Understanding the Recent Bank of England Rate Cut: Implications for UK Business Owners and Mortgage Holders

Last Thursday, 1st Aug 2024, the Bank of England made a pivotal decision to lower interest rates by 0.25%. This move, aimed at stimulating economic growth amid uncertain economic conditions has significant implications for both business owners and mortgage holders across the UK. Let’s explore what this rate cut means for you and how our accountants can guide you through it.

What does the rate cut mean?
The Bank of England’s decision to cut interest rates to 5% is primarily designed to make borrowing cheaper and encourage spending, which can boost economic activity.

Impact on Business Owners
For business owners, the reduction in interest rates presents both opportunities and challenges:

1. Cheaper Borrowing Costs: Businesses looking to expand or invest in new projects can now access cheaper loans. This reduction in borrowing costs can lead to increased capital investment, allowing businesses to grow and innovate more affordably.
2. Improved Cash Flow: Existing debts will become less expensive to service. For businesses with variable rate loans, monthly payments should decrease, improving overall cash flow    and potentially freeing up resources for other investments.
3. Encouragement to Spend:  Lower interest rates often signal a favorable environment for growth and expansion. This could be the perfect time for businesses to invest in new equipment, hire additional staff, or launch new products and services.

Impact on Mortgage Holders
For mortgage holders, the 0.25% rate cut can lead to significant savings and financial relief:

1. Reduced Mortgage Payments: If you have a variable or tracker mortgage, you will likely see a reduction in your monthly mortgage payments. This decrease can provide so much-needed breathing room in your personal finances.
2. Opportunities for Refinancing: Fixed-rate mortgage holders might consider refinancing to take advantage of the lower rates. Even a small reduction in interest can lead to substantial savings over the life of the mortgage.
3. Increased Housing Market Activity: Lower interest rates can make buying a home more attractive, potentially boosting the housing market. For those looking to sell, this could mean a larger pool of prospective buyers.

Strategic Considerations
While the interest rate cut presents clear benefits, it’s essential for both business owners and mortgage holders to think strategically:

Assess your financial health: Before taking on new debt, ensure your financial situation is stable and that you have a solid plan for repayment.

Consider Long-Term Goals: Align borrowing decisions with your long-term financial and business goals. Don’t be swayed solely by the allure of lower rates.

Stay Informed: Economic conditions can change rapidly. Keep abreast of financial news and be prepared to adapt your strategies as needed.
 
Conclusion
The bank of England’s decision to lower interest rates by 0.25% is a significant development for the UK economy. For business owners, it can provide opportunities for growth and expansion. We know how it offers a chance to save money and improve financial stability for mortgage holders and by understanding the implications and making informed decisions, you can take full advantage of this favorable interest rate environment.

If you need personalized advice on how this rate cut affects your financial situation, feel free to contact our team. As expert tax accountants, we are here to help you navigate these changes and make the most of the opportunities they present.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

On 6th March 2024 the UK Chancellor announced the Spring Budget for the UK. There were quite a few positive changes and the main points to help plan ahead are below:

Child Benefit Changes
Starting April 2024, parents will receive Child Benefit as follows: £25.60 per week (£1,331 annually) for the eldest child and £16.95 per week (£881 annually) for additional children.
Presently, if either parent's income exceeds £50,000, the High Income Child Benefit Charge (HICBC) takes effect, requiring repayment of Child Benefit once income surpasses £60,000. This necessitates completing a self-assessment tax return.

As of April 6, 2024, the threshold rises to £60,000 with a gradual taper, fully recouping Child Benefit when income exceeds £80,000. By April 2026, the clawback assessment will shift to a "household income" basis, pending HMRC adjustments.

The 2024 threshold increase will lower the combined tax rate (HICBC, income tax, and NIC) on incomes above £60,000, encouraging parents to earn more. Eventually, transitioning to a "household income" basis should create fairer outcomes for families, albeit HMRC implementation challenges may arise.

Changing the Non-Domiciled (non-dom) status and tax treatment
The government plans to end the current tax treatment for UK resident non-domiciled individuals (non-doms) starting April 6, 2025. This regime, in place for over 200 years, allowed UK residents with permanent homes abroad to avoid UK tax on foreign income and gains (FIG) unless brought into the UK. It also shielded non-UK assets from Inheritance Tax.

