Student loans are a big concern for students and their families, but there are many misconceptions about this type of debt. When it comes to borrowing money, the normal approach is to self-fund where possible, and if you really must take out a loan, to pay it off in full as soon as you can.

However, when it comes to student loan repayments, the normal debt rules don’t apply. The loan is the better choice rather than self-funding tuition fees, and it’s not worth trying to pay off a student loan early. Let’s look into the way student loans operate and how you should manage them.

How do you repay student loans?

While you won’t need to pay back grants and bursaries, you’ll need to pay back most types of student finance – including tuition fee loans and maintenance loans for help with living costs.

When you start to owe repayments and how much you’ll have to repay depends on your repayment plan, when you finish your course, and how much you’re earning. Typically, repayments are due from the April following the end of a full-time course, while they’re due from the April four years after starting a part-time course. You’ll still need to pay back your loan if you don’t finish the course.

The Student Loans Company will start adding interest to your loan from your first payment, but you won’t have to pay anything back until your earnings are above the annual threshold for your plan.

The student loan repayment plans in England and Wales work like this:

If you’re earning above the threshold for your repayment plan, then you’ll owe 9% of your earnings above this amount. For postgraduate loans, you’ll owe 6%. If you have both an undergraduate loan and
a postgraduate loan, you’ll be repaying a total of 15% of your earnings at the relevant rates.

Your student loan repayments are automatically deducted from your wages along with your National Insurance Contributions
if you’re an employee. However, if you’re self-employed, you must repay the percentage along with Income Tax after submitting a self-assessment tax return.

You can check your balance, update your details, and make payments in your online account.

Should you repay student loans early?

Being thousands of pounds in debt with mounting interest is a terrifying thought. This is why many people think of student loans the way they would any other debt, believing that paying it all off quickly is the best thing to do. The truth is that paying upfront or repaying early is a bad decision.

The way student loans work is different to other types of debt, because they’re written off after 30 years. Regardless of how much you’ve repaid, or even if you’ve never paid back a penny – your student loan will be wiped away 30 years from the April when repayments first became due.

This means that if you never earn above the repayment threshold for your plan in those 30 years, you’ll effectively get your degree for free. Many people who do earn over the threshold and gradually pay back 9% a month still won’t clear the full debt in 30 years, so they’ll get a big discount.

There’s no use worrying about debt figures in the tens of thousands when, realistically, you won’t have to pay back anywhere near that amount. If you have concerns about the government changing the rules in the next 30 years, you can be relatively confident that any changes won’t be retroactive.

If you’re a parent thinking about paying your child’s student fees upfront, it’s not worth it. Never take out another loan to cover your child’s student debt, either. You’ll be much better off saving your money and using it to help your child with a mortgage deposit or other investment later on.

Will student loan repayments affect my credit?

You don’t have to worry about student loan debt collectors or how it will look on your credit report. Most people make automatic repayments through their employer’s payroll system, so nobody is chasing up missed payments. At worst, HMRC might investigate self-employment tax returns.

Student loans taken out after 1998 don’t appear on credit files, either, so the large ‘debt’ won’t put lenders off. Mortgage providers are more likely to ask about student loans, but they won’t affect whether you get the mortgage or not – just the minimum mortgage repayments you can make.

Be sure to keep your student loans account updated with your employment circumstances, so you don’t end up paying more or less than you owe, and you should be fine. In the case of student loan arrears, you can contact the Student Loans Company for help with your repayment arrangements.

As MoneySavingExpert
says, it’s less of a debt and more like a tax, so you should think of student loan repayments as ‘graduate contributions’ instead. If you need financial advice to help manage your income and payments, contact GBAC – our accounting experts will be happy to assist you.

With estimations of more than two million holders of cryptoassets
in the UK, many of these people might wrongly believe that their crypto transactions are tax-free. Unfortunately, this isn’t the case, as most crypto sales and exchanges are actually eligible for some level of Capital Gains Tax (CGT).

For this reason, HMRC has been sending out advisory letters to taxpayers who they believe hold cryptoassets. If you own any type of crypto token, or are interested in holding them in the future, then read on to learn more about the tax implications of buying and selling cryptoassets
in the UK.

