The Chancellor Philip Hammond presented a very important Budget speech, given that it was the final one before Brexit. From a Northern Ireland point of view, £320m further funds have been set aside for the NI Executive, £350m for the Belfast City Deal and a further £2m to help revitalise Belfast following the “Primark” fire. A further £300m was also announced for shared and integrated education.
Key Tax points for businesses and individuals include:
The amount of 100% tax relief on qualifying capital expenditure has been increased from £200,000 to £1m, and will be effective for 2 years from 1 January 2019 to 31 December 2020. This represents a significant opportunity to invest in your business and save tax at the same time. Careful planning is required around your year-end date to ensure you can maximise the tax relief available to your business.
Whilst many companies currently utilise R&D spend to reduce their tax bill, others use it for a cash injection through a payable credit of 14.5%. The amount available for refund is to be restricted to 3 times the company’s total PAYE & NIC liability for the tax year, with effect from 1 April 2020. This may reduce the amount repayable in many cases and therefore, we encourage businesses to give consideration to their recent R&D projects, and to consider the timing of any refund claims.
From 1 October 2019 the ‘reverse charge’ rule will apply to the construction industry, similar to that already in place in the Republic of Ireland. Businesses involved in the Construction Industry should note this date and review their VAT processes and systems in advance, in order to ensure they are compliant.
VAT will be accounted for on single purpose vouchers on issue. For multi-purpose vouchers the VAT point is redemption of vouchers. Businesses who issue vouchers should be careful to note the changes effective from 1 January 2019.
The £3,000 annual allowance no longer applies to businesses with Employers NIC liability greater than £100,000.
Rates increase from April 2019 for all age groups. Employers should be mindful of complying with these rates when processing wages.
Personal Service Companies (PSCs) have long been a target for HMRC. In the Public Sector from 6 April 2017 the responsibility for assessing the employment status of PSCs became the responsibility of those using and paying for the service. This will extend to private medium and large companies from 6 April 2020. We advise that businesses who think they may engage the services of a PSC, take the opportunity over the coming months to assess their engagement and their requirements.
The time period for meeting qualifying conditions to avail of the 10% rate of Capital Gains Tax was extended from 1 to 2 years – possibly with the view to its abolishment. We urge anyone who may be considering disposal of qualifying business assets to review their position and carefully plan their disposal.
The Personal Allowance has increased to £12,500 from 2019/20, a year earlier than previously announced. Furthermore, the basic rate tax band will increase to £37,500. This means that individuals will not pay higher rate tax until income reaches above £50,000.
The above sets out some of the key points we consider relevant to businesses. If you have any further queries on these, or on any of the other announcements, and how they may impact on you and your business, please contact Noel Convery or Sean Cavanagh on 02887755880, or by email to email@example.com / firstname.lastname@example.org
T: 028 8775 5880 | (ROI) 016994453
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