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When moving between the UK and Singapore, it is important to be aware of the differences that each jurisdiction imposes on areas of personal taxation. Failing to comply with the relevant procedures and local tax legislation could leave individuals with a series of penalties.

The table below highlights a list of arguably the most important areas of personal taxation that individuals should be aware of when moving between the UK and Singapore. Whilst both countries operate a progressive income tax system, this is where similarities cease as from here on, the UK and Singapore tax systems function differently in almost every way.

UK Tax System vs Singapore Tax System:


UK Tax System Singapore Tax System
Tax Year for individuals 6 April to 5 April 1 January to 31 December
Who is required to file a Tax Return In the UK, most individuals who are employed will pay tax on their income through payroll and are not required to file a Tax Return.

Tax Returns are required where:

  • Earnings are over £100,000 in a tax year
  • In receipt of non-UK sourced income
  • In receipt of property income
  • In receipt of taxable savings, investments and dividends
  • Claiming income tax reliefs
  • Need to pay capital gains tax
  • Self-employed or partnership income
  • Liable to high income child benefit charge
  • In receipt of taxable income which has not yet been taxed

Tax Returns are required where:

  • Individuals who are tax resident and have annual income of S$20,000 or more 
  • Non-resident individuals who derived income from Singapore 
Payroll System In the UK, HMRC operates a Pay As You Earn (PAYE) system where tax is collected by the employer through every payslip. The employer then remits the tax withheld to the tax office (HMRC). In Singapore, there is no income tax withheld at source via payroll. It is the employee’s responsibility to file their annual tax declaration and pay directly to the Inland Revenue Authority of Singapore (IRAS), the local tax authority.
Tax Free Allowance UK residents (and in some instances non-residents) receive a tax-free personal allowance each year. In 2023-23, the tax-free personal allowance is £12,750. In certain circumstances this can be reduced or increased. Tax residents of Singapore receive the first S$20,000 of their income charged at a 0% tax rate.
Income Tax The UK operates progressive rates of income tax which include:
  • £0 to £12,570 (personal allowance) – 0%
  • £12,571 to £50,270 (Basic rate) – 20%
  • £50,271 to £150,000 (Higher rate) – 40%
  • Over £150,000 (Additional rate) – 45%
    		•  As with the UK, Singapore operates a progressive income tax system. The current individual tax rates in Singapore are as follows:
  • S$0 to S$20,000 – 0%
  • S$20,000 to S$30,000 – 2%
  • S$30,000 to S$40,000 – 3.5%
  • S$40,000 to S$80,000 – 7%
  • S$80,000 to S$120,000 – 11.5%
  • S$120,000 to S$160,000 – 15%
  • S$160,000 to S$200,000 – 18%
  • S$200,000 to S$240,000 – 19%
  • S$240,000 to S$280,000 – 19.5%
  • S$280,000 to S$320,000 – 20%
  • Above S$320,000 – 22%

    • The top marginal income tax rate will be increased with effect from Year of Assessment (YA) 2024 (calendar year 2023). Chargeable income in excess of $500,000 up to $1 million will be taxed at 23%, while that in excess of $1 million will be taxed at 24%; both up from the current rate of 22%.
    Capital Gains Tax

    In the UK there is a Capital Gains Tax allowance of £12,300 per year (2022-23). After this your tax rate will depend on whether you’re a ‘Basic rate’ tax payer or ‘Higher rate’ tax payer:

    Basic Rate: 18% on residential property and 10% other chargeable assets

    Higher Rate: 28% on residential property and 20% other chargeable assets

    		 Singapore has no capital gains tax.
    Inheritance Tax In the UK, the standard Inheritance Tax threshold is £325,000 (which can increase to £500,000 where the home is passed to children of the deceased). Where an estate is valued over £325,000 there is a 40% Inheritance Tax rate. Inheritance tax, also known as estate duty was abolished for deaths on and after 15 February 2008 in Singapore.
    Tax Return Deadline 31 January following the end of the tax year (31 October if filing a paper return) In Singapore, the filing due date for individual tax returns is 15 April following the end of the tax year. If filed electronically, the deadline is 18 April.
    Tax Payment Deadline 31 January following the end of the tax year. This is the same as the tax return deadline. Once your individual tax return has been filed, you will receive your Notice of Assessment or tax bill between May and September. Any tax liability is due in full within 30 days of receiving your Notice of Assessment.
    Assessable on Worldwide Income UK residents, for tax purposes are taxed on their worldwide income*. Overseas income received in Singapore is generally not taxable and need not be declared in the Income Tax Return (‘territoriality’ system) 
    National Insurance/ CPF In the UK, both the employee and employer are required to pay national insurance contributions each month. The rates vary from 0% to 13.8%. National Insurance is also due on self-employed income. Singapore operates ‘The Central Provident Fund’ (CPF). Both employees and employers must contribute to the fund. The statutory rate for employees is 20% and the rate of the employer’s contribution is 17%. (There are caps – above which CPF does not apply)

    *Assessable on worldwide income (UK) – Individuals resident of the UK with non-domicile status can opt to claim remittance basis and not be taxed on their overseas income as long as it is not remitted to the UK.