What are cryptoassets?

Cryptoassets, or cryptocurrencies, aren’t actually a currency or valid form of money, so HMRC won’t treat them the same way. HMRC defines them as ‘cryptographically secured digital representations of value or contractual rights that can be transferred, stored, or traded electronically’. This means they’re only virtual, recorded digitally via ‘blockchains’ using Distributed Ledger Technology (DLT).

Like a regular currency, you can still buy, sell, and trade cryptoassets, and there are market-driven fluctuations in their exchange rate. HMRC categorises crypto tokens into the following groups:

The Capital Gains Tax due depends on the nature of the token and your specific use of it. If HMRC suspects you of evading or underpaying cryptoasset taxes, they can enforce financial penalties.

How does HMRC tax cryptoassets?

HMRC treats cryptoassets more like traditional assets when it comes to CGT, as they aren’t considered to be equivalent to real money. Buying and selling crypto tokens therefore isn’t considered gambling, either. Capital Gains Tax only applies if you profit from cryptoasset disposal.

The transaction counts as a CGT disposal if you sell crypto tokens, exchange one type for another, use them to pay for goods/services, or gift them to someone else (who isn’t your spouse or civil partner). If you’re only moving tokens between different virtual wallets/platforms, it isn’t a disposal.

If there is no disposal, then no CGT is due. The amount you’ve invested in cryptoassets so far is irrelevant – the only part that matters to HMRC is the profit you make when they’ve been sold or exchanged. This means you’ll only pay tax on the difference between the purchase and sale prices.

For example: an investor purchases Ethereum tokens, using some Bitcoin tokens as payment. The Ethereum tokens increase in value, so the investor exchanges them for more Bitcoin tokens. Both of these transactions count as disposals, so CGT
is due if the transactions exceed the CGT allowance.

What about taxes on NFTs?

As you’re probably aware from their recent popularity, Non-Fungible Tokens (NFTs)
are another form of cryptoasset. However, you can’t trade or exchange them for equivalent values in the same way as cryptocurrencies, so the current CGT guidance on crypto token taxes doesn’t seem to apply.

No tax authority has published legal guidance on NFTs just yet, including HMRC, but it’s likely that they’ll eventually be taxed in a similar way to their already categorized cryptoassets. Keep an eye on the online HMRC Cryptoassets Manual for updates if taxes on NFTs
in the UK are of interest to you.

When do taxes apply to cryptoassets?

In addition to paying Capital Gains Tax on profits from disposals, individuals investing in or receiving cryptoassets may also be subject to Income Tax and National Insurance Contributions (NICs) in certain circumstances. These three taxes may also apply to businesses – plus Corporation Tax, VAT, and Stamp Duties – if they buy, sell, exchange, or receive gifts of crypto tokens as a company.

In any case, cryptoassets must be declared on tax returns, so it’s important to keep permanent records of every significant crypto transaction. If you’re unsure about which taxes apply, how to plan for cryptoasset tax, or how to calculate your tax bill, why not get in touch with the team at GBAC? We offer both personal and corporate tax consultancy services from our base in Barnsley.

Click here to view the government guidance on paying Capital Gains Tax when selling cryptoassets.

After proposed changes to Universal Credit (UC) in the Autumn Budget 2021, the improvements came into effect last month. From December 2021, workers claiming UC will be able to keep more of their earnings, and some higher rate taxpayers could be eligible for the benefit for the first time.

The COVID-19 pandemic saw millions of households claim Universal Credit, with numbers rising from 1.7 million to 4.2 million between February 2020 and May 2020. In an attempt to boost income for these struggling families, the government temporarily increased payments until October 2021.

After this Universal Credit uplift expired last autumn, the government took steps to expand UC to allow claimants to earn more without becoming ineligible – meaning that higher earners could now also qualify for the benefit. So, how is Universal Credit changing, and who will be affected by this?

What are the Universal Credit reforms from the Autumn Budget?

