News Archives • SG Umbrella

What Payslip Buddy means to you

Ciaran Woodcock — Wed, 14 May 2025 12:33:50 +0000

Here at SG Umbrella we’re proud that every single one of our employee’s payslips have been audited by SafeRec’s Payslip Buddy.

So what does this mean for our employees, what value does payslip auditing hold and why should you be concerned about your payslip’s compliance? In our blog we explore all this and more.

What is Payslip Buddy?

Payslip Buddy is a contractor focused solution designed to protect Umbrella employees from unlawful and / or ethical practices from Umbrella Companies. By auditing payslips, employees and agencies can check their Umbrella Company’s compliance.

Revolutionary within the payroll sector, Payslip Buddy audits the payslips we generate for our employees in real time, direct from our payroll software and cross-references with RTIs sent to HMRC. A report of our audit is then sent to our partnering agencies and our employees, meaning that you’ll receive an audit report each and every time we pay you.

Why is it important within the Umbrella Company industry?

Sadly for the Umbrella industry it isn’t a prerequisite for every Umbrella Company to have their payslips audited, so here at SG we’re proud to say that we have voluntarily signed up to have every single one of our employee’s payslips checked. If compliancy is followed and there’s complete transparency in the payment process, then there’s no reason why every Umbrella Company shouldn’t be Payslip accredited. That is if they don’t have anything to hide!

How does Payslip Buddy work?

As an SG Umbrella employee, you’ll have already received emails from Payslip Buddy, but if you’re thinking of joining us, you’ll be sent two emails from Payslip Buddy when you receive your first payslip:

The first email will be onboarding email, which will ask you to activate your Payslip Buddy account. You’ll only receive his email once
The second email will be an audit report for your first SG Umbrella payslip. You’ll then receive an audit report every month, which will be stored and recorded on your Payslip Buddy dashboard. With every audit stored in one, central place, you’ll be able to quickly and easily refer to them whenever you need to track your income, taxes and pension contributions

As a SG Umbrella employee there’s no obligation to signup to Payslip Buddy, but we believe for peace of mind and security it’s worth its weight in gold. Along with our Freelancer and Contractor Services Association (FCSA) accreditation our dedication to compliance and transparency in the way we operate, demonstrates to the whole contracting industry that we’re serious about our conformity.

Got questions about Payslip Buddy?

Take a look at our dedicated Payslip Buddy page, for more information.

Alternatively, speak to the SG Umbrella team today. They’ll happily talk you through the benefits of Payslip Buddy, how it works and how you’re able to opt-out should you wish.

The SG Umbrella team are always on hand to offer you support and guidance, ensuring your experience with us is nothing but exceptional. Get in touch today to find out more and speak to the team.

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SG Umbrella is FCSA accredited once again

Ciaran Woodcock — Thu, 10 Apr 2025 15:05:07 +0000

The whole team here at SG Umbrella are so pleased and proud to announce the renewal of our FCSA accreditation.

How do you become an FCSA accredited?

In order to maintain our FCSA accreditation, we have to undertake an independent and rigorous assessment of all our business services, operations, policies and processes every single year. These are all examined to ensure we’re complying with the FCSA’s high compliance standards. You can view our accreditation here.

SG Umbrella’s Commercial Director, Ciaran Woodcock comments

“I am delighted that SG Umbrella has successfully had our FCSA accreditation renewed for another year. Our commitment to compliance is our competitive advantage and is the reason were trusted by so many agency partners. Being an FCSA member isn’t just a badge to us, its a demonstration that we work with the industry to help raise the standards of compliance for others to follow”.

What does having FCSA accreditation mean for us and our employees?

By having accreditation we’re sending our clients and recruitment businesses a clear message that we adhere to the highest standards set by the FCSA, and that we’re acting both professionally and ethically within the UK tax, employment, and regulatory laws. HMRC also receive a copy of the audit report, as we are required to prove our compliance annually. New for 2025 we’re also proud to announce that we’re SafeRec accredited, and that every single one of our employee’s payslips is audited by Payslip Buddy.

Compliance and transparency are top of our agenda when it comes to processing our employee’s pay. We do everything by the book, to ensure they receive every penny they’re owed, and to protect them from any future HMRC enquiries.

We’re incredibly proud of our ability to demonstrate the high standard of compliance within the professional employment sector, and strongly encourage all contractors to ensure they’re working with FCSA accredited providers only.

SG Umbrella – helping you contract confidently and compliantly

SG Umbrella is run by experienced contractor accountants, who know the needs of Umbrella contractors like the back of their hands. They can advise you on set-up, help you make the most tax -efficient decisions, without any additional fees for paying into your preferred private pension. Get in touch for more information on how we can help you reach your contracting goals.

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The Autumn Budget 2024

Sam Brown — Wed, 30 Oct 2024 15:50:35 +0000

Forty billion pounds of tax rises represents one of the very largest tax rising Budgets outside of a time of recession, with Rachel Reeves announcing a compendium of changes aimed at businesses and higher tax payers. A penny off a pint and frozen fuel duty will be small comfort for some, with the following headlines affecting contractors and small business owners in the UK. (Don’t forget to follow our socials for more detail in the coming days.)

National Living Wage

Minimum wages will rise in April 2025, with rates for over-21 is set to go up from £11.44 to £12.21 an hour. For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10. The government will be working towards a single adult rate over time.

Apprenticeship wages will go up from £6.40 to £7.55 an hour.

Employers National Insurance contributions

Employers’ National Insurance contributions will rise from 13.8% to 15% from April 2025.In addition, the threshold at which businesses start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000. To protect smaller businesses, the employment allowance will increase from £5,000 to £10,500.

There will be no changes to employee NI, VAT or income tax. In addition, there will be no extension of the freeze in income tax and National Insurance thresholds beyond the decisions of the previous government meaning that from 2028-29, personal tax thresholds will be uprated in line with inflation.

Business Asset Disposal Relief

Business Asset Disposal Relief will remain at 10% for the remainder of the year, then increase to 14% from 25/26 and then 18% from 26/27 onwards. The lifetime limit will remain at £1 million.

Capital Gains Tax

Capital gains tax will increase to 18% on lower rate and 24% on higher rate immediately. This tax is charged on profits which are made from selling assets, such as investments, including shares. The lower rate of Capital Gains Tax will rise from 10% to 18%, and the higher rate from 20% to 24%.

On the sale of second residential properties, CGT will remain at 18% and 24%.

Inheritance tax

The budget will extend the inheritance tax threshold freeze for a further two years to 2030. That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1m when a tax free allowance is passed to a surviving spouse or civil partner. Inherited pensions will be bought into inheritance tax from April 2027.

Electric Vehicles

The Budget will maintain existing incentives for EVs in company car tax from 2028. It will also increase the differential between fully electric and other vehicles in the first rates of Vehicle Excise Duty beginning in April 2025.

Non-Dom

The government will abolish the non-dom tax regime and remove the “outdated concept” of domicile from the tax system from April 2025.

This applies to a UK resident whose permanent home – or domicile – for tax purposes is outside the UK. It means they do not pay UK tax on money they make elsewhere in the world. A new, residence-based scheme with “internationally competitive arrangements” for those coming to the UK on a temporary basis will be introduced. The Office for Budget Responsibility say that this package of measures will raise £12.7bn over the next five years.

Stamp Duty

There will be an increase in second homes stamp duty from 3% to 5%

Schools

VAT will be introduced on private school fees from January 2025, and that the government will also introduce legislation to remove their business rates relief from April 2025.

Pensions

2025/26 uprated by 4.1%

That will follow a government commitment to the triple lock. Spending on the state pension is projected to rise 4.1% in 2025-26 – that is a £470 increase for over 12 million pensioners in the UK, Reeves says.

The Budget 2024 – Full Report

The Chancellor of the Exchequer, Rachel Reeves came to Parliament to deliver her first Budget.

The Chancellor’s stated aim with this Budget was to “fix the foundations and deliver change” and “invest, invest, invest”. To do this there would be a need to raise an additional £40 billion in taxes.

Here are some of the main announcements from the UK Autumn Budget.

Personal Tax

The Labour Government will retain the Personal Tax Allowance and Basic rate band announced by the previous Government until 2028, after which they will increase with inflation. Personal allowances will still be reduced by £1 for every £2 a person’s income exceeds £100,000.

UK Income Tax Rates (except Scotland)

Band	Taxable income	2025/26	2024/25
Allowance	£0 to £12,570	0%	0%
Basic	£12,571 to £50,270	20%	20%
Higher	£50,271 to £125,140	40%	40%
Additional	Over £125,140	45%	45%

It is worth noting the Scottish Parliament has had the power for a number of years to vary the tax rates and thresholds of Non-Savings, Non-Dividend income for Scottish taxpayers. The differential between Scotland and the rest of the UK in this respect has grown quite significantly.

The Wales Act 2014 gave the National Assembly of Wales the power to vary the tax rates in respect of Welsh resident taxpayers as regards Non-Savings and Non-Dividend income. However, to date they have continued to set income tax rates in line with those announced by the UK Government. The Welsh Government will publish their draft budget on 10th December 2024.

Scottish Tax Rate Bands

The Scottish Budget is set for 4th December 2024. The Scottish Parliament have previously announced the tax rates and thresholds for Scottish Taxpayers for the tax year starting 6 April 2024.

Scottish tax rates 2024/25 for non-savings, non dividend income

Band	Taxable income	2024/25
Allowance	£0 to £12,570	0%
Starter rate	£12,571 to £14,876	19%
Basic rate	£14,877 to £26,561	20%
Intermediate rate	£26,562 to £43,662	21%
Higher rate	£43,663 to £75,000	42%
Advanced rate	£75,001 to £125,140	45%
Top rate	Over £125,140	48%

Tax tip

If you are a sole trader or property landlord and your turnover exceeds £50,000 during the 2024/25 tax year you may fall under Making Tax Digital for Income Tax rules from April 2026 which includes quarterly reporting. If you are both a sole trader and a property landlord then aggregate the two turnovers together when applying the £50,000 threshold. Are you ready for this? If not we can help.

Options to consider to defer the MTD compliant requirement might be creating a partnership or incorporating the business.

National Insurance

The Chancellor retained the current rates of National Insurance paid by employees, as well as rates for the self-employed will remain the same.

