Welcome to BPU's Spring Newsletter 2022
In this issue:
- New Funding Available
- Tax Update - Reflecting on Spring Statement , Plastic Tax, Tax Reliefs
- Latest on MTD
- BPU Staff News - Goodbye Barbara , BPU Baby News, Bake Off to Support Ukraine
- BPU's IFA Ian Sinclair - Investment Tips for The New Tax Year
New Fund – Help to Grow: Digital
Help to Grow: Digital is a UK-wide government-backed scheme that offers businesses free advice and guidance on the best digital technologies to choose and buy to help grow their business.
The Help to Grow: Digital scheme offers the following:
- Free, impartial advice and guidance about what digital technology is best suited and how it can boost performance
- Up to £5,000 of financial support towards the costs of buying approved digital technologies
If your business is eligible, you can access a discount of up to 50% on the costs of buying approved software, worth up to £5,000, on the Help to Grow: Digital website.
Businesses can only apply for one discount per eligible business and the Help to Grow Digital discount cannot be split across more than one software purchase.
All businesses can access the free, impartial advice and guidance on digital technology adoption on the Help to Grow: Digital website.
The financial support towards purchasing approved digital technologies is available to UK businesses that meet all four eligibility criteria:
- Must have a registered office in the UK (England, Wales, Scotland or Northern Ireland) and be registered at the relevant Companies House or be a registered society listed on the Financial Conduct Authority’s Mutuals Register.
- Must have been actively trading for over 12 months prior to the date of application and have an incorporation date of, at minimum, 365 days prior to the date of application.
- Must have a total of between 5 and 249 employees.
- The business must be purchasing the approved software for the first time.
Eligible businesses will only receive one discount towards the purchase of one approved software product up to a maximum of £5,000 (not including VAT).
For full details on the above fund and to apply please visit the gov.uk link here
Flexible Skills Programme
The Welsh Government has announced further funding support to Wales-based businesses that wish to upskill their workforce in the tourism and hospitality sectors.
Businesses in the tourism and hospitality sector can now apply to the Flexible Skills Programme for funding to help with upskilling staff.
Funding is available to support employees of Wales-based tourism and hospitality businesses to attend training courses that are relevant to the sector. This can include face-to-face, or online training. The maximum contribution expected from the Welsh Government is £25,000.
There is no requirement to use any particular training company - the applicant may choose any certified training provider . For further information and eligibility criteria click here.
Energy Bills - Government Support
The government recently unveiled its new Energy Strategy, which aims to boost UK energy independence and tackle rising prices. Under the government's new plan, up to 95% of the UK's electricity could come from low-carbon sources. Here, we take a look at the Energy Strategy in greater detail.
Support with energy bills
The Energy Bills Support Scheme will see households in Great Britain given a £200 reduction in energy bills from October. This will be recovered through energy bills and will help to spread the cost of the energy price shock over five years from next year. Additionally, the government will invest £500 million in a Household Support Fund to be used by local authorities in supporting vulnerable households with food and utility bills.
Help for businesses
In recognition of UK industrial energy prices being higher than those of other countries, the government is extending the Energy Intensive Industries (EII) Compensation Scheme for a further three years and will increase the aid intensity to up to 100%.
The government stated that it will also consider other measures to help businesses, including increasing the renewable obligation exemption to 100%.
The Energy Strategy can be found in full here.
For help or advice on the support available for businesses please contact your usual BPU Adviser or contact:
Huw Palin, Director
BPU Staff News
Good Bye Babs - Happy Retirement!
Our long-standing administrator and receptionist Barbara Carter is retiring in May after an incredible 34 years working at BPU!
Barbara joined BPU in September 1988 and knows everything there is to know about BPU and beyond. Barbara is our quiz guru and her general knowledge is exceptional - she has won BPU many prizes at quiz events and we always argue over who’s team she will be in.
Barbara also has special powers when it comes to finding files and seems to know where everything is in the office! She is often out and about delivering and collecting client work and makes sure everyone is ok and has cake on their birthday! How are we going to cope without you Babs!
Everyone at BPU will miss you dearly. Thank you for your loyal service to the firm. We have all enjoyed working with you over the years and making BPU memories. Missing you already! Congratulations on your retirement and enjoy every minute. Send us a postcard from Greece!
BPU Baby News
Congratulations to our Accounts Manager Alex and his partner Abbagayle on the birth of their beautiful baby boy Mason. Mason was born on 27th January weighing 9lb 3oz , Mum and Mason are doing really well. I'm sure Mason will be adding up in no time - so sign him up for the BPU graduate accountant scheme now!
Cardiff Half Marathon Not Taxing For Our Carolyn!
Congratulations to our Tax Senior Carolyn Windos who completed the Cardiff Half Marathon in March - well done Carolyn! Carolyn enjoys running and trains hard every week independently and with her running club. She has completed a total of seven full marathons to date. Carolyn applied for this year's London Marathon but was unsuccessful in the ballot. She would love to take part this year so if you know anyone looking for a runner for their charity or organisation please get in touch with us.