Firstly, the Universal Credit monthly work allowance
is increasing from £515 to £557. This is the amount you can earn without affecting your UC payment – an extra £42 a month adds up to £504 a year. For those receiving housing benefits as part of their claim, their UC work allowance
will go up from £293 to £335 a month. You can view the Universal Credit allowances for 2022-2023 online.

Secondly, the Universal Credit taper rate is dropping from 63p to 55p per £1. Previously, claimants would lose 63p of their UC
payment for every £1 earned over the work allowance. Now, workers will be able to keep 8p more of their UC benefit per £1. For example, if a claimant earns an extra £100 over their allowance, their UC payment will only be reduced by £55 rather than the previous £63.

How will Universal Credit changes affect higher earners?

The UK government estimates that these two changes will see 2 million of the lowest-earning families get to keep an average of £1,000 more per year. However, the Institute for Fiscal Studies (IFS) revealed the new taper rate also means that an additional 600,000 households could be eligible for Universal Credit
– even if they’re in the higher rate tax band (40% on earnings over £50,270).

Workers can earn above average while still receiving UC
(as long as they aren’t in a couple with another earner). The IFS
provides the example of a single parent with 2 children and £750 monthly rent earning £51,900 a year before losing UC entitlement, compared to £44,500 before the changes. A couple with only one earner in the same situation could earn £58,900 a year (up from £49,300).

Of course, this also only applies if the single parent or couple doesn’t have savings above £16,000, which would disqualify them from UC
entitlement. As it also only applies to higher rate taxpayers with child dependants, there’s also the High Income Child Benefit Tax to consider. As a complex trio, it’s important to know how tapering UC, higher rate tax, and child benefit tax can affect each other.

How will I know if the Universal Credit changes affect me?

A senior research economist from the IFS, Mr Tom Waters, told the BBC
that people should be aware that the changing UC taper rate and UC work allowance is only good news for claimants who are actually in work – meaning that households with nobody in work won’t be any better off.

Similarly, as the cost of living rises in 2022, including inflation and tax increases, this is likely to negate any benefit or wage increases, even for middle-income earners and those in the higher tax band. That said, it’s always worth claiming what you can – so check your Universal Credit eligibility.

If you require financial advice concerning capital allowances and tax reliefs, and how these intersect with UC benefit entitlement, we provide tax consultancy services and assist with HMRC enquiries. Contact GBAC accountants in Barnsley by calling 01226 298 298 or emailing info@gbac.co.uk today.

As part of the UK government’s agenda to increase investments in deprived communities, the first 11 designated tax sites
from a list of eight planned freeports are up and running. This includes sites alongside the Thames, Tees, and Humber rivers and estuaries, plus several in East Suffolk.

Like enterprise zones, the purpose of freeports is to increase opportunities for employment and economic development in previously underdeveloped areas, which will also boost the overall UK economy. Let’s take a look at the advantages of freeport designated tax sites and where they’ll be.

What is a freeport or designated tax site?

A UK freeport is a geographical zone where normal customs and tax laws do not apply. These areas are usually located close to a sea port or airport, and up to 45 kilometres in diameter. There were previously six freeports in the UK from 1984 to 2012, and now there will be eight in England alone.

The working theory is that goods entering the freeport zone from abroad, or even manufactured and exported overseas from within the zone, will be exempt from the regular tariffs. Businesses will only have to go through the full customs tax process if the goods leave the zone and enter the UK.

However, exemptions won’t necessarily apply to every part of the freeport area; that’s where designated sites come in. For example, there may be separate designated tax sites and designated customs sites – smaller areas within the freeport zone where specific exemptions will apply.

Where are the new UK freeports?

The government in England is currently working with the other nations in the UK to establish British freeports, but Scotland, Wales, and Northern Ireland may develop slightly different freeport policies. The following eight regions in England were successful in the freeport bidding process:

Of these eight freeport regions, four are currently in action, each with three designated tax sites (apart from Humberside, where the third proposed site is yet to be officially designated). Most of the freeport designated sites came into effect on 19th November 2021, with the East Suffolk freeport following from 30th December 2021.

