I hope you are well and that your business is recovering from the effects of the pandemic. It still seems that the have a way to go to bring COVID-19 fully under control and that we may be moving towards more restrictions in the near future.

With this in mind, I wanted to make you aware of 3 important updates that may help you, your business and employees in the coming months.

HMRC Issue Detailed Guidance on the Super-Deduction for New Equipment.

The Finance Act 2021 legislated for the temporary 130% super-deduction for companies acquiring new plant and machinery announced in the Spring 2021 Budget. This applies where the expenditure is incurred between 1st April 2021 and 31st March 2023.

This means that a new machine that cost £100,000 will reduce the company’s profits for corporation tax purposes by £130,000, saving £24,700 in corporation tax (at 19%). However, there is a clawback charge when the specific asset is disposed of, as it needs to be separately identified and not pooled.

The 130% allowance is available where the equipment would normally be included in the general plant and machinery pool. Where the equipment would normally be included in the special rate pool, typically integral features such as air conditioning units, then a 50% allowance is available.

The HMRC guidance sets out detailed conditions for claiming the new tax relief and clarifies that the super-deduction does not apply to motor cars and leasing business among other exclusions.

Where equipment such as lifts, heating systems and air conditioning is installed in a building that is rented out, the leasing restriction does not apply.

Please note also, that there is the 100% Annual Investment Allowance for up to £1 million of expenditure per annum. This was due to revert to just £200,000 from 1st January 2022 but was extended to 31st March 2023 in the Autumn 2021 Budget.

See:  https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca23161

Guidance for employers on RTI reporting obligations for payments made early at Christmas

HMRC is aware that some employers pay their employees earlier than usual over the Christmas period, as their business may close for Christmas and New Year. If you do pay early, please report your normal payment date on your Full Payment Submission (FPS).

For example: If you intend to pay your employees on 17th‌‌‌ ‌December‌‌ ‌2021, but your normal payment date is 31‌‌st ‌December‌‌ ‌2021, please report the payment date as ’31‌‌ ‌December‌‌ ‌2021′. In this example the FPS would need to be sent on or before the 31st‌‌ ‌December 2021.

Doing this will help protect your employees’ eligibility for Universal Credit, because reporting an early payment could affect further entitlements.

For further information, please see HMRC’s October 2021 at https://www.gov.uk/government/publications/employer-bulletin-october-2021/employer-bulletin-october-2021

New grants available for Dudley borough businesses

Businesses are being invited to apply for a new round of Government grants to enhance their business premises, offer outdoor hospitality or improve their digital facilities.

The additional restrictions grant phase 3 is now open to all eligible businesses across Dudley borough with grants from £1,000 to £5,000 available.

Find out more and apply now dudleybusinessfirst.org.uk

If there are any aspects of these 3 updates you are unsure of and would like more advice and help, please do not hesitate to contact me on 01384 376964.

Best wishes,

Nigel Meredith
Senior Partner
Folkes Worton LLP Chartered Accountants

Accounting for the Future