Proposed changes to business rates could benefit small firms

Proposed changes to business rates could benefit small firms

Local authorities could have greater flexibility to offer business rate discounts to small local firms, under a proposal put to the Chancellor by the Local Government Association (LGA) in November 2014. Business rates are currently set by central government, meaning local authorities’ ability to offer local discounts is restricted. Under the LGA proposal, all responsibility for setting and collecting business rates would lie with local authorities, allowing greater flexibility for local authorities to offer reduced rates to local high street firms, new start ups and firms using local suppliers. If the proposal goes ahead, local authorities will also be able to link business rates to turnover, including that from e-commerce, to create more fairness between high street and online retailers, and to encourage new start ups to trade on the high street.

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Government publishes response to company filing consultation

Government publishes response to company filing consultation

The Department for Business has published a response to the company filing requirements consultation it carried out last year. The consultation asked for feedback on proposed changes to the annual filing requirements for UK companies that were intended to simplify filing processes and reduce duplication.

The response to the consultation includes changes to the process of filing annual returns and information about a joint filing tool for submitting information to Companies House and HMRC.

 

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‘Care and support’ employers face double allowance loss

'Care and support' employers face double allowance loss

According to the Low Incomes Tax Reform Group (LITRG), anyone employing a personal assistant to help with their care needs will be adversely affected by tax changes introduced on 6 April 2014. The Percentage Threshold Scheme has now been abolished, preventing employers from claiming reimbursement for Statutory Sick Pay payments to employees. The announcement follows the exclusion of care and support employers to claim the £2,000 Employment Allowance, which was also introduced this April to assist firms and charities with workforce costs.

The LITRG has expressed its disappointment that there was little public consultation over the changes, which it estimates could leave vulnerable elderly care and support employers around £2,500 per year out of pocket.

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Review of business rates administration announced

Review of business rates administration announced

A review of the administration of business rates from 2017 has been announced by the Treasury and the Department for Communities and Local Government (DCLG). The review will look at the application of rates relief and exemptions, improving communication with ratepayers, changes to the valuation process and the frequency of valuations, but will not review the link between business rates and rental property values. James Lowman, Chief Executive of the Association of Convenience Stores (ACS), said: “This review will provide retailers with a great opportunity to communicate the impact of business rates and how the system can be improved.”

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Rules for company names relaxed

Rules for company names relaxed

The list of ‘sensitive’ words requiring approval before they can be used in company names has been shortened by around a third, following a Government consultation. From next year, firms will be free to use terms such as ‘authority’, ‘data protection’ and ‘watchdog’ in their company name, but others such as ‘association’, ‘inspectorate’ and ‘regulator’ have been retained in the list of those requiring the approval of Companies House.

The Government will also relax the rules to make it easier for companies operating as part of a group to swap names.

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Small business owners spend 12 days a year on tax administration

Small business owners spend 12 days a year on tax administration

Small business owners spend around 12 days a year keeping on top of their tax administration, with an estimated accumulative annual related costs of at least £490 million, according to a survey by the Federation of Small Businesses (FSB). Half of survey respondents said they spend between two and eight hours a month on tax administration, and 77% spend up to £5,000 paying professionals and on software to keep up to date with their tax obligations.

The FSB has called on the Government and Office for Tax Simplification (OTS) to create a simplified ‘enterprise tax’ system in order to encourage enterprise and growth.

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New-build rate relief for empty commercial properties

New-build rate relief for empty commercial properties

Newly-built empty commercial properties in England which are completed between 1st October 2013 and 30th September 2016 will be eligible for 100% relief on business rates for the first 18 months after construction is complete. The Government is providing around £150 million to local authorities, which can use their discretionary powers to grant relief from business rates where commercial buildings meet specific criteria.

Local Government Minister Brandon Lewis said: “This move will boost confidence in the commercial property sector and allow them to develop new projects again without worrying about the risk of rate bills on empty buildings whilst they find a buyer.”

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Employment allowance to become law by the end of the year

Employment allowance to become law by the end of the year

Proposals to provide businesses with a £2,000 employment allowance towards their national insurance contributions (NICs) will become law by the end of 2013, according to HMRC policy adviser Raj Nayyar. Mr Nayyar said details of the allowance were yet to be finalised, but all firms would be entitled to the allowance from April 2014. The allowance will form part of the National Insurance Contributions Bill, a package of measures to crack down on ‘abusive’ tax avoidance schemes.

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Government failing rural communities and business

Government failing rural communities and business

The Government must do more to support rural areas and business, the Environment, Food and Rural Affairs Committee has concluded in a recent report. The report revealed that the Rural Broadband Programme, which pledged to deliver superfast broadband to 90% of rural areas, is two years behind schedule, and the number of premises set to get mobile coverage under the Mobile Infrastructure Project is just 60,000, compared with the original aim of the Project to reach six million people. Chair of the Committee Anne McIntosh said the situation is “deeply unfair” and called on the Government to ensure forthcoming initiatives such as the Business Bank and the Single Local Growth Fund are “as available to rural businesses as they are to their urban counterparts.”

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Budget Special 2013

Here is a summary of the most relevant and important measures announced by the Chancellor in his 2013 Budget.

Key points affecting small and medium-sized businesses include:

Taxation

  • The main rate of corporation tax will be reduced to 20% from April 2015.
  • The VAT registration threshold will be increased to £79,000 from April 2013 and the deregistration threshold increased to £77,000.
  • The income tax personal allowance will be increased to £10,000 from April 2014.
  • The Government is to consult on plans to simplify and reduce administration for self-employed people, by using Self Assessment to collect Class 2 National Insurance Contributions (NICs) alongside income tax and Class 4 NICs.
  • From April 2014, all businesses will be eligible for an Employment Allowance of £2,000 to offset against their NICs.
  • The Government will extend capital gains tax relief to encourage investors to take up the Seed Enterprise Investment Scheme (SEIS). Investors making capital gains in tax year 2013-14 will receive 50% capital gains tax relief when they reinvest those gains into seed companies during tax year 2013-14 and 2014-15.
  • A consultation will take place in Summer 2013 on plans to introduce tax relief to encourage private investment in social enterprise.

Growth and support

  • £1.6 billion of funding will be provided to support the life sciences and aerospace sectors, and will be allocated by the end of 2013.
  • Several strategies for supporting the creative industries has been announced, including a competition of £15 million launched by the Technology Strategy Board for digital content production by specialist small businesses, educational research facilities and training providers; increasing funding for the Skills Investment Fund to £8 million each year for the next two years; and launching a public consultation on plans to provide support to the visual effects industry.
  • The Government will launch a £30 million Growth Vouchers programme for small and medium-sized enterprises in England, to help them overcome barriers to growth, such as limited access to external advice.
  • The Government has accepted the majority of the recommendations made in the Heseltine Review on economic growth, for example creating a Single Local Growth Fund allocated to Local Enterprise Partnerships (LEPs) to support local economic growth. The Single Local Growth Fund will be operational from April 2015.
  • The new Business Bank will introduce a £300 million investment scheme to help diversify sources of funding for small and medium-sized businesses; provide £75 million of funding for venture capital; and increase funding of the Enterprise Finance Guarantee (EFG) scheme to encourage lenders to provide finance to small firms.
  • The Small Business Research Initiative (SBRI) will increase the value of government contracts available to smaller firms from £40 million to over £100 million in 2013-14, and rising to over £200 million in 2014-15.

The full Budget report and associated notices are available from HM Treasury at:
www.hm-treasury.gov.uk/budget2013.htm