There is currently also a Teesside customs site and a Thames customs site in operation. These are by no means the only designated sites within these four areas, as more are likely to be added along with sites within the remaining four freeport zones – so keep an eye on the government website.

What are the tax benefits of freeports?

Companies operating within freeport designated sites in England will be eligible for temporary tax exemptions and reliefs, which is the main draw for many businesses. These tax incentives include:

In the first year of investing in plant or machinery for use within the freeport zone, companies could receive a 100% deduction or 130% ‘super-deduction’ on qualifying assets (both main and special).

Qualifying buildings and structures within freeport sites
will receive an increased 10% allowance for both Corporation Tax and Income Tax, relieving investments 3 times faster than the national rate.

Purchases of land or property within a freeport for commercial purposes may qualify for full stamp duty land tax (SDLT)
relief. This means some developments won’t have to pay the 2% or 5% rates.

All new businesses and some expanding businesses in freeport designated sites may qualify for a 100% exemption from business tax rates, applicable for 5 years from an accepted application.

From April 2022, new hires working in a freeport designated site at least 60% of the time could be eligible for an employer NICs rate of 0% on earnings up to £25,000 a year, applicable for 36 months.

These tax benefits will only be available until 30th September 2026. The NICs relief is still subject to Parliamentary approval, but there are also plans to extend it for a further 5 years until April 2031.

In addition, there are customs benefits for businesses operating within freeport designated customs sites. These include a simplified import process, with no customs tariffs due unless the imported goods enter the UK domestic market. Imports that are processed into finished goods within the freeport and then re-exported will also avoid UK tariffs (this is subject to UK trade agreements, meaning that customs and taxes may still be payable upon reaching the destination country).

When are more UK freeports opening?

Since the government intends to operate at least three designated tax sites and perhaps also three designated customs sites in each of the eight freeports in England, we can expect regular updates on new designations and operative dates via the government website as we progress into 2022.

The government also intends to open at least one freeport
each in Wales, Scotland, and Northern Ireland. Considering the ongoing discussions with the EU regarding the Northern Ireland Protocol, there is likely to be separate guidance for customs procedures and tax reliefs over the Irish border.

If your business is within a planned freeport region, and you require tax advice or any other type of accounting assistance, please contact GBAC. Our experienced accountants in Barnsley are just a phone call away on 01226 298 298, or you can email us at info@gbac.co.uk and we’ll be in touch.

Back in September 2021, the UK government’s first Autumn Budget in three years suggested that there would be no new Inheritance Tax (IHT) reforms and minimal Capital Gains Tax (CGT) reforms.

Following the second Tax and Administration Maintenance Day of 2021, on 30th November, the government responded to reviews of the tax system by the Office of Tax Simplification (OTS).

In a letter addressing the recommendations for updating Capital Gains Tax (CGT) and Inheritance Tax (IHT), the UK government accepted several CGT changes, and upheld an earlier objective to amend the Excepted Estates regulations for estates that are exempt from IHT from January 2022.

Read on to learn more about the new rules for CGT and IHT, and when they come into effect.

How is IHT changing in 2022?

While the OTS made 11 recommendations for IHT
reforms, the government decided not to pursue them, as the IHT threshold
is already frozen at £325,000 until 2025-2026. While the IHT interest rate is increasing from 2.6% to 2.75% from 4th January 2022, the Inheritance Tax rate itself is staying the same. This means that the standard 40% tax still applies for any inheritance valued above £325,000.

However, the government announced its intention to change the IHT reporting rules for non-paying estates earlier, in March 2021. The Excepted Estates Amendment applies from 1st January 2022. Previously, you had to notify HMRC when inheriting an estate, even if its value was below £325,000.

The amended rules should ease this administrative burden, as grieving families in this situation will no longer need to submit an IHT
form to gain probate or confirmation. If the estate value is less than the threshold for owing IHT, the beneficiary will only need to provide the estate value information directly on the probate or confirmation form, which they can calculate using the IHT Checker tool.

