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Election 2024: What Business Owners Need to Know

Election 2024: What Business Owners Need to Know

As the 2024 election approaches, business owners across the UK are keen to understand how potential changes in government policies might impact their operations. The outcome of this election could bring about significant shifts in economic, tax, and regulatory environments. To help you stay informed and prepared, we’ve outlined key considerations and potential impacts for business owners.

Economic Policies

Taxation Changes

One of the most significant areas where elections can impact businesses is taxation. Different political parties often have varying approaches to corporate taxes, VAT, and other business-related levies. It’s essential to stay informed about each party’s tax proposals:

  • Corporate Tax Rates: Changes in corporate tax rates can directly affect your profitability. Watch for proposed increases or decreases in these rates and consider their implications for your financial planning.
  • VAT Adjustments: Shifts in VAT rates can influence your pricing strategy and cash flow. Keep an eye on proposed changes and plan accordingly.
  • Business Reliefs and Incentives: Look for any new reliefs or incentives aimed at small and medium-sized enterprises (SMEs). These can provide valuable opportunities for growth and investment.

Employment and Labour Policies

Labour policies, including those related to the minimum wage, worker rights, and employment regulations, can significantly impact your business operations:

  • Minimum Wage Adjustments: Increases in the minimum wage can raise your labour costs. It’s crucial to factor these potential changes into your budgeting and staffing plans.
  • Worker Rights: Enhanced worker rights and protections may require adjustments to your HR policies and practices. Ensure you understand any new regulations to remain compliant.
  • Employment Contracts and Benefits: Changes in laws regarding employment contracts and benefits can affect your employee relations and retention strategies.

Regulatory Environment

The regulatory landscape is another area that can undergo significant changes following an election. Here are some key areas to monitor:

  • Health and Safety Regulations: New or revised health and safety regulations can impact your operational procedures and compliance requirements.
  • Environmental Regulations: With increasing focus on sustainability, expect potential changes in environmental regulations that could affect your business practices and reporting obligations.
  • Industry-Specific Regulations: If you operate in a highly regulated industry, such as finance or healthcare, stay informed about any sector-specific regulatory changes that could impact your business.

Trade and International Relations

The UK’s trade policies and international relations can influence your supply chain, export opportunities, and overall market stability:

  • Trade Agreements: New trade agreements or changes to existing ones can open up new markets or impose new barriers. Keep an eye on proposed trade policies and consider how they might affect your business.
  • Import and Export Regulations: Adjustments to import and export regulations can impact your supply chain logistics and costs. Stay informed to mitigate potential disruptions.
  • International Relations: Geopolitical shifts and changes in international relations can influence market conditions and business confidence. Monitor these developments to adapt your strategies accordingly.

Financial Markets and Investment Climate

The election outcome can also influence the broader financial markets and investment climate:

  • Market Stability: Political uncertainty can lead to market volatility. Be prepared for potential fluctuations in share prices, interest rates, and currency exchange rates.
  • Investment Opportunities: Changes in government policies can create new investment opportunities or risks. Stay informed about potential shifts in the investment landscape to make informed decisions.
  • Access to Finance: Monitor any proposed changes to government-backed finance schemes and support for businesses. These can provide crucial funding opportunities for growth and expansion.

Preparing for the Election Outcome

While it’s impossible to predict the exact outcome of the 2024 election, proactive planning can help mitigate risks and position your business for success:

  1. Stay Informed: Regularly update yourself on the latest news and developments related to the election. Follow reliable sources and consider joining business networks or associations that provide insights and analysis.
  2. Scenario Planning: Develop contingency plans for different election outcomes. Consider how changes in policies might impact your business and identify strategies to address potential challenges.
  3. Engage with Stakeholders: Communicate with your stakeholders, including employees, customers, and suppliers, to understand their concerns and expectations. Keeping an open line of communication can help build resilience and trust.
  4. Seek Professional Advice: Consult with financial advisors, accountants, and legal experts to navigate potential changes in the regulatory and economic environment. Professional guidance can help you make informed decisions and stay compliant.