As of April 6, 2025, the current remittance basis will be replaced by a new residence-based test lasting four years for those who have been non-UK residents for at least the prior ten tax years. During this period, newcomers won't pay tax on foreign income or trust distributions brought into the UK. However, they'll lose personal allowances and CGT exemptions.

After four years, individuals will be taxed like other UK residents on worldwide income and gains.
Transitional rules apply: non-doms moving from remittance to arising basis in 2025/26 will be taxed on 50% of foreign income; reduced rates for pre-6 April 2025 FIG remittances till 2027; and Capital Gains Tax rebasing for non-UK assets. Business Investment Relief continues.
From April 6, 2025, settlor-interested trusts lose tax protection unless they qualify for the four-year FIG regime. Overseas workday relief remains for the first three years, depending on opting into the new regime.

Inheritance Tax shifts from domicile to residence-based from April 6, 2025, with assets within ten years of UK residency potentially liable. UK sited assets remain subject to IHT.
These changes simplify the non-dom tax system, but complexities persist. Transitional provisions offer time for adjustment. Current non-doms should consult their Tax Affinity adviser promptly as these are significant changes.

National Insurance
Class 1 Changes (Employed)
Starting from an annual income of £12,570 up to £50,270, employees pay Class 1 National Insurance Contributions (NICs). The rate is currently 10% (down from 12% since January 6 this year). Above £50,270, the rate remains 2% for additional earnings.
From April 6, 2024, the main rate will decrease by another 2% to 8%, potentially saving employees up to £63 monthly (£754 yearly). Employers' NICs, at 13.8% over the lower threshold, remain unchanged.

This reduction benefits employees and may ease pressure on employers regarding wage hikes.

Self-Employment Changes
Self-employed individuals pay Class 4 NICs from £12,570 to £50,270 at 9% (dropping to 8% from April 6, 2024). Above this threshold, the rate stays at 2%.

Starting April 6, 2024, the rate decreases by another 2% to 6%. This saves £30 for every £1,000 of profit, up to £1,131 annually for those paying at the main Class 4 NIC rate. Class 2 NICs were abolished from April 6, 2024, offering a positive financial change for the new tax year.

Capital Gains Tax
When you sell residential property and make a profit, you might owe Capital Gains Tax (CGT), except when it's your main home, which is CGT exempt. If the property wasn't always your main home, only part of the gain is taxable.

Currently, residential property gains are taxed at 18% for basic rate band profits and 28% thereafter. Starting April 6, 2024, the higher rate reduces to 24% for property sales.
Reporting the sale within 60 days from completion is crucial. Sales exchanged before April 6, 2024, may still be taxed at 28%.

Landlords affected by the abolishment of Furnished Holiday Lets tax benefits from April 2025 will see changes. From April 6, 2025, furnished holiday lettings will be treated as property investment businesses, losing several tax benefits:

• Interest on loans for furnished holiday lettings will no longer be deductible but will receive a 20% tax credit.
• Capital gains will be subject to CGT rates, losing business asset disposal relief.
• CGT rollover relief and capital allowances will be withdrawn.
• Tax relief for pension contributions may require adjustments.

These changes impact property owners and landlords, requiring careful consideration and possibly seeking advice.

Investments
The Budget introduced measures to encourage individual investing and foster a stronger savings culture. Here are the key points:

1. UK ISA Consultation:
   • The government is considering a new UK ISA with a £5,000 allowance, in addition to the existing £20,000 allowance.
   • The consultation, open until June 6, 2024, seeks input on defining eligible investments for the UK ISA.
   • ISAs offer tax-free savings, potentially benefiting higher earners amidst frozen tax thresholds.
2. NS&I British Saving Bond:
   • NS&I will launch a British saving bond in early April 2024, offering a fixed interest rate for three years on investments ranging from £500 to £1 million.
   • Investors can choose between growth bonds and income bonds, each with different tax implications.
   • Bonds from NS&I are backed by HM Treasury.
3. NatWest Share Sale:
   • The government plans to sell part of its NatWest shareholding directly to individual investors, aiming for full divestment by 2025/26.
   • The sale may occur this summer, subject to market conditions.