    The UK and Singapore Tax Systems: An Overall Comparison

    As you would expect, Singapore’s tax system is far more attractive than the United Kingdom’s.

    While the UK and Singapore both operate progressive income tax systems, the rate at which you pay tax in Singapore is substantially less, with the UK’s top rate of income tax over double that of Singapore’s. For example, where an individual earns a salary of £150,000 in the UK, they will pay a total of £52,460 in income tax. Whereas, if a tax resident earns £150,000 (S$250,500) in Singapore they will pay a total of £18,531 (S$30,947) in income tax. The above calculations are for illustrative purposes only, they do not consider any eligible reliefs or deductions in either country.

    Singapore’s tax system also boasts no tax on capital gains, where the UK, although offers a tax free allowance of £12,300, applies tax rates of between 10% to 28% on capital gains above this.

    What’s more, where Singapore has no inheritance tax, the UK still maintains an aggressive tax rate of 40% above the inheritance tax threshold.

    It is therefore evident that where an individual moves from the UK and acquires tax resident status in Singapore,  they can heavily reduce their tax burden.

    If you require any advice or assistance with UK or Singapore personal tax, we are here to help. Simply send us an email at the address below or fill in our contact form to arrange a free initial consultation.

    Contact us

    At Sheltons Accountants Singapore, Australai and the UK we have extensive experience in setting up and administering operations for overseas-based businesses. We provide a broad range of services, from setting up the entity and opening a bank account, to providing the legally required local director and a full range of tax, accounting, company secretarial and administrative services.

    We are also experienced in providing local and international tax advice, advice on tax treaty issues and cross-border tax efficient structures.

    If you need advice or assistance with UK, Singaporean or Australian matters, we’re here to help. Simply send us an email at SG@SheltonsGroup.com.

    Click here to read our blog where we compare the UK and Australian Tax systems.

    Back to Blogs

    Are you moving to Australia and renting out your UK property? If so, you will be classified as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC).

    Below we have covered some of the popular UK tax issues and questions that arise when becoming a non-resident landlord:

    How do I stop my estate agent or tenant from deducting UK tax at source?

    If you have been determined as a non-resident landlord of the UK, your letting agent or tenant will deduct basic rate tax (20%) from your rent. Once the tax year is complete, your estate agent or tenant will provide you with a certificate certifying how much tax they have deducted in the relevant tax year.

    As a landlord, cash flow is important, therefore it’s likely you would prefer to receive your rent in full and pay any tax due through your UK self-assessment tax return.

    The way in which you can receive your rent in full, prior to any taxation, is to file a non-resident landlord form (NRL1). Once the form has been approved, HMRC will inform your letting agent or tenant to stop deducting tax from your rent. From there on, you will receive your rent in full without UK taxation. Any tax deducted earlier in the year will be refunded on your next rental statement.

    However, it is worth noting that HMRC will only approve your NRL1 application if your taxes are up to date. For example, you have no outstanding tax or tax returns due.

    What expenses can I claim on my UK property income?

    If this is your first experience of being a landlord, you may be unsure about what expenses are tax deductible. HMRC iterate that for an expense to be allowable for tax purposes, it should be incurred wholly and exclusively as a result of renting out your property. Typical expenses include buildings insurance, estate agent fees and utility bills (only if not reimbursed by tenants).

    In some instances, what you assume are revenue expenses may in fact be ‘capital expenses’ for example, improving or upgrading something that was existing. Capital expenses are not allowable and cannot be claimed against rental income, however you might be able to set them against capital gains tax if you sell the property in the future. You should seek professional advice if you’re unsure on the tax treatment of your property expense.

    Since April 2020, you have no longer been able to deduct any mortgage expenses from taxable rental income. Instead, mortgage interest is used as a tax reducer, where you receive a tax credit based on 20% of mortgage interest payments. For example, if you make mortgage interest payments of £5,000 per year, you will receive a tax credit of £1,000 to deduct from the liability incurred on your property income.

    Will I be taxed on my UK rental income in Australia?

    Whether you’re taxed on your UK rental income in Australia will depend on the type of tax resident you are. There are three main types of residents in Australia: Australian resident, foreign resident and temporary resident.

    If you’re classified as a ‘foreign resident’ or ‘temporary resident’ working in Australia, you generally don’t need to declare income you receive from outside Australia in your Australian tax return. Therefore, as long as you remain a ‘foreign resident’ or ‘temporary resident’, you will not be taxed on your UK rental income in Australia.

    However, in the event that you’re an ‘Australian resident’ for tax purposes, you must declare all income you earned both in Australia and overseas. In this instance, UK property income must be added to your Australian tax return. If you’ve paid tax in the UK on your UK property income, you may be entitled to an Australian foreign income tax offset.

    Where an ‘Australian resident’ has property income from the UK, the Australia-UK double tax treaty becomes relevant.

    Will I receive my UK personal allowance as resident of Australia?