From 6 April 2025, Employers National Insurance will increase to 15% from the current 13.8%. The limit from which Employers National Insurance is due will reduce from £9,100 per employee to £5,000 until 5 April 2028.

Tax tip

It is worth reviewing your NIC records at least every 5 years, whilst it is fresh in your memory, to ensure they are correct and up to date. National Insurance contributions protect your rights to certain state benefits and contribute towards your state pension.

Tax tip

If you have more than one employment you may pay too much employees national insurance. HM Revenue & Customs can request the second employer to operate a lower rate to ensure the correct amount is paid. Refunds may be possible if national insurance has been overpaid in earlier years.

In addition Class 1A National Insurance will increase to 15%. This rate is payable by employers on certain benefits provided to employees.

The Employment Allowance will increase from £5,000 to £10,500 from 6 April 2025 and the current restriction regarding the previous year’s liability will be removed.

National Insurance (NI)	2024/25	2025/26
Class 1 NI employees – earnings between £12,570 – £50,270	8%	8%
Class 1 NI employees – earnings in excess of £50,270	2%	2%
Class 1 NI employers – earnings in excess of £9,100	13.80%	15%
Class 1A Benefits in kind	13.80%	15%
Class 1B NI PAYE settlement agreements	13.80%	15%
Class 4 NI self-employed – Profits between £12,570 – £50,270	6%	6%
Class 4 NI self-employed earnings in excess of £50,270	2%	2%

Dividend Rate Bands

The dividend allowance will remain at £500 from 6th April 2025. There will be no change to the dividend tax rates.

Band	2024/25	2025/26
Dividend ordinary rate	8.75%	8.75%
Dividend upper rate	33.75%	33.75%
Dividend additional rate	39.35%	39.35%

Tax tip

With the dividend allowance threshold at only £500, it could be worthwhile transferring some shares to a spouse/civil partner to maximise it.

Do you have control over when a dividend can be paid out? If so have you made use of the £500 zero rate threshold for this tax year?

Tax tip

There are a number of approved tax efficient share option schemes, as well as the non-tax advantages share scheme arrangements, which could be considered when looking at incentivising employees. There are different issues, benefits and problems for each type of incentive arrangement, both for the employer and the employee.

Tax tip

If you are an employer ensure to carry out a regular review to ensure that you are adhering to the National Minimum Wage Regulations. Failure to comply, can result in a penalty of up to 200% of the liability due and any underpayment of wages can go back up to 6 years using the current NMW rates.

National Minimum Wage

The National Minimum Wage (NMW) and the National Living Wage (NLW) rates will increase by 6.7% from 1 April 2025.

	Currently	from 1-4-25
Worker 21 years+	£11.44	£12.21
Worker 18 – 20	£8.60	£10
Worker under 18	£6.40	£7.55
Apprentice	£6.40	£7.55

Pensions

The annual pension allowance, which impacts on how much individuals can contribute to their pension schemes will remain at £60,000 for 2025/26.

The Money Purchase Annual Allowance and Tapered Annual Allowance will remain at £10,000 from 6 April 2025. In addition the Tapered Annual Allowance will remain at £260,000.

Tax Tip

It is worth having an annual pension review, to ensure you maximise the use of all the pension allowances which may be available to you and to do so in the most tax efficient way.

From 6 April 2027 the government will bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax purposes.

The pension tax free lump sum percentage will remain at 25% of the pension value up to a maximum of £268,275.

From 30th October 2024, pension transfers from tax relieved UK pension to Qualified Registered Overseas Pension Schemes (QROPS) in the EEA and Gibraltar will be subject to a 25% charge, unless another exclusion applies.

Tax Tip

If you are a member of a UK registered pension scheme and are thinking of leaving the UK, you may want to consider topping up your pension scheme in the tax year in which you leave the UK in order to maximise your UK tax relief and enhance your pension provision. This should be done in conjunction with your accountant and a suitably qualified financial advisor.

State Pension

Under the triple lock, the State Pension will rise in line with the highest of average earnings, inflation or 2.5%. The Government have announced an increase to the State Pension of 4.1%. The new State Pension increases from £221.20 to £230.30 per week in April 2025, while the full basic State Pension will increase from £169.50 to £176.45 per week.

Tax Tip

Consider making voluntary national insurance contributions to fill gap years in your state pension history. Up until 5 April 2025 you can go as far back as April 2006. Each year would cost you just over £824. After that date you can only go back 6 tax years. The cost for each year would then be based upon the voluntary Class 3 national insurance rate applicable for that current year. Each additional year could result in an extra £342 state pension (based upon 2025/26 figures) on an annual basis.

Capital Gains Tax

The main rates of Capital Gains Tax will increase from 10% and 20% to 18% and 24% respectively for disposals on or after 30 October 2024.

The rate of Capital Gains Tax on the disposal of residential property remains the same.

Gains for	Before 30 Oct 2024	From 30 Oct 2024
Residential property to basic rate limit	18%	18%
Residential property above basic rate	24%	24%
Residential property for Trusts and personal representatives	24%	24%
Other assets to basic rate limit	10%	18%
Other assets above basic rate limit	20%	24%
Other assets for Trusts and personal representatives	20%	24%
Business Asset Disposal relief*	10%	10%
Investors relief*	10%	10%

* Business Asset Disposal relief or Investors relief rates up to lifetime limits. The lifetime limit for Investors Relief reduces to £1M from 30 October 2024. These rates will increase from 6 April 2025.

Tax Tip

Before you sell an asset, such as shares or property, please speak to us. There may be planning opportunities prior to the sale to reduce the potential capital gains tax.

Tax Tip

Remember, if you are a UK resident taxpayer and sell a UK residential property, which could trigger off a gain liable to capital gains tax (CGT), to avoid penalties from arising, you need to complete a CGT Return within 60 days of completion and pay the tax over within the same time frame.

There is no change to the capital gains tax annual exempt amount available. This is the tax-free allowance available against taxable gains.

Tax year	Individuals	Trustees
2024/25	£3,000	£1,500
2025/26	£3,000	£1,500

Business Asset Disposal Relief

The rate of Capital Gains Tax which applies to Business Asset Disposal Relief and Investors Relief will increase from 10% for disposals on or after 6 April 2025 to 14%, with a further increase the following year to 18%.

Inheritance Tax

The Chancellor has retained the £325,000 Nil Rate Band, the £175,000 Residence Nil Rate Band (RNRB) and the tapering limit for RNRB at £2 million until 5 April 2030.

The tax rates for Inheritance Tax remain unchanged, with the main rate staying at 40%.

From 6 April 2026, the 100% rates of Agricultural Property Relief and Business Property Relief will be restricted to the first £1 million of combined agricultural and business property, with the excess relieved at 50%.

Agricultural Property Relief (APR) is a relief from Inheritance Tax on the agricultural value of land and other property that is owned and occupied for the purposes of agriculture.

Business Property Relief (BPR) is a relief from Inheritance Tax on the value of certain business assets.

Tax Tip

Did the deceased gift an asset away within 7 years prior to death but the value of it was lower at the time of death? Normally the market value at the date of the gift comes back into the deceased’s estate for inheritance tax purposes. However, if the value was less at the time of death you can make a loss relief claim and use that value instead to mitigate the inheritance tax burden.

Tax Tip

As a result of the restriction of Business Property relief, one option for business owners to consider to protect their inheritance tax (IHT) position is to take out life policies to fund the IHT liabilities perhaps in conjunction with term policies to cover the risk of you dying within seven years of any lifetime gift. Qualified financial advisor advice should be taken in this instance.

Company Taxation

There were no new announcements for corporation tax. From 1st April 2025, the Corporation Tax main rate for non-ring fenced profits will remain at 25% for profits over £250,000.

	Profits	From 1-4-24	From 1-4-25
Main rate	over £250,000	25%	25%
Small profit rate	£50,000 or less	19%	19%
Marginal rate*	Between £50,000 & £250,000	26.50%	26.50%

*Profits below £50k effectively taxed at small profits rate

Tax Tip

Does your company have cash reserves which are not required for working capital? Consider paying your corporation tax early as the interest return on early payments is competitive.

Tax Tip

If your company is carrying out innovative work, is it worthwhile applying for a patent? Bearing in mind the corporation tax rates, the benefit of having a patent or you exclusively licence the rights to those patents, could result in the associated profits tied to the patent attracting a much lower corporation tax rate of only 10%.

The small profits rate (SPR) will continue at 19% for companies with profits of £50,000 or less. The small profits rate will not apply to close investment-holding companies.

Quick Tip

If you are an employer considering providing a one off/exceptional payment to your lower paid employees to mitigate the impact of the cost of living crises, then it may be better to do so in the form of non-cash vouchers, as opposed to cash itself, as it will not impact upon their universal credit payments.

Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.

If the total profits are below £250,000, the effective rate for profits between these limits is called ‘Marginal Rate’ and shown above.

Capital Allowances

This Budget has not changed the ability for companies to claim a 100% first year allowance (FYA) for main rate expenditure (known as Full Expensing) and 50% FYA for special rate expenditure. These allowances are only available to companies.

The 100% Annual Investment Allowance deduction for expenditure incurred of up to £1 million in purchasing plant & machinery also remains in place.

The 100% FYA for qualifying expenditure on zero-emission cars and on plant or machinery for electric vehicle charge-points has been extended to 31st March 2026 for Corporation Tax purposes and to 5th April 2026 for Income Tax purposes.

Research & Development

There are no changes to the R&D rules following the merger of the R&D tax relief scheme for small and medium-sized companies and the R&D expenditure credit (RDEC) used by large companies for accounting periods beginning on or after 1st April 2024.

The SME rules restricting relief where part of the project expenditure has been subsidised have been removed.

Tax Tip

The R&D criteria is quite wide, and many eligible companies are missing out on it. Since 1st April 2023, you only have 6 months from the end of the accounting period in which R&D activity has occurred to make a claim, unless you have made a similar claim in the previous 3 years.

Loss-making companies claiming the existing SME tax relief will be eligible for a higher payable credit rate of 14.5% if they meet the definition for R&D intensity.

For accounting periods beginning on or after 1 April 2024, the intensity threshold is 30%.

There is a one-year grace period that allows a company which fails to meet the intensity threshold, for example due to a one-off shock or small fluctuations in expenditure (for companies close to the threshold), to continue claiming the enhanced support in that year if it met the intensity threshold and successfully claimed enhanced support in the previous year.

