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Yesterday, the chancellor announced his spring budget.
There is a lot to digest and unpick. With a general election looming, it was clear that the chancellor had decided to put more money back into the pockets of working people. However, not much of this money directly comes to small business owners.
National Insurance Contributions are again being cut. The government is cutting the main rate of employee National Insurance by 2p from 10% to 8% from 6 April 2024. Combined with the 2p cut announced at Autumn Statement 2023, this will save the average worker on £35,400 over £900 a year.
The government is also cutting a further 2p from the main rate of self-employed National Insurance on top of the 1p cut announced at Autumn Statement 2023. This means that from 6 April 2024 the main rate of Class 4 NICs for the self-employed will now be reduced from 9% to 6%. Combined with the abolition of the requirement to pay Class 2, this will save an average self-employed person on £28,000, around £650 a year.
The point where businesses need to register for VAT is going up from £85,000 to £90,000. This will supposedly help small businesses grow. There are differing opinions about this. What we see is that, in reality, businesses often slow their growth as they near the VAT threshold. Radically lowering the VAT threshold towards £40,000 or even lower would make it a level playing field for most small businesses. But then, what does the Chancellor really know about small businesses?
Inflation has more than halved from its recent peak, i.e. from 11.1% to 4.0%. The OBR forecasts inflation to fall to its 2% target in Q2 2024, a year earlier than in their November 2023 forecast. In 2023, the UK was pretty much in recession as GDP grew by 0.1%. Growth is now forecast to pick up from the first half of 2024 and the IMF is forecasting that the UK will have the third fastest cumulative growth in the G7 over the 2024-2028 period.
The UK government has recently announced an extension of the Recovery Loan Scheme, which will provide £200 million in funding to assist small businesses to invest and expand. To qualify for the loan, businesses must have a turnover of £45 million or less, must be viable, and should not be experiencing any financial difficulties.
Capital allowances are a great way for businesses to reduce their tax bill. By deducting the value of certain items such as equipment, machinery, and certain business vehicles from their profits, businesses can benefit from tax relief. It’s a smart way to save money and reinvest it back into the business. Full expensing is an allowance which allows companies to use these capital allowances in the year that the investment was made. The chancellor indicated yesterday that at some point in the near future full expensing for leased assets is coming. When? Apparently ‘when affordable to do so’.
At the moment, there is a situation where a household with 2 parents, each earning £49,000 a year, still gets the full Child Benefit, but those with one parent earning over £50,000 will see some or all of the benefit withdrawn. From 6th April 2024 the point at which child benefit will start to be withdrawn will now be at a higher level of earnings i.e. £60,000 not £50,000. Instead of starting to lose child benefit once at least one parent earns over £50,000 a year, it will be £60,000. It will be taken away entirely from £80,000 a year, rather than £60,000. But more importantly, the government is consulting on moving the system from being based on an individual’s salary to a system based on household income. This new system will come in by April 2026. So watch this space!
The government is keen to increase the amount of available housing. It is reducing the higher rate of property capital gains tax from 28% to 24% in April. This will benefit any property owner who is selling a property which is not their home.
The ‘temporary’ 5p cut in fuel duty is being extended for another 12 months.
The alcohol duty freeze is being extended from 1st August to 1st February.
There is a new ISA in town! This ISA gives savers another £5k tax-free allowance, on top of the current £20k that can be subscribed into an ISA. The only restriction is this new UK ISA
needs to be invested in british businesses.
The government is also announcing over £1 billion of new tax reliefs for the UK’s creative industries. This includes introducing a 40% relief from business rates for eligible film studios in England for the next 10 years; introducing a new UK Independent Film Tax Credit; and increasing the rate of tax credit by 5% and removing the 80% cap for visual effects costs in the Audio-Visual Expenditure Credit. A permanent extension will be made to tax relief for theatres, orchestras, museums and galleries.
The government is abolishing the Furnished Holiday Lettings tax regime from 6th April 2025 and the multiple dwelling stamp duty relief from 1st June 2024. Contracts that were exchanged on or before the 6th March 2024 – i.e. before the budget was announced – will continue to get the multiple dwelling stamp duty relief regardless of the completion date. Any purchase that completes before the 1st June 2024 will also get this relief.