    When non-resident of the UK, it’s only in certain circumstances that you will get a personal allowance of tax free UK income each year. These include the following:

    • you hold a British passport
    • you’re a citizen of a European Economic Area (EEA) country, or
    • you’ve worked for the UK government at any time during that tax year.

    However, under the double tax treaty between the UK and Australia, it’s likely as a resident of Australia that you will be entitled to the UK personal allowance. Thus, only the rental income over the UK personal allowance will be taxable in the UK.

    How do I file my UK self-assessment tax return from Australia?

    Regardless of whether you’re a resident of Australia, renting out a UK property automatically enters you into the UK self-assessment regime. The return will be used to calculate any tax liability arising from your UK property income and any additional UK taxable income.

    The same Tax Return deadlines apply to non-residents as they do to UK residents – 31st January following the tax year end (31st October for paper returns). Automatic late filing penalties will apply after the deadlines have passed.

    As a non-resident you are unable to use HMRC’s online services to file your return. Instead, you need to:

    • Send your tax return by post
    • Use commercial software
    • Get help from a professional

    Contact Us

    If you need advice or assistance with your UK or Australian tax obligations, we are here to help. Feel free to contact us for a no-charge fact finding call. After such call, we are usually able to send a fee quote for services.

    For enquiries please contact:

    Ned Shelton
    Director
    Sheltons Accountants Australia
    N.Shelton@SheltonsGroup.com

    and

    Jamie Feng
    Assistant Accountant
    Sheltons Accountants UK
    J.Feng@SheltonsGroup.com

    Click here to read our blog where we compare the UK and Australian Tax systems

    Back to Blogs

    When moving between the UK and Australia, it is important to be aware of the differences that each jurisdiction imposes on areas of personal taxation. Failing to comply with the relevant procedures and local tax legislation could leave individuals with a series of penalties.

    The table below highlights a list of arguably the most important areas of personal taxation that individuals should be aware of when moving between the UK and Australia. Whilst both countries operate a progressive income tax system, with the top tax rate peaking at 45%, this is where similarities cease as from here on, the UK and Australian tax systems function differently in almost every way.

    UK Tax System vs Australian Tax System:


    UK Tax System Australian Tax System
    Tax Year for individuals 6 April to 5 April 1 July to 30 June
    Who is required to file/lodge a Tax Return

    In the UK, most individuals who are employed will pay tax on their income through payroll and are not required to file a Tax Return.

    Tax Returns are required where:

    • Earnings are over £100,000 in a tax year
    • In receipt of non-UK sourced income
    • In receipt of property income
    • In receipt of taxable savings, investments and dividends
    • Claiming income tax reliefs
    • Need to pay capital gains tax
    • Self-employed or partnership income
    • Liable to high income child benefit charge
    • In receipt of taxable income which has not yet been taxed

    		 All Australian residents and non-residents with any Australian sourced income (some exclusions apply)
    Payroll System In the UK, HMRC operates a Pay As You Earn (PAYE) system where tax is collected by the employer through every payslip. The employer then remits the tax withheld to the tax office (HMRC). Australia operates a Pay As You Go Withholding system which deducts tax and is then paid to the tax office. As with the UK, the employer withholds tax when processing payroll and then forwards this to the tax office.
    Tax Free Allowance UK residents (and in some instances non-residents) receive a tax-free personal allowance each year. In 2023-23, the tax-free personal allowance is £12,750. In certain circumstances this can be reduced or increased. There is a tax-free threshold of $18,200 for all Australian resident taxpayers, regardless of the source of income. Foreign and temporary residents are excluded from this threshold.
    Income Tax The UK operates progressive rates of income tax which include:

    • £0 to £12,570 (personal allowance) – 0%
    • £12,571 to £50,270 (Basic rate) – 20%
    • £50,271 to £150,000 (Higher rate) – 40%
    • Over £150,000 (Additional rate) – 45%

    Australia operates progressive rates of income tax which include:

    • $0 to $18,200 – Nil
    • $18,201 to $45,000 – 19%
    • $45,001 to $120,000 – 32.5%
    • $120,001 to $180,000 – 37%
    • $180,001 and over – 45%

    The income tax rates above are for ‘Australian’ Residents only. Different rates apply for ‘temporary’ and ‘foreign’ residents.
    Capital Gains Tax

    In the UK there is a Capital Gains Tax allowance of £12,300 per year (2022-23). After this your tax rate will depend on whether you’re a ‘Basic rate’ tax payer or ‘Higher rate’ tax payer:

    Basic Rate: 18% on residential property and 10% other chargeable assets

    Higher Rate: 28% on residential property and 20% other chargeable assets

    There is a 50% Capital Gains Tax discount for Australian individuals who own an asset for 12 months or more. This means you pay tax on only half the net capital gain on that asset.

