Originally written by Timothy Adler on Small Business
What is the super-deduction tax?
The super-deduction £25bn tax break, announced in last Wednesday’s Budget, is intended to spur investment by providing 25p off company tax bills for every pound of qualifying spending on plant and machinery.
How the super-deduction works
The super-deduction offers 130 per cent first-year relief on qualifying main rate plant and machinery investments from April 1 2021 until March 31 2023 for companies.
For most business equipment, there will be a super-deduction of 130 per cent of the expenditure incurred. This will mean that on a spend of £100,000, the corporation tax deduction will be £130,000, giving corporation tax relief at 19 per cent on £130,000, which is £24,700.
Normally such expenditure would either fall within a company’s annual investment allowance and produce relief of only £19,000 or alternatively be tax-relieved at 18 per cent of the cost per annum.
Nigel May, partner at MHA MacIntyre Hudson, said: “Companies looking to use this relief will need to take care when the assets that the expenditure relates to are sold: tax charges may then arise clawing back the relief. It is perhaps worth noting that certain expenditure is excluded, in particular the acquisition of company cars.”
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Super-deduction tax break – what is it and how does it work?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
What is the super-deduction tax?
The super-deduction £25bn tax break, announced in last Wednesday’s Budget, is intended to spur investment by providing 25p off company tax bills for every pound of qualifying spending on plant and machinery.
How the super-deduction works
The super-deduction offers 130 per cent first-year relief on qualifying main rate plant and machinery investments from April 1 2021 until March 31 2023 for companies.
For most business equipment, there will be a super-deduction of 130 per cent of the expenditure incurred. This will mean that on a spend of £100,000, the corporation tax deduction will be £130,000, giving corporation tax relief at 19 per cent on £130,000, which is £24,700.
Normally such expenditure would either fall within a company’s annual investment allowance and produce relief of only £19,000 or alternatively be tax-relieved at 18 per cent of the cost per annum.
Nigel May, partner at MHA MacIntyre Hudson, said: “Companies looking to use this relief will need to take care when the assets that the expenditure relates to are sold: tax charges may then arise clawing back the relief. It is perhaps worth noting that certain expenditure is excluded, in particular the acquisition of company cars.”
What
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by Ben Lobel • • 0 Comments
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by Ben Lobel • • 0 Comments
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by Ben Lobel • • 0 Comments
For many small business owners, tax is one of the most challenging areas of running a business. And with good reason, too – the tax system is complicated. Unfortunately, that can lead to problems. In 2016, it was estimated that UK citizens overpaid not far off £5 billion in tax by not taking advantage of
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Tax-efficient ways to extract profits from your business
by Owen Gough • • 0 Comments
Navigating your way through the early stages of your company lifecycle can be one of the most challenging times for small businesses. From knowing when it’s time to recruit to choosing suitable office space, there are a number of pitfalls awaiting companies who aren’t prepared for what’s ahead – and financial instability can be one
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Seven things the new tax year will bring for SMEs
by Owen Gough • • 0 Comments
Now that Spring is upon us, for many a new tax year is beginning. A number of changes have been announced by government and these will take effect on 6th April 2017. These will have an impact on small businesses, therefore it is important they are aware of the changes and their impact. Personal allowance
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Institute of Fiscal Studies tax report fundamentally flawed says FCSA
by Owen Gough • • 0 Comments
A report just out suggesting that the different tax rates of National Insurance Contributions (NICs) between self-employed workers and employees are unfair is fundamentally flawed, argues the Freelancer & Contractor Services Association (FCSA). The Institute of Fiscal Studies (IFS) believes that the differential NICs rates should be aligned because, in their opinion, there is minimal
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What is a reasonable excuse for missing your tax return payment?
by Owen Gough • • 0 Comments
Individuals who missed their self-assessment tax return payment on January 31st and do not have a reasonable excuse for failing to do so should act now and avoid facing further penalties, say Blick Rothenberg. Paul Haywood-Schiefer, assistant manager at Blick Rothenberg, says, ‘Anyone who hasn’t submitted their self-assessment tax return by now should be looking to
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Small businesses feel they’re getting a raw deal on tax
by Ben Lobel • • 0 Comments
SMEs becomes liable for corporation tax when they change from being a sole trader to a limited company, yet many business owners are struggling to calculate the correct level of tax due, finds a study by FreeAgent. Seven in ten (71 per cent) UK micro-business owners in the UK feel that larger businesses benefit more from
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