Conclusion

The 2024 election presents both opportunities and challenges for business owners. By staying informed and prepared, you can navigate potential changes and position your business for continued success. At 1 Accounts, we’re committed to helping you understand and adapt to the evolving business landscape. If you have any questions or need assistance with your financial planning, please don’t hesitate to contact us.

The Spring Budget – The Detail

On March 6, 2024, Chancellor Jeremy Hunt delivered a spring budget aimed at boosting public morale and securing voter support, especially important as an election looms and the UK faces economic challenges. This budget focuses on easing financial strains by lowering National Insurance for everyone, tweaking VAT rules for small businesses, and adjusting child benefit charges to support families. Plus, there’s a small break on property sales taxes for some, but no changes to income or inheritance taxes. Let’s explore what these changes could mean for you.

The first budget announcement was that National Insurance Contributions are again being cut. The government is cutting the main rate of employee National Insurance by 2% from 10% to 8% from 6 April 2024. Combined with the 2% cut announced at Autumn Statement 2023, this will save the average worker on £35,400 over £900 a year.

The government is also cutting a further 2% from the main rate of self-employed National Insurance on top of the 1% cut announced at Autumn Statement 2023. This means that from 6 April 2024 the main rate of Class 4 NICs for the self-employed will now be reduced from 9% to 6%. Combined with the abolition of the requirement to pay Class 2, this will save an average self-employed person on £28,000, around £650 a year.

Following these changes, assessing both salary and dividend options for their tax advantages is advisable. This strategy could optimise your tax position.

The Chancellor raised the VAT registration threshold to £90,000 to alleviate the administrative burden on small businesses and encourage their growth. This change means that smaller businesses can generate more revenue before needing to charge VAT, potentially increasing their competitive edge and allowing them to reinvest savings into their operations. However, businesses approaching this new threshold must plan strategically to manage their growth and VAT responsibilities effectively.

They announced in the budget that Inflation has significantly decreased from 11.1% to 4%, and is expected to reach the 2% target by the second quarter of 2024, according to the OBR. This reduction, occurring faster than previously predicted, indicates a stabilising economy. Last year, the UK experienced minimal growth, indicative of a recession. However, projections show an improvement from early 2024, with the UK predicted to be among the top three fastest-growing G7 economies between 2024-2028. For business owners, this could mean more stable costs, improved consumer spending, and better conditions for growth and investment.

The British government has recently updated the Recovery Loan Scheme with an additional funding provision of £200 million, aiming to support the growth and investment plans of small-scale enterprises. To be eligible for this loan, a business must generate no more than £45 million annually, maintain a sustainable model, and be free from immediate financial distress. The Recovery Loan Scheme is also being renamed The Growth Guarantee Fund as announced in the budget.

Capital allowances offer businesses an effective strategy to decrease their taxable income. This is achieved by allowing companies to deduct the cost of qualifying purchases such as equipment, machinery, and certain types of business vehicles from their profits, leading to tax savings. This approach not only reduces tax liabilities but also encourages reinvestment in the business. The concept of full expensing enables businesses to apply these capital allowances in the same fiscal year the investment is made. The Chancellor recently hinted that full expensing for leased assets would be implemented when it is financially feasible.

At the moment, there is a situation where a household with 2 parents, each earning £49,000 a year, still gets the full Child Benefit, but those with one parent earning over £50,000 will see some or all of the benefit withdrawn. From 6th April 2024 the point at which child benefit will start to be withdrawn will now be at a higher level of earnings i.e. £60,000 not £50,000. Instead of starting to lose child benefit once at least one parent earns over £50,000 a year, it will be £60,000. It will be taken away entirely from £80,000 a year, rather than £60,000. But more importantly, the government is consulting on moving the system from being based on an individual’s salary to a system based on household income. This new system will come in by April 2026. So watch this space!