    Taxable Capital Gains are added to the individuals assessable income and are taxed at the marginal rate at which the income falls.
    Inheritance Tax In the UK, the standard Inheritance Tax threshold is £325,000 (which can increase to £500,000 where the home is passed to children of the deceased). Where an estate is valued over £325,000 there is a 40% Inheritance Tax rate. Australia does not have any Inheritance Tax.
    Tax Return Deadline 31 January following the end of the tax year (31 October if filing a paper return). In Australia, the due date is 31 October following the end of the tax year. However, if an individual is registered with a tax agent this will usually extend to 15 May of the following year i.e. tax-year end 30 June 2022 would be due 15 May 2023.
    Tax Payment Deadline 31 January following the end of the tax year. This is the same as the tax return deadline.

    In Australia, the tax payment deadline depends on when the tax return is due and the date it is lodged. Where a tax return is due 15 May, the following payment dates will apply when the tax return is lodged:

    • Up to and including 12 February, the payment date is 21 March
    • From 13 February to 12 March, the payment date is 21 April
    • From 13 March, the payment date is 5 June

    If the tax return is not due by 15 May, the payment will be due on the later of 21 days after the:

    • Relevant lodgement due date, or
    • Notice of assessment is deemed received
    Assessable on Worldwide Income UK residents, for tax purposes are taxed on their worldwide income*.

    Australian residents for tax purposes, are also taxed on their worldwide income.

    ‘Foreign’ and ‘temporary’* residents for tax purposes only need to declare income and gains derived in Australia.
    National Insurance/ Medicare In the UK, both the employee and employer are required to pay national insurance contributions each month. The rates vary from 0% to 13.8%. National Insurance is also due on self-employed income. In Australia, individuals must pay a flat rate of Medicare (unless exempt). The Medicare levy is 2% of an individual’s taxable income. An additional Medicare levy of up to 1.5%, unless they pay for private health insurance.

    *Assessable on worldwide income (UK) – Individuals resident of the UK with non-domicile status can opt to claim remittance basis and not be taxed on their overseas income as long as it is not remitted to the UK.
    *Assessable on worldwide income (AUS) – Individuals who are ‘temporary’ resident will also be taxable on income earned from employment or services performed overseas whilst temporary resident.

    The UK and Australian Tax Systems: An Overall Comparison

    Determining which country has the more competitive tax system is no easy task.

    Although income tax is generally lower in the UK (due to the progressive tax bandings), the Australian system includes a considerably lesser Medicare tax in comparison to the UK’s National Insurance rates. What’s more, where Australia allows a 50% discount on net taxable Capital Gains, the rate at which Capital Gains tax is payable in the UK may be under half of what individuals could be liable to pay in Australia (if their annual income exceeds the top tax bracket in Australia).

    In addition, establishing whether an individual is an ‘Australian’, ‘foreign’ or ‘temporary’ tax resident of Australia, or their ‘domicile’ status when tax resident of the UK, heavily dictates their tax liability due at the end of the tax year.

    Since 1978, Australia’s tax system has operated with no inheritance tax –which saw Australia as the first developed country to abolish death duties. In stark contrast, the UK still maintains an aggressive tax rate of 40% above the inheritance tax threshold. It is evident that, where an individual’s assets equate to more than £325,000 on death, the Australian tax system is significantly more attractive.

    As the tax systems in the UK and Australia are extremely different, it requires in-depth analysis to understand how each system operates and the implications which might then present for an individual on a case-by-case basis.

    If you require any advice or assistance with UK or Australian personal tax, we are here to help. Feel free to contact us for a no-charge fact finding call. After such call, we are usually able to send a fee quote for services.

    For enquiries please contact:

    Ned Shelton
    Director
    Sheltons Accountants Australia
    N.Shelton@SheltonsGroup.com

    and

    Jamie Feng
    Assistant Accountant
    Sheltons Accountants UK
    J.Feng@SheltonsGroup.com

    Click here to read our blog in regard to renting out your UK property whilst living in Australia.

    Back to Blogs

    Are you considering expanding your business to Australia? Join our free webinar on Tuesday 31 July at 10am for a review of the questions you should be asking yourself.

    Your expert speakers

    Richard Harper, now the owner of Keyway Trade Services in Sydney, shares his decades of experience in Australia with UKTI/Department for International Trade working with UK businesses entering Australia.

    Ned Shelton, Managing Partner of the independent specialist firm Sheltons Accountants, makes available his many years of experience with working with UK businesses exporting to and setting up in Australia.

    Who is the webinar for?

    The webinar has been designed for any business that has been considering expanding from the UK to Australia. Ned Shelton and Richard Harper will discuss the key issues to consider before your business expansion.

    What does the webinar cover?

    The webinar will provide guidance on everything from Australian tax rules on exporting and on running a business in Australia to selling on-line, and from special considerations on selling in Australia to understanding Australia, Australians – and the Australian market.

    Ned Shelton touches on

    • Company law – differences (to the UK)
    • Company tax
    • Fringe Benefits Tax (FBT
    • Superannuation
    • State taxes
    • When you need to register with ASIC (as a branch)
    • When you might have to pay company tax (the ‘permanent establishment’ issue)
    • ABNs, domain names and trademarks,
    • And especially: GST on sales (export) to Australia

    Richard Harper addresses

    • Australia – the country in context
    • Agents and distributors and ways to market
    • Registration – prohibitions and restrictions
    • Resonating with Australians
    • Specifics on food and drink
    • The supermarket dominance
    • Key elements for success
    • The importance of market visits
    • Dealing with Aussies

    Why join the webinar?