It's advisable to seek independent investment advice before making any investment decisions.

VAT threshold increased
The government is raising the VAT registration threshold from £85,000 to £90,000 and the deregistration threshold from £83,000 to £88,000. These changes start on April 1, 2024. Over 28,000 businesses are expected to benefit by no longer needing to register for VAT in 2024-25.

Conclusion
Overall this is a much better budget than the previous autumn one presented in 2023. VAT announcement is decades overdue and the drop in NI thresholds don't make that much of a real world difference when price rise percentage is way higher then the percentage drop. And again the goverment did not address any of the large multinationals raking huge profits while small businesses and the public suffer. The sale of Natwest shares in a recession (that the government used tax payers money to bail out the bank recently) needs to be critically analysed more closely as to the effective timing of the sale and real time benefit for tax payers who directly paid for this out of their pockets. At times like these its even more important to have an experience and knowledgable tax accountant in your corner.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

Chancellor Jeremy Hunt has disclosed the UK government's fiscal plans for the upcoming year. On November 22, 2023, Hunt presented the Autumn Statement in the House of Commons, likely the last pre-election mini-budget, with Prime Minister Rishi Sunak hinting at a potential election in October 2025 next year.

The Office for Budget Responsibility (OBR) has concurrently unveiled its latest economic outlook for the UK. In response to last week's news of a drop in inflation to 4.6% for the year up to October, Conservative MPs had advocated for broader tax cuts, taking advantage of what was termed as 'fiscal headroom.' Consequently, the chancellor has indeed announced tax reductions in today's statement.

The focus now turns to how these revelations might impact small businesses and the self-employed. Read on for key updates affecting this sector:

1. Living Wage Increase: The government has confirmed that the national living wage will increase in April 2024, reaching £11.44 per hour for workers aged 23 and above. This increase will also extend to include 21 and 22-year-olds for the first time.
2. National Insurance Reform for the Self-Employed: The chancellor has reformed and simplified taxes for the self-employed. Class 2 National Insurance has been abolished, resulting in average savings of £192 annually for self-employed individuals. Additionally, Class 4 National Insurance has been reduced to 8% for those earning profits between £12,570 and £50,270, with an anticipated annual savings boost of £350 from April 2024.
3. Business Rates Relief for Small Businesses: Despite impending increases in business rates with inflation, the small business multiplier has been frozen for an additional year. Moreover, the 75% business rates relief for eligible retail, hospitality, and leisure businesses (up to £110,000 per business) has been extended for the fiscal year 2024-25.
4. Late Payment Reforms: The government is taking measures to address late payment of invoices by companies, including the extension of payment terms and stricter requirements for companies bidding for large government contracts.
5. Simplified R&D Relief: Research and development (R&D) relief for small businesses will be streamlined, with the merging of the current R&D Expenditure Credit and SME schemes from April 2024.
6. Alcohol Duty Freeze: A temporary freeze on alcohol duty has been extended until August 1, 2024, with new rates set to be announced in the Spring Budget next year.
7. Business Tax Changes: The 'full capital expensing' business tax break, which reduces corporation tax liabilities for UK-based investments, has been made permanent. Businesses can now claim back 25p in corporation tax for every £1 invested in IT, machinery, and equipment.

Despite receiving a little bit of positive feedback, reservations linger about the effectiveness of these reforms in bolstering the strained small business sector. The increase in minimum wages rates for employees will no doubt increase costs for SME's already suffering from high utility bills - and will ultimately mean smart business owners decease the days and hours of staff. The majority of small businesses already had access to small business rates relief so nothing changed there. Finally the much talked about CGT and IHT amendments did not materialise, neither was there any  focus on reigning in large energy suppliers sapping the profits out of small and medium sized business to boost their annual profits. And the loss of class 2 NI is a blow for micro businesses and sole traders who needed it to top up their state pension contributions. Overall not impressed at all.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

The Smart Move: Why You Should Use a Tax Accountant for Your Self-Assessment

In the world of personal finance, few things are as certain as taxes. Each year, individuals across the globe prepare to navigate the labyrinth of tax regulations, deductions, and forms required for their self-assessment. While some opt for the DIY approach, a growing number are discovering the numerous benefits of enlisting the expertise of a tax accountant. In this blog post, we'll explore why using a tax accountant for your self-assessment is not just a smart choice but often a financially savvy one.