More estates held in trust should now find themselves exempt from IHT, as the limits for chargeable properties and aggregated transfers are increasing from £150,000 to £250,000. The gross estate limit is also increasing from £1 million to £3 million (though not for trust assets that pass to a spouse or charity). These increases only apply if the deceased person had their permanent home in the UK.

Additionally, the ‘prescribed period’ of IHT liability
is increasing from 1st January 2022 to bring the rest of the UK in line with Scotland’s practices. UK court services previously had 1 week from issuing probate or confirmation to notify HMRC, but this is now extended to 30 days. Rather than 35 days, HMRC will now have 60 days to investigate the estate before discharging it from IHT liabilities.

How is CGT changing in 2022?

The OTS had 14 recommendations for Capital Gains Tax reform, of which the government only accepted 5. However, a further 5 are under review and may be considered for implementation in the future. Here’s a breakdown of what the government accepted, put on hold, and rejected for CGT:

Accepted CGT reforms

CGT reforms for further consideration

Rejected CGT reforms

To be clear, the rejected reforms will NOT be happening, the reforms under consideration may still happen at some point, and the accepted reforms are in development. Extending the deadline for reporting and paying CGT
is the only recommendation that is already in force (from October 2021).

What to do if these tax changes affect you

These relatively minor tax adjustments are mostly good news, but they will only affect taxpayers in specific circumstances. The IHT
changes will affect those administering estates of the deceased worth more than £325,000 in England, Wales, and Northern Ireland, while the existing CGT extension affects anyone who has a duty to report capital gains and/or pay tax on them.

As for the CGT reforms still in the works, we cannot be certain who they will impact and what the extent will be under the government undertakes further consultations, which should happen at some point in 2022. In the meantime, if you need advice on Capital Gains Tax or assistance with Inheritance Tax from expert accountants in Barnsley, please contact GBAC by phone or email. Our accountants in Barnsley are happy to help, while we also have accountants in Leeds and accountants in Sheffield too.

While the newer system of postponed import VAT accounting
has been in place since early 2021, it still isn’t without its problems. Unfortunately, import VAT confusion is ongoing, as many businesses continue to experience issues like the following:

Inability to access monthly statements

Some importers have trouble accessing monthly statements for import VAT when logging on through the Government Gateway. If this is happening to you, try clicking the ‘start now’ button at the bottom of this page to get your import VAT statement.

Remember that online VAT statements are only available as an online PDF for 6 months after they’ve been published. This means you must download the import VAT documents within this time, and store them securely for your annual and long-term records.

Lack of feedback from freight agents

You may have been importing goods without receiving any import VAT paperwork, so haven’t made import VAT payments. In this case, it’s likely that the freight agent switched to postponed VAT accounting by default, and may not have informed you.

If you haven’t already done so, then you’ll need to sign up for the Customs Declaration Service as soon as possible. You’ll only have access to the previous 6 months of import VAT statements, and you’ll need these for your tax returns in order to reclaim VAT.

Missing VAT figures on invoices

Have you been receiving invoices for imported goods without a VAT number? This can be confusing and worrying if freight companies are adopting different approaches, and aren’t getting in touch with you to let you know how their VAT accounts are operating.

Usually, postponed VAT accounting will deal with import VAT returns, as previously explained. However, freight agents might pay the VAT to release the imported goods, in which case HMRC should send you a C79 form to reclaim the VAT that was paid.

Not receiving C79 forms

If you haven’t received a C79 VAT certificate from HMRC, it could have gotten lost in the post, or HMRC may not have issued one because the freight company defaulted to postponed accounting. This can complicate finding out how much VAT you’ve paid and how much input tax you can reclaim.

You should receive a C79 in the mail if the import VAT declarations were made using the CHIEF service (Customs Handling of Import and Export Freight). If they used the Customs Declaration Service, you should be able to access the certificates online.

Incorrect coding in import VAT software

It’s always important to use the correct VAT codes, but it’s especially important for businesses with partial exemptions, who might not be able to recover the VAT without the appropriate coding. If you have any doubts about your import VAT coding, it’s best to get advice from your software provider.

