10th April 2017
Now that we’ve passed the start of the new tax year, there is a range of new tax information to take on board. We’ve picked seven to highlight here, but there are more, and your Wise & Co adviser can tell you more about the changes that might affect your business or your personal finances.
The Apprenticeship Levy
For those employers whose annual payroll is more than £3m, the Apprenticeship Levy charges 0.5% of that part of the payroll which exceeds £3m. The government estimates that this will affect just 2% of companies in the UK, and the monies raised will fund new apprenticeship schemes. The charges will be collected through PAYE.
Tax on salary sacrifice schemes
Employees using salary sacrifice schemes to access certain benefits will now pay the same level of tax as the cash income sacrificed. Some benefits, such as pensions, childcare and cycle-to-work schemes are excluded from this change.
Patent Box rules amended
Where R&D is undertaken by two or more companies collaboratively and under a cost-sharing arrangement, the rules for reduced corporation tax via the Patent Box legislation have been amended to ensure that no company is disadvantaged or advantaged by collaborative arrangements.
Social investment tax relief
From April 2017, the amount of money that new social enterprise schemes can raise has been increased. At the same time, the tax relief has become more targeted on smaller enterprises and higher-risk enterprises. This is partly to reduce the potential to ‘play the system’ encountered under the previous rules.**
**Please note that the proposed tax changes may not now take effect from the date stipulated. The usual timetable to introduce the changes into legislation has been delayed due to the unexpected General Election. Please speak with your adviser in connection with any matters contained in this article.
Informing HMRC electronically if you stop being an employer
Previously, you would inform HMRC by letter if you were no longer an employer. It is now required that you do this electronically, or HMRC will not make the required changes.
Verification of contractors online
Also moving to an online system is HMRC’s service that verifies Construction Industries Scheme (CIS) contractors. All requests must now be made online rather than by phone.
National Living Wage and National Minimum Wage increases
All employers should already be paying the National Living Wage to those employees who qualify. These rates rose by 4% at the start of the new tax year, with rates for those on the National Minimum Wage rising by 1.4%. You should ensure that these increases are in place across your company.
To find out more about tax changes that affect your business, contact Wise & Co on 01252 711244.