What will 2019 mean for your business?

2019. A new year, new legislation, and new opportunities for you and your business. Tax regulations and Budget implementations may not have been at the forefront of your mind over the festive period – and who can blame you? However, it’s important to be aware of the impact that legislative change can have on how your company operates. So, here are five things which may affect your business, or your self-employment, over the next 12 months.

1. Making Tax Digital

Making Tax Digital (MTD) is an important part of the Government’s long-term tax plan. As of April 2019, most VAT registered businesses with a taxable turnover above the £85,000 threshold will be required to keep digital VAT records. Figures will need to be reported to HMRC on a regular basis. However, businesses which fall below this threshold will not be obliged to do this until next year.

MTD will not be mandated for taxes, other than VAT, until at least 2020. Though, if you’re self-employed, you can voluntarily use the software now. At Danbro, we’re specialists in cloud-based accounting, with over 98% of our clients now Making Tax Digital. You’ll get access to online accounting packages, such as FreeAgent and QuickBooks Online. Both platforms include an easy-to-use app, so you can track your income and expenses straight from your smartphone, recording transactions on the go.

And, because so many of our clients are already benefitting from this online accountancy technology, the transition to Making Tax Digital is not as difficult as you might think.

2. IR35 in the Private Sector

Intermediaries Legislation, or IR35 as it’s more commonly known, is a contentious issue for the Government. This follows the slightly problematic public sector implementation in 2017. The Chancellor revealed in the October Budget that the Government had delayed their plans for off-payroll reform in the private sector until April next year, at the earliest.

Further consultations are scheduled later in the year and, though IR35 does not apply to small businesses, for those whom the legislation will apply, 2019 is an opportunity to prepare and get ready for when it comes into force next year.

Here at Danbro, we’re experts in IR35. So, we’ll keep you up to speed with the latest industry news, and how it might affect you.

3. The Taylor Review

Last month, the Government released the ‘Good Work Plan’. It includes a response to the review into modern working practices conducted by Matthew Taylor, Chief Executive of the Royal Society of Arts. If your business involves members of the UK’s temporary or contingency workforce, or, if you’re a contractor employed by an Umbrella Company, it’s worth familiarising yourself with the plan and its developments. Some key points include:

• The repealing of Swedish Derogation – a model of employment where an agency hires a worker directly, rather than being the middleman between a worker and a client company.
• Plans to better align employment status for tax and status for employment rights.
• The announcement that Umbrella companies are to be regulated by the Employment Agency Standards Inspectorate.

Reception to the plans were mixed, with Julia Kermode, FCSA Chief Executive, referencing the ‘challenge’ faced by certain sectors.

“We hope that this new requirement will go some way towards stamping out poor practices, in particular disguised remuneration schemes, which place workers at significant personal financial risk,” she said. “However, it will be challenging for recruitment businesses to implement, given that they will be responsible for producing information on behalf of the supply chain, if intermediaries are involved.”

We’ll be covering the Taylor Review, and its potential implications, in more detail over the coming months.

4. Budget 2018

• Following the announcement in last year’s Autumn Budget, this week (January 1^st) marked the temporary increase in the Annual Investment Allowance. The limit has increased for a two year period from £200,000 to £1,000,000.

• As of April this year, the UK’s National Living Wage will increase by more than 4%, from £7.83 to £8.21.

• In the same month, smaller retail businesses will see their business rates cut by a third for two years. The hope is to provide much needed support to the struggling high street economy.

• The higher rate tax threshold will increase to £50,000 – a year ahead of schedule. So, any earnings over £50,000 will be subject to 40% in Income Tax. There’s no change in the additional rate threshold, which will remain at £150,000 with an Income Tax rate of 45%.

• Personal tax allowance will rise to £12,500 from April 6^th 2019, up by £650.

• From October, a ‘domestic VAT reverse charge’ will be introduced for the UK construction industry. The charge will apply where the recipient makes an onward supply of the same construction services, and exact changes will be published later in the year.

5. Entrepreneurs’ Relief

Entrepreneurs’ Relief serves to reduce the rate of Capital Gains Tax, from 20% to 10%, on disposals of certain business assets. In last year’s Budget, the Government introduced two significant changes to how claims are made under Entrepreneurs’ Relief. This included a longer holding period for shares and business assets held by individuals. These will need to be held for a minimum of two years – which is double the current term – before the individual can claim Entrepreneurs’ Relief on any disposals.

This amendment will only apply to disposals made on or beyond April 6^th. However, people who’ve held assets or shares for one to two years at the date of disposal won’t be eligible.

We’ll understand, deliver, and grow together.

Are you a sole trader and would like to look into incorporating your business? At Danbro, you’re part of the family. Whether you work for yourself, run a business, own property, or if you’re just looking for some straightforward tax advice, we’ll have a service to suit you.

We believe that accounting is about more than just number crunching. It’s about developing great relationships, overcoming obstacles, providing solutions, and helping your business achieve its absolute potential. We’ve been helping businesses of all sizes with their finances for 20 years now, and we appreciate that outsourcing even the smallest part of the financial organisation of your business requires a great deal of confidence in your provider. That’s why we make switching swift, simple, and stress-free.

You can learn more about Danbro’s award-winning accountancy services – or join us today – by getting in touch with our dedicated team, or by calling 01253 600 150 now. We also have a range of free guides and resources for you to download and peruse at your leisure. And, for the very latest on tax, employment legislation, and the world of business finance, be sure to check out the Danbro website and social channels throughout the year.

All that’s left is to wish you a Happy New Year from everyone here at Danbro. We hope 2019 is a successful and rewarding one for you, your business, and your family.