    • Explore the benefits of setting up a physical presence in Australia vs exporting to Australia
    • Learn about the various tax rates and rules
    • Find the most tax efficient ways to expand into the Australian market
    • Learn about the special features of Australia
    • Find out about the key actions prior to market entry
    • Hear about the traps and opportunities of selling to the Australia market
    • Put your questions to an expert panel

    Reserve your place in seconds – for free

    The webinar takes place on Tuesday 31 July at 10am. You can reserve your place in seconds here. It’s free! Can’t make it? No problem. We will send you a link to the full recording of the webinar so you can learn from the experts’ views at a more convenient time. Don’t miss out.

    Bloomberg Tax Honours Sheltons Group Partner, Ivan Zammit, with International Tax Contributing Author of the Year Award

    7 December 2020

    Sheltons Group partner, Ivan Zammit, has been awarded International Tax Contributing Author of the Year Award from Bloomberg Tax & Accounting in recognition of the contributions made by him and our colleagues at Sheltons Malta to Bloomberg Tax & Accounting.

    “We at Sheltons are firm believers that knowledge, gained through experience and practice, be shared with fellow practitioners. We are proud to be associated with such an outstanding organisation, which shares the same values.” – Ivan Zammit

    The official press release can be found here:

    https://www.bloombergindustry.com/press-releases/bloomberg-tax-accounting-recognizes-authors-of-the-year/

    Ivan Zammit joined Sheltons in 2006 and is the partner in charge of the Sheltons offices in Malta, as well as being heavily involved in the Sheltons office in Denmark.

    Ivan advises both corporate and individual clients. His experience includes advising on expat relocation as well as a wide variety of European cross-border activities, re-domiciliation and investment within the European Union.

    Originally from Malta, Ivan moved to Copenhagen in 2006, where he joined Sheltons working directly with Ned Shelton on international clients, primarily with Danish company law, IFRS and Danish accounting as well as Maltese, Danish and international tax and VAT law.

    After receiving his Adv. LLM in international tax law, Ivan accepted a position as a teaching assistant at the International Tax Centre (ITC Leiden) at Leiden University (The Netherlands). He continues to lecture on a regular basis on courses organised by ITC Leiden in particular in the area of Transfer Pricing.

    In 2018, Ivan co-authored a book published by Thomson Reuters, entitled ‘Transfer Pricing in Ibero America, USA and UK’, where he wrote the chapter on UK transfer pricing.

    During 2019 and 2020, Ivan authored (with the help of colleagues in our Malta office) the Bloomberg country tax guide for Malta, a publication available to subscribers of Bloomberg Tax, which is continuously updated with the latest developments.

    Apart from his native English and Maltese, Ivan speaks fluent Danish and Italian and reads Spanish and French.

    For more information about the award winners, please visit:

    https://pro.bloombergtax.com/2020-tax-author-awards.

    About Bloomberg Tax & Accounting

    Bloomberg Tax & Accounting provides comprehensive global research, news and technology services enabling tax and accounting professionals to get the timely, accurate, and in-depth information they need to plan and comply with confidence. Our flagship Bloomberg Tax platform combines the proven expertise and perspectives of leading practitioners in our renowned Tax Management Portfolios™ with integrated news from the industry-leading Daily Tax Report®, authoritative analysis and insights, primary sources, and time-saving practice tools. Bloomberg Tax technology solutions help practitioners simplify complex processes to better mitigate risk and maximize profitability. For more information, visit https://pro.bloombergtax.com/

    Doing Business with Australia guide

    Doing Business with Australia

    The ‘Doing Business with Australia Guide’ website is now live and the hard-copy brochures are currently being distributed.

    12th November 2020 – The ‘Doing Business with Australia Guide’ is now officially live and can be accessed via: www.Australia.DoingBusinessGuide.co.uk

    The main objective of this Doing Business with Australia Guide is to provide you with basic knowledge about Australia; an overview of its economy, business culture, potential opportunities and to identify the main issues associated with initial research, market entry, risk management and cultural and language issues. We do not pretend to provide all the answers in the guide, but novice exporters in particular will find it a useful starting point. Further assistance is available from the Department for International Trade (DIT) team in Australia. Full contact details are available in the guide.

    To help your business succeed in Australia we have carefully selected a variety of essential service providers as ‘Market Experts’; Commonwealth Bank of Australia, Dentons Australia Ltd, Informed Solutions, Quest Apartment Hotels, Radisson Blu Plaza Hotel and Sheltons Accountants Australia.

    The guide has been produced by International Market Advisor, in partnership with the Institute of Export & International Trade, and with support from the British High Commission Canberra and the Australian British Chamber of Commerce.