 1.   Expertise and Knowledge: Tax accountants are professionals who specialize in tax laws and regulations. They stay up-to-date with the latest changes in tax codes and have the experience to navigate complex financial situations. This expertise can help you minimize your tax liability legally.

 2.   Maximize Deductions and Credits: Tax accountants have a keen eye for identifying deductions and credits that you might overlook. Their attention to detail can result in significant savings, ensuring you're not paying more taxes than necessary.

 3.   Reduce Stress and Save Time: Preparing your own taxes can be time-consuming and stressful. It often involves sifting through a mountain of paperwork and deciphering intricate tax jargon. Hiring a tax accountant frees up your time and reduces the stress associated with tax season.

 4.   Avoid Costly Mistakes: Filing taxes incorrectly can lead to penalties and audits. Tax accountants are trained to minimize errors and ensure that your return is accurate, reducing the risk of costly mistakes that can haunt you later.

 5.   Year-Round Assistance: A tax accountant's support isn't limited to just tax season. They can offer financial advice throughout the year, helping you make informed decisions to optimize your tax situation and financial health.

 6.   Audit Protection: If you're audited by tax authorities, having a tax accountant on your side can be invaluable. They can guide you through the audit process and ensure that your rights are protected.

7.    Customized Strategies: Tax accountants can create personalized tax strategies that align with your financial goals. They consider your unique circumstances to help you make the most of available tax benefits.

 8.   Peace of Mind: Perhaps one of the most valuable aspects of hiring a tax accountant is the peace of mind it brings. Knowing that a professional is handling your taxes can alleviate anxiety and allow you to focus on other aspects of your life.

 9.   Cost Savings: Contrary to common belief, hiring a tax accountant can often result in cost savings. The deductions and credits they can uncover, combined with the reduction in errors, can more than offset their fees.

10.    Legal and Ethical Compliance: Tax accountants operate within the bounds of the law and adhere to ethical standards. This ensures that your taxes are filed ethically and legally, eliminating any worries about potential legal repercussions.

In conclusion, the decision to use a tax accountant like Tax Affinity for your self-assessment is an investment in your financial well-being. Their expertise, ability to maximize savings, and dedication to compliance can make the process smoother, more accurate, and less stressful. Ultimately, it's a smart move that can pay dividends in terms of both financial savings and peace of mind. So, this tax season, consider enlisting the help of a tax accountant like Tax Affinity and reap the rewards of a stress-free and financially optimized experience.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are the number rated and recommended Tax Accountants in London. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

Tax Affinity Accountants are rated as experts in Tax and Accounting Industry and because of our experience and expertise with Tax we can help clients to both legally minimise their tax and make the best plans for the future.

We never recommend breaking any rules but instead using our expertise know that there is more than enough scope with the framework to legally reduce taxes and still have the peace of mind. And because we stay abreast with the latest changes and developments we are are always at the forefront of advising clients when things change.

And you know your in safe hand because Tax Affinity are experts in tax law with a good working relationship with HMRC. There to there to help and support clients if they are involved in a HMRC tax or VAT investigation or have a Worldwide Disclosure / Let Property Campaign letter etc to respond to. We are always able to successfully support and guide clients to the best possible outcome. Just ask one of our many happy clients who sing our praises.

Below is a list of just some of the things we can help with. If what your looking for is not listed we most likely are still able to do it but just didnt want to make the list too long.

Give us a call and have a chat with one of our tax experts or come into one of our high street branches - we will be happy to help.

-          Inheritance tax planning for landlords with estates between £1million - £250million
-          Capital gains tax planning
-          Transferring properties into a limited company - Incorporation
-          Offshore tax planning
-          HMRC Tax and VAT Investigations
-          Code of Practice 8 and 9 investigations
-          Alternate Dispute Resolution
-          Tax Tribunals
-          Forensic Accounting
-          Worldwide Disclosure Facility
-          Let Property Campaign
-          HMRC Check of Self Assessment / Tax
-          Contractual Disclosure Facility (CDF)
-          Code of Practice 8 / 9 / 11 / 14
-          Section 144 Enquiry
-          Section 12A TMA 1970 Notice Investigations
-          Code of Practice 11 (Local Compliance Offices)
-          Code of Practice 14 Investigation (Company Tax Return Investigations)

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

The new UK Chancellor (yes another one...can you believe the UK had 4 Chancellors in 4 months in 2022) has given his first budget. And as before we have refined the main points and facts for business owners including SME's and entrepreneurs. So you can easily navigate and plan ahead with clarity.