Every accounting package might have its own approach to postponed VAT, but you can always check when postponed VAT accounting is possible here. Of course, should you need import VAT assistance from our accountants in Barnsley, we’re always available to help if you get in touch with GBAC.

As recommended by the Low Pay Commission, the National Living Wage will increase to £9.50 an hour from next April. This applies to workers aged 23 or above, but the minimum wage rates for apprentices and workers between 16 and 22 years old is also increasing in 2022.

With these National Minimum Wage rises, the government should be back on track to achieve a minimum wage that’s level with two-thirds of the average earnings in the UK by 2024. These changes are intended to help the lowest-paid workers to recover from the pandemic.

Minimum wage changes in 2022

So, how much is the National Minimum Wage increasing next year? Check out the table below to easily check the pay rise that your age group can expect from 1st April 2022.

Worker Age

Current Amount

Amount in 2022

Increase (%)

23 and above

£8.91

£9.50

6.6%

21 – 22

£8.36

£9.18

9.8%

18 – 20

£6.56

£6.83

4.1%

16 – 17

£4.62

£4.81

4.1%

Apprentice

£4.30

£4.81

11.9%

For full-time workers over 23, this 59p-an-hour increase should translate to an extra £1,000 of salary a year, which we’re sure you know can make a massive difference.

There will be an 11.9% uplift (51p per hour) for apprentice wages, bringing the hourly rate in line with the minimum wage for the youngest workers. This rate will apply for apprentices either aged 19 years old or in the first year of the apprenticeship.

What is the Real Living Wage?

It’s easy to confuse the different Minimum Wages and Living Wages, but they aren’t quite the same thing. To clear things up, the National Living Wage is the statutory minimum for workers aged 23 and over, while the National Minimum Wage rates apply to age brackets from 16 to 22 years old.

The Real Living Wage, also referred to as the UK Living Wage, is independently calculated to reflect current living costs and is not legally enforced – though at least 9,000 employers voluntarily pay this rate. The London Living Wage is also different, reflecting the higher costs of living in the capital.

Common misconceptions about wage deductions

HMRC has helpfully published a Minimum Wage Checklist for employers, ensuring that no employee is being purposefully underpaid. Common causes of underpayment include wrongful deductions for employer benefits, job-related expenses, and failure to pay for training or overtime.

Currently, providing accommodation is the only benefit that counts towards minimum pay, and the maximum offset for this will also increase to £60.90 a week next year (£8.70 a day).

If you’re an employer in need of payroll services
to calculate the correct wages and tax for your employees, or an employee yourself with HMRC enquiries about whether you’re being paid enough, you can contact GBAC for accounting assistance.

Despite previous talk of Capital Gains Tax reform, the only change confirmed by Chancellor Rishi Sunak’s Autumn Budget 2021 speech is an extension of reporting and payment deadlines.

From 27th October 2021, if you sell a property in the UK, then you’ll have 60 days from the date of completion to report your gains and pay the tax. The deadline was previously 30 days, which is a tight turnaround for most taxpayers (and unfortunately still applies to sales before the change).

This also applies for non-UK residents selling property within the UK, who were finding it particularly difficult to set up a Government Gateway account in time to report and pay their Capital Gains Tax. Non-UK residents must report and pay CGT for both residential and commercial property sales.

Are CGT rates increasing in 2022 – 2023?

No: at the moment, this administrative modification is the only change to Capital Gains Tax until April 2023. The CGT allowance (tax-free maximum, called the Capital Gains Tax Annual Exempt Amount) is due to remain at £12,300 until 2025-2026, continuing to stay at the 2020-2021 level.

The CGT rates will also remain the same, at 28% for residential property gains and 20% for other chargeable assets if you’re a higher rate taxpayer. For basic rate taxpayers, the amount of CGT you have to pay over the allowance depends on your taxable income and the size of the gains.

The income tax rates are also set to stay the same until 2025-2026, with the Personal Allowance for tax-free earnings fixed at £12,570. There is no tax-free allowance if you earn more than £125,140 a year. The basic rate limit (20%) will be £37,700 for this time, while the higher rate (40%) and the Upper Earnings Limit for National Insurance Contributions will stay at £50,270.