    Five things to know about exporting to Australia:

    • The UK and Australia are very similar. Therefore, if your product or service is successful in the UK, there is a high chance that it will be successful in Australia.
    • The UK is Australia’s tenth-largest source of goods imports and second-largest in terms of services, showing that trade and investment between the two countries remains strong.
    • Australia has avoided recession for 28 years, making it, in recent decades, one of the most resilient and best performing advanced economies worldwide.
    • There are numerous opportunities for UK companies wishing to do business with Australia, such as in the education, energy, healthcare, creative industries, ICT, professional and financial services, and transport and infrastructure sectors.
    • Australia ranks 14th out of 190 countries in the World Bank’s 2020 Ease of Doing Business Index.

     

    Source: Institute of Export & International Trade

    Institute of Export & International Trade

    This article was published on 22 July 2020 in Corriere di Malta newspaper

    Grants for businesses to provide training

    Enabling business training processes means investing in its people to increase the skills of both the individual employee and the work group. The result is not only the professional development of people, but also the growth of the business. In addition, by motivating and rewarding human resources, training has the advantage of acquiring knowledge and new skills filling some internal gaps, enhancing and discovering talents.

    But training has a cost that needs to be assessed before setting up a plan. And it must be absolutely checked whether there are grants or incentives, even non repayable investments, that can facilitate this path and in some way reduce programming costs.

    In Malta, entrepreneurs and public authorities are fully aware of the important value of human resources and employee training is a priority for both manufacturing companies and service providers. For this reason, the Government takes this issue in high regard and has studied some measures that help the entrepreneur to reduce the costs.

    One of these measures provides a specific incentive for small and medium-sized enterprises, but also for large ones, those outside the European definition, and also for self-employed people.

    The assumption is that they are carrying out an economic activity.

    The incentive is directed to training and knowledge transfer initiatives that will support employees to acquire skills, know how and knowledge, provided that these skills are not mandatory for the exercise of a given activity.

    In principle, the grant is made in the form of the tax credit, but the competent authority may also decide to grant the relief in the form of a non repayable contribution and a mix can also be decided, a part non refundable and the rest in the form of the tax credit.

    The amount of the aid varies depending on the size of the applicant. This ranges from a maximum of 70% in the case of small business to a percentage of 50% in the case of large enterprises.

    Contributions provided by this measure are directed to the support of the training provided to one or more employees of the company through:

    (a) other employees of the company itself (e.g. a senior who trains junior staff);

    (b) employees of companies linked to the beneficiary company;

    (c) external experts;

    (d) private training companies (with an NCFHE license).

    The costs eligible for training projects are as follows:

    (a) consulting costs for the development of the training programme;

    (b) wage costs of those involved in the training activity, calculated on the basis of the actual hours of training;

    (c) wage of trainers, covering the hours directly devoted to the provision of training;

    (d) hourly costs covering direct hours of training service providers engaged to deliver training;

    (e) air travel expenses incurred for participation in training courses abroad, if the training is not available locally and it is more economically feasible than holding the training locally;

    (f) air travel expenses incurred to bring trainers to Malta;

    (g) costs of renting training rooms, tools and equipment, to the extent that they are used exclusively for the training project.

    It is necessary to apply for the grant before 30 November 2022 and a cost plan must be prepared for a training programme which can only start after the application for the grant is submitted.

    If you need advice to understand what expenses to bring in, in which category your company is classified and you need to be assisted in the preparation of the application, remember that we can assist you.

    Just contact us at the email provided below.

    Stefano De Stalis
    European Affairs and State Aid Manager
    Sheltons Malta
    S.Destalis@SheltonsGroup.com

    This article was published on 05 July 2020 in Corriere di Malta newspaper

    Grants for diversification and internationalisation of companies

    At this delicate stage of the economy, companies need to strengthen their business by opening in new markets or by activating new services or product lines. Besides, they can also become more competitive through enhancing innovation or by diversifying internal productions or organisational processes.

    The Government of Malta provides some measures that allow small and medium-sized enterprises to grow and internationalise thanks to the support of some grants. Let us analyse how.

    Participation in international trade fairs, for example, is a traditional but always good way to allow your products or services to be known and to be able to increase orders, especially if you can present in the stands something innovative with respect to the existing products or services.

    One of the incentive still available this year, with several deadlines for submissions in the coming months, is the incentive that provides for a maximum grant of EUR 10,000 to cover 50% of the costs of participation at fairs held abroad, aimed at introducing new products and services in new markets with the aim of strengthening the presence of the company at international level.

    This measure also supports the participation to trade fairs abroad as part of trade missions abroad.

    In this case, the costs which could be reimbursed refer to:

    • Participation fee.
    • Rental of hexibition space/stand.
    • Expenses for services related to the construction and installation of the stand.
    • Travel expenses for up to 2 employees/administrators representing the company.
    • Per Diem allowance for up to 2 employees/administrators representing the company up to a maximum of 8 nights according to the rates set by the Ministry of Finance.
    • Costs related to the design and printing of advertising material within the limits of the guidelines.
    • Shipping costs of the products that will be displayed in the stand.

    All the costs described above must be incurred from external sources to the beneficiary company.

    Moreover, another way to achieve new goals and lead the company towards new development and real growth paths is via innovation and diversification projects. Also for this, there are support measures.