The main points from the budget are:

1. Energy price guarantee for homes will remain at £2,500 extended for only 3 months until end of June. It was set to rise to £3,000 but that has now been cancelled. And no new support announced for business bills.

2. Corporation Tax for a limited company will rise from 19% to 25% from 6th April 2023. Small company's with profit of less than £50k will still pay the lower 19%. But companies with profits between £50k to £250k have to pay between 19% and 25% but are allowed to claim marginal relief. Company profits over £250k will be taxed at 25%. And companies with group ownership of other companies may end paying close to 26.5% (effectively) because the corporation tax for Group Companies was increased also - sadly all important details missed by the main stream media.

3. Tax-free yearly allowance for pension cash out to rise from £40,000 to £60,000 after being the same for the past 9 years.

4. Fuel duty (tax) frozen so the 5p cut to fuel duty/tax on petrol and diesel which was due to end in April, has been extended for another year.

5. Maximum amount a worker can accumulate in pensions over their lifetime before paying extra  tax currently £1.07 Million will be cancelled. Now there is no limit.

6. Tax on tobacco to increase by 2% above inflation for normal and 6% above inflation for hand-rolling tobacco.

7. Those who are already drawing down on their pensions, the total amount they can save tax free under the Money Purchase Annual Allowance is increased from £4,000 to £10,000 from April 2023.

8. 30 hours of free childcare for working parents in England expanded to cover 9 months to three year olds.

9. New £600 "incentive payment" for people becoming childminders, and the rules have been changed in England to let childminders look after more children.

10. Immigration rules to be relaxed for five roles in the construction sector, to ease labour shortages in the Industry. These categories are:

• Bricklayers & masons
• Roofers, roof tilers and slaters
• Carpenters and joiners
• Construction and building trades n.e.c
• Plasterers

11. Super deduction of 130% will end on 31/03/23 and move back to 100% AIA for plant and   machinery purchased and can be used directlty against corporation tax payable. A list of typical purchases is lasting until 31/03/26:

• computer equipment and servers
• tractors, lorries, vans
• ladders, drills, cranes
• office chairs and desks
• electric vehicle charge points
• refrigeration units
• compressors.

If your worried how these will effect you and need more specific guidance to help your business carry on growing during turbulent times then contact one of our Tax Affinity expert business advisors today (click here). With their countless years of knowledge and expertise they can guide your business to success even in the toughest of economic conditions.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

On 17/11/2022 Jeremy Hunt the Chancellor for the UK Governments expressed their plans for the coming year and the contents of his autumn budget. As before we have read thorugh the detailed report and listed the main bullet points for small business and the self employed.

Personal Income Tax
There are no changes to the personal tax thresholds. And they will remain at the current level until April 2028. This also includes the National Insurance Contribution threshold for PAYE and self employed. Minimum wage for people aged over 23 to increase from £9.50 to £10.42 an hour from April 2023

Company Dividend Tax-Free Allowance (DIV)
The dividend tax free allowance threshold will be reduced from £2,000 to £1,000 from April 2023. And this will be reduced even more in 2024-25 to £500.

Additional Rate of Income Tax (Higher Tax band)
From April 2023, the higher rate band will be reduced from £150,000 to £125,140. Which means anyone earning above £125,140 will now be taxed at the 45%. Apart for Scotland.

Annual Investment Allowance (AIA)
The Annual Investment Allowance will be permanently set at £1 million to help promote growth in the economy.

Corporation Tax (CT600)
From April 2023, the Corporation Tax is due to increase to 25% if a company’s profits exceed £250,000. Companies whose profits are between £50,001 to £250,000 will be subject to a tapered relief. Companies whose profits fall below £50,000 will remain at the current level of 19%.

