Adam Young - Partner at MHA MacIntyre Hudson - explains the key takeaways from the recent budget for businesses...
The recent Budget showed clear signs the Government would like to pre-empt potentially falling investment but on the other hand introduced measures which will have a significant effect on employers in the logistics sector.
Capital allowances provide businesses with tax relief for capital expenses – plant, machinery and certain building works. In Budget 2018, there were two positive changes.
- The ‘Annual Investment Allowance’, the amount on which 100% tax relief is available in the first on capital spending, will increase from £200,000 to £1,000,000 from 1 January 2019 for a two-year period. If you’re looking to make significant investments soon, I’d recommend you look carefully at the timing to avoid wasting valuable tax relief.
- The other positive in this context was the (re)introduction of tax relief for the cost of new buildings. For contracts signed after 29 October 2018, tax relief will be given at 2% per year – small, but not insignificant. If you’re commencing new building work it will be well worth taking specialist advice from the start to ensure you obtain maximum relief.
From an employment perspective, the Government confirmed the tightening of the ‘off-payroll working’ (IR35) rules. From April 2020, the onus will be on the employer to pay employer’s NICs and deduct PAYE/NICs whether the worker is being paid through a company or not.
If your business currently engages drivers and specialist skills but doesn’t pay them through the payroll, now is the time to review your arrangements. Where the rules are not complied with, penalties are likely to be severe so if you have any concerns, we recommend taking specialist advice well in advance of the changes.
For further information please contact Adam Young at MacInTyre Hudson