Company car and fuel

Appropriate percentages for zero emission and electric vehicles will increase by 2 percentage points per tax year in 2028/29 and 2029/30, rising to an appropriate percentage of 9% in tax year 2029/30.

Appropriate percentages for all cars with emissions of 1 to 50g of CO2 per kilometre, including hybrid vehicles, will rise to 18% in tax year 2028/29 and 19% in tax year 2029/30.

Appropriate percentages for all other vehicle bands will increase by 1 percentage point per year in tax years 2028/29 and 2029/30. This will be to a maximum appropriate percentage of 38% for tax year 2028/29 and 39% for tax year 2029/30.

The car fuel benefit charge multiplier will be £28,200 in the 2025/26 tax year.

Van and Fuel Benefit

The van benefit charge will be £4,020 and fuel benefit charge £769 in the 2025/26 tax year. The Government will no longer maintain the treatment of double cab pick-up vehicles with a payload of one tonne or more as goods vehicles.

HMRC is updating guidance to clarify the position in respect of such vehicles which will be treated as cars for capital allowances, for benefits in kind and for some deductions from business profits. Transitional arrangements will also apply.

Fuel Duty

The Chancellor will extend the 5 pence cut in the rates of Fuel Duty first introduced at Spring Statement 2022 until 22nd March 2026.

Vehicle Excise Duty (VED)

The Budget announced VED first year rates for new cars registered on or after 1 April 2025.

Zero emission cars will pay the lowest first year rate at £10 until 2029/30.

Rates for cars emitting 1g/km to 50g/km of CO2, including hybrid vehicles, will increase to £110.

Rates for cars emitting 51g/km to 75g/km of CO2, including hybrid vehicles, will increase to £130.

All other rates for cars emitting 76g/km of CO2 and above will double from their current level.

Tax Tip

Before considering whether to buy or lease a car through the company or do so personally, why not have a review of the tax and national insurance impact on both you and the company before reaching that decision.

VAT

The taxable turnover threshold for determining whether a business must register for VAT remains at £90,000 and the point at which a business can apply to deregister will also remain at £88,000.

Tax Tip

Businesses that regularly receive VAT repayments from HMRC should consider filing VAT returns monthly instead of quarterly as this will help with their cashflow.

All education services and vocational training supplied by a private school or a ‘connected person’ for a fee will be liable to VAT at the standard rate of 20% starting on or after 1st January 2025.

Tax Tip

Where, in the past, private schools have suffered irrecoverable VAT on large capital projects, there may be some circumstances where the school could look back at that expenditure and possibly start recovering the VAT incurred under the Capital Goods Scheme.

Board and lodging services closely related to such supplies will also be liable to VAT at 20%, including when supplied by a ‘connected person’.

Any school fees paid on or after 29th July 2024 relating to the period from 1st January 2025 will also be liable to the standard rate of VAT.

Tax Tip

When first registering for VAT, you may be able to claim input VAT on goods purchased in the 4 year period before registration where those goods have been used in the business and are still owned on the first date of registration. This includes both stock and assets.

When first registering for VAT, you may be able to claim input VAT on services purchased in the previous 6 months for business purposes, unless already recharged to a customer prior to registration.

If the supplies you make are outside the scope of UK VAT (e.g. a provision of services to an overseas customer), but they would be taxable VAT supplies if they were made in the UK, then VAT input tax on expenditure incurred in relation to that supply may be claimed back.

The provision of nursery services to children below school age will remain VAT exempt as will state school education and sixth form colleges where no fee is charged.

Where a Special Education Needs place is provided at a private school and is funded by a local authority (LA) or similar body, the LA will be able to claim a VAT refund on the fees charged.

Annual Tax on Enveloped Dwellings (ATED)

The ATED charge for those property companies liable to pay it, has been increased by 1.7% in respect of the 2025/26 year.

Property value	2024/25	2025/26
£500,001 to £1M	£4,400	£4,450
£1,000,001 to £2M	£9,000	£9,150
£2,000,001 to £5M	£30,550	£31,050
£5,000,001 to £10M	£71,500	£72,700
£10,000,001 to £20M	£143,550	£145,950
Over £20M	£287,500	£292,350

Tax Tip

Do you own or have an interest in residential property through a corporate vehicle? Was the value of the property, as at 1st April 2022, worth more than £500,000 or did you acquire it after that date for more than that amount? Even if you rent the property out on a commercial basis, you still need to complete an ATED return within 30 days of acquiring the property.

If a corporate has constructed a new build or converted an existing property into a dwelling then it has 90 days from the completion date or the date it is first occupied if earlier to complete the ATED return. An ATED return should then be completed by 30th April each year otherwise penalty charges of up to £1,600 per property could arise.

Stamp Duty Land Tax (SDLT)

The temporary SDLT residential rates and thresholds which applied from 23 September 2022 comes to an end on 31 March 2025. The SDLT residential rates and thresholds in existence immediately prior to that date will apply from 1st April 2025.

Property/Lease premium/ Transfer value	until 31-3-25	from 1-4-25
Up to £125,000	Zero	Zero
£125,001 to £250,000	Zero	2%
£250,001 to £925,000	5%	5%
£925,001 to £1,500,000	10%	10%
Above £1,500,000	12%	12%

First time buyers relief may be available. Non-UK resident will still pay an additional 2% SDLT surcharge.

The SDLT surcharge on acquiring an interest, in excess of £40,000, in a second residential property increases from 3% to 5% from 30 October 2024.

Corporate bodies purchasing residential property valued at more than £500,000 will be charged SDLT at 17% from 31st October 2024. unless an applicable relief applies.

Tax Tip

If you have incurred the 3% SDLT Surcharge, uplifted 5% SDLT surcharge, (England and Northern Ireland) or the Welsh 4% Land Transaction Tax Higher Rate charge upon acquiring a new main residence but before having disposed of your previous one, then you may be able to claim a refund if you sell your old property within 36 months of purchasing the new one.

Tax Tip

If you have incurred the Scottish 6% (previously 4%) Additional Dwellings Supplement upon acquiring a new main residence before having disposed of your previous one, then you may be able to claim a refund if you sell your old property within 36 months of purchasing the new one. This timeframe was increased from 18 months to 36 months from 1st April 2024.

The Devolved Parliaments of Wales and Scotland will set their own land transaction tax rates in due course. The current rates are;

Wales residential Land Transaction Tax (LTT) rates

Property (freehold/leasehold) value	LTT rate
Up to £225,000	Zero
£225,001 to £400,000	6%
£400,001 to £750,000	7.50%
£750,001 to £1,500,000	10%
Above £1,500,000	12%

Scotland residential Land & Building Transaction Tax (LBTT) rate

Property purchase value	LBTT rate
Up to £145,000	Zero
£145,001 to £250,000	2%
£250,001 to £325,000	5%
£325,001 to £750,000	10%
Above £750,000	12%

Non-Dom Tax status

From 6 April 2025, the current remittance basis of taxation will be abolished for UK resident non-domiciled individuals.

This will be replaced with a new 4-year foreign income and gains (FIG) regime for individuals who become UK tax resident after a period of 10 tax years of non-UK residence.

Qualifying individuals will not pay tax on FIG arising in the first 4 tax years after becoming UK tax resident and will be able to bring these funds to the UK free from any additional charges.

They will not pay tax on non-resident trust distributions either.

Individuals, who on 6 April 2025, have been tax resident in the UK for less than 4 years (after 10 years of non-UK tax residence) will be able to use this new regime for any tax year of UK residence in the remainder of those 4 years. The protection from tax on foreign income and gains arising within settlor-interested trust structures will no longer be available for non-domiciled and deemed domiciled individuals who do not qualify for the 4 year foreign income and gains regime.

Transitionally, for Capital Gains Tax purposes, current and past remittance basis users will be able to rebase foreign assets they held on 5 April 2017 to their value at that date when they dispose of them.

Any foreign income and gains that arose on or before the 5 April 2025, while an individual was taxed under the remittance basis, will continue to be taxed when remitted to the UK under the current rules. This includes remittances by those who are eligible for the new 4-year foreign income and gains regime.

A new Temporary Repatriation Facility will be available for individuals who have previously claimed the remittance basis. They will be able to designate and remit at a reduced rate foreign income and gains that arose prior to the changes. This includes unattributed foreign income and gains held within trust structures.

The Temporary Repatriation Facility (TRF) will be available for a limited period of 3 tax years, from 2025/2026. The TRF rate will be 12% for the first 2 years and 15% in the final tax year of operation.

The measure extends the period of Overseas Workday Relief to 4 years to align with the new 4-year foreign income and gains regime.

From 6 April 2025, Overseas Workday Relief will be subject to a financial limit on the amount of relief that can be claimed, this is the lower of £300,000 or 30% of an individual’s total employment income.

Furnished Holiday Lettings

The announcement that the FHL regime was to be abolished was in the Spring 2024 Budget. However it did not get enacted before the General Election came about.

The Labour Government have since confirmed its demise.

FHL will be treated the same as long term lets from April 2025 as regards income tax.

Loan interest relief will be restricted to a 20% income tax credit from April 2025.

Where an existing FHL business has an ongoing capital allowances pool of expenditure, it can continue to claim writing down allowances on that pool post April 2025 but not in respect of new expenditure after that date.

Tax Tip

If you are a furnished holiday let business, and you can afford to do so, consider whether to incur capital expenditure in advance of the beginning of April 2025, as the favourable capital allowances treatment will no longer be available for expenditure post that date.

There is an anti-forestalling rule which, with minor exceptions, prevents FHL owners obtaining capital gains relief through the use of unconditional contracts with effect from 6th March 2024.

FHL income will not be counted as relevant income for pension contribution purposes from 6th April 2025 onwards.

Certain capital gains tax reliefs will cease from April 2025 except where the FHL conditions are satisfied up to April 2025 and the criteria for that particular relief includes conditions which can still come into play post April 2025.

Where the FHL business ceased prior to 6th April 2025, business asset disposal relief (the 10% capital gains tax rate) may still apply to a disposal of the property within 3 years of the FHL business coming to an end.