The tax breaks for non-domicilied residents, people who live in the UK, but not domiciled here for tax purposes have been abolished. Currently, foreign nationals who live here, but are taxed in another country, do not have to pay tax on their foreign income for up to 15 years. From April 2025 this is changing.
For new arrivals, who have a period of 10 years consecutive non-residence, there will be full tax relief for a 4-year period of subsequent UK tax residence on foreign income and gains arising during this 4-year period, during which time this money can be brought to the UK without an additional tax charge.
Existing tax residents, who have been tax resident for fewer than 4 tax years and are eligible for the scheme, will also benefit from the relief until the end of their 4th year of tax residence.
There are transitional arrangements being put in place for existing non-doms.
In Oct 2026 vapers will be taxed more and the tax on cigarettes and tobacco products will go up.
Sadly, the government is not – on the surface of it – making an investment in front-line HMRC staff. It is investing an extra £140m to improve HMRC’s ability to manage tax debts. Think of
this as an investment in identifying where more tax is due and then having the headcount to get this money paid. If you don’t already have tax investigation insurance, now is the time to take it out!
In addition, it was announced that there is a consultation on how best to implement the Crypto-Asset Reporting Framework and amendments to the Common Reporting Standard.
Interested to find out more?
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I’ve been around for a few years. In my opinion there is nothing worse than talking to a prospect whose business and mental health is in a pickle because they trusted their accountant to do their stuff once a year. That’s where a decent accountant comes in. If you get a good one (and pay for the right service level), they should be working with you to, keep you out of trouble and save you a bob or two along the way. But picking the right one can be a right palaver. After all, so many of them sound the same. So here’s what to look out for:
You wouldn’t let some bloke in the pub operate on you, would you? Same with your business. Don’t get some backstreet bookkeeper fiddling with your finances. Make sure they’ve got the proper certificates and licenses, alright? A good way to check is look for institute and software logos on their website.
Are they qualified through one of the main accountancy bodies (the ACCA, ICAS or CIMA)? What is their speciality and what industry experience do they have? Whatever your specific requirements are, make sure that they have the experience and the kind of services that you need. (E.g. goal setting, tax planning or cash forecasting as well as compliance services).
The next factor to consider when choosing an accountant is money! There are still some traditional accountants out there, who charge by the hour, like a meter on a cab. Others do a set price, no matter how much you bend their ear. By the way, we charge a fixed fee as we know our clients like certainty around what it will cost.
The most common complaint about accountants is the disappearing act. Don’t get me wrong, they’ll be reminding you to send in your documents when your self-assessment tax return is due. Some may bill you a fortune to do nothing more than pop some numbers in their software. Then vanish again for another 9 months. Think of a decent accountant as financial partner, critical friend and the voice of sanity. After all, there isn’t much I haven’t seen in 30 years of working with construction and property company owners.
A good accountants should help you navigate those pesky growing pains, and keep your business on the straight and narrow, all year round. Not just when the taxman comes knocking! Or when that nasty unexpected brown envelope arrives.
When choosing an accountant, check their accessibility (referrals and reference checks is a good way to see whether you’re likely to be fobbed off to a junior). It’s also handy to see how proactive they are (e.g. suggesting ways to save you money and offering to introduce you to good contacts) all year round.
You’ve got to feel alright with them. Like chatting with a mate down the pub. If explaining your business feels easy, that’s good. For example, we don’t make any judgement if a client turns up from a busy day on site with their dirty work clothes still on. Or if the air gets turned somewhat blue while we are talking.
You and your accountant will need to be a team. So find someone who gets your vision and what you are about, not some youngster with a laptop covered in stickers.
Whether you’ve been trading for a while or new into business, a decent accountant is worth their weight in gold. They’ll be your financial sidekick (sorry cheesy!), sorting the numbers and giving you the right advice. The sooner you get a good one on your team, the better. But remember, choose wisely, alright? Like finding the perfect partner for a game of darts – you have to be on the same wavelength!
Interested to find out more?
