DfT pledges to spend one third of its procurement budget on SME’s by 2022

The Department for Transport (DfT) has outlined plans to increase its spend with small and medium-sized enterprises (SMEs) to 33 per cent over the next four years and to support small and innovative companies through grants. Read more

Shipping industry calls for Brexit talks amid fears of no-deal outcome

Representatives of the shipping industry have called for Brexit talks to be extended to avoid the disruption that could be caused by a no-deal scenario. Read more

Record number of consumers retract data permissions following introduction of GDPR

More than half of UK consumers have taken action to reduce or review the amount of data a company holds on them since the introduction of the general data protection regulation (GDPR), a new study has revealed. Read more

Christopher Darwin, Thomas Coombs

Prestigious charity awards gain the support of top Yorkshire accountants

Children’s cancer charity Candlelighters has invited one of Yorkshire’s oldest firms of Chartered Accountants, Thomas Coombs, as a sponsor at its 2018 Awards ceremony. Read more

Do you need to pay tax on your overseas interests?

The tax office is warning those with overseas investments to declare income ahead of the introduction of a new sophisticated international tax detection system. Read more

Inheritance Tax receipts hit record high in 2017/18

A new report published by HM Revenue & Customs (HMRC) in recent days has revealed that Inheritance Tax (IHT) receipts hit a record high in 2017/18. Read more

SMEs confident about short-term growth prospects despite Brexit uncertainties

A new study carried out by Wesleyan Bank suggests that almost two thirds (65 per cent) of UK small and medium-sized enterprises (SMEs) are feeling confident about their short-term growth prospects despite Brexit-related uncertainties. Read more

121,500 first-time buyers benefit from stamp duty cut

Thousands of first-time homeowners have saved millions of pounds as the Government releases its first official statistics analysing the new stamp duty cut.

According to the report, a total of 121,500 first-time buyers have saved some £284,000,000 since the introduction of the cut in November last year.

Under the new scheme, first-time buyers purchasing homes of up to £300,000 and under now pay no stamp duty at all, while those buying properties up to £500,000 benefit from a reduced rate.

The Government estimated that the cut would save an average of £1,700 for buyers, with maximum possible savings of up to £5,000.

The changes mean a stamp duty cut for 95 per cent of all first-time buyers who pay it, and no stamp duty at all for 80 per cent of first-time buyers.

Financial Secretary to the Treasury, Mel Stride, said: “Once again, we can see that our cut to stamp duty for first-time buyers is helping to make the dream of home ownership a reality for a new generation – exactly as we intended.

“In addition, we’re building more homes in the right areas, and have introduced generous schemes such as the Lifetime ISA and Help to Buy.”

Michael McCarthy, Developer at Equitas Properties, added: “46 per cent of our new home buyers benefited from the recently introduced stamp duty reduction.

“This policy allowed these new home buyers reduced acquisition costs while increasing options, choice and purchasing power.”

What is changing in the new tax year

We are one week into the new tax year, and new rates and regulations which are to be introduced. So how will this affect you?

Personal taxes

The income tax personal allowance (how much you can make without paying any income tax) is to increase to £11,500, and the threshold for the 40% higher rate of income tax is to increase to £45,000 (£43,000 in Scotland). The Government is committed to raising the income tax personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament (May 2020).  It is worth noting that the personal allowance is withdrawn for incomes over £100,000, and the High Income Child Benefit Charge remains in place for those earning more than £50,000.

Capital Gains Tax

The Capital Gains Tax annual exemption threshold is being increased to £11,300.

Inheritance taxes

The threshold for inheritance tax is currently frozen at £325,000 until April 2018. Coming into effect is a policy announced in George Osborne’s July 2015 Budget Statement, which details a tax-free allowance for inheritance tax on family homes, starting at £850,000 this year and rising by £50,000 until it reaches £1million.  Once the estate is worth over £2million, the £1million tax-free allowance is gradually tapered away.  However, all residential property indirectly held through an offshore structure will be liable to inheritance tax.

Individual savings accounts (ISAs)

The maximum limit of payment into an ISA will jump from £15,240 to £20,000 for the 2017-2018 tax year. A newly-introduced Lifetime ISA will allow under-40s to save up to £4,000 per year, with a 25% bonus from the government to fund first-time property purchase or to save for retirement.

Tax avoidance

In an effort to combat aggressive tax avoidance schemes, the Government is bringing in the serial tax avoider’s regime. Individuals using schemes that are defeated by HMRC after today, 6 April 2017, will be liable to sanctions such as penalties, restrictions to direct tax relief or public ‘naming-and-shaming’.  It’s more important than ever before to ensure that your assets are not held in an inappropriate or artificial scheme.

If you’d like to speak to the Greg Langley, the head of our tax department, about changes to personal or business tax structures, please call 0113 2449512.

Stuart Adam, Thomas Coombs

National Minimum Wage: How Does the Increase Affect You?

As the National Minimum Wage for young people in the UK has been increased by the government, we look at what the changes mean for employers, and some of the common mistakes made by business owners.

Firstly, what is the difference between the National Minimum Wage and the National Living Wage?

Very little – just that the National Living Wage applies to working people over the age of 25, whereas the National Minimum Wage concerns the earnings of those who are 24 and younger.

The new minimum wage rates are as follows:

 

  • £6.95 per hour for workers aged 21 – 24
  • £5.55 per hour for workers aged 18 – 20
  • £4.00 per hour for workers under the age of 18 who have finished compulsory education
  • £3.40 per hour for apprentices under 19 years old, or in the first year of their apprenticeship

One issue that can be easily avoided is a lack of information about wages for apprentices.

 

Small, owner-managed businesses have sometimes seen an apprenticeship scheme as a great way of giving a young person a start to their career, taking on young talent and paying a relatively low wage for the trouble.

 

When taking on an apprentice, many don’t realise that the minimum wage for an apprentice can rise significantly after one year, depending on age. If the apprentice is aged 16 when taken on, they can be paid the apprenticeship minimum wage until they turn 19.  However, if the apprentice is 19 when taken on, after a year of employment they would be entitled to £5.55 per hour, the minimum wage for workers aged 18 to 20.

 

Another fact which is often overlooked by business owners who take on an apprentice is that the apprentice must be paid for time spend training or studying for a relevant qualification, whether while at work or at a training organisation.

 

There are risks associated with underpayment of employees: there are knock-on effects such as a potential loss of motivation and productivity, and difficulty in hiring new workers and retaining existing ones. Furthermore, there is potential for the firm’s reputation to be damaged, especially by the government, which has the right to ‘name and shame’ those who underpay their staff.

 

If you’d like to discuss the National Minimum Wage changes, how to ensure that your business is conforming to regulations, or assistance on future wage planning, please feel free to speak to one of the Thomas Coombs team at 0113 2449512 or mail@thomascoombs.com.