Tax Tip

Furnished holiday let income will cease to count as net relevant earnings for pension purposes from 6th April 2025 onwards. It may be worth checking if it is worthwhile and feasible to top up your pension pot prior to this beneficial pension treatment coming to an end.

High Income Child Benefit Charge (HICBC)

The individual’s High Income Child Benefit Charge (HICBC) adjusted net income threshold will remain at £60,000.

Tax Tip

If you are a single parent or divorced or widowed and a new partner subsequently moves in with you, depending upon their level of income, you may find that they may get hit for the high income child benefit charge.

For individuals with income between £60,000 and £80,000, the rate at which HICBC is charged is halved, and will equal one per cent for every £200 of income that is more than £60,000.

Tax Tip

If you have a child under the age of 12 and register for child benefit you will automatically receive a parent’s state pension credit for each year. If you have a family member who helps you with childcare support whilst you are at work and has a gap in their own national insurance records, you may be able to elect to transfer your state pension credit to them.

Tax Tip

If you have separated from your spouse or partner, with the intention for it to be a permanent separation, or if you divorce, then it is important to revisit the child benefit claim. Failure to do so could result in you being hit for the HICBC even if the child may not live with you.

Individual Savings Account (ISA)

The existing ISA allowance limit of £20,000 will remain in place for the 2025/26 tax year.

The Junior ISA allowance limit and Child Trust Fund subscription limit will continue at £9,000 per annum.

Employee Ownership Trusts (EOT)

There is a tightening of the EOT rules as regards disposal made to the trustees of an EOT on or after 30 October 2024.

The revised tax treatment for contributions made to an EOT to repay the former owner and the changes to the Income Tax relief conditions for annual bonus payments to employees of EOT controlled companies also has effect from 30 October 2024.

Legislation will be introduced to restrict former owners or persons connected with former owners from retaining control of companies post-sale to an EOT by virtue of control (direct or indirect) of the EOT.

Tax Tip

If you are a partially exempt business for VAT purposes, you normally cannot claim the VAT input tax on costs attributable to any VAT exempt supplies that you make. However, if the total value of your exempt input tax is not more than £625 per month on average and it represents no more than 50% of your total VAT input tax then this can be recovered.

Trustees of an EOT must be UK resident (as a single body of persons) at the time of disposal to the EOT. Trustees must take reasonable steps to ensure that the consideration paid to acquire the company shares does not exceed market value.

If qualifying conditions surrounding the EOT are breached, the timeframe to clawback tax relief from the vendor has been extended to the end of the 4th tax year following the end of the tax year of disposal.

A requirement that individuals provide within their claim for Capital Gains Tax relief information on the sale proceeds and the number of employees of the company at the time of disposal.

Tax Tip

If a business deregisters for VAT purposes, it must account for output tax on unpaid sales invoices on its final VAT Return. However, if at a later date (up to 4 years), some sales are written off as they are not expected to be paid by the customer then bad debt relief can be claimed.

Tobacco & vaping duty

With effect from 6pm on 30th October 2024 duty rates for all tobacco products will increase using the TD escalator by 2% above inflation (based on the Retail Price Index (RPI).

The rate for hand-rolling tobacco by an additional 10% above the escalator, to 12% above RPI. There will be a one-off TD increase of £2.20 per 100 cigarettes or 50 grams of tobacco, effective from 1 October 2026.

With effect from 1st October 2026 there will be a single VPD rate of £2.20 per 10ml of vaping liquid.

Tax Tip

Were you going to receive shares from your employer as a result of your employment? Subject to the way those shares are provided, you could be liable to an immediate income tax charge (in some cases national insurance as well), based upon the actual market value (AMV) of the shares at the time. You and your employer may want to elect, within 14 days of receiving the shares, to be taxed on the unrestricted market value (UMV) instead. More tax is likely to be paid upfront but it may result in considerable overall tax savings further down the line.

Alcohol duty

AD duty rates on draught products below 8.5% alcohol by volume (ABV), will be cut by 1.7%, so that an average ABV strength pint will pay 1 pence less in duty.

AD duty rates on non-draught products will increase in line with RPI inflation.

These AD measures will take effect from 1 February 2025.

Tax Tip

Are you an employer who retains an element of the tips, gratuities or service charges to meet any employers national insurance liability which may arise in respect of that income? Be aware that the Employment (Allocation of Tips) Act came into force from 1st October 2024. Under the legislation an employer will not be able to retain any monies of this ilk, as it all has to be paid out to the employee.

Consider setting up an independently controlled Tronc scheme which should help you avoid suffering the employers national insurance liability in the first place.

Be aware that tips, gratuities or service charges allocated to the employees do not count as wages when applying the national minimum wage legislation.

Infrastructure Spending

The Government has changed its self-imposed debt rules in order to free up £50 billion for infrastructure spending.

The National Audit Office and the Office for Budget Responsibility will be asked to validate the investments made.

The extra room for manoeuvre for spending on investment projects will not be able to be used for extra day to day spending, as this will need to be funded from tax receipts.

There will be £500 million in new funding to help build up to 5,000 social homes and bring total investment in housing supply to £5 billion as part of the government’s Affordable Homes Programme.

A further £1.4 billion will be allocated to rebuild crumbling schools.

Tax Tip

Are you looking to reward employees who have been with you for more than 20 years? You can provide long service gifts which can be free of tax for the employee. The gifts can be worth up to £50 for each year of service up to a maximum of 20 years and should be the first in the last 10 years, and not cash.

Further Announcements

To help support aims to reduce waiting times, there will be an additional £1.5 billion capital investment into new surgical hubs and scanners, alongside £70 million for new radiotherapy machines.

£1.8 billon will be allocated for the expansion of government-funded childcare, with a further £15 million of capital funding for school-based nurseries.

Tax Tip

A charity or Community Amateur Sports Club may be able to claim 25% on cash or contactless card donations of £30 or less up to a maximum of £2,000 in relief, without the need to keep individual donor records under the Gift Aid Small Donation Scheme.

The first stage of the plan will pay for 300 new or expanded nurseries across England.

The government will triple investment into free breakfast clubs to £30 million in 2025/26.

From the beginning of next week the subsidised £2 bus fare cap will be increased to £3.

The subsidy was due to come to an end in December this year but the government has extended it for a further year. The Chancellor has raised the limit people can earn before being ineligible for the Carers Allowance from £151 a week to £181.

To keep more children in stable and loving homes, £44 million of funding has been announced to support kinship and foster carers.

£240 million Get Britain Working package to include work, skills and health support for disabled people and the long-term sick has been announced.

Benefit reform will be accelerated this year, with 800,000 people on the old Employment and Support Allowance (ESA) benefit to be moved onto Universal Credit (UC) from this autumn instead of 2028.

The Energy Profits Levy will increase from 35% to 38% from 1st November 2024 until 31st March 2030.

The alternative finance (AF) legislation is amended, with effect from 30th October 2024, to ensure that where an existing asset is used as a means to raise finance using AF, the tax outcome is broadly the same as conventional financing.

The government is extending the employer National Insurance contributions relief for employers hiring qualifying veterans for a further year from 6 April 2025 until 5 April 2026.

The late payment interest rate charged by HMRC on unpaid tax liabilities will increase by 1.5% from April 2025.

The Help to Save Scheme will be extended a further two years to 5th April 2027.

Making Tax Digital (MTD) for Income Tax will be extended to sole traders and landlords with income over £20,000 by the end of this Parliament.

The post The Autumn Budget 2024 appeared first on SG Umbrella.

SG Umbrella is FCSA accredited for another year running

Jen Winslow — Thu, 20 Jun 2024 10:10:07 +0000

Here at SG Umbrella we’re delighted to announce that our FCSA accreditation has been renewed for another year.

To become an accredited member we annually have to undertake an independent and rigorous assessment of all our business services, operations, policies and processes, which are all examined to ensure we’re complying with the FCSA’s high compliance standards. You can view our accreditation here.

Head of SG Umbrella Sam Brown comments

“I am thrilled that SG Umbrella has had its FCSA accreditation renewed for another year. The dedication from the team to offer a compliant, transparent, and personal service has always been our top priority. For our Umbrella employees and agencies that we work closely with, you are in safe hands!”

What does the accreditation mean?

SG Umbrella – helping you contract confidently and compliantly

The post SG Umbrella is FCSA accredited for another year running appeared first on SG Umbrella.

The Autumn Statement 2023

Sam Brown — Wed, 22 Nov 2023 09:42:19 +0000

Chancellor Jeremy Hunt has just finished delivering his Autumn Statement 2023, which he’s hailed a ‘huge boost’ for British competitiveness in his statement for growth. A series of measures were announced with the ‘overall impact of £20bn a year within the decade – the biggest ever business boost for business investment in modern times’.

The headlines are as follows, with the full report being published November 23^rd.

Inflation to fall to 2.8% by the end of 2024
Benefits and Universal Credit will increase next year by 6.7%, the inflation rate for September.
Hand rolling tobacco duty is up by an additional 10% above the tobacco duty escalator, and alcohol duty is frozen until 1 August 2024
The full state pension will increase to £221.20 per week from April 2024. This will mean an extra £902 per year per person
£50 million in funding for apprenticeship schemes over the next two years
Additional £500 million in funding for UK AI over the next two years, in the hope to make the UK an ‘AI powerhouse’
Class 2 National Insurance for the self-employed is to be abolished from April 2024. Saving an average of £192 per self-employed person per year
Small business rates multiplier frozen along with the 75% reducer for retail, leisure and hospitality
Class 4 National Insurance will be reduced by 1%, down to 8% from April 2024
Full Expensing to be made permanent, meaning that for every £1 that a business invests in IT, machinery and equipment, 25p in Corporation Tax can be claimed back
National Insurance to be cut by 2% to 10% from January. The NI bill will be reduced by roughly £450 per year for a worker earning £35,000
National Living Wage to increase from £10.42 to £11.44 p/h from April 2024 for workers aged 21 and over. That’s an increase of 9.8%, worth up to £1,800 for a full-time worker

Initial reactions – what does this mean for business owners?

We believe that the full expensing being made permanent is unlikely to impress many small businesses. There wasn’t a lot in the statement that supports small businesses, and small business owners will probably feel quite disappointed by this.

Class 2 National Insurance (NI) abolition will be good news for those working on a self-employed basis – although only at £3.45 per week. It does simplify the NI system a bit though.