Call us on 01617 985789
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Self-employment can be tempting, especially if you’re fed up chasing the weekend or longing to be your own gaffer. Before you chuck in the towel at your day job and daydream about all the time you’ll have for brew breaks (because let’s be honest, that’ll be replaced with a different kind of hectic), take a good, long look at yourself. Self-employment is not for wimps or those who are work-shy – despite what you may think about the gaffer. If you are going to put food on the table and take your missus to a nice place for her holidays, you are going to have to work hard and handle pressure.
So, grab a cuppa, stick your thinking cap on, and answer these questions truthfully:
1) Are you confident in your skills and expertise?
2) Do you have skills and passion for the business you’re considering?
3) Do you enjoy working alone?
4) Got the knack of prioritising tasks like a pro?
5) Got the get-up-and-go to crack on without someone cracking the whip?
6) Up for wearing all the hats – marketing, sales, the whole lot?
7) Sharp enough to pick up new tricks quickly?
8) Got the initiative to chase new ideas?
9) Can you single-handedly make the call when the going gets tough?
10) Are you able to pick yourself up, dust yourself off and problem solve in tricky situations?
11) Do you have the knowledge and skills to make your own product or service?
12) Do you know how to promote yourself so that others will buy from you?
13) Happy to build potential connections in the business world?
14) Thick-skinned enough to handle a bit of a pay cut while you get your business off the ground?
15) Are you willing and prepared to put in long hours of graft at the start?
16) Have you given the family the heads up on the potential impact at home?
17) Can you live with high levels of uncertainty?
18) Can you take a knock and keep on ticking?
19) Good at turning a penny into a pound?
20) Are you a dab hand at setting goals and smashing them?
Give yourself a point for every Yes answer and give yourself a mark out of 20. If you scored 16-20, self-employment will be a walk in the park for you!
If you answered “no” or “maybe” to a lot of the questions, self-employment might not be your cup of tea right now. You may need to do some thinking and soul searching before you take the plunge.
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By no means is this self-employment quiz the decider for whether you choose to run your own business or not. However, it is based on the qualities, skills, and traits you will need to become a successful business owner! Even if your ambition level is to “only” work with yourself with a few subbies helping you out on jobs.
If you want to go for it and become self-employed, look at where your ‘No’ answers are. If you know you’re not a dab hand with money, consider getting an accountant or bookkeeper as early as possible.
Interested to find out more?
Call us on 01617 985789
Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb
You all want your firms to thrive, don’t you? It can be a right handful sometimes, you know the feeling. You want to see it grow, not leave you feeling like you’ve been chasing your tail all day.
The key is taking control of your time, use it like a bag of gold. Here’s a few tips on how to do that…
Let’s talk about simplifying your operations to get things running a bit smoother. We’re looking to identify any problems in your current processes, there’s always room for improvement.
On that note, one of the best ways to increase productivity is to invest in some decent practice management tools. We’re talking software that’ll make dealing with clients, working as a team, keeping track of jobs, and the day-to-day grind a whole lot easier.
To stop spending so much time faffing about, start prioritising effectively. Use the Urgent Important Matrix to do this.
Group your tasks into 4 quadrants:
Once you’ve grouped your tasks, you’ll know what you need to focus on and what you need to avoid.
Now you have identified tasks that need to be done, delegate the low-value work to your team so that you can focus on the ones that require your level of skill.
If you delegate effectively (i.e. delegating authority as well as tasks), you can take a step back knowing the day-to-day stuff is running smoothly. This frees you up to focus on the real game-changers, the things that’ll make the firm grow.
You need to invest more time in quadrant 2, doing the planning and budgeting and development activities that will grow your firm. It’s easy to forget things in the daily grind, chaps. Schedule those important jobs – it’s the best way to ensure they get done.
If you prioritise these tasks and appoint the rest, you’ll have time tosit down with a cuppa, and focus on them. You just need to find the days and times where you can work productively and without any interruptions.
It really is as simple as that. To build your business, not your workload, you need to follow these 4 steps. When you do these consistently, you’ll find that each day follows a more chilled approach:
Interested to find out more?
Call us on 01617 985789
Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb
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