By Mel Hackney

Many people have come across childcare vouchers in their employment – essentially, this is where an employer can ‘award’ vouchers which are paid tax and NIC free.

However, HMRC have been intending on abolishing this scheme for some time, recognising the lack of equality between employed and self-employed individuals in this area, and the old childcare voucher scheme is now closed to those who were not in it already.

The alternative to this is called ‘Tax Free Childcare’ and is in theory much simpler to administer than the old childcare voucher scheme.

You can get up to £500 every 3 months (£2,000 a year) for each of your children to help with the costs of childcare. The government will pay £2 for every £8 you pay your childcare provider via an online account, which you can use it to pay for approved childcare.

In addition, you can get Tax Free Childcare at the same time as 30 hours free childcare if you’re eligible for both.

To find out more information and for help with any advice in this area, including whether to stick with an existing voucher scheme which you are part of, or to move on to Tax Free Childcare, please contact us!

By Mel Hackney

There have been some pretty significant changes to capital allowances recently, and it’s important to consider these when making investment decisions.

A capital allowance is a deduction from trading profits which is allowable for tax, therefore reducing yours or your company’s tax liability.

Firstly, from October 2018, capital allowances for structure and buildings is available. Businesses that incur qualifying capital expenditure on structures or buildings used for qualifying activities will be able to claim an allowance to encourage investment in the construction of new structures and buildings and the improvement of existing ones.

This will be a deduction from taxable profits at an annual rate of two percent.

In addition, the Annual Investment Allowance (AIA) has been temporarily increased from £200,000 to £1,000,000 from 1 January 2019 to 31 December 2021.

The AIA is a 100 per cent upfront deduction from taxable profits that applies to qualifying expenditure on plant and machinery up to a specified annual limit or cap. As such this increase could lead to significant savings.

In order to maximise the benefit from this it is crucial to plan carefully for the purchase of capital items as, depending on the timing of the year end of the business, there are limitations which sit around these maximum allowances in order to account for transitional rules.

If you are thinking of making a capital investment of any type, give us a call and we can advise on what reliefs may be available, plus the optimal timing of the expenditure.