Capital Gains Tax-Free Allowance (CGT)
Also rumoured before the budget, the threshold for Capital Gains Tax will be reduced from £12,300 to £6,000 from April 2023. Similarly to the dividend allowance, a further reduction will be seen in 2024-25 to £3,000.

Employment Allowance (Employer NIC)
The Employment NIC Allowance will stay at £5,000 meaning that eligible employers.

Road Tax
Electric cars, vans and motorcycles will start to pay road tax from April 2025.

Energy
The household energy price cap has been extended for one year beyond April 2023 but has been made less, with typical bills capped at £3,000 instead of £2,500 a year.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

The UK now has a new PM Rishi Sunak after the shock resignation of the previous PM Liz Truss due the GBP (Sterling)  stock market crashing after the announcment of her mini budget just weeks ago. So the new Chancellor Jeremy Hunt announced a raft of reversals listed below that seem to have temporarily reassured the markets and IMF etc. But what are they in a quick short read - well see below:

1. Cut to Corporation tax down to 19% from 25% - cancelled
2. Removal of 45% higher rate tax - cancelled
3. Personal Income tax cut from 20% to 19% - cancelled
4. Alcohol duty freeze - cancelled
5. VAT free shopping for overseas visitors - cancelled
6. National Insurance reverse of 1.25% - retained
7. No stamp duty on first £250,000 - retained
8 First time buyers no stamp duty on first £425,000 - retained
9. IR35 rules reversal - cancelled
10. Removal of bankers bonus cap - retained
11. Freeze on energy bills for 2 years - amended to 6 months only now

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

 
UK Chancellor, Kwasi Kwarteng announced a series of tax cuts & changes in his mini-budget on 23rd Sept 2022, and yesterday did a U-turn on cancelling the drop from 45% to 40% on the highest tax rate.

A quick list of how the mini-budget will affect tax payers is listed below:

1. Income taxes
The top rate of income tax for those earning more than £150,000 per annum was reduced from 50% to 45% by a previous Chancellor in 2013 this was planned to be lowered to 40% but has now been cancelled by the government U-turn and will remain at 45%.

From 6th April 2023 the rate of income tax on income between £12,571 & £50,270 per annum will be reduced from 20% to 19%.

2. National Insurance reversal
Chancellor confirms the 1.25 percentage national insurance rise introduced earlier this year by the previous Chancellor will be cancelled from 6th November 2022 i.e. from December’s payslip onwards.

3. Stamp duty cut
Before there was no stamp duty to pay on the first £125,000 of a property’s value. It has now been doubled to £250,000.

The no stamp duty threshold for first-time buyers will rise from £300,000 to £425,000.
The max property value for first-time buyers’ stamp duty relief will rise from £500,000 to £625,000.

4. Corporation tax stays at 19%
Corporation tax rises have been scrapped, the previous Chancellor Rishi Sunak announced that the rate of corporation tax would be increasing from 19% to 25%, from 6th April 2023.

So now businesses with profits below £50,000 will stay at the 19% rate, as well as businesses with profits over £250,000 that were meant to pay 25% rate ie everyone stays at 19%.

5. Changes to IR35
From 6th April 2023, the previous IR35 rules introduced in 2017 and 2021 have been reversed. Allowing individuals to contract instead of work as employees again ie self employed off-payroll working through a limited company.  The changes mean its up to the contractors themselves to make sure they have the right status and are paying the right amount of tax instead of putting the burden on employers.

6. Strikes legislation
The government says it will legislate to stop “militant trade unions” from closing down key infrastructure through strikes.

The laws will require unions to put pay offers to a member vote, to ensure strikes can only be called once pay talks have genuinely broken down, he says.

7. Investment zones
The government confirmed that almost 40 investment zones will be created with tax breaks for businesses. Areas included are the West Midlands ,Tees Valley, Norfolk and the west of England etc.

8. Energy Bills
Freeze household energy bills at £2,500 for a typical household and a price cap on energy bills for commercial properties also.

9. Investment
(AIA) Annual investment allowance, the total amount a company can invest tax free, stays at £1 Million.
 
New & start-up companies are able to raise up to £250,000 under a scheme giving tax relief to investors in their business

Share options for (PAYE) employees doubled from £30,000 to £60,000

10. Bankers’ bonuses
Chancellor confirms the bankers’ bonus cap will be scrapped.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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