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Brits ‘spending more disposable income than a year ago’

Wed, 25 Jun 2025 08:46:15 GMT

Brits ‘spending more disposable income than a year ago’

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UK government launches Industrial Strategy

Wed, 25 Jun 2025 08:45:43 GMT

UK government launches Industrial Strategy

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Tax gap estimated at 5.3%

Wed, 25 Jun 2025 08:44:35 GMT

Tax gap estimated at 5.3%

The tax gap estimate was 5.3% for the 2023/24 tax year, according to the latest data from HMRC.

The tax gap is the difference between what tax is expected to be paid and actually paid.

HMRC collected £829.2 billion in the 2023/24 tax year representing 94.7% of all tax due, leaving £46.8 billion unpaid.

However, HMRC revised the figures upwards for 2022/23, from 4.8% (£39.8 billion) to 5.6% (£46.4 billion). It also warned that the latest figures may be revised as more data becomes available.

Some of the key findings from this year’s calculations show:

· Small businesses represent the largest proportion of the tax gap (60%).

· Corporation Tax accounts for 40% of the total tax gap.

· Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.

Ellen Milner, Director of Public Policy, said: ‘These figures show the stubbornness of the tax gap and how optimistic the government’s target of a £7.5 billion reduction by 2029/30 is.

‘While large businesses and wealthy individuals are often accused of not paying enough tax these figures suggest that their total share of the tax gap is not much more than a quarter of that of small businesses.

‘The small business figures reflect big upward revisions from HMRC a year ago as a result of a random enquiry programme carried out in 2020/21, which identified greater inaccuracy and non-compliance than previously forecast.’

Cost of minimum retirement lifestyle has fallen amid lower energy prices

Wed, 11 Jun 2025 09:07:49 GMT

Cost of minimum retirement lifestyle has fallen amid lower energy prices

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Government introduces Pension Schemes Bill

Wed, 11 Jun 2025 09:07:09 GMT

Government introduces Pension Schemes Bill

The government has introduced the Pension Schemes Bill, which it says will make pensions easier to understand and manage as well as drive better value over the long term.

The bill will work to ensure savers get good returns and drive economic investment by requiring defined contribution (DC) schemes to prove they are value for money to avoid underperforming schemes.

It also aims to simplify retirement choices by all pension schemes offering default routes to a retirement income and consolidate and professionalise the Local Government Pension Scheme (LGPS).

In addition, it will bring together small pension pots worth £1,000 or less into one scheme certified as delivering good value, create new rules for multi-employer DC scheme ‘megafunds’ of at least £25 billion.

This is so bigger pension schemes can drive down costs and invest in a wider range of assets and increase flexibility for defined benefit (DB) pension schemes to safely release surplus worth £160 billion, the government said.

Liz Kendall, Work and Pensions Secretary, said: ‘Hardworking people across the UK deserve their pensions to work as hard for them as they have worked to save, and our reforms will deliver a huge boost to future generations of pensioners.

‘The bill is about securing better value for savers’ pensions and driving long-term investment in British businesses to boost economic growth in our country.’

Energy costs 'an anchor on our ambition', warns CBI chief

Wed, 11 Jun 2025 09:06:37 GMT

Energy costs 'an anchor on our ambition', warns CBI chief

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Chancellor outlines pension ‘megafunds’ plans

Wed, 04 Jun 2025 08:03:54 GMT

Chancellor outlines pension ‘megafunds’ plans

Chancellor Rachel Reeves has set out government plans to double the number of so-called pension ‘megafunds’ by 2030.

A megafund is a multi-employer Defined Contribution pension scheme or a local government pension scheme which manages at least £25 billion in assets.

The government has outlined its plans to help reform the pensions industry in the UK. £25 billion megafunds will be created and will have to make a portion of their investments locally in order to help boost economic growth.

Megafunds will also see millions of UK workers retire with bigger pension pots, the government added. 17 of the largest pension firms in the UK have already approved the terms of the reforms, according to the government.

Commenting on the matter, the Chancellor said: ‘We’re making pensions work for Britain.

