Mention the words chips to most people and fried potatoes would come to mind.

Suggesting that there is a growing shortage of chips would no doubt generate a stampede to the local supermarkets. This sudden rise in demand would double up the pressure on farmers to increase supply and within a short time the price of potatoes would soar as supermarket shelves emptied.

Consumers seem to lose all sense of proportion when items they consider are necessities are in short supply. Even if prices rise exponentially, forages to seek out and purchase chip potatoes would likely rank with the pursuit of gold in the Klondike.

It all comes down to elasticity. If there are substitutes for consumer items, shortage of supply will simply encourage buyers to seek out the substitutes. Problems arise when there are no substitutes. Frying chopped carrots or parsnips just doesn’t hit the spot.

This example servers to illustrate the significance of the present shortage in supply of another, non-organic variety of chip, the computer chip.

Toyota announced a 40% cut in production of new cars in September and more recently Apple iPhone announced that production of the new iPhone 13 would be affected, in both cases, by the continuing supply issues for computer chips.

The pandemic bought huge swathes of the global economy to a grinding halt, and lockdown restrictions extended this process for well over a year.

Backlogs of items waiting to be shipped languished in Asian ports. When the brakes started to come off, it was if the global economy had to start over. Goods released had to begin their journey to Europe, the trips leaving manufacturers with dwindling stocks until much needed containers were delivered.

It will take time for the global network that manufactures and supplies computer chips to meet outstanding orders and restore some semblance of normality. Until then, we should expect shortages in the supply of consumer items that rely on computer chips.

If you have electronics on your Christmas list you might be advised to buy now, if you can find a supplier in stock.

Computer chips are not down, but it will be some time before supply catches up with demand. Time to ease frustrated expectations, anyone for chips?

In a recent press release the government confirmed that more than 500,000 rural homes in the UK are to receive access to better broadband plans. They said:

• 570,000 more rural premises in line for best broadband available via £5 billion Project Gigabit

• Includes Cheshire, Devon, Dorset, Somerset, Essex, Herefordshire, Gloucestershire, Lincolnshire, East Riding and North Yorkshire

• Follows £8 million broadband boost for 3,600 rural homes and businesses in northern Scotland announced at Budget

“More than half a million more rural homes and businesses will be given access to better broadband as part of plans to level up the country with improved internet connectivity, Digital Secretary Nadine Dorries has announced.

“An estimated 567,000 hard-to-reach premises across Cheshire, Devon, Dorset, Somerset, Essex, Herefordshire, Gloucestershire, Lincolnshire, East Riding and North Yorkshire are in line to benefit from the government’s £5 billion Project Gigabit, which is bringing next generation gigabit-capable broadband across the UK.

“Project Gigabit is the biggest broadband rollout in UK history and part of the Prime Minister’s plan to level up communities with the future-proofed connectivity they will need for the next forty years.

“Most of the gigabit-capable connections will be delivered through full fibre broadband cables. This provides the speed and reliability needed for several people to work from home, stream ultra-high definition video content and play next-generation online games all at the same time.

For families in all the affected areas, particularly those who need to accommodate multiple connections, this will be welcome news.

However, don’t hold your breath. The start date for this project is not planned until June 2022 at the earlies and be completed across all the affected regions by late summer 2024.

It was difficult to find any changes proposed in the budget last week that gave rise to great optimism or that swept away the nagging feeling that we are not out of the woods just yet.

We have summarised below some of the issues that will affect actions that we should perhaps consider between now and the end of the present tax year.

When reading these suggestions please bear in mind that you should take advice before acting on any of the ideas shared. Every business and individual has, to some degree, unique circumstances, and these must be carefully considered before making any changes to your tax planning options.

We have restricted our comments to ideas that it may be wise to consider before the end of the 2021-22 (before April 2022).

• To counter the freezing of the income tax personal allowance and higher rate threshold, it may be beneficial to consider any planning options that would reduce your taxable income for the current year and next year. These could include deferring bonuses, increasing pension contributions, considering charitable donations, and reducing taxable benefits.
• As NIC contributions and tax on dividends are increasing next year (by 1.25% to meet health and social costs) now may be an opportune time to consider reworking how you extract funds from an owner/managed company.
• Benefits in kind will also increase from April 2022. This may be due to increases in taxable benefit rates and increased employer Class 1A NIC charges. Time to reconsider any benefits you take or provide? A change to electric cars for example.
• If you were born after 6 April 1973, you may have spotted that the minimum age that you can access your pension savings without incurring unauthorised tax charges, is changing. Presently, it is age 55, but from April 2028 it is increasing to age 57. If this affects you, and you are in business, you may need to rethink your business exit options. Effectively, you may need to work for a further two years.

These are just a few of the issues that you may be wise to consider before April 2022. To ensure all your bases are covered, please call when you have read this post and we will look at all your planning options.

1 November 2021 – Due date for Corporation Tax due for the year ended 31 January 2021.

19 November 2021 – PAYE and NIC deductions due for month ended 5 November 2021. (If you pay your tax electronically the due date is 22 November 2021.)

19 November 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2021.

19 November 2021 – CIS tax deducted for the month ended 5 November 2021 is payable by today.

1 December 2021 – Due date for Corporation Tax payable for the year ended 28 February 2021.

19 December 2021 – PAYE and NIC deductions due for month ended 5 December 2021. (If you pay your tax electronically the due date is 22 December 2021)

19 December 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2021.

19 December 2021 – CIS tax deducted for the month ended 5 December 2021 is payable by today.

30 December 2021 – Deadline for filing 2020-21 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2022-23.

We now know the Chancellor’s preferred strategy for plugging any hole in the UK’s finances is by tweaking taxation and using the proceeds to pay-back government borrowings.

Various government departments will also need to tighten their departmental belts to reduce government expenditure.

When we’ve had time to consider the effects of the announced budget changes, we will be highlighting any new ideas to make best use of any tax changes in the coming issues of this newswire.

In the meantime, if you have concerns about budget changes, and how these might impact your tax payments or business finances, please call. We are happy to discuss your options.