To address the housing shortage, the government plans to decrease the higher rate of capital gains tax on non-primary residences from 28% to 24% in April. This change aims to encourage more property sales by reducing the tax burden on sellers of investment properties or second homes.

The ‘temporary’ 5p cut in fuel duty is being extended for another 12 months.

The alcohol duty freeze is being extended from 1st August to 1st February.

There is a new ISA in town! This ISA gives savers another £5k tax-free allowance, on top of the current £20k that can be subscribed into an ISA. The only restriction is this new UK ISA needs to be invested in British businesses.

The government is also announcing over £1 billion of new tax reliefs for the UK’s creative industries. This includes introducing a 40% relief from business rates for eligible film studios in England for the next 10 years; introducing a new UK Independent Film Tax Credit; and increasing the rate of tax credit by 5% and removing the 80% cap for visual effects costs in the Audio-Visual Expenditure Credit. A permanent extension will be made to tax relief for theatres, orchestras, museums and galleries.

The government plans to phase out the Furnished Holiday Lettings tax benefits starting April 6, 2025, and the relief on stamp duty for multiple dwellings beginning June 1, 2024. Properties under contracts exchanged before March 6, 2024—the day before the budget announcement—will still qualify for the multiple dwelling stamp duty relief, regardless of their actual completion date. Additionally, any transactions completing before June 1, 2024, will be eligible for this relief.

The tax breaks for non-domiciled residents, people who live in the UK, but not domiciled here for tax purposes have been abolished. Currently, foreign nationals who live here, but are taxed in another country, do not have to pay tax on their foreign income for up to 15 years. From April 2025 this is changing. 

For new arrivals, who have a period of 10 years consecutive non-residence, there will be full tax relief for a 4-year period of subsequent UK tax residence on foreign income and gains arising during this 4-year period, during which time this money can be brought to the UK without an additional tax charge. 

Existing tax residents, who have been tax residents for fewer than 4 tax years and are eligible for the scheme, will also benefit from the relief until the end of their 4th year of tax residence. 

There are transitional arrangements being put in place for existing non-doms. 

In Oct 2026 vapers will be taxed more and the tax on cigarettes and tobacco products will go up.

At first glance, it appears the government isn’t directly investing in increasing HMRC’s frontline workforce. However, it’s channeling an additional £140 million to enhance HMRC’s capacity to handle tax debts. Essentially, this can be seen as an allocation aimed at boosting the identification and collection of outstanding taxes. Now might be a prudent time to consider tax investigation insurance, especially if you haven’t already done so. For those who are clients of 1 Accounts, you’ll be pleased to know this service is already included in our offering!

The recent budget may not have met the expectations of many small businesses, as it offered limited new measures for support. However, as a business owner, there are essential steps to take. Ensure your payroll systems are updated to accommodate the new National Insurance contributions starting April 6, 2024. It’s advisable to start planning now—reach out to us to strategise effectively, particularly regarding the upcoming minimum wage adjustments. Now is also a crucial time for personal tax planning, especially considering the changes to child benefit. Review your pension contributions and, for those operating limited companies, reassess your cash flow in light of these changes and keep your forecasts current. Anticipate additional updates from a potential budget announcement later this year, which could bring more changes.

2024 Spring Budget – The Highlights

We’ve got the latest scoop on the recent Spring Budget announcement by the chancellor. Buckle up because there’s a lot to unravel, but we’ve got you covered with the need-to-knows.

Let’s dive into the highlights:

Good news! National Insurance Contributions are getting slashed again. This means more money in your pocket. For employees, the main rate of employee National Insurance is dropping from 10% to 8%, saving the average worker over £900 a year. Self-employed folks are also in luck with a reduction from 9% to 6%.

The threshold for VAT registration is climbing up to £90,000. While some debate its impact, it’s aimed at supporting small business growth.