‘These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses — the Plan for Change in action.’

HMRC names and shames employers failing to pay NLW

Wed, 04 Jun 2025 08:02:51 GMT

HMRC names and shames employers failing to pay NLW

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IFS outlines ‘four big decisions’ for Spending Review

Wed, 04 Jun 2025 08:02:13 GMT

IFS outlines ‘four big decisions’ for Spending Review

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Higher borrowing figures ‘increase prospect of tax rises’

Thu, 29 May 2025 08:20:27 GMT

Higher borrowing figures ‘increase prospect of tax rises’

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Household Support Fund ‘needs reforming’

Thu, 29 May 2025 08:19:47 GMT

Household Support Fund ‘needs reforming’

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Chancellor confirms ISA allowance won’t be cut

Thu, 29 May 2025 08:19:08 GMT

Chancellor confirms ISA allowance won’t be cut

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Household Support Fund ‘needs reforming’

Wed, 28 May 2025 10:15:17 GMT

Household Support Fund ‘needs reforming’

Think tank the Resolution Foundation has stated that the Household Support Fund needs renewing and reforming to ensure it continues to help families through the cost-of-living squeeze.

The Fund has helped millions of families in England with their food, energy and water bills since it was introduced in 2021. However, the Foundation stated that its effectiveness has been ‘hampered’ by ‘chaotic and declining funding’.

It says that funding needs to be put on a ‘firmer footing’, and urged the government to use the upcoming Spending Review to ensure the long-term future of the Household Support Fund.

Alex Clegg, Economist at the Resolution Foundation, commented: ‘The Household Support Fund has been a vitally important scheme, helping millions of families with unexpected costs and rising bills through the pandemic and cost of living crisis.

‘But its success has been hampered by chaotic and declining funding, and a lack of public awareness. This risks households in need of urgent help being left unaware and unable to access support.’

Household Support Fund ‘needs reforming’

Wed, 28 May 2025 10:14:38 GMT

Household Support Fund ‘needs reforming’

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Chancellor confirms ISA allowance won’t be cut

Wed, 28 May 2025 10:14:00 GMT

Chancellor confirms ISA allowance won’t be cut

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Parents of teens reminded to extend Child Benefit claim online

Wed, 21 May 2025 11:14:45 GMT

Parents of teens reminded to extend Child Benefit claim online

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One in ten people have no cash savings

Wed, 21 May 2025 11:13:33 GMT

One in ten people have no cash savings

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Business confidence rises to highest level since late 2024

Wed, 14 May 2025 07:53:21 GMT

Business confidence rises to highest level since late 2024

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Record numbers file assessment in first week of new tax year

Wed, 14 May 2025 07:52:49 GMT

Record numbers file assessment in first week of new tax year

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Lack of trust and board expertise putting brakes on AI adoption

Wed, 07 May 2025 08:38:50 GMT

Lack of trust and board expertise putting brakes on AI adoption

A lack of trust in outcomes and a shortage of expertise at board level are limiting the adoption of AI in UK businesses, according to research from the Institute of Directors (IoD).

Over half of survey respondents said limited expertise or understanding of models and tools at management and board level was restricting adoption of AI. In addition, 51% said that lack of trust in AI outcomes was their biggest concern.

Security risks, such as cyber, data protection and privacy, as well as employee skills and training gaps and safety and ethical risks, are also significant barriers for business leaders.

Of the half of UK business leaders whose organisations use AI, 78% cite increased productivity and operational and administrative efficiencies as the most significant benefits.

Dr Erin Young, Head of Innovation and Technology Policy at the IoD, said: ‘While UK business leaders in early AI adoption are enthusiastic about greater productivity and efficiencies, they face a complex set of barriers to top-down implementation and governance – from skills and expertise gaps at board level, to a lack of trust and fundamental concerns about reliability, security and business value across AI capabilities, tools and applications.

‘Given a focus on addressing private sector user-adoption barriers in the UK government’s AI Opportunities Action Plan, it is important that these concerns are addressed strategically for businesses of all sizes across sectors in the Industrial Strategy.’

