Archive for the ‘Budget 2014’ Category

Autumn Statement: Payroll update

Posted on: February 9th, 2015 by Clive Headon No Comments

There were plenty of measures in the recent Autumn Statement that will affect payroll.

Personal Allowances

George Osbourne had already announced that the annual Personal Allowance was rising to £10,500 for 2014/15. In the Autumn Statement he increased this to £10,600. This means that the Age Allowance for people aged 65-74 will be overtaken by the Personal Allowance. The Age Allowance for people of 75 and over will remain at £10,600 until the Personal Allowance rises above that.

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Multinational Tax avoidance – latest HMRC measures

Posted on: February 9th, 2015 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

HMRC are continuing with their efforts to tackle what they see as tax avoidance by certain multi national companies. The latest initiative, announced in the 2014 Autumn Statement, is the establishment of a new tax – the “diverted profits tax”. The main objective of the tax is to counteract “contrived arrangements” used by large groups (typically multinational enterprises) that result in lower UK tax being paid and is not intended to apply to small and medium –sized entities (SME’s). The new diverted profits tax will charge UK tax on any profits that are established as “diverted” out of the UK, at the rate of 25% of the profit diverted. It applies to profits arising after 1 April 2015.

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Autumn Statement 2014: Key VAT announcements

Posted on: February 5th, 2015 by Liz Mounfield No Comments

Our guest author, Andrew Norris from Centurion VAT looks at the recent Autumn Statement in which the Chancellor provided a number of announcements significant to VAT.

Firstly, there were two pieces of good news for the charity sector.

  1. From April 2015, UK search and rescue and air ambulance charities will be eligible to claim refunds on VAT they have paid on purchases of goods and services for their non-business activities.
  2. Similarly, Hospices are currently subject to rules that deny them the right to recover the VAT incurred on expenditure. The Government felt that this treatment is unfair when compared to the NHS and as a result will refund the VAT that hospice charities incur. There is no detail yet on how the ‘rebate’ system will work nor when it will be effective from.  However, it is likely that Hospices will still have to pay VAT on the supplies they buy in but that the Government will refund these VAT costs through a separate refund mechanism rather than through recovery from HMRC via a VAT return.

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Impact of the Autumn Statement on Corporate Finance

Posted on: January 12th, 2015 by Katherine Broadhurst No Comments
Katherine Broadhurst , Assistant Manager, Corporate Finance, MHA Broomfield Alexander

Katherine Broadhurst , Assistant Manager, Corporate Finance, MHA Broomfield Alexander

Now that the run up to the election seems to have started properly, we thought it would be a good time to recap on 3 budget changes set out in the Chancellor’s Autumn Statement which could have an impact on the availability of finance in the economy.

Restriction on historical tax losses

Significant losses were made in the banking sector as a result of the recession and provisions against compensation due as a result of mis-selling scandals. Being able to relieve all of these losses against future profits would have meant banks may not have paid any tax for a significant period of time. As a result, the government has announced that from next year, banks will only be able to use historic losses to relieve 50% of their profits.

The Office for Budget Responsibility has estimated that changes to the tax regime in this way could lead to banks paying an extra £700m extra a year this decade. Whilst this could have a negative impact on the lending activity undertaken by banks as they will have less cash available, the government has announced a number of schemes that will reintroduce some of this tax back into the economy through support for SMEs seeking funding.

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Autumn Statement 2014 Review

Posted on: December 23rd, 2014 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

If anyone was expecting a giveaway Budget before the General Election, they will be disappointed. The chancellor’s Autumn Statement represents a fiscal tightening over the next five years, with the objective of achieving a budget surplus by the end of the next parliamentary term.

Sole traders and partnerships who transfer their business to limited companies will no longer benefit from a valuable “tax break.” In the past, it has been possible to create goodwill on incorporation, and benefit from entrepreneur’s relief. The capital gains tax on the goodwill has therefore been charged at 10%.

From 3 December, these capital gains will be taxed at 28%. Alternatively, tax payers should still be able to use the existing claim hold over relief to avoid the tax charge.

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Autumn Statement 2014: Positive announcements for charities

Posted on: December 4th, 2014 by Sarah Case No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

The festive season has got off to a great start with good news for charities in the Autumn Statement. The National Press coverage is concentrating on stamp duty reforms that will affect you if you are buying a home, amongst other announcements. Hidden behind those headlines are a number of positive measures for charities; perhaps the most direct measures are the extension of VAT rebate schemes for hospices and search and rescue charities.