Inflation is down, and the economy is revving up. With forecasts showing growth on the horizon, it’s a positive sign for businesses.

The post-pandemic recovery loan scheme is extending its support to small businesses with an additional £200 million in funding.

The chancellor hinted that full expensing for leased assets will come soon, but it’s not clear when, likely when it’s affordable.

The threshold for the high-income child benefit charge is going up from £50,000 to £60,000. The upper limit for which the benefit is fully removed is also increasing from £60,000 to £80,000. There are also plans in the future to switch this approach from an individual income basis to a household income basis. However, no date has been put on this further change.

Property owners will see a reduction in Capital Gains Tax on residential properties, and there’s a new UK ISA allowing for tax-free investments in British businesses.

Over £1 billion in tax reliefs are being introduced for the UK’s creative industries, offering support for film studios, independent films, and more.

The Furnished Holiday Lettings tax regime and multiple dwelling stamp duty relief are on the chopping block.

Tax breaks for non-domiciled residents are being phased out starting April 2025.

Brace yourselves, smokers and vapers, as taxes on these products are set to rise in the coming years.

The government is beefing up HMRC’s capabilities to collect more tax, so it’s wise to stay on top of your tax affairs.

In conclusion, while there are some wins and losses in the budget, it’s essential to stay informed and adapt your business strategy accordingly. We’re here to help navigate these changes and ensure your business thrives.

spring budget predictions

Our Spring Budget Predictions

Simplified Guide for Business Owners: Understanding the Spring Budget Predictions

Attention all business owners! The Spring Budget is set to be announced on March 6th, and it will be aired live on BBC1 at 12pm. This is a crucial event, especially with the general election on the horizon. We anticipate significant announcements that could impact your business, particularly in terms of tax changes and economic growth initiatives. Here’s what you need to know in simple terms.

The Budget is a financial statement made by the government every year which outlines its plans for tax changes, spending, and economic strategies. For UK businesses, this means changes in taxes you pay or incentives you might receive.

This is the tax paid on an estate (property, money, and possessions) of someone who has passed away. Currently, there are talks that the government might remove this tax entirely, which could be good news for individuals and families.

These are limits up to which you don’t have to pay income tax. Since April 2022, there haven’t been changes, but there are whispers that these thresholds might increase. This means you might start paying less tax on your earnings, leaving more money in your pocket.

Following a recent cut in National Insurance, we might also see a reduction in income tax rates. This could further reduce the amount of tax you owe from your earnings, enhancing your take-home pay.

This is a government initiative aimed at making it easier for businesses and individuals to manage their taxes online. Although its launch has been delayed, there might be news on when this will finally kick in.

Currently, businesses with a turnover below £85,000 are exempt from registering for VAT. There’s a possibility this threshold could increase, which could mean fewer tax burdens for small businesses and possibly more room for growth.

We are hoping the Spring Budget will bring good news in the form of tax savings for small businesses. These could come through reductions in various taxes or by raising thresholds that relieve smaller businesses from the complex web of tax obligations. This would not only help businesses grow but also stimulate overall economic growth.

Stay tuned for the budget announcement, and consider how these changes could impact your business.

Is It Time to Electrify Your Double Cab Pickups?

Double cab pickups are the backbone of the construction industry, serving as both reliable haulers for equipment and convenient transportation for workers and their families. Yet, looming changes in tax regulations could reshape the landscape for these indispensable vehicles.

Currently, double cab pickups enjoy favorable tax treatment, including a standard benefit-in-kind rate set at £3,600, plus £688 for fuel, leading to a tax bill of £857.60 for basic rate taxpayers and £1,715.20 for those in the higher tax bracket. Additionally, companies can fully deduct the cost of these vehicles from their taxable profits thanks to 100% Capital Allowances. However, starting from July 1st, significant tax changes will come into effect, subjecting double cab pickups to similar tax assessments as cars. This shift includes considering CO2 emissions ratings, which could substantially increase taxes and reduce capital allowances.