Government warned over ‘lost generation’

Wed, 07 May 2025 08:38:14 GMT

Government warned over ‘lost generation’

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Chancellor unveils plans to maintain level playing field for British business

Wed, 30 Apr 2025 08:39:35 GMT

Chancellor unveils plans to maintain level playing field for British business

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IHT receipts reach record £8.2 billion

Wed, 30 Apr 2025 08:39:02 GMT

IHT receipts reach record £8.2 billion

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Inflation falls as result of lower petrol prices

Wed, 23 Apr 2025 08:34:00 GMT

Inflation falls as result of lower petrol prices

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Business confidence falls to two-year low

Wed, 23 Apr 2025 08:33:08 GMT

Business confidence falls to two-year low

Data published by the Institute of Chartered Accountants in England and Wales (ICAEW) has revealed that business confidence has fallen to its lowest level in two years.

The ICAEW’s Business Confidence Monitor for the first quarter of 2025 showed that optimism amongst businesses was at -3, the lowest level since the fourth quarter of 2022 and down from 0.2 in the previous quarter.

According to the ICAEW, the fall was attributed to record high tax worries, rising cost pressures and a slowdown in expected domestic sales growth.

Suren Thiru, Economics Director at the ICAEW, said: ‘These figures suggest that this year has so far been a pretty harrowing one for the UK economy as accelerating anxiety over future sales performance, April’s eye-watering tax hike and US tariffs helped push business sentiment into ominous territory.

‘Economic performance was rather unbalanced with improvements in some segments of the economy overshadowed by a torrid quarter for those sectors most vulnerable to these domestic and global headwinds, most notably manufacturers.’

Spending Review ‘could brighten living standards outlook’

Wed, 16 Apr 2025 08:38:32 GMT

Spending Review ‘could brighten living standards outlook’

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Business group welcomes launch of Code of Practice

Wed, 16 Apr 2025 08:38:01 GMT

Business group welcomes launch of Code of Practice

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UK firms show ‘resilience’ as exports grow in January

Wed, 09 Apr 2025 08:06:14 GMT

UK firms show ‘resilience’ as exports grow in January

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Confidence amongst business leaders ‘remains low’

Wed, 09 Apr 2025 08:05:34 GMT

Confidence amongst business leaders ‘remains low’

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Campaigners call for tougher action on fraud

Thu, 03 Apr 2025 07:54:06 GMT

Campaigners call for tougher action on fraud

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Minimum wage rose on 1 April

Thu, 03 Apr 2025 07:51:54 GMT

Minimum wage rose on 1 April

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Employment reforms continue to stifle businesses’ hiring intentions

Thu, 03 Apr 2025 07:51:10 GMT

Employment reforms continue to stifle businesses’ hiring intentions

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Campaigners call for tougher action on fraud

Wed, 02 Apr 2025 11:16:20 GMT

Campaigners call for tougher action on fraud

Anti-scam campaigners have called for UK police forces to take a tougher stance on fraud as a result of a rise in the number of scam cases.

Figures published by the Office for National Statistics (ONS) showed that 2024 saw a 19% rise in fraud reports.

Campaigners are calling for UK law enforcement to collaborate with international counterparts in order to combat global scam networks exploiting cross-border vulnerabilities which leave consumers exposed.

The UK government recently announced that it will work on an expanded fraud strategy in response to the ONS’s latest data.

Commenting on the issue, Rocio Concha, Director of Policy at Which?, said: ‘Law enforcement has a crucial role to play in stopping the UK’s fraud epidemic and deterring scammers. But we also need stronger action from telecoms firms, banks and online platforms to prevent scams appearing in the first place.

‘Regulators must be empowered to impose financial penalties when firms fail to implement effective systems to protect consumers.’

Finance Act 2025 receives Royal Assent

Wed, 02 Apr 2025 11:15:31 GMT

Finance Act 2025 receives Royal Assent

The first Finance Act of the Labour government has gained Royal Assent and passed into law.

