Author: Umar Memon

Spring Budget 2023 Overview: A Comprehensive Guide to Key Measures | Jack Ross Chartered Accountants

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The Spring Budget 2023 is finally here, and it brings with it a plethora of measures aimed at boosting economic growth and improving the financial outlook for businesses and households alike. In this blog post, we provide a comprehensive overview of the key measures announced in the Budget Statement.

Firstly, we examine the impact of falling natural gas prices on inflation, which is projected to drop to below 3% by the end of the year. This decrease in inflation will help businesses avoid steep increases in payroll and borrowing costs, as well as ease the squeeze on households facing a decline in living standards.

Next, we discuss the Bank of England’s base rate, which is projected to peak significantly lower than the 5% assumed in the Autumn Statement. This change is good news for homeowners and businesses, indicating a more stable financial environment.

We then delve into the critical tax measures highlighted in the Budget Statement under the Chancellor’s focus on Enterprise and Employment. While there was no change to the decision to increase the primary Corporation Tax rate to 25%, the Chancellor announced a Full Expensing approach for qualifying plant and machinery, which aims to incentivize business investment.

The Spring Budget also brings better news for SMEs, with increased R&D relief granted for R&D-intensive businesses. Although this improvement doesn’t reach the levels of relief previously available, it is a positive step forward.

The proposed abolition of the Lifetime Allowance charge, which removes the cap on the amount of pension savings someone can have, is a significant surprise in employment policies. This major shift in government policy will result in a rethink for employees regarding their approach to pension savings.

The Chancellor structured his plans around the four Es, which he believes are critical in unlocking the UK’s national potential: Enterprise, Education, Employment, and Everywhere. However, measures like increased childcare support will take time to materialize and affect growth numbers.

The budget also includes measures supporting R&D and investment in fast-growth sectors. However, it lacks a grand strategy for boosting productivity and overall economic resilience, similar to the US Inflation Reduction Act or the EU’s Green Deal Industrial Plan.

In summary, the Spring Budget 2023 brings relatively better news on the short-term economic outlook and includes several commendable measures. While it doesn’t represent a game-changing budget, it sets the stage for future growth and development.

Full Expensing: A Game-Changer for UK Capital Investment, the end of the Super-deduction, and other Corporation Tax changes

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In recent years, full expensing has emerged as a powerful incentive for businesses to maximise their investments and minimise their corporation tax liabilities. As the super-deduction policy expires in 2023, full expensing is set to become a vital tool for stimulating capital investment and economic growth in the UK. This article will explore the intricacies[…]

AI in Finance: Benefits, Pitfalls, and Future Prospects

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We have all heard of ChatGPT, and clients are now asking me how AI will benefit their business. In this month’s article, I will explore the benefits and pitfalls of AI in finance, its prospects, and its legal and ethical implications. I will produce articles for different industries over the coming months. As artificial intelligence[…]

When Companies Pay Interest on a Loan from Individuals in the UK, Withholding Tax Deduction and CT61: An Overview for UK resident taxpayer

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As a business owner or investor in the UK, it is important to understand the rules and processes involved in receiving interest from companies. In this article, we cover withholding tax, the CT61 form, and how to claim a tax credit for withheld tax. Get the information you need to comply with UK tax laws and ensure that you are accurately reporting your income.

VAT Submission

New VAT Penalties

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Starting in 2023, submitting a VAT return after the deadline will result in penalty points. These points can add up, resulting in fines of up to £200 for each subsequent late submission. It’s important to understand how the points system works and how to avoid these penalties. For example, businesses making quarterly returns have a higher threshold for penalty points compared to those making annual or monthly returns. It’s also important to note that changes to your business, such as switching to a different accounting period, can affect your penalty points. If you have questions or need help managing your VAT, contact us for expert assistance

Construction sector: Reverse charge VAT

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Those working in the UK’s construction industry will have to handle and pay VAT differently from 1 March 2021, unless there’s another last-minute Government U-turn. This is when the VAT domestic reverse charge for building and construction services, to use its full name, will finally take effect at the third time of asking. In this[…]