The AIA is an allowance for most businesses regardless of size that offers 100% tax relief on most fixed asset expenditure in the year of purchase. The measure was introduced in April 2008, and is designed to boost growth, particularly for small and medium sized businesses. It is a very valuable relief that can make a real difference to the size of an asset-investing business’s tax liability; it should always be used when possible.

Companies that have a financial year that spans the period where the allowance changes take effect will have to limit the AIA for that year worked-out on a pro-rata basis. You can find more detail on AIA and the recent increase by following this link.

From April 2013 employers will pay one HMRC bank account, affecting employers who make payments to HMRC by:

• Bacs Direct Credit
• Faster Payments by online/telephone banking
• CHAPS

All should make their payments to a single bank account from April 2013. From month 1 of the 2013-14 tax year payments should be made to the Accounts Office Cumbernauld account. HMRC has started to send employers information about this change ready for 2013-14.

Please find the relevant HMRC webpage page here. And for your reference, the Cumbernauld bank account details are available here.

Finally, please be aware that all employers are still permitted to make payments by cheque, using the (now white) payslip booklet, although these are not now automatically despatched to new employers.

Although widely regarded as a beneficial exercise for most established companies, the cost of a statutory audit can be relatively high, and so most companies that are not statutorily required to have one, don’t. In order to qualify for exemption, companies may now satisfy two of the following three criteria: 1) have annual turnover less than £6.5 million; 2) have assets worth no more than £3.26 million; 3) have 50 or fewer employees on average in any one accounting period.

Note that a statutory audit may still be required if more than 10% of shareholders deem it necessary.

Other useful-sounding changes focus on subsidiary companies: trading subsidiaries may now qualify for exemption, and instead rely on the statutory audit of the parent (rather than having the subsidiary audited separately as now), and dormant subsidiaries will not be required to submit (dormant) accounts anymore (presumably ticking a new box on the annual return notifying Companies House)

Further information can be found here, here, and here.

Please find the new rates below.

Aged 21 or Over £6.19 per hour
Aged 18 to 20 (Inclusive) £4.98 per hour
Aged 16 to 17 £3.68 per hour
Apprentices aged under 19 £2.65 per hour
Apprentices aged over 19, but in the first year of the apprenticeship £2.65 per hour

You can find further information on the changes to the NMW here.

The focus of the tribunal was to decide whether HMRC were right to classify the taxpayer’s company vehicle as a car and not a goods vehicle (as the individual sought to do). The vehicle was a Land Rover that had been modified to hold tools and car parts necessary for the individuals’ work as a mobile technician. The rear seats and seat belts were unusable due to the addition of fixed tool boxes in the back. In spite of this however, the tribunal found in favour of HMRC as the alterations did not “fundamentally alter its structure”, and so the vehicle was to be taxed as a car.

Further information on this case can be found here.

HMRC’s guidance (available here) already provides that a road vehicle will be considered a car for tax purposes unless it meets certain criteria. Our view has always been that in order to be taxed as a van, the vehicle must have been constructed primarily for the purpose of carrying goods – anything less than this may well be challenged successfully.

The Gift Aid Small Donations Scheme will enable charities to claim top-up payments of 25p for every pound donated on individual donations of £20 or less, on up to a maximum of £5,000 of donations, without the need to collect donors’ details. To help prevent fraud all claimant organisations must have a pre-existing history of making claims under the existing Gift Aid scheme.

For more details, including outcomes of the consultation as they are announced please follow this link.

Companies that elect to do so will from April 2013 be able to pay a reduced rate of corporation on all profits derived from qualifying intellectual property (QIP). The definition of QIP in given as any UK or EPO patents, supplementary protection certificates, regulatory data protection, and plant variety rights. In order to qualify, the company has to have made a significant contribution to either an item protected by a patent, or a product which incorporates a patented item.

The rate of tax payable for eligible companies will be reduced in stages, starting from 1st April 2013 at a rate of 15.2% (for main rate or 13.2% for small profits rate) instead of the standard 24% corporation tax rate. The tax rates will decrease annually until 2017 when the rate charged will be just 10% (or 8.7% for small profits rate) on profits attributable to patents. There is a further election small companies may make to forego some of the complexity involved in calculating the profits attributable to each patent held.

All companies that are in possession of patents should seek advice on whether they can take advantage of these new rules. Interestingly, ‘Brand IP’ is mentioned in passing in one of the Treasury documents, which may have been in error but we are eager to know more. Further details should be provided in the full 2012 Finance bill when that is published.

You can find out more now by following these HMRC links: http://www.hmrc.gov.uk/tiin/tiin726.pdf or http://www.hmrc.gov.uk/budget-updates/march2012/patent-box-tech-note.pdf

Businesses are also to be given the opportunity to defer 60% of the increase in their 2012-13 business rate bills, and repay this amount equally across the following two years.

Firstly, the maximum amount that can be invested into any one qualifying company per year will rise to £10 million (from £2m now); the maximum amount an individual can invest into any one company in any one year will also rise to £1million (from £0.5m now).

Another positive is that more companies will be eligible for EIS investment as the employee limit will be increased from a maximum of 50 employees to 250. Details as to which companies can use the EIS scheme are available at: http://www.hmrc.gov.uk/eis/part2/2-1.htm

As before, small or medium sized enterprises (SME’s) will benefit most from the changes, which will include another increase in the R&D tax credits rate, from 200% presently to 225%, from April 2012 (130% for large companies).

The requirement for a minimum project expenditure of £10,000 in any one year period to qualify for the relief will also be removed, affecting accounting periods ending on or after 1st April 2012.

Futher information on the proposed changes can be found here and here.