Well done to the BPU Team for all of the baking and organisation to make the latest BPU Bake Off a success.
Together we raised £180 for the people of Ukraine.
Martin Knight - BPU Director
Reflecting on the Spring Statement
Against a backdrop of soaring inflation with rising fuel, energy and food prices hitting both businesses and households, Chancellor Rishi Sunak presented his first Spring Statement on Wednesday 23 March 2022.
Here, we look at the Chancellor's key announcements at Spring Statement.
The Chancellor started and finished his Spring Statement speech with two tax-cutting flourishes. It began with the widely expected cut to fuel duty, which saw 5p per litre cut from petrol and diesel. Although this was welcomed by motoring groups it also drew criticism as the cut will likely be swallowed up by rising costs and may not be passed on fully by retailers.
Mr Sunak's grand finale saw him pledge that the basic rate of income tax will be cut by 1p in the pound in April 2024. By then the Chancellor had said that the Office for Budget Responsibility (OBR) expects inflation to be back under control, with debt falling substantially.
- Giving and taking on NICs
In between these announcements the Chancellor disappointed those who hoped he would cancel the Health and Social Care Levy, which adds 1.25% to national insurance contributions (NICs) and will be implemented this April.
However, he softened the blow of this rise by raising the starting thresholds for NICs to £12,570, which brings them into line with income tax thresholds.
The Chancellor also gave some businesses a boost with a £1,000 increase to the Employment Allowance, which will benefit SMEs.
Meanwhile, he revealed that no business rates will be due on a range of green technology used to decarbonise buildings, while there will also be 50% business rates relief for eligible retail, hospitality and leisure properties from April 2022.
The Federation of Small Businesses (FSB) gave one of the more enthusiastic responses to the Spring Statement. It said that uprating the Employment Allowance and cutting fuel duty would 'provide crucial breathing space' to small businesses.
However, other business groups did not hide their disappointment that the Chancellor had not laid out further measures. The British Chambers of Commerce (BCC) said the Statement fell short of the action needed and 'did not fundamentally address the huge cost pressures businesses are facing'.
Meanwhile, the Confederation of British Industry (CBI) warned that the measures announced by the Chancellor 'don't do enough to tackle the current challenges facing firms'.
Coming into the Spring Statement, soaring energy costs had been one of the major issues facing the Chancellor.
The government had previously announced that over £9 billion in state-backed loans will be made available in England, Scotland and Wales, with households set to be given up to £350 to help with their energy bills this year. Many were hoping the Chancellor would go much further in the Spring Statement.
However, he made just three announcements on energy, including the fuel duty cut.
The other measures saw the removal of 5% of VAT from the cost of energy saving materials. In addition, vulnerable households will be aided by £500 million of new funding.
These measures drew a scathing response from consumer champion Martin Lewis.
Taking to social media, he said: 'If that's all he's doing on energy - it is limited and won't impact the majority of households who will see a likely £1,300 average increase in year-on-year bills by October. My head has sunk. I just hope there's a rabbit to come out of the hat.'
However, the only rabbit to come out of Mr Sunak's hat saw him pledge to make a cut to income tax in two years' time.
The response to the Chancellor's Spring Statement has highlighted that there are some tough times ahead due to the crises in the costs of both living and doing business. We are here to help: if you need advice on improving your cashflow, please contact us
To read our full Spring Statement 2022 Report click here
New HMRC One-stop Online Shop Provides Taxpayers With Tax Relief Information
HMRC has launched a new one-stop online shop designed to provide taxpayers with information on the tax reliefs and financial support available to them.
In a new section of the GOV.UK website, HMRC has listed the financial support available to ensure individuals are not missing out on reliefs they are eligible for.
The web page is designed to make it easier than ever for taxpayers to claim the benefits, credits and allowances they are entitled to. HMRC has provided online guidance and tools to permit people to check if they are eligible for each relief. Some examples of some of the reliefs included are:
- Child Benefit
- Tax-Free Childcare
- Marriage Allowance
- Work-related expenses and uniform allowances
To view the new section of the GOV.UK website click here
Plastic Packaging Tax Introduced
The UK government introduced the Plastic Packaging Tax (PPT) on 1 April 2022.
From this date, firms that manufacture or import plastic packaging must check if they are liable for the PPT. Firms will have 30 days to register for the tax from the date they become liable.
Businesses will not need to file a PPT return or pay the tax until July 2022 at the earliest. However, they may need to register before this point.
The government says the PPT will incentivise businesses to use recycled plastic in the production of plastic packaging. Manufacturing or importing ten tonnes or more of plastic packaging containing less than 30% recycled plastic will be taxed at £200 per tonne.
Businesses over the registration threshold who already include recycled plastic in their packaging will still need to register but will not pay any tax.
The government said: 'Businesses who import plastic packaging need to check who is responsible for complying with and paying the PPT. This is unlikely to be the suppliers.