The Finance Act 2025 makes major changes to the tax rules for non-doms, removes the VAT exemption for private school fees, increases some rates of Capital Gains Tax (CGT) and Stamp Duty Land Tax, and extends the energy profits levy on the oil and gas sector.

The abolition of the remittance basis of taxation for non-UK domiciled individuals sees it replaced it with a residence-based regime with effect from 6 April 2025. This means all longer-term UK residents will be taxed by the UK on their worldwide income and gains as they arise.

The Act removes the VAT exemption on the supply of private school fees, vocational training and, board and lodgings when supplied by a private school or similar institute.

The Act increases the main rates of CGT from 10% and 20% to 18% and 24% respectively for disposals made on or after 30 October 2024.

John Barnett, Chair of the Technical Policy and Oversight Committee at the Chartered Institute of Taxation (CIOT), said: ‘Moving from domicile to residence as the basis for taxing people who are internationally mobile makes sense.

‘As well as being a major simplification, it is a fairer and more transparent basis for determining UK tax.

‘Residence is determined by criteria far more objective and certain than the subjective concept of domicile. Replacing the outdated remittance basis is also sensible and the Temporary Repatriation Facility offers a helpful transition.’

2025 Spring Statement – the economic picture

Thu, 27 Mar 2025 09:36:56 GMT

2025 Spring Statement – the economic picture

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2025 Spring Statement – the political reaction

Thu, 27 Mar 2025 09:36:26 GMT

2025 Spring Statement – the political reaction

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2025 Spring Statement – the business reaction

Thu, 27 Mar 2025 09:35:40 GMT

2025 Spring Statement – the business reaction

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No further tax increases in Spring Statement

Thu, 27 Mar 2025 09:35:02 GMT

No further tax increases in Spring Statement

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OECD cuts UK growth forecasts

Wed, 26 Mar 2025 11:34:43 GMT

OECD cuts UK growth forecasts

UK growth will be weaker than previously expected this year and next, according to the Organisation for Economic Co-operation and Development (OECD).

The OECD cut its predictions for UK growth to 1.4% in 2025 and 1.2% in 2026, down from 1.7% and 1.3%, respectively.

The OECD said global growth would slow from 3.2% in 2024 to 3.1% in 2025 largely as a result of trade tensions sparked by President Trump.

In a stark warning, the OECD said in its interim economic outlook report that ‘consumers face much of the burden of higher tariffs’ as it cautioned over a significant impact on living standards.

The report shows that inflation in the G20 group of countries will rise to 3.8% this year and 3.2% next year.

Chancellor of the Exchequer, Rachel Reeves, said: ‘This report shows the world is changing, and increased global headwinds such as trade uncertainty are being felt across the board. ‘A changing world means Britain must change too, and we are delivering a new era of stability, security and renewal, to protect working people and keep our country safe. ‘This means we can better respond to global uncertainty, with the UK forecast to be Europe’s fastest growing G7 economy over the coming years – second only to the US.’

Act now to boost your state pension, warn tax experts

Wed, 26 Mar 2025 11:34:02 GMT

Act now to boost your state pension, warn tax experts

People should check their National Insurance contributions (NICs) record to see if they can boost their state pension entitlement before 5 April 2025, warns the Low Incomes Tax Reform Group (LITRG).

For a limited time, certain people are able to make voluntary contributions to cover any gaps in their NICs record dating back as far as the 2006/07 tax year, potentially boosting entitlement to the new state pension.

This applies to people who have already retired and are claiming the new state pension, as well as those who have not yet reached state pension age.

However, the extended window to make voluntary contributions for years from 2006/07 to 2018/19 will end on 5 April 2025, following which the window will revert to the usual six tax years.

Antonia Stokes, LITRG Interim Senior Manager, said: ‘If you have gaps in your National Insurance record, it can potentially make a big difference to the amount of state pension you receive now or in the future.

‘The deadline to make voluntary contributions dating back to 2006/07 will end in a few weeks’ time, so it is time to act if you want to take advantage of this.

