Archive for the ‘Budget 2013’ Category

Corporation tax delay for family firms

Posted on: January 2nd, 2014 by Leighton Reed No Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

Family-owned businesses may be able to use an Autumn Statement initiative to delay corporation tax payments and boost their cash flow.

Currently, many family-owned companies have to pay their tax in quarterly instalments where they are classified as being under common ownership — for example, one company owned by a husband and another by his wife could be caught by this rule, which also applies for civil partnerships.

However, from April 2015 such firms may be able to pay their tax nine months after the end of their tax year — as long as their companies are not directly linked within a group.

For more information on the details in the above article please contact us on tax@broomfield.co.uk

Highlights of the Autumn Statement 2013

Posted on: December 5th, 2013 by Liz Mounfield No Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

The Autumn Statement was very different presentation from the Chancellor’s last set-piece, the Budget of last March. On this occasion he was able to say that his previous forecasts had been too pessimistic: instead of borrowing more than expected in the future, the government would be borrowing less. The Chancellor could even see a surplus on the distant horizon of 2018/19, albeit only a small one.

However, politics and the uncertainty of forecasts meant that there were no giveaways from Mr Osborne. Instead he produced a ‘fiscally neutral’ set of measures, many already announced or briefed, but some unexpected:

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What can we expect in the 2013 Autumn Statement from a tax perspective?

Posted on: December 4th, 2013 by Leighton Reed No Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

There are some things we already know about which we can expect an update from, or confirmation of the proposed next steps.  These include:

  • Measures to reduce the opportunity to use partnerships in a manner which reduces taxes for the members such as “hybrid” structures or using partnerships as contracting parties for persons who in reality should be treated as employees
  • Improvements to the Community Amateur Sports Club status which improve the tax reliefs available
  • Improvements to the Venture Capital Schemes (including a potential new tax relief for investors in social enterprise)
  • A continued campaign against tax avoidance and additional measures to make avoidance more challenging and in particular against “marketed” schemes

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Podcast: Patent Box

Posted on: September 11th, 2013 by Denise Roberts No Comments

As intellectual property (IP) becomes more relevant to the business world the Patent Box regime is about recognising new and innovative technologies and getting the greatest possible tax benefit from it.

In a recent podcast, Denise Roberts talks through the incentive that has been recently introduced by the government:

To discuss Patent Box and the information in this podcast in more detail, please contact Denise Roberts.

Spending review 2013 reaction

Posted on: June 26th, 2013 by Liz Mounfield No Comments

Today’s spending review announcement by chancellor George Osborne does not make happy reading – but there are signs of small movements in the right direction.

Public spending for 2015-16 will be £745bn, but the government needs £11.5bn of extra savings and this will not be achieved without significant hardship – especially in the public sector, with knock-on effects among private sector contractors.

Public sector pay rises will be capped at an average of one per cent for 2015-16 and there are plans to scrap automatic pay rises for time served in schools, NHS, prisons and the police – although not the armed forces.

The Office for Budget Responsibility predicts total number of people working for the government to fall by another 144,000 by 2015-16.

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Budget 2013: Childcare Scheme

Posted on: March 29th, 2013 by Leighton Reed No Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

In Autumn 2015, a new childcare scheme will be introduced to help working families with their childcare costs.

For families where both parents are in work, a 20% contribution will be available from the Government on up to £6,000 of childcare costs per year per child. This will be worth up to £1,200 per child. Families receiving support through Working Tax Credits/Universal Credit, or where one  parent has an income over £150,000, will not be eligible.

To start with, the scheme will be available to all children under 5 and gradually expand to include children under 12.

This scheme will replace the current system of Employer Supported Childcare, including the current ability for employers to provide up to £55 per week in tax free child care vouchers.

Budget 2013: Employment Allowance

Posted on: March 28th, 2013 by Leighton Reed No Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

A new Employment Allowance will be introduced from April 2014.  The allowance will reduce the employer’s normal National Insurance Contribution (NIC) liability by £2,000. It will have no effect on the employees’ NIC liabilities.  The reduction will be claimed through the new Real Time Information system and further details will be announced over the course of the year.

Interest Free and Cheap Loans

The limit for interest free or cheap loans will be increased from £5,000 to £10,000 from April 2014.  Employers may make loans up to this amount without any income tax or NIC being charged. It should, however, be noted that the separate corporation tax charge will still apply to loans to shareholders and their families.

Budget 2013: Corporation Tax

Posted on: March 27th, 2013 by Leighton Reed No Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

Rates of corporation tax

From 1 April 2013, the main rate of corporation tax will be 23% and from 1 April 2014 it will be cut to 21%.  The small profits rate is to remain at 20% throughout the same period.

From 1 April 2015, the corporation tax main rate will be aligned with the small profits rate and set at 20%.  Hence there will be a single rate of tax for all companies irrespective of their level of taxable profits.

The small profits rate applies where profits are less than £300,000 and the main rate applies where profits exceed £1,500,000.  These thresholds will become less important in future, but will still be relevant to determining whether Quarterly Instalment Payments are payable.

Budget 2013 – Agriculture

Posted on: March 26th, 2013 by Leighton Reed No Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

If you are a small business owner, farmer or other landowner, are you aware of a recent change in the deductibility of debts for IHT purposes?

Currently you would look at how a debt is secured for IHT purposes rather than the purpose for which the debt was used for working out a liability on death.

For example: where a landowner or a small business owner buys a factory or additional tranche of land, currently they would look to secure the debt on an investment property or their house.

The business property would attract BPR and the debt would reduce the value of their house for IHT purposes. From Royal Assent of the Finance Act 2013 (about 20 July 2013), the debt will now be deducted from the value of the business asset rather than the investment.

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Budget 2013: EMI Schemes and Entrepreneur’s Relief

Posted on: March 26th, 2013 by Leighton Reed 2 Comments
Leighton Reed, Director, Broomfield & Alexander

Leighton Reed, Director, Broomfield & Alexander

Buried in the small print of the Budget is a welcome improvement to the Employment Management Incentive (EMI) Scheme.  Employees who receive shares under EMI schemes will now be able to claim the 10% rate of capital gains tax if they have held the options for 12 months. Previously, they needed to hold the shares for 12 months. EMI schemes will become much more attractive as a result of this change.

The Chancellor has also confirmed the introduction of the Employee Owner scheme. In return for giving up certain employment rights such as redundancy, a new employee may be awarded shares in the company. The first £2,000 worth of shares will now be tax free. As before, the shares will be exempt from capital gains tax, within certain limits. The scheme is beset with practical difficulties and, as it currently stands, is likely to see very little take-up.

Please contact our tax team for advice or information on the EMI scheme and the changes that the recent budget announcement will bring.

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