New tax rules take effect

Thursday 2 April 2015

To mark the start of the new financial year, Her Majesty’s Revenue and Customs (HMRC) have announced that changes to taxes have come into effect. There are a number of adjustments that will be of great interest to the self-employed and contractors, particularly when it comes to more favourable business rates.

The first of these is the doubling of the Small Business Rate Relief scheme for a further year in England. This means that businesses with only one property with a rateable value of £6,000 or less remain eligible for 100 per cent relief - effectively exempting them from business rates.

Those using a single property where the rateable value is between £6,000 and £12,000 are also eligible for relief calculated on a sliding scale basis. It’s also worth remembering that if you have acquired an additional business property, you will continue to receive your previous relief for the year after the expansion.

In addition to this, the business rates discount offered to shops, pubs, cafes and restaurants in England with a rateable value of under £50,000 has been raised from £1,000 to £1,500. The small business multiplier rate has also been adjusted from 74.1p to 48.0p, which includes the two per cent interest cap. For comparison, the standard business multiplier rate has also increased from 48.2p to 49.3p.

If you occupy a building with a rateable value of £18,000 or less, you are eligible for small business rates. The maximum rateable value rises to £25,000 for properties in the Greater London area.

The rules for businesses with more than one property remain the same, meaning that companies or sole traders with two buildings that each have a rateable value of less than £2,600 are still eligible for small business rates relief. This is worked out by adding the values of the two properties together, then applying the relevant amount of relief to your main property.

The changes were announced in chancellor George Osborne’s Budget 2015, and are designed to help small local businesses compete with both big chain retailers and international online companies that often pay less tax. It is hoped that the rebalancing will help bring economic regeneration to regions across the country.

Control of small business rates and associated relief schemes in Wales has now been devolved to the Welsh National Assembly, as reported by the BBC. While finance minister Janice Hutt welcomed the “new flexibilities” the change has brought, it has been confirmed by economy minister Edwina Hart that the system will continue to mirror the English model for at least another year.

For contractors hunting for an economical form of transport, vehicles run on methanol are an increasingly viable option, as the fuel duty on this substance has been reduced to 9.32p per litre. However, anyone considering this route should compare the running costs with petrol, diesel and electric versions. This is all the more important as the price of oil seems likely to remain down for some time.


By Victoria McDonnell

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