What’s in Kwasi Kwarteng’s Mini Budget?

New Chancellor Kwasi Kwarteng set out a mini-budget on Friday with some headline grabbing tax cuts, which he says are the biggest in a generation.

What do they mean for you?

 

Income Tax.

Kwarteng has cut the basic rate of income tax from 20% to 19%, effective April 2023. The Government estimates 31 Million people will benefit from £170 more a year.

Basic rate applies to people who earn between £12,571 and £50,270 Per Annum.

He has also abolished the higher rate income tax of 45%, instead keeping one single rate of 40% for people who earn over £50,270.

 

Corporation Tax.

The Chancellor has decided to stop the planned rise in corporation tax to 25%, opting to keep it at the current 19%.

 

National Insurance.

The recent rise in NI contributions will be reversed from November 6th. Since April, both workers and employers have paid an extra 1.25% in the pound.

 

Stamp Duty.

There are changes to when and how much stamp duty you pay now when you buy a property in England and Northern Ireland.

The price in which you pay has now doubled from £125k to £250k. (First time buyers don’t pay until £425k)

From then the rates are:

5% £250k-925k

10% £925k-£1,500,000

12% £1,500,000 +

 

Energy.

The big talking point this summer. Kwasi Kwarteng has announced there will be a freeze on energy bills for both residential and businesses, costing the government an estimated £60 Billion for 6 months.

 

Working and Investments.

Companies can invest tax free annually at £1M indefinitely.

IR35 rules are going to be simplified.

Regulations are changing so pensions funds can increase UK investments.

Share options for employees have been doubled from £30k to £60k.

New and start up companies will be able to raise up to £250k under a scheme giving tax relief to investors.

 

Good news if you are a banker. The limitations on bankers’ bonuses have been scrapped.

 

For a more detailed overview of the plans, go to gov.uk .

If you’d like to discuss how the changes will affect you or your business, as always, give Soldi Partners a call.

Kindest,

Theresa.

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5 Ways to Get Support for your SME

Five ways you can get financial support for your business

1: Claim up to £5,000 with employment allowance

Employment allowance is a tax relief which allows eligible businesses to reduce their national insurance contributions bills each year. You can claim this is if you are a business, and your employer Class 1 national insurance liabilities were less than £100,000 in the previous tax year.

That’s a new tax cut that’s worth up to £1,000 for nearly half a million SMEs!

2:Get a discount of up to £5,000 on software, with Help to Grow: Digital

Help to Grow: Digital is a UK wide Government backed scheme that aims to help businesses choose, buy and adopt digital technologies that will help to grow their business.

Eligible businesses can receive a 50% discount on buying new software worth up to £5,000 per SME, alongside free, impartial advice and guidance about what digital technology is best suited to boost their business performance.

3: Get up to half off your business rates 

From April this year, small retail, hospitality and leisure businesses can benefit from 50% off their business rates bills. The business rates multiplier has also been frozen.

4: Invest in your business with Super-deduction and Annual Investment Allowance

To spur business investment, the super-deduction allows companies to cut their tax bill by 25 pence per every £1 they invest in any qualifying machinery and equipment. This can include the purchase of computers, most commercial vehicles and office furniture. This allows businesses to spend up to £1 million on qualifying business equipment , and deduct in-year its full cost before they calculate their taxable profits.

5: Benefit from the cut in fuel duty

The government has cut fuel duty on petrol and diesel by 5 pence per litre for 12 months – effective from 23 March 2022.

This cut, plus the freeze in fuel duty in 2022-2023 , represents a £5 billion saving worth around:

  • £200 for the average van driver
  • £1,500 for the average haulier

 

Information on behalf of HMRC – for more information visit Gov.uk or Call us for a no obligation Consultation. 

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Five things to know if you are considering employing someone

You’re thinking of employing someone? Great news! This is a positive sign that your business is thriving.

Taking on employees can be a lucrative move – whether you are hiring for someone’s particular expertise to grow your business, expanding your services, or making use of an extra pair of hands so you can dedicate your precious time to scaling the business.

Employing someone isn’t straightforward (nothing ever is in business, right?) and you’ll need to take on new responsibilities, so we have put together some handy tips to bear in mind when taking this exciting step.

 

1 – Know your facts.

There are numerous responsibilities you will take on when employing someone, so it’s important to have knowledge of employees’ basic statutory rights, employment law, and your PAYE obligations. It might be worth hiring an expert to help you navigate new company policies and contracts to ensure you are compliant as necessary.

 

2 – Get insured.

You’ll need to get Employment Liability Insurance when taking someone on – this is a legal requirement and is there to protect your staff if they get injured or become ill as a result of working for your business. It’s a relatively small monthly cost to ensure you aren’t liable if something goes wrong.

 

3- Be careful not to discriminate.

When recruiting you’ll need to ensure you are not discriminating against anyone in the process. Ensure you have a thorough job advert, which clearly states the skills you require for the job.

Don’t ask questions or make decisions based on a candidate’s ‘protected characteristics’  – which include gender and gender reassignment, race, age, disability, religious belief, sexual orientation, pregnancy and marriage, and civil partnership.

 

4- Can you afford it?

There will be costs involved when hiring someone. You’ll need to check:

  • What the National Minimum wage is
  • How much National Insurance you’ll have to pay
  • How much sick pay your employee is entitled to
  • How much you’ll need to pay towards their pension
  • Maternity / Paternity leave costs (this will include direct payments to your employee along with taking on someone to cover their absence, should you need to)

 

5- Register as an Employer.

Once you’ve done all of the above checks and you are prepared to take on an employee, you’ll need to register as an employer with HMRC. You’ll find all of the information you need on the GOV.UK website along with the online forms to submit. Click here for more info.

 

Soldi Partners is able to offer friendly, reliable, and simplified support for your business at all stages.

If you’d like to discuss anything covered in this article, get in touch.

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