Class 1 National Insurance rate cut from 12 to 10% will benefit those who are employed by Umbrella Companies, as it works out to be roughly a £750 per year saving for someone earning over £50,000 per year.

Full report – Autumn Statement 2023

On 22 November 2023, Jeremy Hunt delivered the ‘Autumn Statement for Growth’. Against an improving economic backdrop, the Chancellor is keen to stimulate economic growth and highlighted 110 measures for businesses. In addition, there were significant statements relating to National Insurance changes and also the reform of work-related state benefits.

Income tax

Income tax rates

The government has stated that the basic rate will remain at 20%, the higher rate at 40% and the additional rate at 45% for 2024/25.

The government reduced the point at which individuals pay the additional rate of 45% from £150,000 to £125,140 for the current tax year and this will continue for 2024/25.

Income tax allowances

The income tax personal allowance and basic rate limit are fixed at their current levels until April 2028. They are £12,570 and £37,700 respectively. For those entitled to a full personal allowance, the point at which they will pay income tax at the higher rate will continue at £50,270.

Dividends

The government has also confirmed that, from 6 April 2024, the rates of taxation on dividend income will remain as follows:

• the dividend basic rate – 8.75%

• the dividend higher rate – 33.75%

• the dividend additional rate – 39.35%.

As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend higher rate, this will also remain at 33.75%.

The government will reduce the Dividend Allowance from £1,000 to £500 from 6 April 2024.

Comment

It is estimated that the reduction in the Dividend Allowance will affect £4.4 million individuals in 2024/25 with the average loss to those affected being around £155.

The Scottish and Welsh governments will make their announcements on the devolved elements of taxation policy in due course.

National Insurance contributions

The Chancellor announced major changes to the National Insurance contributions (NICs) system.

Employees and NICs

The government will cut the main rate of Class 1 employee NICs from 12% to 10% from 6 January 2024 so that employees can benefit as soon as possible.

Comment

According to the government, this will provide a tax cut for 27 million working people with the average worker on £35,400 receiving a cut in 2024/25 of over £450.

The self-employed and NICs

The self-employed generally have to pay two forms of NICs: Class 2 and Class 4.

Firstly, the government will abolish Class 2 self-employed NICs from 6 April 2024. This means that, from 6 April 2024:

• Self-employed people with profits above £12,570 will no longer be required to pay Class 2 NICs but will continue to receive access to contributory benefits, including the State Pension.

• Those with profits between £6,725 and £12,570 will continue to get access to contributory benefits, including the State Pension, through a National Insurance credit without paying NICs.

• Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension, will continue to be able to do so.

The government will set out the next steps on Class 2 reform next year.

Comment

This will mean that a self-employed person who currently pays Class 2 NICs will save at least £192 per year.

Secondly, the government will cut the main rate of Class 4 self-employed NICs from 9% to 8% from 6 April 2024.

Comment

This will benefit around two million individuals, recognising the contribution of the self-employed to the economy and ensuring that work pays for all.

Extension of NICs relief for hiring veterans

The government is extending the employer NICs relief for businesses hiring qualifying veterans for a further year from April 2024 until April 2025. This means that employers will continue to pay no employer NICs up to annual earnings of £50,270 for the first year of a qualifying veteran’s employment in a civilian role.

National Living Wage and National Minimum Wage

The government has accepted in full the recommendations of the Low Pay Commission and announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from April 2024. In addition, from April 2024 the NLW will be extended to 21 and 22 year olds. The rates which will apply from 1 April 2024 are as follows:

Age NLW 18-20 16-17 Apprentices

From 1 April 2024 £11.44 £8.60 £6.40 £6.40

The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over.

Comment

The Department for Business and Trade estimates 2.7 million workers will directly benefit from the 2024 National Living Wage increase.

Individual Savings Accounts

The government is freezing the limits on Individual Savings Accounts (ISAs) (£20,000), Junior Individual Savings Accounts (£9,000), Lifetime Individual Savings Accounts (£4,000 excluding government bonus) and Child Trust Funds (£9,000) for 2024/25.

However, a number of changes will be made to allow multiple subscriptions to ISAs of the same type every year and to allow partial transfers of ISA funds in-year between providers from April 2024.

Pension tax limits

A number of changes were made to the tax regime for pensions for 2023/24 and these include the following, which will remain at their 2023/24 levels for 2024/25:

• The Annual Allowance (AA) is £60,000.

• Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000.

• No Lifetime Allowance (LA) charge.

In addition, as previously announced the LA of £1,073,100 will be abolished from 2024/25. Changes will be made to clarify the taxation of lump sums and lump sum death benefits, and the application of protections, as well as the tax treatment for overseas pensions, transitional arrangements, and reporting requirements.

Backing British business

To increase business investment, the government has announced a number of measures which could raise around £20 billion per year from businesses in a decade’s time. The changes include:

• Full Expensing will be made permanent.

• The removal of barriers to critical infrastructure by reforming the UK’s inefficient planning system and speeding up electricity grid connection times.

• A package of pension reform and driving private investment from insurers into infrastructure by legislating for key reforms to Solvency II.

• Making £4.5 billion available in strategic manufacturing sectors such as auto, aerospace, life sciences and clean energy from 2025 for five years.

• New Investment Zones.

• From April 2024, firms bidding for government contracts over £5 million will have to demonstrate that they pay their own invoices within an average of 55 days, tightening to 45 days in April 2025 and then 30 days in future years.

• Changes to Research and Development.

Business Rates

The small business multiplier will be frozen for another year, while the 75% Retail, Hospitality and Leisure relief will be extended for 2024/25. The standard multiplier will be uprated in line with September’s Consumer Prices Index. These changes will take effect from 1 April 2024 in England.

Freeports and Investment Zones

Both regimes allow businesses in specific locations to benefit from a number of reliefs including Stamp Duty Land Tax relief, enhanced capital allowances, structures and buildings allowances and secondary Class 1 NIC relief for eligible employers.

Both regimes were originally to run for five years but the Chancellor has announced that they will both now run for ten years.

Capital allowances

The new Full Expensing rules for companies allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is unused and not second-hand. The rules were originally designed to be effective for expenditure incurred on or after 1 April 2023 but before 1 April 2026. Similar rules apply to integral features and long life assets at a rate of 50%. The government has announced that both allowances will now be made permanent.

The Annual Investment Allowance, which gives a 100% write-off on certain types of plant and machinery, remains at £1 million per 12-month period.

Research and Development (R&D)

The existing Research and Development Expenditure Credit (RDEC) and SME schemes will be merged, with expenditure incurred in accounting periods beginning on or after 1 April 2024 being claimed in the merged scheme. The rate under the merged scheme will be set at the current RDEC rate of 20%. The notional tax rate applied to loss-makers in the merged scheme will be lowered from 25% to 19%.

A number of other changes will apply to the new regime from April 2024, including that R&D claimants will no longer be able to nominate a third-party payee for R&D tax credit payments, subject to limited exceptions. In addition, no new assignments of R&D tax credits will be possible from 22 November 2023, meaning that, in most circumstances, payments of R&D tax reliefs will be paid directly to the company that claims for the R&D.

Comment

Further action may be needed to reduce the unacceptably high levels of non-compliance with the R&D rules and HMRC will be publishing a compliance action plan.

Corporation tax rates

The government has confirmed that the rates of corporation tax will remain unchanged, which means that, from April 2024, the rate will stay at 25% for companies with profits over £250,000. The 19% small profits rate will be payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate.

VAT

The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2024, staying at £85,000 and £83,000 respectively.

In addition, the government will extend the scope of the current VAT zero rate relief on women’s sanitary products to include reusable period underwear from 1 January 2024.

Other business measures

A number of other measures have been announced:

• Making the cash basis of accounting the default position for the self-employed from 2024/25, with an alternative to opt for the accruals basis, together with technical changes to the regime.

• A number of changes to strengthen the Construction Industry Scheme from April 2024.

Other taxation matters

Capital gains

The capital gains tax annual exempt amount will be reduced from £6,000 to £3,000 from April 2024.

Comment

It is estimated that around 570,000 individuals and trusts could be affected in 2024/25.

Inheritance tax

The inheritance tax nil-rate bands will stay fixed at their current levels until April 2028. The nil-rate band will continue at £325,000, the residence nil-rate band will continue at £175,000 and the residence nil-rate band taper will continue to start at £2 million.

Back to work

The government is introducing a Back to Work Plan, which includes investment of over £2.5 billion over the next five years. It will significantly expand available support and transform the way people interact with the benefits system. It has been designed:

• To support those who are long-term unemployed to find work.

• To ensure that those with long-term sickness and/or disabilities are better equipped to manage their conditions and participate in work, if they are able to do so.

As part of the Back to Work Plan, the government will invest over £1.3 billion over the next five years to help tackle long-term unemployment by establishing an end-to-end process that supports and incentivises unemployed Universal Credit claimants to find work. These policies, which include expanding Additional Jobcentre Support and strengthening Restart, build on previously announced changes.

The government will also strengthen the Universal Credit sanctions regime to enforce the government’s expectation that those who can work must engage with the support available or lose their benefits. As a result, no claimant should reach their claimant review point at 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with Jobcentre support.

State benefits

From April 2024, the government is increasing working age benefits in line with inflation by 6.7%. The government is also maintaining the Triple Lock and the basic State Pension, new State Pension and the Pension Credit standard minimum guarantee will be uprated by 8.5%.

Making Tax Digital

The government has announced the outcome of the review into the impact of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) on small businesses which includes maintaining the current MTD threshold at £30,000 and design changes to simplify and improve the system. These changes will take effect from April 2026. The government will also ensure taxpayers who join MTD from 6 April 2024 are subject to the government’s new penalty regime for the late filing of tax returns and late payment of tax.

The post The Autumn Statement 2023 appeared first on SG Umbrella.

The Autumn Statement 2022 Full Report – what it means for contractors

Sam Brown — Thu, 17 Nov 2022 15:31:40 +0000

Since the reversal of Liz Truss’s tax policy changes last month, new PM Rishi Sunak and Chancellor Jeremy Hunt have promised a new statement, concluding that now is the right time to proceed with a package of tax cuts. In today’s statement there was a focus on energy prices & Covid, as being responsible for necessary tax increases. Taken together with maintaining the basic rate of income tax at 20% these changes are estimated to raise £34 billion per year. The headlines are as follows, with the full report below.

