BUDGET SPECIAL
This month is full of changes - the nights get darker with the clocks changing, the shops are full of Halloween and Christmas decorations and this year, the budget happened early (and on a Monday which it hasn't done for decades!)
We unfortunately had issues with our office landline provider and are currently in the midst of getting a new business number. It isn't live yet but it will be 0161 470 7878 when it becomes active over the next week or two.
This newsletter will focus on the recent budget and areas which we think may be of interest to our small business clients and individuals. A simple summary is on our website which can be accessed here.
As always, get in touch with us if you need to discuss anything raised here.
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IR35 “OFF-PAYROLL” RULES TO BE EXTENDED TO PRIVATE SECTOR
Very controversially, the Government have decided to extend the rules for personal service companies in the public sector to workers in the private sector from April 2020.
This follows a consultation in Summer 2018 on how to tackle non-compliance with the intermediaries legislation (commonly known as IR35) in the private sector. The legislation which has applied in the public sector since April 2017 seeks to ensure that individuals who effectively work as employees are taxed as employees, even if they choose to structure their work through a company.
There will be further consultation on the detailed operation of the rules, and small businesses (yet to be defined) engaging such workers will be excluded.
This will represent a significant administrative burden on large and medium-sized businesses who will be required to decide whether the rules apply to payments to such workers and deduct tax and NICs.
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CAPITAL GAINS ENTREPRENEURS’ RELIEF CHANGES
The Chancellor has announced that the minimum qualifying period for CGT entrepreneurs’ relief will be increased from 12 months to 24 months for disposals on or after 6 April 2019.
There are further changes affecting shareholdings in personal companies. In addition to the individual holding 5% or more of the ordinary share capital and voting control they will also now be required to be entitled to 5% or more of the company’s distributable profits and assets in a winding up. As now the individual must also be an officer or employee of the company concerned; and the company must be a trading company or the holding company of a trading group.
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VAT REGISTRATION LIMIT CONTINUES TO BE FROZEN
It was announced last year that the limit would be frozen at £85,000 until 1 April 2020. It has now been announced that the limit will now remain at the same level until 2022. The deregistration limit will remain at £83,000.
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MORE RATES RELIEF FOR SMALL BUSINESSES
There has been much lobbying from the small business sector to reduce business rates to enable traditional retailers in particular to compete with internet traders.
The Chancellor has announced a one third reduction in business rates for small businesses with premises with a rateable value up to £51,000.
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