Take, for example, purchasing a Toyota Hilux Active, priced at £34,145 including VAT. Under the current tax regime, there are significant tax savings for both the company and the employee due to VAT recovery and full capital allowances. However, post-change, the tax implications become much more burdensome, with capital allowances reducing to just 6% annually.

So, what’s the solution? It might be time to consider electrifying your double cab pickup fleet. Electric vehicles (EVs) are currently treated more favorably in terms of taxation, and although there’s no guarantee, there’s a possibility that future government policies may continue to support EV adoption.

With the impending tax changes, it’s essential to weigh the benefits of purchasing under the existing tax regime against the potential long-term financial and environmental advantages of electric vehicles. While the current rules apply to purchases made before July 1st, 2024, until April 5th, 2028, it’s crucial to consider the broader shift towards electrification and potential changes in legislation that could impact the cost-effectiveness of maintaining a diesel-powered fleet.

To dive deeper into the tax implications and allowances, refer to the official guidance at HMRC’s Employment Income Manual.

In conclusion, the changing tax landscape suggests that now might be the time to rethink your double cab pickup fleet and consider transitioning to electric vehicles for a more sustainable and financially sound future.

For more detailed information on the tax implications and allowances, please refer to the official guidance at HMRC’s Employment Income Manual.

HMRC Time To Pay Arrangements

In the complex world of business finance, one of the challenges UK businesses often face is managing their tax obligations effectively. The HM Revenue and Customs (HMRC) understands that businesses sometimes encounter cash flow difficulties, making it hard to pay their tax bills on time. To assist, HMRC offers a “Time to Pay” (TTP) arrangement, a vital tool for businesses needing extra time to pay their taxes. This blog explores what TTP arrangements are, how they work, and why they might be a critical solution for your business.

Simply it’s an agreement between a business and HMRC to pay outstanding taxes over an extended period. This facility is designed to help businesses struggling with temporary financial difficulties to spread their tax payments, thereby avoiding penalties and helping to manage cash flow more effectively.

To be eligible for a TTP arrangement, businesses must:

  • Have existing tax liabilities.
  • Be in genuine temporary financial distress.
  • Be able to demonstrate that they can pay off the debt in the foreseeable future.

The application process typically involves contacting HMRC, discussing your financial situation, and proposing a payment plan.

TTP arrangements can cover various types of taxes, including:

  • Corporation Tax
  • PAYE and National Insurance Contributions
  • VAT
  • Self-Assessment Tax

One of the primary benefits of a TTP arrangement is improved cash flow management. By spreading tax payments over a longer period, businesses can maintain operational liquidity and avoid the strain of a lump-sum payment.

Timely negotiation of a TTP arrangement can help businesses avoid late payment penalties and interest charges, which can accumulate quickly on unpaid taxes.

Staying compliant with tax obligations is crucial for any business. A TTP arrangement helps maintain a good relationship with HMRC and ensures compliance.

It’s crucial to contact HMRC as soon as you anticipate cash flow problems. Early communication is key to negotiating a feasible and realistic payment plan.

To set up a Time to Pay (TTP) arrangement with HMRC, you can use the following contact details:

  1. For Self-Assessment: Call 0300 200 3822. The Self Assessment Payment Helpline is open Monday to Friday from 8 am to 6 pm.
  2. For Limited Companies: Contact HMRC’s Payment Support Services on 0300 200 3835.

When negotiating a TTP arrangement, be prepared with accurate and detailed financial information to support your case. This includes cash flow forecasts, business plans, and an explanation of what caused the financial difficulties.

Propose a payment plan that your business can realistically meet. Overly ambitious plans that lead to default can complicate future negotiations.


HMRC’s Time to Pay arrangements can be a lifeline for businesses facing temporary financial difficulties. They provide a structured and manageable way to meet tax obligations without crippling the business’s cash flow. However, it’s essential to approach these arrangements with a clear understanding of your financial situation and a realistic plan for repayment. Regular communication with HMRC and adherence to the agreed payment schedule are critical to the success of these arrangements.