    Especially in this period companies have been looking for and are still thinking about new paths, For example, we are assisting a company active in the manufacturing sector and that manufactures products destined for the tourism sector. The company has suffered a drop in turnover and its aware that tourism will start again in a year time or two. Still, the entrepreneurs who lead this company have decided to move towards innovation so to strengthen their product and, at the same time, develop a new type of service. Such service will operate in a completely different field and can be activated right away. So, this is what innovation is all about: is the ability to get back into the game in other areas while continuing the existing path.

    But let us go back to the analysis of the aids available.

    There is one which deadline for submitting applications is at the end of this month. This tool aims to specifically support companies in developing investment strategies for their diversification, for the implementation of substantial change or for bringing significantly improved and innovative products/services to the market, compared to those already offered by the company.

    In this case, it will be necessary to develop a business plan with the aim of better defining the specific activities. For example, activities which can be supported by this measure are:

    • production diversification in an existing plant of different products or services;
    • implementation of a substantial change in the production process of an existing plant;
    • adoption of solutions for the development of a significantly improved product service.

    To be eligible for such aid measures, companies must operate in certain sectors, such as:

    • The production, manufacture, improvement, assembly, preservation, processing of goods, materials, commodities, equipment, plant machinery.
    • Biotechnology, pharmaceuticals, and life sciences.
    • Research and technological innovation.
    • The repair, overhaul or maintenance of pleasure boats, yachts, aircraft.
    • Development of information and communication technologies (ICT), software development.
    • Eco-innovations and environmental solutions.
    • Developments of tourism products and/or services because of networks created between traditional tour operators and craft companies.
    • Development and supply of tourism products and/or services related to emerging niche markets.
    • Development and supply of tourist products and/or services related to social tourism with a focus on the elderly.
    • Development and provision of childcare-related services and products.
    • Development and creation of artisanal products.

    While the costs covered by this measure are as follows:

    • Leasing and rental costs of premises required for the operation of the enterprise activity for the duration of the project. Such costs must not exceed 10% of the project’s total eligible expenditure.
    • Costs of building and improving the premises for the operation of the business activity. Such costs must not exceed 10% of the project’s total eligible expenditure.
    • Costs for the purchase of equipment, machinery and/or plant. Machinery and equipment can also be used, refurbished, or reconstituted, but only under certain conditions set out in the guidelines.
    • Costs related to patents or licenses essential for the effective implementation of the project. Such costs must not exceed 10% of the total eligible expenses of the project.
    • Costs of the full-time salary of a “Change Manager” who has the ability to drive the necessary change within the company through diversification or a substantial change initiative, for the duration of the project, i.e. for a period of no more than 24 months.

    In addition to the typical documentation to be provided in such cases, to benefit of this aid measure a project must be supported by a solid business plan that must be attached to the application. Such business plan must include some minimum requirements, defined by the guidelines, requirements normally provided in any standard business plan.

    If you need help developing a new project, or developing a good business plan, or evaluating which type of state aid or financial support measure is best suited to your initiative, be aware that we can help. Simply send us an email at the address below.

    Stefano De Stalis
    European Affairs and State Aid Manager
    Sheltons Malta
    S.Destalis@SheltonsGroup.com

    This article was published on 28 June 2020 in Corriere di Malta newspaper

    How to finance the cost of a business plan

    In one of the previous articles we have analysed how important it is to implement a business plan that, on the one hand, can be a useful tool for entrepreneurs and managers who want to develop a project or start a start-up and, on the other hand, can also constitute a credible document to convince investors, banks and public authorities.

    It is normal for companies to seek the assistance of a professional, experienced in the drafting of business plans. The Government of Malta provides for the possibility of recovering part of the professional’s cost through a reimbursement procedure up to 80% of the cost, equal to the amount of EUR 4,000 out of a maximum expenditure of EUR 5,000.

    However, when filling out the application, be careful to follow the rules defined by the Government’s guidelines. For example, there are some aspects of importance we would like to highlight for you to avoid making mistakes.

    First, it is necessary to check deadlines: applications are to be submitted, through an online platform, by certain dates (open calls), the next one is 17 July 2020. But don’t panic, there are also other further deadlines and the last one is scheduled for 30 November 2020.

    In addition, it should be verified that your business can actually be defined as micro, small or medium-sized enterprise and that it is included in the list of eligible sectors. For example, steel processing companies, transport companies or those that provide insurance financial services, or which produce advertising material, are excluded.

    Besides, it is not possible to include among the costs those relating to ongoing services such as tax advice services provided routinely, or legal or advertising advice services that are provided regularly.

    Another very important aspect relates to the professional advising on the drafting of the business plan. The professional consultant or consultancy company must external and anyhow independent from the company who intends to apply for the grant, in the sense that there must be no business relationship between the two. In addition, the professional providing you with his/her consultancy should be listed in a special registry before the Ministry which manages these funds. So do check on your consultant to verify he/she is duly registered.

    Among the various declarations and certificates to be attached to the application, there is a very important statement relating to so-called “de minimis aid”, which is now well known by companies that are used to submit applications for grants.