Decrease in the additional rate threshold from £150,000 to £125,140 from 6 April 2023. The government is also fixing other personal tax thresholds within income tax, NICs and Inheritance Tax for an additional 2 years, until April 2028
Reduction in the Dividend Allowance (currently £2,000 tax free but set to reduce to £500 from April 2024)
Reduction in Capital Gains Tax Annual Exempt Amount (reducing to £6,000 from April 2023 and £3,000 from April 2024). The Personal Allowance will generally be available in addition to the reduced Dividend Allowance and Capital Gains Tax Annual Exempt Amount
The income tax additional rate threshold will be lowered from £150,000 to £125,140 from 6 April 2023. The ART for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The ART for savings and dividend income will apply UK-wide.
VAT registration and deregistration thresholds will be maintained at the current levels for an additional 2 years and will not change for a further period of 2 years from 1 April 2024.
Confirmed Off-payroll working rules: maintain 2017 and 2021 reforms (also known as IR35)
Reflecting the success of the transition to electric vehicles, the government will introduce Vehicle Excise Duty (car tax) on electric cars, vans and motorcycles from April 2025

The Autumn Statement 2022 – Full Report

On 17 November 2022, the government undertook the third fiscal statement in as many months, against a backdrop of rising inflation and economic recession. The Chancellor laid out three core priorities of stability, growth and public services. The government sought a balanced path to support the economy and return to growth, partially through public spending restraint and partially through tax rises.

Income tax

Income tax rates

The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This was to be accelerated so that it took effect from April 2023. However, whilst the government aims to proceed with the cut in due course, this will only take place when economic conditions allow and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely.

At the Mini Budget on 23 September 2022 the government announced a plan to abolish the 45% additional rate of income tax from April 2023. It was announced on 3 October 2022 that the government would not proceed with this plan.

From 6 April 2023, the point at which individuals pay the additional rate will be lowered from £150,000 to £125,140.

The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK.

Income tax allowances

The income tax personal allowance and higher rate threshold were already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028. They will be £12,570 and £50,270 respectively.

The government will uprate the married couple’s allowance and blind person’s allowance by inflation for 2023/24.

Dividends

The government has also confirmed that, from April 2023, the rates of taxation on dividend income will remain as follows:

the dividend ordinary rate – 8.75%
the dividend upper rate – 33.75%
the dividend additional rate – 39.35%.

As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%.

In addition, the government will reduce the Dividend Allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024.

These changes will apply to the whole of the UK.

National Insurance contributions

In September 2021 the government published its proposals for new investment in health and social care in England. The proposals were intended to lead to a permanent increase in spending not only in England but also by the devolved governments. To fund the investment the government introduced a UK-wide 1.25% Health and Social Care Levy based on the National Insurance contributions (NICs) system but ringfenced for health and social care.

The Health and Social Care Levy Act provided for a temporary 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs for 2022/23. From April 2023 onwards, the NIC rates were intended to revert back to 2021/22 levels and be replaced by a new 1.25% Health and Social Care Levy.

However, the government has:

reversed the temporary increase in NICs and
cancelled the Health and Social Care Levy completely.

Comment

According to the government, not proceeding with the Levy will reduce tax for 920,000 businesses by nearly £10,000 on average next year.

For SMEs, the government predicts that the savings will be around £4,200 on average for small businesses and £21,700 for medium sized firms from 2023/24.

In addition, it will help almost 28 million people across the UK save £330 on average in 2023/24, with an additional saving of around £135 on average this year.

More detail for employees and employers

The changes took effect for payments of earnings made on or after 6 November 2022, so:

primary Class 1 NICs (employees) generally reduced from 13.25% to 12% and 3.25% to 2% and
secondary Class 1 NICs (employers) reduced from 15.05% to 13.8%.

The effect on Class 1A (payable by employers on taxable benefits in kind) and Class 1B (payable by employers on PAYE Settlement Agreements) NICs will effectively be averaged over the 2022/23 tax year, so that the rate will generally be 14.53%.

Comment

The government hopes that most employees will receive the NICs reduction directly via the payroll in their November pay but acknowledges that some will have to wait until December or January, depending on the complexity of their employer’s payroll software.

More detail for the self-employed

Following the principle detailed above, the changes to Class 4 NICs will again be averaged across 2022/23, so that the rates will be 9.73% and 2.73%.

NICs thresholds

A similar principle to that outlined above for income tax thresholds will be followed in respect of the NICs upper earnings limit and upper profits limit. From July 2022, the NICs primary threshold and lower profits limit were increased to align with the personal allowance and will be maintained at this level from April 2023 until April 2028. The Class 2 lower profits threshold will also be fixed from April 2023 until April 2028 to align with the lower profits limit. They will again be £12,570 and £50,270 as appropriate.

In addition, the government will fix the lower earnings limit and the small profits threshold at 2022/23 levels in 2023/24, namely £6,396 and £6,725 per annum respectively.

The government will uprate the Class 2 and Class 3 NICs rates for 2023/24 to £3.45 per week and £17.45 respectively.

Finally, the government will fix the level at which employers start to pay Class 1 NICs for their employees at £9,100 from April 2023 until April 2028.

Comment

The government states: ‘It is fair that businesses play their part in reducing the UK’s debt. The Employment Allowance means that 40% of businesses do not pay NICs and will be unaffected by this change, and the largest employers contribute the most.’

Capital gains

The government has announced that the capital gains tax annual exempt amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.

Comment

Combined with the changes to the Dividend Allowance, these measures will raise over £1.2 billion a year from April 2025.

Inheritance tax

The inheritance tax nil-rate bands are already set at current levels until April 2026 and will stay fixed at these levels for a further two years until April 2028. The nil-rate band will continue at £325,000, the residence nil-rate band will continue at £175,000 and the residence nil-rate band taper will continue to start at £2 million.

Stamp Duty Land Tax

A number of changes were made to the Stamp Duty Land Tax (SDLT) regime earlier this year and these remain. Generally, the changes increase the amount that a purchaser can pay for residential property before they become liable for SDLT.

The residential nil rate tax threshold increased from £125,000 to £250,000.

The nil rate threshold for First Time Buyers’ Relief increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief increased to £625,000.

The changes apply to transactions with effective dates on and after 23 September 2022 in England and Northern Ireland. These changes do not apply to Scotland or Wales which operate their own land transactions taxes.

There are no changes in relation to purchases of non-residential property.

Residential Band £	Rate %	Non-residential Band £	Rate %
0 – 250,000	0	0 – 150,000	0
250,001 – 925,000	5	150,001 – 250,000	2
925,001 – 1,500,000	10	Over 250,000	5
Over 1,500,000	12

Higher rates may be payable where further residential properties are acquired.

Comment

However, the government has now confirmed that these changes will be a temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025 to support the housing market.

Land Transaction Tax

The Welsh government also altered its rates in relation to land and buildings in Wales for transactions with an effective date on or after 10 October 2022.

Residential Band £	Rate %	Non-residential Band £	Rate %
0 – 225,000	0	0 – 225,000	0
225,001 – 400,000	6	225,001 – 250,000	1
400,001 – 750,000	7.5	250,001 – 1,000,000	5
750,001 – 1,500,000	10	Over 1,000,000	6
Over 1,500,000	12

Higher rates may be payable where further residential properties are acquired.

Business

Corporation tax rates

It had been previously announced that the expected increase in the rate of corporation tax for many companies from April 2023 to 25% would not go ahead. However the government announced on 14 October 2022 that this increase will now proceed and this has been confirmed.

This means that, from April 2023, the rate will increase to 25% for companies with profits over £250,000. The 19% rate will become a small profits rate payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate.

In addition:

bank corporation tax surcharge changes will proceed, meaning that from April 2023 banks will be charged an additional 3% rate on their profits above £100 million and
from April 2023 the rate of diverted profits tax will increase from 25% to 31%.

Capital allowances

The Annual Investment Allowance (AIA) gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit has been £1 million for some time but was scheduled to reduce to £200,000 from April 2023. The government has announced that the temporary £1 million level of the AIA will become permanent and the proposed reduction will not occur.

Comment

Companies incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow.

The government will also extend the 100% first year allowance for electric vehicle chargepoints to 31 March 2025 for corporation tax purposes and 5 April 2025 for income tax purposes.

Research and Development

For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20% but the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86% and the SME credit rate will decrease from 14.5% to 10%.

Comment

This government states that ‘this reform ensures that taxpayer support is as effective as possible, improves the competitiveness of the RDEC scheme, and is a step towards a simplified, single RDEC-like scheme for all’. The government will consult on the design of a single scheme and consider whether further support is necessary for R&D intensive SMEs. As previously announced at Autumn Budget 2021, the R&D tax reliefs will be reformed by expanding qualifying expenditure to include data and cloud costs, refocusing support towards innovation in the UK, and targeting abuse and improving compliance.

Seed Enterprise Investment Scheme

From April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from two to three years. To support these increases, the annual investor limit will be doubled to £200,000.

Company Share Option Plan

From April 2023, qualifying companies will be able to issue up to £60,000 of Company Share Option Plan (CSOP) options to employees, twice the current £30,000 limit. The ‘worth having’ restriction on share classes within CSOP will be eased, better aligning the scheme rules with the rules in the Enterprise Management Incentive scheme and widening access to CSOP for growth companies.

VAT

The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2024, staying at £85,000 and £83,000 respectively.

Comment

According to the government, at £85,000, the UK’s VAT registration threshold is more than twice as high as the EU and OECD averages.

Vehicles

The government will set the rates for the taxation of company car benefits until April 2028 to provide long term certainty for taxpayers and industry. Rates will continue to incentivise the take up of electric vehicles.

In addition, from 6 April 2023 car and van fuel benefits and the van benefit charge will increase in line with inflation.

Comment

In addition, from April 2025 electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty in the same way as petrol and diesel vehicles. According to the government, this will ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues to accelerate.

Welfare, work and pensions

Cost of living payments

The government will provide households on means-tested benefits with an additional £900 cost of living payment in 2023/24. Pensioner households will receive an additional £300 and individuals on disability benefits will receive an additional £150.

Uprating of benefits

The government will increase benefits in line with inflation, including the state pension. The standard minimum income guarantee in pension credit will also increase in line with inflation from April 2023.