For businesses struggling to manage their tax liabilities, a TTP arrangement can offer the necessary breathing space to regain financial stability. Always consider seeking advice from an accountant to navigate the process effectively and ensure that the proposed plan aligns with your business’s overall financial strategy.

jumper, hot chocolate and book for autumn

Simplifying the Autumn Statement

Hello, business owners! Let’s talk about what the UK Autumn Statement means for you in plain English, with all the important bits you need to know:

Our director Paul breaks down the Autumn budget with a quick synopsis

The government has a safety net of funds aimed at supporting businesses making sure they can grow. They’ve introduced 110 measures to help businesses with things like productivity and taxes​​. This is collated in a 120 document you can click here to read.

If you’re in the business of selling drinks, there’s good news – no tax hike on alcohol until August 2024. Cigarette sellers, however, will see a 10% tax increase​​ on hand-rolling tobacco.

If your business is on the smaller side, you’ll be glad to hear that your business rates won’t go up this year. And if you’re in retail, hospitality, or leisure, you’ll continue to enjoy a significant reduction in business rates​​.

When you buy equipment for your business, you can now get a tax break for the full price from now on. This should make investing in your business a bit more attractive​​.

If your business invests in research and development, things are getting simpler. The government is merging two tax relief schemes into one, making it easier to understand and claim your benefits​​.

For the creatives making films, TV shows, or games, there’s a new tax credit system starting in 2024 that may put some extra cashback in your pocket​​. We are awaiting the details on this one!

Big news for both employees and the self-employed: National Insurance is getting cheaper. Employees will see a 2% cut from their National Insurance rates, and for the self-employed, Class 4 NI goes down by 1% to 8%. Plus, a certain type of National Insurance payment, known as Class 2, will be abolished, making tax a bit simpler for the self-employed​​.

With all these changes, if you’re earning an average salary, your taxes will be lower in the UK than in many other major economies. This means more take-home pay for millions of workers​​.

Last but certainly not least, if you’re paying your staff minimum wage, note that it’s going up to £11.44 from April 2024. This is a significant raise, which means those earning the minimum will take home more money​​ but it also could be a huge change for your business. Making it more important than ever to plan!

Listen to Paul talking about the impact on small businesses by watching this video.

Remember, all these changes are about making sure that work pays off more and that your business can thrive. It’s always a good idea to chat with an accountant to see exactly how these changes affect your specific business. Stay informed and keep growing!

Please check out our social media for more videos breaking down the budget!

leaves for autumn

Understanding the Autumn Statement and Its Impact on Your Business

The Autumn Statement is more than just a financial forecast; it’s a roadmap that can influence your business decisions for the upcoming year. At 1 Accounts Online Ltd, we understand its significance and are here to simplify what it means for you.

This annual announcement by the Chancellor of the Exchequer outlines the government’s economic plans and budget priorities, giving us insight into the fiscal direction of the country.

  • Business Forecasting: Economic indicators from the Statement guide us in helping you plan your next business move.
  • Policy Updates: It’s essential to know about changes in taxation or spending that may affect your business’s bottom line.
  • Strategic Advantage: With our expert analysis, you can turn the information from the Statement into a competitive edge.
  • Corporate Tax Rates: Any changes here could be critical to your financial strategy, and we’re on hand to navigate through them​​.
  • Regulatory Adjustments: We’ll decode complex legislative updates, such as IR35 changes, so you can focus on running your business​​.
  • Fiscal Signals: Tax cuts or adjustments in government spending signal economic trends that could impact your growth plans​​.

The Autumn Statement is a vital indicator for strategic business planning, and we at 1 Accounts Online Ltd are dedicated to providing you with clear, actionable advice. As we approach the release of this year’s Statement, let’s work together to align your business with the upcoming economic landscape.

jade and paul in a meeting

Are You in the Crosshairs of the Associated Company Tax Rates?