'The retailer is the consignee and in control of the import, so are the businesses who will need to register for the tax where they pass the ten-tonne registration threshold.
'If businesses import finished plastic packaging components using incoterms, they will need to agree with the other business about who is responsible for including the details on their PPT return and paying the tax.'
More information about the PPT can be found here.
VAT Changes for the Hospitality & Leisure Sector
During the COVID-19 pandemic the Government introduced reduced rates of VAT to help businesses in the hospitality, hotel and holiday accommodation sectors. A 5% rate was initially introduced and ended on 30th September 2021 , a 12.5% VAT rate was then introduced and ended on 31 March 2022.
From 1 April 2022 the standard rate of 20% VAT was re-introduced to supplies of hospitality, hotel and holiday accommodation and admissions to certain attractions and events. Businesses in these sectors must ensure they make the relevant changes to their VAT and accounting systems so that they are compliant with the VAT rate change of 20%.
If you need advice or help with this please get in touch.
Making Tax Digital: Why it Still Means Big Change for Individuals and their Businesses
April 2022 saw the final phase of Making Tax Digital (MTD) for VAT. But that’s just the tip of the iceberg. MTD for income tax (MTD ITSA) comes next, and implementation is likely to be altogether more challenging.
Read Our Full MTD Factsheet here.
Insurance Against The Cost of HMRC Investigations
HMRC tax investigations hit 137,000 in the second half of 2021, up 9 per cent from the 126,000 investigations in the same period last year. This amounts to the Revenue opening 1,062 tax investigations per day.
Tax investigations can happen to anyone – whether you are an individual or in business – however good your records are. HMRC regularly undertake random enquiries as a means of policing the system.
BPU Chartered Accountants provides insurance against the cost of HMRC investigations.
In addition when you subscribe to our tax investigations package, you’ll also have access to a team of qualified solicitors for employment law, health and safety matters and commercial issues.
Click here to read our information sheet on the full cover available.
Essential Tax Dates
19th - PAYE, Student loan and CIS deductions are due for the month to May 5th
31st - Deadline for forms P60 for 2021/22 to be issued to employees.
1st - New Advisory Fuel Rates (AFR) for company car users apply from today.
19th - PAYE, Student loan and CIS deductions are due for the month to 5 June 2022.
30th - End of CT61 quarterly period.
For further information on any of the above please contact:
Martin Knight, Director
Investment Tips for the New Tax Year
In the last newsletter I talked about ISA's and the benefits. The 6th April saw the start of the new tax year which means that you can now invest up to another £20,000 into an ISA for this tax year but you cannot carry over unused allowances from previous years.
You can choose whether you want to invest the whole lot in to one type of ISA, or whether you want to split the allowance between different types, such as Cash ISAs or Investment ISAs. However, even if you choose to split it, you can't invest more than a total of £20,000 across the different types.
ISAs are a tax-efficient way to save, as you won’t pay any Income Tax or Capital Gains Tax (CGT) while the money is invested or when you take money from your account. The sooner you get your 2022/23 ISA contribution paid and invested, the sooner it can start working for you.
A Lifetime ISA (LISA) is available to those aged between 18 and 39 who may be saving for their first home or saving for later life. You can contribute up to £4,000 each tax year into the Lifetime ISA and the government will add a further 25% of up to £1,000 a year. Contributions can be made up until the investor reaches the age of 50. However, you can’t access a Lifetime ISA before age 60 without paying a large penalty unless it is being used for the purchase of your first home with a mortgage.
The start of the new tax year is also an ideal time to start saving money into a Junior Individual Savings Account (JISA) for children or grandchildren. A JISA has the same tax benefits as an adult ISA, but annual contributions are limited to £9,000 (2022/23). The Junior ISA can only be opened by the child’s parent or legal guardian. You can pay into a JISA until the child/grandchild reaches the age of 18 when at this point the account will become an adult ISA and passed to the child/grandchild that you have been saving for.
Topping up your pension could also be something to think about when starting a new tax year. The limit to the amount you can tax-efficiently pay into your pension (Annual Allowance) is currently capped at the equivalent of your relevant taxable income that year, up to £40,000. However, for higher rate tax payers the Annual Allowance may be as low as £4,000. Please contact me if you are unsure of the Annual Allowance available to you.
There is good news in that, your unused Annual Allowance can be rolled over from the previous three years - this is called Carry Forward. If you think you might qualify for Carry Forward or want to discuss increasing your pension contributions, please contact me.
Since establishing BPU Financial Solutions Ltd in 2012, we now manage over £45million of client monies via a wide range of investment, retirement and inheritance tax planning solutions using independently sourced portfolios of investment funds to diversify risk and maximise returns for clients.
You will find a good variety of investment information in the Your Money section on our website but if you think you could benefit from personalised independent financial advice about your savings and investments, please get in touch with me.
Ian Sinclair DipPFS
Independent Financial Adviser
BPU Financial Solutions Ltd
T: 02920 734100