    The so called “de minimis aid” is a measure that has all the characteristics of a State Aid, but does not distort competition nor has an impact on trade since such aid does not exceed a preset amount and it is granted to a company in a given period of time. Therefore, such aid is not considered as State Aid in strict sense and does not follow the notification procedure which otherwise would involve complications and long times.

    The rule is that a company can receive “de minimis” subsidies from a Member State within three years, within the maximum of EUR 200,000.

    Moreover, if various companies, formally separated, act on the market as a single entity, by virtue of the links between them, through forms of control or connection with the company applying for the grant, in this case it is necessary to consider them all as a single company and must declare those positions in the application, also including the relevant balance sheets.

    The approval procedure is not normally very long and in the event that the Evaluation Committee does not approve the application, it sends a letter describing the reasons why the application was not approved with the possibility of appeal within 10 days from the notification date and in this case a board will re-evaluate the application on the basis of the reasons given in the appeal procedure.

    Following the approval of the application, an agreement is reached between the public authority that manages the funds and the contact person identified by the company that applied for the contribution.

    At this point the consultancy service covered by the application, in this case the business plan, can be developed and once finished, transmitted in the final version along with the request for reimbursement.

    As this measure is co-financed by the European Union, the beneficiary has an obligation to give visibility to the intervention following the guidelines rules.

    If you are about to start a new business or develop a new project, you will surely need a good business plan. Please consider seeking our assistance for developing such a business plan as we can provide you with any information and support you need to identify the scheme that best suits your specific project and submit its application.

    You can easily contact us by sending an email at the address below.

    Stefano De Stalis
    European Affairs and State Aid Manager
    Sheltons Malta
    S.Destalis@SheltonsGroup.com

    This article was published on 21 June 2020 in Corriere di Malta newspaper

    Inside the new measures to support businesses

    In the last article we anticipated the content of the package of new measures that the Maltese Government announced a few days ago to support the recovery of the economy following the COVID-19.

    Today we can provide more detail in our analysis and, in this article, we intend to summarise the main incentives that are made available for business support. Such financial aids include the drafting of business plans, the investments in machinery, equipment, materials, assistance to open new markets and for the training of employees.

    Businesses are facing a new reality now that the COVID-19 emergency is behind them and will therefore have to redesign their business plans so that they can tackle the new challenges with determination. For this purpose, an aid measure of up to EUR 5,000 has been introduced for the development of business plans by external consultants. The budget allocated for this measure is EUR 2.5 million and will allow you to use more technology in your business by guiding the country more and more towards a digital economy.

    In the construction sector, EUR 4 million has been allocated to enable companies to purchase modern, more efficient machinery that reduces environmental impact as well as reduces costs. The maximum incentive each company can get is EUR 200,000.

    Those companies that in 2019 obtained a tax credit through Microinvest, the development support measure managed by Malta Enterprise, the operational arm of the Government, will now be able to obtain the conversion of 30% of the tax credit into a corresponding contribution to the cost of restructuring and improving offices and factories, investments in machinery and other equipment. This measure was designed to support those at a disadvantage having made investments last year, just before the outbreak of the pandemic. The maximum grant is EUR 2,000 for all companies, while it reaches EUR 2,500 for companies located in Gozo, family-run businesses and those run by women entrepreneurs.

    As Malta’s traditional business markets may be in a weak position at the moment, opening up to new markets such as the African continent, the Middle East and Latin America can strengthen the capacity for economic recovery even if there is an element of risk that hinders access to these markets. To encourage this new opening and help companies to address this risk, EUR 10 million has been put in place to activate an export credit guarantee system to be managed by Malta Enterprise with the help of Malta Development Bank.

    In addition, Malta Enterprise will define a cash grant in the maximum limit of 80% of eligible costs to support companies in the implementation of projects that increase or start the production of products being relevant to COVID-19 or that involve the diversification of existing production towards products connected with COVID-19.

    Investments must be completed within 6 months from the start of work and eligible costs must be incurred after 1 February 2020. These include material and intangible goods, the cost of personnel developing tools for collecting and processing data (including Artificial Intelligence solutions) to support the medical profession and public issues associated with COVID-19. Also included are the costs for testing new plants and the material costs required for such tests and the data sets acquired to the test the processing and data collection processes. The measure will be available until 31 December 2020.

    Finally, Malta Enterprise will strengthen an existing skills development measure, called the Skills Development Scheme. This measure will enable more beneficiaries to be reached through an additional EUR 5 million to be allocated to small businesses, those with no more than 50 employees. The aim is to support employee training, especially internal training by focusing on sharing skills between the most experienced and the youngest.

    As you can see the measures activated by the government are numerous, you only have to wait for the enactment of the operational criteria and then activate in the preparation of any business plans and applications for access to the different facilitative opportunities.

    Please do remember that if you need assistance in this regard you can contact us by writing to the email address below. We will be happy to help you.

    Stefano De Stalis
    European Affairs and State Aid Manager
    Sheltons Malta
    S.Destalis@SheltonsGroup.com