‘The easiest way to find out if you have a gap in your National Insurance record and how much it might cost to plug it, is to check your online tax account on GOV.UK or contact the DWP.’

Government must tackle ‘archaic’ infrastructure

Wed, 19 Mar 2025 08:56:15 GMT

Government must tackle ‘archaic’ infrastructure

The British Chambers of Commerce (BCC) has called for the government to ‘tackle the problems of the UK’s worn out infrastructure’ in order to boost economic growth.

The business group has outlined a range of recommendations in a new report, including improving the road and rail capacity; delivering regional transport projects and grid connectivity; and listening to business on its national and regional infrastructure needs.

In addition, the BCC stated that the Infrastructure and Planning Bill, which is expected to be put before Parliament in due course, must have the interests of business at its heart.

The report revealed that 66% of business leaders believe their views aren’t considered when it comes to local infrastructure decisions.

Shevaun Haviland, Director General of the BCC, said: ‘If the government’s plans to power economic growth through a new era of construction are to be realised, then these are the issues that must be fixed.

‘It has already taken some positive steps in this direction. The recommendations in this report set out what needs to happen next. We must rebalance our approach to infrastructure and give businesses the confidence they need to align their investment plans.’

Side hustle trading threshold raised to £3,000 per year

Wed, 19 Mar 2025 08:55:34 GMT

Side hustle trading threshold raised to £3,000 per year

The reporting threshold for trading income for self assessment is being lifted from £1,000 to £3,000 gross within this parliament, according to the Treasury.

This includes people trading clothes online, dog-walking or gardening on the side, driving a taxi, or creating content online.

The Treasury says this will benefit around 300,000 taxpayers who will no longer need to file a self assessment tax return.

An estimated 90,000 of them will have no tax to pay and no reason to report their trading income to HMRC in the future at all. Others will be able to pay any tax they owe through a new simple online service.

The alterations are part of the government’s Plan for Change, which it says will drive forward efficiency reform.

James Murray, Exchequer Secretary to the Treasury, said: ‘From trading old games to creating content on social media, we are changing the way HMRC works to make it easier for Brits to make the very most of their entrepreneurial spirit.

‘Taking hundreds of thousands of people out of filing tax returns means less time filling out forms and more time for them to grow their side hustle.

‘We are going further and faster to overhaul the way HMRC works to make sure it delivers the Plan for Change that will help put more money in people’s pockets

Chancellor unveils plan to cut red tape

Wed, 19 Mar 2025 08:55:00 GMT

Chancellor unveils plan to cut red tape

Chancellor Rachel Reeves has unveiled plans to cut red tape as the government aims to kickstart economic growth.

The government says its Action Plan will save businesses across the country billions of pounds by cutting the number of regulators, streamlining their core legal duties and cracking down on complexity in the regulatory system.

It says regulators have signed up to 60 growth boosting measures, including fast-tracking new medicines to market through a new pilot to provide parallel authorisations from key healthcare regulators, so that patients can access the medicine they need quicker.

Other measures will boost infrastructure building by simplifying guidance to protect bat habitats and streamlining mortgage lending rules, including making it easier to re-mortgage with a new lender and reduce mortgage terms.

Ms Reeves said: ‘The world is changing and that’s why we must go further and faster to deliver on our Plan for Change to kickstart economic growth.

‘We are taking further action to free businesses from the shackles of regulation. By cutting red tape and creating a more effective system, we will boost investment, create jobs and put more money into working people’s pockets.’

Employment Rights amendments do little to address employer concerns

Wed, 12 Mar 2025 12:25:03 GMT

Employment Rights amendments do little to address employer concerns

The government’s proposed amendments to the Employment Rights Bill will ‘do little to alleviate employer concerns’, the Institute of Directors (IoD) has warned.

Changes to a number of proposals, including application of zero-hours contracts to agency workers and Statutory Sick Pay, have been announced.

In February, the IoD set out four key changes to the Employment Rights Bill which would significantly soften the negative impact of the reforms on hiring.