Comment

Around 19 million families will see their benefit payments increase from April 2023.

Raising the benefit cap

The benefit cap will be raised in line with inflation, so that more households will see their payments increase as a result of uprating from April 2023. The cap will be raised from £20,000 to £22,020 for families nationally and from £23,000 to £25,323 in Greater London. For single adults it will be raised from £13,400 to £14,753 nationally and from £15,410 to £16,967 in Greater London.

National Living Wage and National Minimum Wage uprating

The government will increase the National Living Wage (NLW) and National Minimum Wage from 1 April 2023 as follows:

the rate for 23 year olds and over to £10.42 an hour
the rate for 21-22 year olds to £10.18 an hour
the rate for 18-20 year olds to £7.49 an hour
the rate for 16-17 year olds to £5.28 an hour and
the apprentice rate to £5.28 an hour.

Comment

This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over two million low paid workers.

In-work conditionality for Universal Credit claimants

The government will bring forward the nationwide rollout of the In-Work Progression Offer, starting with a phased rollout from September 2023, to support individuals on Universal Credit (UC) and in work to increase their earnings and move off benefits entirely. This will mean that over 600,000 claimants on UC whose household income is typically between the equivalent of 15 and 35 hours a week at the NLW will be required to meet with a dedicated work coach in a Jobcentre Plus to increase their hours or earnings.

Energy

The Autumn Statement sets out reforms to ensure businesses in the energy sector who are making extraordinary profits contribute more. From 1 January 2023, the Energy Profits Levy will be increased to 35% and extended to the end of March 2028 and a new, temporary 45% Electricity Generator Levy will be applied on the extraordinary returns being made by electricity generators.

The Energy Price Guarantee (EPG) will be maintained through the winter, limiting typical energy bills to £2,500 per year. From April 2023 the EPG will rise to £3,000.

The government is also setting a national ambition to reduce energy consumption by 15% by 2030, delivered through public and private investment, and a range of cost-free and low-cost steps to reduce energy demand.

The post The Autumn Statement 2022 Full Report – what it means for contractors appeared first on SG Umbrella.

BREAKING NEWS – Repeal of IR35 reforms and back track on Corporation Tax

Sam Brown — Mon, 17 Oct 2022 14:16:57 +0000

Jeremy Hunt, The Chancellor of the Exchequer, has today scrapped the plans to repeal the Off-payroll IR35 Reforms, which had been announced by Kwasi Kwarteng on 22 September 2022.

As part of his ‘Growth Plan’, Kwarteng had set out a number of tax cuts designed to support the growth of the British Economy. However, following widespread criticism and instability in financial markets, Mr Kwarteng was replaced with Jeremy Hunt who has scrapped all of the growth plan changes bar the planned cut to stamp duty and National Insurance.

Repeal of the IR35/off-payroll working legislation had come as welcome news for our industry, with optimism that the UKs self-employed workforce would flourish. So this u-turn on a u-turn is very disappointing, with the end client being responsible for determining the IR35 status of their contractors. So, business as usual, but not as we would wish for our contractor clients.

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MINI BUDGET SEPTEMBER 2022

Sam Brown — Mon, 26 Sep 2022 09:57:26 +0000

The mini budget – what it means for contractors

Well that was a big U-TURN affecting the contracting industry! The (not so) mini-budget delivered by new Chancellor, Kwasi Kwarteng last Friday, had a lot more in it than anyone expected.

Repeal of the IR35/off-payroll working legislation from April 2023 is welcome news for our industry. Since 2017 for the Public Sector, and 2021 in the Private Sector, the end client has been responsible for determining the IR35 status of their contractors, with many taking a risk-averse approach to doing so, to the extent of banning Limited Company contractors altogether in some cases. However, from April 2023, the responsibility will return to the contractor, leading to an opening up of the market. At SG, we can support you with your Limited Company needs, if you decide to go down that route in the future, with our sister company SG Contractor Accounting.

On top of this big IR35 news we’ve also summarised the other changes below:

Corporation Tax planned increase from 19% to 25% has been scrapped
Basic rate of income tax reduced from 20% to 19% from April 2023
Reversal of the 1.25% increase in the dividend tax rate from 2023
Additional rate of income tax of 45% has been scrapped
NI (health and social care levy) increase of 1.25% has been repealed from 6th November 2022
AIA remains at £1m indefinitely
Stamp duty 0% threshold increased to £250,000. This is a saving of £2,600 on an average house costing £312,000
Freeze on energy bills
Rules on bankers’ bonus limits are to be scrapped
IR35-off-payroll rules to be repealed from April 2023. Reverting to pre-2017 rules

For a more detailed look at the mini budget and what was announced, please take a look below.

Chancellor reveals his plan for growth

The week leading up to Chancellor Kwasi Kwarteng’s ‘Mini Budget’ may have been a short one due to the Queen’s funeral but the new government managed to fill it with a stream of policy announcements.

Before Mr Kwarteng stood up to make his statement on ‘The Growth Plan’ much of what he had to say about energy support for businesses and households, bankers’ bonuses, investment zones and reversals to NICs had already been announced. The government also said that the Chancellor’s statement would not be subject to a forecast from the Office for Budget Responsibility. However, this did not stop the media from dubbing this event a Mini Budget.

The Growth Plan set out a new approach to the economy built around three central priorities:

reforming the supply-side of the economy
maintaining a responsible approach to public finances
cutting taxes to boost growth.

National Insurance contributions

However, the new Chancellor has decided to:

reverse the temporary increase in NICs from November and
cancel the Health and Social Care Levy completely.

The Health and Social Care Levy was expected to raise around £13 billion a year to fund health and social care and the Chancellor has confirmed that funding will be maintained at the same level as if the Levy was in place, funded from general taxation.

Comment

According to the government, not proceeding with the Levy will reduce tax for 920,000 businesses by nearly £10,000 on average next year.

For SMEs, the government predicts that the savings will be around £4,200 on average for small businesses and £21,700 for medium sized firms from 2023/24.

In addition, it will help almost 28 million people across the UK save £330 on average in 2023/24, with an additional saving of around £135 on average this year.

More detail for employees and employers

The changes take effect for payments of earnings made on or after 6 November 2022, so:

primary Class 1 NICs (employees) will generally reduce from 13.25% to 12% and 3.25% to 2% and
secondary Class 1 NICs (employers) will reduce from 15.05% to 13.8%.

Comment

More detail for the self-employed

Following the principle detailed above, the changes to Class 4 NICs will again be averaged across 2022/23, so that the rates will be 9.73% and 2.73%.

Income tax

Income tax rates

The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This is now being accelerated so that it takes effect from April 2023.

Comment

The government states that this reduction is worth over £5 billion for workers, savers and pensioners. Also, that 31 million taxpayers will benefit in 2023/24, with an average gain of £170.

In addition, to ‘incentivise enterprise and hard-work and simplify the tax system’, the government will abolish the 45% additional rate of income tax from April 2023. Consequently, there will be a single higher rate of income tax of 40%.

Comment

These changes will generally apply to taxpayers in England, Wales and Northern Ireland. It remains to be seen what the Scottish government will do in relation to the setting of rates on non-savings income.

There are a number of tax consequences which stem from these changes. One of them is the amount of tax relief given at source on pension contributions and Gift Aid donations. This is currently given at the basic rate of 20%. The government has stated that there will be a four-year transition period for Gift Aid relief to maintain the income tax basic rate relief at 20% until April 2027. This will support almost 70,000 charities and is worth over £300 million. However, there was little comment on pension contributions other than that there will also be a one-year transitional period for Relief at Source pension schemes to permit them to continue to claim tax relief at 20%.

Dividends

From April 2023:

the dividend ordinary rate of 8.75% will reduce to 7.5%
the dividend upper rate of 33.75% will reduce to 32.5% and
the dividend additional rate will be abolished.

As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, it will also reduce to a 32.5% charge for loans made on or after 6 April 2023.

These changes will apply in Scotland as the rules on dividends apply to the whole of the UK.

Business

Corporation tax rates

It had been previously announced that the rate of corporation tax would increase for many companies from April 2023 to 25%. This change will now not go ahead, leaving the rate of corporation tax at 19% for the majority of companies.

Comment

The 19% UK corporation tax rate is significantly lower than the rest of the G7 and the lowest in the G20.

In line with this change, the Bank Corporation Tax Surcharge will remain the same, as will the Diverted Profits Tax.

Capital allowances

The Annual Investment Allowance (AIA) gives a 100% write-off on certain types of plant and machinery, including cars with zero emissions, up to certain financial limits per 12-month period. The limit has been £1 million for some time but was scheduled to reduce to £200,000 from April 2023. The government has announced that the temporary £1 million level of the AIA will become permanent and the proposed reduction will not occur.

Up to 31 March 2023, companies investing in qualifying new plant and machinery are able to benefit from capital allowances, generally referred to as ‘super-deductions’. These reliefs are not available for unincorporated businesses. Interestingly, these allowances were not mentioned, other than minor amendments to the current rules, so it appears the scheduled withdrawal of them will occur in 2023.

Comment

Businesses incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow.

Seed Enterprise Investment Scheme

Company Share Option Plan

Investment Zones aim to encourage rapid development

As part of the government’s plan to drive economic growth and encourage development the Chancellor confirmed that Investment Zones will be established across the UK.

These zones will benefit from lower taxes and liberalised planning frameworks to encourage business investment.

The government is already in discussions with 38 local authorities to establish investment zones in England. In addition, it says it will work closely with the devolved administrations to offer the same opportunities in Scotland, Wales and Northern Ireland.

Businesses in designated areas in investment zones will benefit from 100% business rates relief on newly occupied and expanded premises.

In addition, businesses will receive full Stamp Duty Land Tax relief on land bought for commercial or residential development and a zero rate for employer NICs on new employee earnings up to £50,270 per year.

There will also be a 100% first year enhanced capital allowance relief for plant and machinery used within designated sites and accelerated Enhanced Structures and Buildings Allowance relief of 20% per year.

As well as time-limited tax benefits there will be designated development sites that will release more land for housing and commercial development in the zones. The need for planning applications will be minimised and streamlined.

Stamp Duty Land Tax

A number of changes are made to the Stamp Duty Land Tax (SDLT) regime. Generally, the changes increase the amount that a purchaser can pay for residential property before they become liable for SDLT.

