details as HMRC will contact you, using these details to tell you when the claim system is available for use.

HMRC will automatically calculate the income support you are entitled to, based on the information submitted from previous tax returns. After HMRC have received and checked your claim, they will pay the money directly in to your bank account in six working days.

You will need to make the claim yourself, although you can seek advice from an accountant. The grant is also not for limited companies or anyone operating a trade through a trust. HMRC will check claims and take action to withhold or recover payments found to be dishonest or inaccurate.

We are still available on the phone and by email, so if you do want to talk through what may be your best option, please feel free to contact us. We are always happy to help.

We’ve all heard of IR35, but do you know the rule changes that are being introduced? IR35 also known as the ‘off-payroll’ working rules and will kick in if a worker provides their services through an intermediary.  It’s been in the news for some time now affecting a lot of News and TV presenters and has been making big headlines.   From April 2020 this will now be affecting the private sector from any industry where they are working either through a limited company or as a sole trader but the relationship between themselves and the client could constitute an employer/employee relationship.

An intermediary will usually be the worker’s own personal service company, such as a limited company. They could also be a partnership, a managed service company, or an individual who is on self-assessment.

The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same tax and National Insurance contributions as employees.

The rules apply if a worker provides their services to a client through an intermediary but would be classed as an employee if they were contracted directly.

So, who decides?

If you’re a worker and your client is in the public sector like a school or library, it’s their responsibility to decide your employment status. You should be told of their decision; we’ve seen a large number of the larger companies starting to make changes to their arrangements with their subcontractors in preparation for this event.     This will affect everyone, including people who employ a Cleaner, a subcontractor in the building industry.   IR35 supersedes the CIS scheme i.e. its take priority over the CIS scheme above everything.

If you are a worker and your client is in the private sector, it’s your intermediary’s responsibility to decide your own employment status for each contract. The private sector includes third sector organisations, such as some charities.

HMRC do have a calculator on their website to help you see for yourself whether you would have to comply with the rules.

There are tests that are run to decide this for you.

https://www.gov.uk/guidance/check-employment-status-for-tax

Some of the tests are as follows

Who has the control, can you say no to projects or specific pieces of work, or are you required to take whatever work is given to you.

Do you use your own tools at work?

Do you have public liability insurance and employers liability insurance?

Can you send in a substitute for yourself?   Not a main point but it does get weighted on any HMRC decision.

The difference on what this will mean for you, is that you will no longer be able to claim the travel expenses you would have been able to claim before regardless of the distance you are travelling to work, plus you will pay the higher national insurance which currently is 12% for employees and 13.8% for  employers.   You effectively could pay out both rates, not just the one.

HMRC do not care if you have given up your employment rights, i.e. holiday pay and sick pay.    We are expecting them to spot check individuals at any point during 2020.

The costs to the private sector will be very high, we haven’t seen the updated budget expected to be out in March 2020.  But are expecting with all the news coverage and the actions the larger companies are planning, everyone could be affected imminently.

If you are facing this problem with your own subcontractors, please get in touch with us, we have a risk assessment template for our clients that they can use.   If you are a subcontractor yourself, it is worth getting in touch with your contractor to find out their plans for the system.   

A lot of these companies are planning on putting everyone on PAYE whether you receive the employment rights that go with that change, we are still waiting to see.