These VAT news stories for charities are:

Hospice charities move to a level VAT playing field

Until now, hospice charities have been disadvantaged when competing for contracts with NHS providers as they have suffered VAT  on many non-business supplies, which NHS providers of course do not. This gives a significant disincentive to contracting out.

Following the Fair Playing Field Review, the government says that they will refund the VAT that hospice charities incur. This should give VAT savings of up to £4million per year.

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Autumn Statement 2014: Initial reflections

Posted on: December 4th, 2014 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Stamp Duty Changes could lead to increasing house prices

Changes to the way stamp duty is calculated changing the ancient system which used to produce unfair results have been broadly welcomed across the board. Purchasers buying houses under £937,500 will now be better off under the new rules which broadly equate to 98% of residential transactions.

There will however be an unintended affect on houses which are valued around the previous boundaries. These properties (which have been artificially reduced because of the boundaries) are likely to go up in value overnight and prospective vendors are likely to try and cash in on stamp duty savings on offer.


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Autumn Statement 2014: Impact upon Welsh individuals

Posted on: December 3rd, 2014 by Lynda Kendall No Comments
Lynda Kendal, Tax Manager, MHA Broomfield Alexander

Lynda Kendal, Tax Manager, MHA Broomfield Alexander

In his last Autumn Statement before the Election next May the Chancellor, George Osbourne, announced a package of measures designed to improve the economy and also win votes.

Whilst spending cuts are still envisaged and the Universal credit allowance is to be frozen for another year, the Chancellor has announced measures that aim to make certain multinational companies and banks pay what is perceived as their fair share of tax. A 25% corporation tax charge is to be levied on multinational companies that artificially transfer profits outside of the UK and banks will only be able to reduce their profits by 50% using losses made during the banking crisis, rather than eliminate them completely.

The personal allowance will be increased from £10,000 to £10,600 from April 2015 and for the first time in many years the basic rate band will also increase by the same amount so that both basic rate and higher rate taxpayers will benefit by the reduction in tax. The ISA allowances also increase to £15,240 and these investments will from April retain their tax free status if passed on to a spouse on death.

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Autumn Statement 2014: Impact upon Welsh businesses

Posted on: December 3rd, 2014 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

In his last Autumn Statement before the General Election next year, the Chancellor has put together a package of measures targeted to help small businesses.

Before the statement, many had lobbied for an overhaul of business rates which is often a businesses’ largest cost after wages. Those that did will be happy that he promised to look at overhauling the system as well as capping inflation linked increases and offering larger discounts to high street shops, pubs and cafes.

To help the UK economy to grow faster by aligning ourselves to the growth of other fast growing countries, he has also introduced a package of measures to encourage investment in Asia, Africa and South America. Businesses looking to expand into those countries should benefit but the detail has yet to be understood.

While the UK has one of the lowest rates of company tax at 20% from April 2015, the Chancellor continues to tackle tax avoidance and with the strapline “low taxes but taxes that are paid” he will introduce a tax rate of 25% on profits artificially diverted to other countries, the so-called “Google tax”.

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Budget 2014: Impact on the Motor Sector

Posted on: April 4th, 2014 by Matthew Thomas No Comments
Matt Thomas, Director, MHA Broomfield Alexander

Matt Thomas, Director, MHA Broomfield Alexander

There was welcome news from the Chancellor with the announcement that the annual investment allowance is to be increased to £500,000 (from £250,000). This allowance offers businesses the ability to deduct 100% of their expenditure on qualifying costs when calculating their taxable profits.

Dealers acquiring new sites or refurbishing existing sites are usually able to make extensive capital allowance claims and the increased allowance is therefore advantageous to the motor sector.

As ever, not every tax change is good news for the sector. From 1 April 2014 new rules take effect regarding the acquisition of properties. It is vital that anyone considering a property acquisition takes advice. Without the appropriate elections being agreed, buyers can lose out on eligibility to claim any capital allowance tax relief on their purchase costs. This eligibility loss is permanent and will apply to all subsequent owners of the property. i.e. it will affect your property’s resale value.

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