New rules and regulations small business owners need to know in 2023
Posted: Thu 1st Jun 2023
There are several new rules and regulations small business owners need to be aware of in 2023. Here's a summary. We are keeping this post updated.
1 January 2023: New HMRC late submission penalty system
The government is changing the sanctions for late submission of tax returns and late payment of taxes.
Financial penalties will no longer be automatically applied. Instead, taxpayers will incur a certain number of points before a fine is levied.
HM Revenue & Customs says the new system is designed to only penalise those who persistently miss their obligations rather than those who make occasional mistakes.
The changes initially apply to VAT customers for accounting periods beginning on or after 1 January 2023.
Useful resources:
1 April 2023: Corporation tax increase
Corporation tax increased from 19% to 25% for businesses with profits over £250,000.
Businesses with profits below £50,000 pay a 19% small profits rate. Businesses with profits between £50,000 and £250,000 pay the main rate reduced by a marginal relief which provides a gradual increase in the effective corporation tax rate.
1 April 2023: Energy support for businesses
The Energy Bills Relief Scheme, which provides a 50% discount on energy bills for businesses, closed on 31 March and was replaced with the new Energy Bills Discount Scheme from 1 April 2023 until March 2024.
The new scheme provides significantly reduced support.
Useful resources:
1 April: Research and development tax relief
For expenditure on or after 1 April 2023, the SME R&D tax relief scheme decreased from 130% to 86%, while the SME credit rate will decrease from 14.5% to 10%.
In the 2023 Budget the government announced an increased rate of relief for loss-making R&D intensive SMEs. This applies to around 20,000 companies investing at least 40% of their spending in R&D. They will receive £27 from HMRC for every £100 of R&D investment.
1 April 2023: National Living Wage and National Minimum Wage increases
The hourly rates increased as follows:
Workers aged 23 and over: £10.42 (up from £9.50)
Workers aged 21 and 22: £10.18 (up from £9.18)
Workers aged 18-20: £7.49 (up from £6.83)
Workers aged under 18: £5.28 (up from £4.81)
Apprentices: £5.28 (up from £4.81)
Useful resources:
1 April: Full expensing capital allowances
Replacing the the super-deduction, which ends on 31 March 2023, is a new full expensing first year allowance, which runs from 1 April 2023 until 31 March 2026.
This is less generous than the super-deduction but it means that companies can write off the full cost of qualifying main rate plant and machinery investment in the first year of investment.
Useful resource:
1 April 2023: Business rates
Business rates (also known as non-domestic rates) are based on a property's 'ratable value'. Rateable values are regularly reassessed in a process known as a 'revaluation'.
The next revaluations of non-domestic properties in England, Scotland, Wales and Northern Ireland apply from 1 April 2023. In England, Wales and Scotland, ratable values reflect the property market at 1 April 2021 and in Northern Ireland, on 21 October 2021.
Useful resource:
1 April 2023: Business rates in England
As announced in the government’s 2022 Autumn Statement, business rates multipliers for 2023-24 were frozen at 49.9p and 51.2p, instead of the previously planned increases of 52.9p and 54.2p. The government said this means bills will be 6% lower than without the freeze, before any reliefs are applied.
The Retail, Hospitality and Leisure (RHL) relief scheme increased from 50% to 75% for 2023-24, up to £110,000 per business. The government said it amounts to a £2.1bn saving for around 230,000 business properties.
A £1.6bn Transitional Relief Scheme was introduced that caps bill increases caused by changes in rateable values at the 2023 revaluation. The 'upward caps' will be 5%, 15% and 30%, respectively, for small, medium, and large properties in 2023-24. The government said 700,000 businesses will be supported by this scheme over three years.
1 April 2023: Business rates in Wales
The business rates multiplier was frozen at 53.5p.
A transitional relief applies to all properties that see their business rates bill increase by £300 or more as a result of the 2023-26 revaluation. The scheme will reduce the increase by 67% in 2023-24, 34% in 2024-25, with the property being liable for the full bill in 2025-26.
The Retail, Hospitality and Leisure (RHL) relief scheme increased from 50% to 75% for 2023-24, up to £110,000 per business. Businesses need to apply for the relief via their local authority.
Useful resource:
1 April 2023: Business rates in Scotland
The 'basic property rate' was frozen at 49.8p, with two higher rates of 51.1p and 52.4p.
The Small Business Bonus Scheme (SBBS) relief was reformed and extended. 100% relief is available for properties with a rateable value of up to £12,000 and the upper rateable value for individual properties to qualify for SBBS relief will be extended from £18,000 to £20,000.
