WELCOME TO HARBOUR KEY'S NOVEMBER NEWSLETTER
Well, the first Labour Government Budget has come and gone, we now have the fall out! Jeremy Clarkson galvanising the farmers regarding the changes to the Inheritance Tax re Agricultural Property Relief, Sir James Dyson attack on the Government.......
“Make no mistake, the very fabric of our economy is being ripped apart. No business can survive Reeves’s 20% tax grab. It will be the death of entrepreneurship”
Even Elon Musk, who we thought was busy with the US election, took to X, his social media platform, urging the Prime Minister to “leave farmers alone.” If some how you missed the Budget, or want a quick summary of some of the points that don’t make the headlines.
EMPLOYERS NIC
The biggest tax rise was the increase in employers NIC, firstly by increasing the rate by 1.2% to 15%. Secondly, per-employee threshold, the point at which employers become liable to pay National Insurance (the Secondary Threshold) will be reduced from £9,100 to £5,000 from 6 April 2025. Tesco is reported to be facing an extra £1bn in cost with the increases in minimum wage, and employers NIC over the next four years. Most employers have already indicated that this cost will be passed on to customers, and/or minimising pay rises.
There is a way to mitigate the increase in NIC for employers, which also helps workers too, which is salary sacrifice schemes. Also review workforce for new hirers who are ex-service people, to see if veterans NIC relief is available.
Salary sacrifice allows employees to make pension contributions or pay for other benefits such as company cars, or medical insurance from the employer’s gross salary before income tax is taken. This “sacrifice” of part of the salary means that income is lower and so the employee pays less tax and NICs. As the employee is paid less the employers NIC will also be less.
MORE DETAILS CAN BE FOUND HERE ON OUR BLOG.
DOUBLE CAB PICK-UPS
A change not announced as part of the Budget speech but found in the detail released after the Chancellor sat down, is the change to the tax treatment of double cab pick-ups. Which if no planning is taken now, a significant tax charge could arise from April 2029.
Please see our article HERE more details double cab pick-ups
Outside of the budget, and looking at less taxing matters:
- Harbour Key was one of the sponsors of a local beer festival (held in a church!), in support of the local Samaritans group;
We continued to support our charity of the year, Let’s Cook with Josie, a community investment company that provides food bank and cooking lessons for children and adults with limited budgets, with some funding for equipment.
INTERNATIONAL TRADE WEEK
Taking place from Monday 11 to Friday 15 November 2024, International Trade Week is a week-long programme of events led by the Department for Business and Trade (DBT), in partnership with industry. The week will feature a variety of free activities and events for businesses across the UK to help them grow their international sales and access new markets.
The DBT offers a wide range of resources to support businesses to sell abroad. The UK Export Academy is a free training programme that gives businesses the know-how to land their first, or next overseas deal. Export Support Service provides insight and guidance for UK exporters wishing to explore opportunities and do business across global markets. Export Digital Enquiry Service can be used by UK businesses to ask business related questions on selling goods or services abroad.
Over the week, DBT will be running a number of events to help businesses explore oversees business.
More details can be found at HERE
SME'S OWNERS FUNDING
A recent report by Shawbrook bank, has highlighted in the continued difficult lending market, SME bosses are continuing to resort to their own credit cards and personal loans.
71% of SME decision-makers reported using their personal finances to fund business growth in the current year, up from 68% in 2023. Over half (54%) reported using their personal credit card or personal savings (53%), and 39% reported using a personal loan. Even those on the larger side of the SME scale are using their personal finances to fund their business, with 55% of those with a business with 100-249 employees using their personal credit card, 49% using personal savings and 42% using a personal loan.
Nearly three-quarters of business leaders (73%) were concerned about the rising cost of running their business this year, which was also the top concern in last year’s survey (69%). Many business leaders are still feeling the effects of, and contending with, the ongoing difficult landscape, and looking at all options to finance their growth. This situation will only become more critical with the 1.2% rise in employers’ NIC from April 2025.
If you are arranging personal funds to finance your company, you can charge a market rate interest. This interest charge is tax deductible for the Company and chargeable on you as receipt of income. However, as a lower/higher rate taxpayer you are entitled to a tax-free allowance of (£1,000/£500), but you need to consider any other interest receipts you receive from other personal accounts and investments. A company that pays interest to an individual must operate quarterly reporting, with HMRC and withholding 20% tax from the interest. The withheld tax is reclaimed by you personally via your self-assessment tax return.
So, some additional administration, but a tax efficient way to extract funds from the Company and will help fund the cost of the personal borrowing.
LESS THAN100DAYS TO THE SELF-ASSESSMENT DEADLINE!
Apart from the countdown to Christmas(!), there are less than 100 days left until the Self-Assessment deadline on 31 January 2025.
HMRC are encouraging taxpayers, and their agents to act now to file their return, so they can budget for their tax liability. HMRC will be sending out reminders online and via social media, but remember don’t click on links or send HMRC personal details direct, as HMRC will not ask for personal information, other than via the filing of your tax return.
For those who have not provided their tax return information to us, or for those who wish to be better prepared for next year, please read our article below.
If you want any tips re information for your tax return, please see HERE.
DATES FOR YOUR DIARY
- Key tax dates for the period July 2024 to December 2024 can be found by clicking HERE!
- 31 January 2025 – Self-Assessment deadline!
Should you wish to speak with us about a specific matter, or just to be a sounding board or for a chat, please do not hesitate to give us a call on 01452 713277
