The last 18 months have not been an easy time for small businesses. From lockdowns forcing them to close completely, to social distancing guidelines preventing them from operating as normal, it's hardly surprising that many small businesses have struggled to survive.
ContentsVAT rate reductionWork allowanceGovernment guaranteed business loansSuper deduction schemePayment deadlineThis has been such a problem across the board that the UK government has had to step in and offer support to businesses that need it most. So whether you're a small business struggling to stay open, or want to know what support network you have in place if things don't go so well in the new year, then this guide is for you. you.
Here's the help we expect to be available to UK small businesses in 2022.
The cost of VAT can be one of the biggest expenses small businesses face. When you buy supplies and products you need to keep running, the costs can soon start piling up.
Therefore, in order to offer additional support and assistance, the government has reduced the VAT rate for certain items for eligible businesses. This primarily includes the hospitality sector and items such as hot/cold food and soft drinks that are consumed on commercial premises.
While this reduction in the VAT rate from 20% to 5% was available for eligible businesses in 2021, we also expect it to be available at 12% until March 31, 2022. However, we recommend that you check whether your small business is eligible. initiative before making any plans or investments.
Employment Benefit is another government program that the UK government has made available to support struggling small businesses. It allows eligible employers to reduce the amount of National Insurance they pay by up to £4,000.
As a company with employees, you must contribute to their national insurance. However, under this scheme you can reduce the amount you pay each time you make your payroll until you reach the rate of £4,000 (or the tax year ends - whichever which comes first). You can check if you are eligible here.
It may be surprising how much the cost of running your own business starts to add up, and while you may feel like a business loan might be just what you're looking for, you may be worried about find the loan that's right for you.
Therefore, the UK government created the Pay As You Grow loan which small business owners can access through their main bank. This is part of their Bounce Back loan program which aims to give small businesses the extra support they need.
But don't worry, these government guaranteed loans don't affect your credit score or negatively affect your credit report as long as you keep up with the repayments and don't miss any deadlines.
One of Rishi Sunak's latest initiatives as part of his 2021 budget, the Super Deduction program encourages small businesses to invest money where it's needed most to help support their future. The initiative can reduce the corporate tax bill by up to 130% on any business investment made over the next 2 years.
So whether your small business is taking advantage of new computer equipment or wants to make a new investment in the air compressor industry, this is a great program to help improve cash flow issues.
Another way small businesses will be helped and supported in 2022 is through the government's Pay Time System. This was announced in the last budget and allows those who self-assess their tax contributions to spread the cost by instalments. This makes it more affordable and HMRC has also removed the 5% payment charge for this payment plan to make it more accessible.
While the thought of being a small owner in 2022 can be anxiety-provoking, there are likely a range of initiatives and programs in place that can help give you the support you need to make the New Year a better one. success.
