With this budget dominating the news and social media, you’ve likely heard about the significant changes that were announced. But what do these changes mean for your business, and how can we assist you in navigating them?
We’ve summarised the key tax changes below, but if you’d like a more in-depth understanding, Jo is available to guide you through it all in an upcoming workshop or webinar. Secure your free spot, and if you’re already an existing client, please use code BWClient using this link.
Workshop & Webinar Dates:
- Tuesday, 12th November at 4 pm – Webinar
- Friday, 15th November at 12 pm – ‘Lunch and Learn’ in our office
Supporting Employers with Payroll Adjustments
If you employ staff, you may wonder how the changes to the National Minimum Wage (NMW) and Employer’s National Insurance (NI) will impact your payroll. We’re here to help! Contact us, and we’ll recalculate your October figures using the new rules, helping you anticipate any impact on your expenses.
In December, we’ll also offer focused Workshops and Webinars on employment obligations to clarify your responsibilities and make planning easier. You can book using the same link above.
Key Budget Changes to Note
National Insurance Contributions (NIC)
- Threshold Adjustment: The earnings threshold for employers’ Class 1 contributions drops from £9,100 to £5,000.
- Rate Increase: Employers’ NIC rate rises from 13.8% to 15% starting 6th April 2025.
- Employment Allowance Increase: Eligible employers will see an increase from £5,000 to £10,500.
Capital Gains Tax (CGT)
- Rate Changes: Effective immediately:
- Basic Rate: Increased from 10% to 18%
- Higher Rate: Increased from 20% to 24%
- Timing for Lower Rates: Disposals made before 30th October 2024 will still be taxed at the previous, lower rate.
- Annual Exempt Amount: This remains at £3,000 for 2025/2026.
Inheritance Tax (IHT)
- Frozen Bands: No changes in rates or allowances; bands are now frozen until 5th April 2030.
Pension Death Benefits
- New Inclusion: From 6th April 2027, unused pension funds and death benefits will be included in a person’s estate for IHT.
- Reporting Obligation: Pension scheme administrators will be responsible for reporting and paying any inheritance tax on these benefits.
VAT
- Thresholds Remain Unchanged: As of 1st April 2025:
- Registration threshold: £90,000
- Deregistration threshold: £88,000
- Private School Fees: From 1st January 2025, VAT will apply to private school fees at the standard rate.
Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA)
- Expansion for Landlords & Sole Traders: MTD will extend to those with incomes over £20,000 by the end of this parliament.
- April 2026: Applies to incomes over £50,000
- April 2027: Applies to incomes over £30,000
Furnished Holiday Lettings (FHL)
- Tax Treatment Changes: Legislation will end the specific tax treatment for FHL properties.
- Effective Dates: These changes begin on or after:
- 6th April 2025 for Income Tax and CGT
- 1st April 2025 for Corporation Tax
Van vs. Car Classification
- Updated Classification: From 6th April 2025, most double cab pick-ups will no longer qualify as vans for benefit charges.
- Transitional Provisions: Employers with existing vehicles can retain van classification until disposal or until 5th April 2029, whichever comes first.
If this all sounds too complicated, then we’re committed to helping you understand and adapt to these changes seamlessly. Our workshops and webinars are designed to provide clarity and actionable insights, so don’t hesitate to join us.
Our Services
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Cloud Accounting
If your business is growing, then you may need to access some sort of finance product to facilitate your growth. With so many products available, it can be bewildering. How do you work out how much you need, for how long and which product/or products are right for you?
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Company Year End
The legal and compliance burden put on businesses through the need to submit tax returns and other such documents to strict deadlines is often one of the most stressful elements of running a business.
Pop in or give us a call
We'd love to hear from you
When it comes to supporting small enterprises, helping them grow whilst avoiding regulatory and commercial pitfalls, we have a weath of experience, expertise and a kettle - a very good kettle. If you think we could be a good fit, get in touch to see how we can add value to your business.
HMRC Targets Puppy Breeders: Letters sent to millions
HMRC is sending out letters to millions of people who they believe have not declared income from breeding and selling puppies. These could come as quite a shock when you receive one out of the blue, and some of the language used in the letters is meant to worry you.
HMRC has changed legislation so that selling platforms must provide them with information about who is selling on their platforms. However, this is only one source of information they have used. This information is in the public domain, so even before the change in legislation, the evidence is out there.
Registrations with the Kennel Club and social media are good sources of public information. There are even rumours that information could also be coming from pet insurers and the RSPCA.
If you have received a letter, HMRC is suggesting you file a voluntary disclosure. They won’t give a time scale of how far to go back. In the UK, the tax system is self-assessment, so they expect you to provide all the information for as long as you have been receiving income, in this case from breeding puppies.
If you regularly breed puppies, you should file a self-assessment tax return, as this is likely to be classed as a trade.
What information do you need to supply to HMRC?
- All the money you received for the pups/kittens
- All the costs you incurred, including vet bills, mating fees, microchipping, injections, etc.
However, if you had a one-off litter, you could argue that this isn’t a trade at all. If you didn’t receive more than £1,000 in total for the pups in that tax year, you wouldn’t need to declare the income.
What if you’ve missed previous declarations?
Unfortunately, the bad news doesn’t end there either. If you receive a letter and make a voluntary disclosure, the likelihood is that the taxable income you then declare is from a previous tax year, meaning you should have already declared this income. As a result, you are likely to incur penalties (fines for not declaring the income) and interest on any tax not paid. If you have been breeding for several years, this could add up.
These rules are not just for the sale of puppies but cover any kind of income—from breeding to rental properties, to selling on eBay, to name a few.
Our Services
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Payroll and Auto Enrolment
Employing people can cause stress for a business owner for many reasons and one of these is payroll. Our teams expect that they will be paid on time and with the correct level of deductions made. We can provide a full payroll service for your business including auto-enrolment, keeping you compliant with your many legal responsibilities.
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Other Accounting Services
We offer a full range of supplementary accounting services and complimentary business services that will help your business thrive and prosper. All our services and come with a friendly approach, which is of course, free of charge!
Pop in or give us a call
We'd love to hear from you
When it comes to supporting small enterprises, helping them grow whilst avoiding regulatory and commercial pitfalls, we have a weath of experience, expertise and a kettle - a very good kettle. If you think we could be a good fit, get in touch to see how we can add value to your business.
Here’s some sound advice from HMRC.
“By sending your tax return early you get peace of mind knowing it’s done.
Everyone has the same first payment date, 31 January. By sending your tax return well before the deadline, you will find out earlier what to pay, helping you budget.
Importantly, if you are due a refund you can receive it sooner.”
If you need some help, or would like us to complete your Self Assessment please call us on 0113 2864486.
Our Services
-
Cloud Accounting
If your business is growing, then you may need to access some sort of finance product to facilitate your growth. With so many products available, it can be bewildering. How do you work out how much you need, for how long and which product/or products are right for you?
-
Tax Protection
With HMRC becoming more spontaneous with tax investigations we strongly suggest that every business is insured against the cost of investigation. So strongly in fact, that we automatically build it in to our fixed fee agreements. Many of our clients have been very grateful for this insurance when HMRC have come knocking.
Pop in or give us a call
We'd love to hear from you
When it comes to supporting small enterprises, helping them grow whilst avoiding regulatory and commercial pitfalls, we have a weath of experience, expertise and a kettle - a very good kettle. If you think we could be a good fit, get in touch to see how we can add value to your business.