The residential nil rate tax threshold is increased from £125,000 to £250,000.

The nil rate threshold for First Time Buyers’ Relief is increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief is increased to £625,000.

There are no changes in relation to purchases of non-residential property.

Residential Band £	Rate %	Non-residential Band £	Rate %
0 – 250,000	0	0 – 150,000	0
250,001 – 925,000	5	150,001 – 250,000	2
925,001 – 1,500,000	10	Over 250,000	5
Over 1,500,000	12

Residential rates may be increased by 3% where further residential properties are acquired.

Other comments

There were a number of other interesting comments made by the Chancellor which suggest future policies and changes, although lacking detail at the moment.

IR35 and off-payrolling

Over the last 20 years, there have been numerous changes to the tax system to try and address ‘disguised employment’ and to generate additional tax and NICs accordingly. In a surprise announcement, the government has stated that it will repeal the off-payroll working rules from 6 April 2023. From this date, workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs.

Comment

According to the government, this will free up time and money for businesses that engage contractors, that could be put towards other priorities. The change will also reduce the risk that genuinely self-employed workers are impacted by the off-payrolling rules.

Infrastructure

The Chancellor announced plans to accelerate new roads, rail and energy infrastructure with new legislation which will cut barriers and restrictions. This will make it quicker to plan and build new roads, speeding up the deployment of energy infrastructure such as offshore wind farms and streamlining environmental assessments and regulations.

Comment

According to the government, in 2021 it took 65% longer to get consent for major infrastructure projects than in 2012.

State benefits

Universal Credit claimants who earn less than the equivalent of 15 hours a week at the National Living Wage will be required to meet regularly with their work coach and take active steps to increase their earnings or face having their benefits reduced, broadly from January 2023. Jobseekers over the age of 50 will also be given extra time with Jobcentre work coaches, to help them return to the job market.

VAT-free shopping areas

The government will introduce a modern, digital, VAT-free shopping scheme with the aim of providing a boost to the high street and creating jobs in the retail and tourism sectors. The delivery will include modernising the scheme that currently operates in Northern Ireland and introducing a new digital scheme in Great Britain. The new VAT-free shopping scheme for non-UK visitors to Great Britain will enable them to obtain a VAT refund on goods bought in the high street, airports and other departure points and exported from the UK in their personal baggage.

Alcohol duties

Reforms to modernise alcohol duties will also be taken forward and the government has published a consultation response on these plans. The reforms will be implemented from 1 August 2023. The government is also freezing the alcohol duty rates from 1 February 2023 to provide additional support to the sector.

Further announcements

Over the next few weeks, the government will set out further details of plans to speed up digital infrastructure, reform business regulation, increase housing supply, improve our immigration system, make childcare cheaper, improve farming productivity and back the financial services sector.

Government announces plans to help cut energy bills for businesses

On 21 September 2022 the government announced a new scheme, the Energy Bill Relief Scheme, which is designed to cut energy prices for non-domestic energy customers, such as businesses, charities and public sector organisations. The new scheme is in addition to the recently announced Energy Price Guarantee for households.

The scheme will apply to fixed contracts agreed on or after 1 April 2022 in addition to deemed, variable and flexible tariffs and contracts. Running for an initial six-month period, the scheme will apply to energy usage from 1 October 2022 to 31 March 2023. According to the government, savings will first be seen in businesses’ October bills.

Businesses are not required to take action or apply for the scheme, support will be automatically applied to bills.

The government intends to conduct a review of the scheme in three months to assess:

how effective it has been in giving support to vulnerable, non-domestic customers
which groups of non-domestic customers remain vulnerable to energy price rises
the extent to which the scheme could either be extended or further targeted.

Support after 31 March 2023 will be determined following the review.

Energy Price Guarantee plan caps household bills

Prime Minister Liz Truss announced the Energy Price Guarantee (EPG) for households on 8 September 2022 which will apply from the start of October 2022. The EPG means that an average household will pay no more than £2,500 per year for each of the next two years. It comes in addition to the £400 Energy Bill Support Scheme and will save the average household at least £1,000.

The EPG limits the price suppliers can charge customers for energy supplies. This takes account of temporarily removing green levies, worth around £150, from household bills. The guarantee will supersede the existing energy price cap.

Under the plan, those households who do not pay directly for mains gas and electricity, such as those living in park homes or on heat networks, will be no worse off and will receive support through a new fund.

The government estimates that the EPG will deliver substantial benefits to the economy, boosting growth and curbing inflation by four to five percentage points, which will in turn reduce the cost of servicing the national debt.

The government will provide energy suppliers with the difference between this new lower price and what energy retailers would charge their customers if this were not in place. Schemes previously funded by green levies will also continue to be funded by the government during this two-year period to ensure the UK’s investment in homegrown, secure renewable technologies continues.

New plan for patients aims to tackle NHS backlog

Health and Social Care Secretary Thérèse Coffey unveiled the government’s new ‘Our plan for patients’ on 22 September 2022, which aims to tackle NHS backlogs.

The centrepiece of the plan is the expectation that everyone who needs an appointment at a GP practice should get one within two weeks, with patients with the most urgent needs being seen the same day.

The plan also includes changing funding rules to recruit extra support staff so that GPs can focus on treating patients. The government says this will free up over one million appointments per year.

There will also be ‘more state-of-the art telephone’ systems to make it easier for patients to get through to their GP surgeries. In addition, more information will be available for patients, with appointments data published at a practice level for the first time ever.

Pharmacies will help ease pressures on GPs and free up time for appointments by managing and supplying more medicines without a GP prescription and taking referrals from emergency care for minor illnesses.

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The Spring Statement 2022 – what it holds for contractors

Sam Brown — Wed, 23 Mar 2022 16:53:13 +0000

In this blog our MD, Daniel Mepham, shares his thoughts from the March 2022 Spring Statement.

A much anticipated Spring Statement was delivered on March 23rd by Chancellor, Rishi Sunak against a backdrop of war in Ukraine, post pandemic super spending and an ever increasing rate of inflation. With that in mind I was expecting some headline grabbing announcements. I’ve highlighted below some of the key points, but if you want to see the full details you can read them in our full pdf guide: Spring Statement March 2022

The National Insurance threshold is being increased by £3,000 to bring it in line with the Income Tax Personal Allowance. This is a Class 1 saving of over £330 per year now based on the increased rate of 13.25% including the new 1.25% Health and Social Care Levy
The planned Health and Social Care Levy of 1.25% will go ahead from April this year
Personal Income Tax will be reduced from 20% to 19% by the end of this government (2024).
The OBR predicts the rate of inflation for this year to average 7.4% and the economy to grow by 3.8%
For the next five years, there will be no VAT applied to energy-saving materials including solar panels, heat pumps and insulation
Fuel duty will be cut by 5p per litre from this evening at 6pm. This is a temporary measure until March next year
The employment allowance to help with the costs of Employers National insurance is being increased to £5,000 from £4,000. Single employee/Director companies are not eligible for this allowance

If you are an SG Umbrella client, we will be in touch if these changes affect you. If you’re not an SG Umbrella client but are a contractor looking for an Umbrella partner to support you with the minefield of legislation and tax, then get in touch today. We’d love to hear from you.

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Holiday pay when you’re using an Umbrella Company

Sam Brown — Tue, 22 Mar 2022 11:12:39 +0000

With Covid restrictions beginning to ease and travel returning to a new version of normal, you may be considering booking your summer holiday. But if you’re contracting under an Umbrella Company, do you get holiday pay?

In this blog we explore how holiday pay works, what you’re entitled to and how it’ll be paid.

How is your holiday pay calculated?

When you sign up to an Umbrella Company, you effectively create an overarching contract between yourself and the umbrella, so you therefore become an employee. As an employee you’re entitled to annual leave, which currently equates to 5.6 weeks (5.6 times the standard working week of 5 days) or 28 days per year. It’s up to your employer whether or not bank holidays are included in this 28 day limit. If you work less than 5 days a week or for six months of the year, your holiday entitlement will be calculated on a pro-rata basis.

Your holiday pay as an Umbrella Company employee is therefore based on these figures.

Example – by dividing 5.6 weeks by 46.4 weeks (the total number of working weeks left over once the 5.6 weeks have been taken out) you end up with a total of 0.1206896, which is rounded up to 12.07. It is this number as a percentage which is used to calculate your annual leave. If you’d like to know your annual leave you can use the government’s holiday pay calculator.

What to consider when taking on a new contract

As an Umbrella Company employee your holiday pay allocation is equated from the agreed contract rate with the end-hirer or recruitment agency. So effectively Umbrella Company employees do not receive the 12.07% uplift amount, as this amount is calculated from the assignment rate (eg the hourly or daily rate amount which you, the contractor has agreed to). So before agreeing to a contract, ensure you’ve considered your holiday pay, and how much you’re entitled to.

How is your holiday pay processed?

Typically there are two ways in which an Umbrella Company could process your holiday pay:

Option 1 – your holiday pay is processed for each payment frequency. You’ll see on your payslip that 12.07% of your pay will be allocated as ‘holiday pay’, and you’ll receive this extra % each and every time you’re paid. Most contractors prefer this method, as they know what to expect at the end of each week / month. Under the terms of the Working Time Regulations (WTR), holiday pay cannot be included in basic pay, so all Umbrella Companies must show each element of pay as separate entries on your payslips.

Option 2 – allows you to accrue holiday pay and then it’s paid back to you at a later date. If you don’t mind receiving less in your pay and prefer a lump sum, then option 2 could be the right choice for you, although it could mean waiting a lot longer to receive your money.

Here at SG Umbrella we only process your holiday pay each time you get paid, so there’s no waiting around. When choosing an Umbrella Company be sure to enquire about how holiday pay is paid, to make sure you’re comfortable with how you’ll receive your pay. If you decide to leave your Umbrella Company with any outstanding holiday payments, ensure they pay it to you.

How SG Umbrella can help you

Here at SG we know the importance of clear and reliable advice and support. We pay your holiday pay monthly, so you know exactly where your money is and can choose how you spend or save it, rather than us keeping hold of it for you. Our transparency translates throughout our services, and how our expert team support and guide you with your contractor pay. Take a look at our services today, or get in touch – we’d love to discuss our services with you.

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