This included delaying protection against unfair dismissal so that it only comes into effect after six months rather than on day one and increasing the planned reference period for the entitlement to guaranteed hours to 52 weeks.

Alexandra Hall-Chen, Principal Policy Adviser for Employment at the IoD, said: ‘While any steps to mitigate the impact of the government’s employment reforms on businesses are welcome, the changes announced today do not address the key areas of the reforms which are of particular concern to employers.

‘Substantial further amendments to the Bill will be required if it is to avoid undermining the government’s growth mission. Our own data shows that directors’ headcount expectations have dropped to lows last seen in the depths of the Covid-19 pandemic. Urgent and substantive action from the government is needed to restore business confidence in hiring.’

25,000 first-time buyers set to miss Stamp Duty deadline

Wed, 12 Mar 2025 12:24:27 GMT

25,000 first-time buyers set to miss Stamp Duty deadline

25,000 first-time buyers are predicted to miss the 31 March Stamp Duty deadline, according to property website Rightmove.

This is based on homes priced up to £625,000, which is the current maximum Stamp Duty threshold to be considered a first-time buyer.

In total, an estimated nearly 74,000 home-movers in England are currently going through the legal completion process and will just miss the deadline and complete in April.

The net effect for this group, who are set to complete just one month later, is a collective £142 million in additional Stamp Duty tax, compared with what they would have paid if they’d been able to complete in March. For first-time buyers, it is a total of £34 million extra in costs.

Rightmove’s Property Market Expert, Colleen Babcock, said: ‘We expect a rush to complete close to 31 March as first-time buyers and home-movers try to avoid paying extra in tax. Our numbers show how there is a relatively small, but disproportionately impacted group of first-time buyers who will be caught out by the changing thresholds, highlighting some disparities in the way the current system works.

‘We think it would make sense to grant a short extension to the deadline and help these movers, rather than have them face higher charges when they complete later in April.’

Chancellor has set herself a ‘fiscal trap’ ahead of Spring Statement

Wed, 12 Mar 2025 12:23:50 GMT

Chancellor has set herself a ‘fiscal trap’ ahead of Spring Statement

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Gender pay gap ‘stubbornly high’

Wed, 05 Mar 2025 12:36:14 GMT

Gender pay gap ‘stubbornly high’

Research carried out by the Trades Union Congress (TUC) has suggested that the gender pay gap means women effectively work for free for the first 48 days of the year.

The business group found that in some industries and regions where the gender pay gap is wider, women effectively work for free for even longer.

It stated that the government’s Employment Rights Bill will help close the gap by making employers with over 250 employees outline their plans for reducing the pay gap.

The TUC also said that the Employment Rights Bill will be a ‘huge boost’ for working women due to the introduction of a right to sick pay from day one and banning zero-hours contracts that disproportionally affect women.

Paul Nowak, General Secretary of the TUC, said: ‘Everyone should be paid fairly for the job that they do.

‘But working women are still waiting for pay parity.

‘The Employment Rights Bill can help to close the gender pay gap by banning exploitative practices like zero-hours contracts that hit women the hardest.’

Workers ‘put in £31 billion of unpaid overtime’ in 2024

Wed, 05 Mar 2025 12:35:29 GMT

Workers ‘put in £31 billion of unpaid overtime’ in 2024

UK workers put in £31 billion of unpaid overtime in 2024, according to research carried out by the Trades Union Congress (TUC).

The business group found that unpaid overtime is an issue for a significant number of workers, with 3.8 million people undertaking unpaid overtime in 2024.

It revealed that those working in the teaching and healthcare sectors worked the most overtime without getting paid. Men and women are similarly likely to work unpaid overtime, with 13.1% of men and 13.2% of women working without being paid.

Commenting on the matter, Paul Nowak, General Secretary of the TUC, said: ‘Most workers don’t mind putting in extra hours from time to time, but they should be paid for it.

‘My message to workers who are unfairly being forced to put in unpaid hours is that help is on the way.

‘The Employment Rights Bill will make it easier for people to come together in a union and challenge unfair practices.

