Accountancy Blog

Deregistering for VAT

When and how to begin the process of deregistration.

These days VAT thresholds are the subject of much speculation, with the Government concerned that many business owners deliberately choose to stay below the VAT-registration threshold.

Limiting your ambition in this way might seem counter-intuitive – surely you want your business to get as big as possible?

But it can make sense if you are seeking to make a sustainable living rather than get rich, perhaps by trading on online auction sites, or running a café with limited opening hours.

If your business’s turnover is predicted to fall below £83,000 over the next year, it can voluntarily deregister for VAT. More…

Budget 2018: Tax and business round-up

At a time of political and economic uncertainty, the announcement of several substantial measures in the Budget on 29 October 2018 came as a surprise for many businesses.

In fact, the Budget was met with an overall positive reception from industry groups, with the FSB calling it the Chancellor’s “first small-business-friendly Budget”.

A range of measures were announced to support high street businesses, including a reduction to business rates by a third for many independent shops, pubs and cafes with rateable values below £51,000.

This will apply for two years from April 2019, subject to state aid limits.

Pressure was also eased for smaller firms funding apprenticeships, as the co-investment rate required for training will be halved from 10% to 5%.

Meanwhile, businesses investing in plant and machinery were boosted by the annual investment allowance rising from £200,000 to £1 million for a two-year period from 1 January 2019.

Employers will need to pay attention to the national living wage when planning for next year, which is set to increase from £7.83 an hour to £8.21 an hour from 6 April 2019.

The VAT-registration threshold was frozen at £85,000 until 1 April 2022, with the Government planning to review it once the terms of the UK’s exit from the EU have been confirmed.

Suren Thiru, Head of Economics at the BCC, said:

“We are pleased that the Chancellor listened to our call to keep the VAT threshold unchanged over the near term, providing much-needed certainty to firms across the UK.

“A reduction in the VAT threshold could well have proved to be a tipping point for some of our most promising young firms.”

For some, however, the Budget wasn’t all good news, as the Chancellor confirmed that reforms to the off-payroll working rules – known as IR35 – will be extended to the private sector in April 2020.

The responsibility for operating these rules will move to the firm engaging the worker.

Chris Bryce, chief executive at the Association of Independent Professionals and the Self-Employed, called the IR35 rules “complex and crude”, and warned that genuinely self-employed people could be impacted.

To ease some of the burden, small organisations will be exempt, while medium and large organisations will be given support and guidance by HMRC.

Speak to us about how these measures affect you.

Government announces apprenticeship levy reforms

Chancellor Philip Hammond has announced a package of new measures to reform the under-fire apprenticeship levy.

Under the revised rules, employers who pay the apprenticeship levy will be able to transfer a quarter of their funds to organisations in their supply chain, including smaller employers.

Levy-paying businesses have been able to transfer up to 10% of their training funds to other employers in their supply chain since April 2018, but the new measures will increase this to 25%.

The reforms also include £5 million of extra funding for the Institute for Apprenticeships, to improve training standards and update existing ones. More…

Small firms not ready for Brexit

Small businesses are woefully unprepared should the Government deliver a no-deal Brexit, according to a report.

The Federation of Small Businesses (FSB) surveyed 1,234 business owners, and found only 14% had contingency plans in place for the UK exiting the EU without arrangements having been agreed.

The research revealed that 41% of UK SME owners fear the impacts of a no-deal Brexit, compared to one in 10 owners who believe no deal will have a positive impact on their business.

Almost half (48%) believed a no-deal Brexit will negatively affect their ability to do business after the UK is scheduled to leave the EU on 29 March 2019. More…

Most small businesses receive funding boost

The overwhelming majority of small businesses that applied for finance in the first six months of 2018 were successful, statistics show.

UK Finance commissioned market research firm BDRC to carry out its SME Finance Monitor Q2 2018 and found 85% of small businesses in the UK secured finance in the first half of the year.

Additionally, around six in 10 SMEs reported that they had a high level of trust in their main bank. More…