Christmas tax reliefs & grant updates
I'm not going to say this will be the final one of the year, because you know what will happen is that Rishi Sunak will pop out of nowhere and announce something hideous like furlough v12.4 and there is not enough wine in Yorkshire for me to deal with that. So, this may, or may not, be the last you hear from me... for this year (don't get too excited)
So, let's keep it brief:
1. Christmas tax relief
There are a few things to remember at Christmas:
- An annual event, such as a Christmas party, is tax deductible up to a total of £150 (inclusive of VAT) per head. This includes transport, drinks, the event itself. If it goes over £150, even by £1, the whole lot is classed as a benefit in kind on the employees and must be reported (booooo!). There are other rules to consider too, so contact us if you aren't sure.
- Virtual events can also count as an annual event
- If you want to give your employees cash or a voucher as a Christmas gift or bonus, you need to report this via payroll.
- If you give them a gift that is under £50 then this is OK - as it is classed as trivial.
- In order for gifts to customers to be tax deductible, they must cost less than £50, must have the business logo or branding on them, and can never be food, drink or tobacco. So chocolates or biscuits in a branded box would not be tax deductible. This doesn't mean your company can't do it and pay for it through the books, it just means you won't get tax relief on the cost.
2. Kickstart Scheme
The scheme closes on the 17 December, so if you want to apply you need to take action now. The Kickstart Scheme provides funding to employers to create jobs for 16 to 24 year olds on Universal Credit who are at risk of long term unemployment. The funding covers 100% of the minimum wage for 25 hours per week, for 6 months. It will also cover any associated employers NI and minimum auto-enrolment pension costs.
The funding can go up to the 30 September 2022 but you must apply now. Kickstart Scheme - GOV.UK (www.gov.uk)
3. Capital Purchases
In case you were frantically trying to spend a million pounds on assets before Christmas (aren't we all?) you can relax, the annual investment allowance (AIA) that was due to drop to £200,000 from 1 January 2022 is to remain at £1,000,000 per year until March 2023, as announced in the Budget.
Don't forget limited companies can also benefit from the super-deduction on new assets purchased before 31 March 2023. I have mentioned before, but there are some specific rules on what does and doesn't count - e.g. cars are always excluded.
If you were to spend £10,000 on a qualifying asset, then the company profits would reduce by £13,000. This would reduce your corporation tax bill by £2,470, which is £570 more than it would have done pre-super deduction rules.
4. Disability and health at work
The Government is testing a new online service for employers which provides advice and guidance on managing health and disability in the workplace.
This may be a real help for smaller businesses who don't have access to a HR department. By taking part, you will receive free information and guidance on disability and health-related employment issues.
5. Innovate UK Smart Grants
Probably only relevant to a few of you but :
Smart is Innovate UK's 'open grant funding' programme. It provides an opportunity for UK registered organisations to apply for a share of up to £25 million to deliver disruptive research and development (R&D) innovations that can significantly impact the UK economy.
All proposals must be business-focused. Applications can come from any area of technology and be applied to any part of the economy, such as, but not exclusively:
the arts, design and media
science or engineering
Innovate UK welcomes projects that overlap with the Industrial Strategy grand challenge areas, but this is not a requirement.
See, told you I'd keep it brief. I finish on the 17 December, after which I will be knee deep in Christmas crafts with the small child, red wine and general last minute Christmas panic. The rest of the gang finish on the 23 December, so please make sure we have all payroll and VAT information in plenty of time.
Finally, I just want to say thank you for all your support and patience over the last 12 months, we've had a fairly turbulent time in the office but my team, as always, have done a fantastic job.
Have a lovely Christmas & New Year
All information is correct at the time of publication. The general comments on this post should not be taken as advice. Always seek professional help with tax and accounting decisions.
Photo by Oriol Portell on Unsplash