How do I know if I owe Capital Gains Tax?

One of the ongoing issues with CGT is that many taxpayers are simply unaware of the tax reporting requirements when selling certain types of property or assets. Accountants may not be informed of a property disposal until it’s time to submit a tax return, which could be almost 2 years later.

Even those who submit self-assessment tax returns may miscalculate and end up paying the wrong amount. In theory, the tax calculation should factor in a refund for overpayment of Capital Gains Tax, but this doesn’t always happen – leaving frustrated taxpayers trying to phone up HMRC.

If you believe that you have been or will be affected by this change to CGT, or if you’re still unclear on what counts as capital gains, you might benefit from getting in touch with the team of experts at GBAC. We can provide tax consultancy services
and help you to resolve your HMRC enquiries.

According to the Autumn Budget 2021, business rates in England are due to be frozen until 2023, with business rate discounts available for commercial properties in certain sectors.

Detailed guidance has yet to be published, but let’s take a look at some of the measures announced by Chancellor Rishi Sunak to relieve the financial burden of the pandemic for businesses.

Business rates 2022-2023

For another year, the government is going to freeze business rates multipliers at the current levels. The standard rate will remain at 51.2p and the small business rate will remain at 49.9p until 2023.

These multipliers will be used to calculate business rate bills for commercial properties below £51,000 in value, which are likely to be ineligible for other small business relief.

They will also introduce temporary business rate relief
for 2022-2023. Eligible retail, hospitality, and leisure businesses can get a 50% discount on business rates, up to a cap of £110,000 per business.

This is less than the 66% retail discount for 2021-2022, but it will still be helpful for medium businesses who can’t get small business rates (for property values between £12,001-£15,000).

Transitional relief will also prevent business rates from fluctuating too much for the next year. Rates can’t increase after revaluation by more than 15% for small businesses (up to £20,000) or 25% for medium businesses (up to £100,000) – subject to subsidy controls and London uplifts.

Tax reliefs for creative industries and charities

Museums and Galleries Exhibition Tax Relief (MGETR)
will be extended until March 2023 to support charitable companies running museum or gallery exhibitions – expenditure after this isn’t eligible.

MGETR and Theatre Tax Relief (TTR) will temporarily increase by 25% from 27th October 2021 to 31st
March 2023. Touring production tax relief will rise from 25% to 50%, and non-touring production tax relief will increase from 20% to 45%. They will reduce to 35% and 30% respectively on 1st April 2023.

Orchestra Tax Relief (OTR) will also increase from 25% to 50% from now until March 2023, reducing to 35% for the 2023-2024 tax year. All MGETR, TTR, and OTR rates will return to pre-increase 2021 levels from 1st April 2024 (decreasing back to either 25% or 20%).

From 1st April 2022, production companies can switch between Film Tax Relief (FTR) and High-End TV Tax Relief (HETR) if they change their distribution method, so they don’t lose out on tax relief.

The government plans to look into increasing safeguards for these tax relief options from 1st April 2022, to ensure that businesses aren’t abusing the system.

Long-term measures for business rates

The 2021 Autumn Budget announcements aren’t quite the radical business rate reform many were hoping for, but further measures being taken in 2023 and onwards will help in the future.

For example, the government plans to increase revaluation frequency to every three years, instead of every five years. They’re also aiming to introduce further exemptions and relief for eligible property improvements that would otherwise increase the property’s rateable value.

This includes a 100% improvement relief for twelve months. The government will outline eligibility and implementation by 2023 and review it in 2028. Most machinery upgrades won’t affect rateable value, but adding assets and amenities such as CCTV or bike sheds might.

Similarly, targeted exemptions for renewable energy
plants and machinery will apply between April 2023 and March 2035, with 100% relief for low-carbon heat networks. This means that you could get business rate exemptions when installing electric vehicle charging points or solar panels.

You can find all the current business rate relief details for English properties on the government website. Should you need assistance with business valuations or HMRC tax enquiries, please get in touch with the accounting experts at GBAC.