HMRC’s recent ‘Government Support’ Email

Finance, HMRC, News, Payroll, Software, Tax,

Several clients have contacted us recently to talk about an email sent by HMRC outlining ‘government support’ options for small to medium businesses, ostensibly to ‘help them invest and grow’.

To clarify, we’re always absolutely in favour of any government measures that help businesses invest and to grow, but feel that this email is more of a PR exercise than solid support. Businesses are struggling with all sorts of challenges at the moment, and the content is misleading.

So, what’s included in the email? Here we look at the headlines and review the relevance of the content:

Claim up to £5,000 with the Employment Allowance

That’s a great headline, and one that any business with employees will be glad to see, BUT any payroll bureau will already have included this increased allowance. It would have been an automatic update in any payroll software following the Spring Statement. 

It’s nothing new and the actual increase this year is actually an extra £1,000, as you could claim £4,000 last year.

You can find out more about the Employment Allowance here.

Get a discount of up to £5,000 on software , with Help to Grow

Help to Grow Digital is a funded programme, but is restricted to 12 months’ costs for certain software, that you have to be purchasing for the first time. We’d definitely recommend clients take a look at it, but only certain software packages are included. The headline figure of £5,000 sounds great, but the actual cost of some of the packages offered is quite low, at less than £50 per month and you can only claim once through the scheme per business. You need to have more than five employees to be eligible.

Help to Grow Management gives you access to a 12 week management course, for a much reduced rate of £750. The eligibility criteria require you to have been operating your business for at least a year and have at least five employees.

If you have any kind of Business Mentor, Business Coach or Outsourced FD, any of which would prompt you to create a business growth plan, this may well be duplication of information, that could take up time you’ll be better spending elsewhere. 

As with the Digital option, we’d definitely recommend you take a look if you do have goals for growth but don’t currently have any of the support mentioned above, but do think carefully about the time you have available, and whether you will actually commit fully to get the benefit before you sign up. 

If you do think this is valid and beneficial use of your time, there is an option being run by Small Business Saturday UK, where Lloyds Bank are sponsoring the £750 cost. 

Get up to half off your business rates

Small retail, hospitality and leisure businesses can benefit from 50% off their business rates bills. The Business Rates Multiplier, which usually rises with inflation, has also been frozen for a year.

The Business Rates adjustment should already be included in your demand from your council, or will be adjusted retrospectively, depending on timing. If you’ve already received this year’s bill, it may well be worth checking that the figure takes account of the frozen multiplier. 

Invest in your Business with Super-Deduction and Annual Investment Allowance

The email reminds business owners that the super deduction allows companies to cut their tax bill by 25 pence for every £1 they invest in qualifying machinery and equipment, including computers, commercial vehicles and office furniture.

It goes on to say that the temporary limit of £1 million Annual Investment Allowance has been extended to the end of March 2023, rather than reverting to the usual £200,000.

Both of these are entirely valid, but they aren’t new, and they aren’t that relevant for smaller businesses. 

If you’re a client – We automatically review all business expenses when we prepare the accounts each year, so you don’t need to worry that you may miss out on these; we’ve got you covered! 

Benefit from a cut in Fuel Duty

Again, the reduction of fuel duty on petrol and diesel by 5 pence per litre until the 23rd March 2023 is a valid saving, but it isn’t new! Businesses have been receiving this saving since the 23rd March, some two months. 

As we mentioned at the outset, we’re all for any support that Government can offer to businesses to help them cope with double digit inflation and the cost of living crisis. What we cannot be positive about are false dawns that don’t actually offer any benefit, and are simply distractions.

If you’re worried that you may be missing opportunities for savings or support, please get in touch. We publish as much as we can in our regular business updates, but are very happy to discuss your unique circumstances if it would be helpful.

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