We’re back with another blog post and this time we’re diving into a topic that isn’t everyone’s cup of tea – taxes. But don’t worry, we’re here to make it as enjoyable and straightforward as possible. Strap in and let’s demystify the new corporation tax rules together.

What are the changes?

As of April 1st, 2023 (and no, it wasn’t an April Fool’s prank), there have been some significant changes in the corporation tax laws. Here’s the lowdown:

  1. Companies with profits that are playing a bit of hide and seek and total less than £50k will continue to be taxed at the friendly rate of 19%.
  2. Those with profits feeling a bit more confident, between £50k and £250k, will be greeted by a still reasonable tax rate of 26.5%.
  3. And for those brave souls whose profits exceed £250k, they’re looking at a flat rate of 25%.

Now, you might be wondering about this £50k threshold we mentioned. It’s not as roomy as it first appears. Much like sharing a dessert, this threshold needs to be split between your company and any other associated companies. The effect? Well, your slice of the pie could be smaller than you initially thought.

Fear not, your trusted accounting partners, should be on the case and we’re here to guide you through this labyrinth. Your accountant will need to know about any other companies you’re involved with, either as a shareholder or director. The same goes for any companies your family members are involved with. This isn’t us accountants just being nosy, promise! It’s all to ascertain whether the associated company rules apply to you and potentially other connected businesses.

We understand that these changes may feel a bit like navigating uncharted waters. If this is going to cause any tax-related stress, rest assured that we’re prepared to assist. We can work with you to plan the most tax-efficient course.

So, let’s sail through these tax changes together. As always, we are committed to lightening the load of tax law changes and making the journey as smooth and pleasant as possible.

Stay tuned for more updates and remember to keep those smiles on. After all, nothing is as certain as change… and taxes!

what are capital allowances

What are capital allowances?

Are you ready for some capital allowances fun? 🙌 🥳

Yeah, we know it’s not the most exciting topic, but stick with us because it’s important. Capital allowances are like the superhero of the UK tax system, providing businesses with tax relief on certain types of capital expenditure. However from April 2023, they’re changing! 

Super Deduction

First up, we have the Super-Deduction. This is a type of capital allowance that provides businesses with a 130% tax deduction on qualifying investment in new plant and machinery. That’s right, you heard us, 130%! It’s like getting an extra boost of power to your capital expenditure. This is designed to help businesses invest in new equipment and machinery, and has been a game-changer. 

But you better act fast because the Super-Deduction is only available for investments made between 1 April 2021 and 31 March 2023. So, if you’re planning to upgrade your plant and machinery, make sure to take advantage of this superpower before it’s too late. 

Special Rate Pool 

Next up, we have the Special Rate Pool, which is used for assets that are eligible for a lower rate of capital allowances. While it’s not as exciting as the Super-Deduction, it’s still an essential part of the capital allowances world. From April 2023, the rate for the Special Rate Pool will be reduced from 6% to 3%. It’s not ideal, but hey, we can’t win them all. 

Annual Investment Allowance

Moving on to the Annual Investment Allowance (AIA), which provides businesses with 100% tax relief on qualifying investment in plant and machinery, up to a certain limit. The good news is that the AIA limit is staying the same at £1million of capital expenditure. 

General Pool Allowances

Last but not least, we have General Pool Allowances. This allows businesses to claim tax relief on assets that don’t qualify for the AIA or exceed the AIA limit. From April 2023, the WDA rate will be reduced from 18% to 16%. It’s not a significant reduction but still something worth being aware of.  

In conclusion, the world of capital allowances is evolving from April 2023. But, as with any superhero story, there are some ups and downs. The Special Rate Pool and General Pool Allowance are getting a little weaker, while the super deduction is leaving us. So, make sure to plan your capital expenditure carefully and consult with a tax professional to ensure that your business is making the most of the available allowances.