SBBS relief for properties with a rateable value between £12,001 and £20,000 is tapered: relief tapers from 100% to 25% for properties with rateable values between £12,001 to £15,000; and from 25% to 0% for properties with rateable values between £15,001 to £20,000. Cumulative rules remain in place including the £35,000 cumulative rateable value threshold. Car parks, car spaces, advertisements and betting shops are excluded from eligibility for SBBS from 1 April 2023.
Small Business Transitional Relief means for those losing or seeing a reduction in reliefs, the maximum increase in the rates liability relative to 31 March 2023 will be capped at £600 in 2023‑24, rising to £1,200 in 2024‑25 and £1,800 in 2025‑26.
Useful resource:
1 April 2023: Business rates in Northern Ireland
The non-domestic rate has been frozen at 2021-22 levels.
The Small Business Rate Relief (SBRR) scheme has been extended for 2023-24.
1 April 2023: Increase to Plastic Packaging Tax
The charge for the Plastic Packaging Tax increased from £200 per tonne to £210.82 per tonne.
The tax applies if you:
expect to import into the UK or manufacture in the UK 10 tonnes or more of finished plastic packaging components in the next 30 days.
have imported into the UK or manufactured in the UK 10 tonnes or more of finished plastic packaging components in the last 12 months.
Useful resource:
2 April 2023: Statutory parental leave increases
Statutory maternity, adoption, paternity, shared parental, adoption and parental bereavement pay increased to £172.48 per week (up from £156.66).
2 April 2023: Statutory sick pay increase
Statutory sick pay increased to £109.40 per week (up from £99.35).
Useful resources:
6 April: Reduction in dividend allowance
The tax-free allowance for dividend income reduced from £2,000 to £1,000 from 6 April 2023 and then to £500 from 6 April 2024.
Useful resource:
6 April 2023: Seed Enterprise Investment Scheme
The limits in the Seed Enterprise Investment Scheme, which encourages investors to back start-ups by providing tax relief, increased as follows:
The ceiling that applies to the investment a company can raise in the relevant period and on which investors can claim relief - from £150,000 to £250,000.
The limit that applies at the date of investment on the "gross assets" a company can have - from £200,000 to £350,000.
The age limit that applies to the definition of a company's "new qualifying trade" at the date of investment - from two years to three years.
The annual limits that apply to the investment amount on which individuals can claim income tax and CGT re-investment reliefs - from £100,000 to £200,000.
1 October 2023: Ban on single-use plastics in England
A range of single-use plastics, such as cutlery, will be banned in England from 1 October 2023.
'Single use' means the item is meant to be used only once for its original purpose.
The ban includes:
online and over-the-counter sales and supply
items from new and existing stock
all types of single-use plastic, including biodegradable, compostable and recycled
items wholly or partly made from plastic, including coating or lining
Exemptions:
You can still supply single-use plastic plates, bowls and trays if either of the following apply:
you are supplying them to another business
the items are packaging (pre-filled or filled at the point of sale)
Examples include:
a pre-filled salad bowl or ready meal packaged in a tray
a plate filled at the counter of a takeaway
a tray used to deliver food
You can still supply food or drink in polystyrene containers if it needs further preparation before it is consumed. Examples include:
adding water
microwaving
toasting
Supply of single-use plastic cutlery and balloon sticks will be completely banned with no exemptions.
Fines and inspections:
If you continue to supply banned single-use plastics after 1 October, you could be fined.
Inspectors from local authorities can visit premises to check that the rules are being followed. They may make test purchases, speak to staff and ask to see records
Inspectors can order a business to cover the cost of the investigation if it breaks the law.
Complaints about a business breaking the law can be made to Trading Standards.
Useful resource:
30 November 2023: Closure of Customs Handling of Import and Export Freight (CHIEF) system
CHIEF, which is used to identify goods for border checks, will close to export declarations on 30 November 2023. It closed to import declarations on 30 September 2022.
From 1 December 2023, all import and export declarations need to be made using HMRC's Customs Declaration Service (CDS).
Useful resources:
31 December 2023: Closure of Northern Ireland Trader Support Service
The Northern Ireland Trader Support Service (TSS) was set up to help traders meet their administrative obligations under the Northern Ireland Protocol following Brexit.
The service was originally due to close on 31 December 2022 but the government has extended it until 31 December 2023.
Useful resources:
You might also like…