HMRC ‘softens’ deadline for National Insurance top-ups

Wed, 05 Mar 2025 12:34:51 GMT

HMRC ‘softens’ deadline for National Insurance top-ups

HMRC has softened the deadline for people to plug gaps in their National Insurance (NI) record.

To mitigate the impact of last-minute inquiries about State Pension top-ups before the 5 April deadline, the government has announced that individuals who request a call back from the Department for Work and Pensions (DWP) in relation to the issue will not be regarded as having missed the deadline.

Currently, savers can make voluntary additional contributions to plug NI gaps back to the 2006/07 financial year.

However, after the 5 April deadline, this will be reduced to only the previous six years. The government has set up an online call back request form for individuals unable to make contact before 5 April.

Steve Webb, former Pensions Minister, commented: ‘After the chaos in the run-up to previous deadlines, it is good that the government has planned ahead to make sure that people do not miss out simply because they cannot get through on official phone lines to discuss State Pension top-ups.’

Tax receipts rise at slower than expected pace

Wed, 26 Feb 2025 10:05:12 GMT

Tax receipts rise at slower than expected pace

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Entrepreneurs call for better access to financial products

Wed, 26 Feb 2025 10:04:35 GMT

Entrepreneurs call for better access to financial products

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HMRC cuts late and repayment interest rates

Wed, 26 Feb 2025 10:03:54 GMT

HMRC cuts late and repayment interest rates

HMRC reduced late payment and repayment interest rates from 25 February following the cut in the base rate.

The Bank of England cut the base rate to 4.5% on 6 February, triggering a 0.25% cut in HMRC interest rates which are pegged to the base rate.

From 25 February, the late payment interest rate reduced to 7.0% from 7.25%.

The repayment interest rate fell to 3.5% from 3.75% from 25 February.

HMRC late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit - or ‘minimum floor’ - of 0.5%.

Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments dropped to 5.5% from 5.75% from 17 February, a week earlier than the main late payment rate change.

Business confidence hits post-Covid low

Wed, 19 Feb 2025 16:04:56 GMT

Business confidence hits post-Covid low

Research carried out by the Federation of Small Businesses (FSB) has shown that confidence amongst small firms hit a post-Covid low in the final quarter of 2024.

The FSB’s Small Business Index (SBI) for quarter four of 2024 revealed that confidence levels fell to -64.5 points from -24.4 points in the previous quarter.

Tina McKenzie, Policy Chair at the FSB, said: The fourth quarter blues reported by small firms underline how urgently the government’s growth push is needed.

‘Small firms are understandably nervous about their prospects as 2025 gets underway.

‘The upcoming Employment Rights Bill is a major source of stress for small firms, with nine in ten business owners saying they are concerned about its introduction, and this is undoubtedly a major cause of the very subdued confidence levels seen in our research.’

A separate survey conducted by the Chartered Institute of Personnel and Development (CIPD) revealed that companies are planning to cut jobs or recruit fewer people ahead of the rise in employers’ National Insurance contributions (NICs) in April.

Firms polled by the CIPD also said they plan to increase prices to cover rising employment costs.

Business group urges government to help firms grow

Wed, 19 Feb 2025 16:04:21 GMT

Business group urges government to help firms grow

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Small firms call for £3,000 apprentices incentive

Wed, 19 Feb 2025 16:03:49 GMT

Small firms call for £3,000 apprentices incentive

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Firms face increasing cyber security risk, warns BCC

Wed, 12 Feb 2025 12:23:48 GMT

Firms face increasing cyber security risk, warns BCC

UK businesses face increased cyber security risks without stronger engagement with government, the British Chambers of Commerce (BCC) has warned.

A report published by the BCC’s Digital Revolution Challenge Group advises that the Cyber Security and Resilience Bill, due to be published this year, must be developed in full consultation with businesses.

The BCC is calling for ministers to:

· Conduct a cyber security awareness programme for businesses, particularly smaller firms.

· Update the National Cyber Strategy.

· Reform cyber security insurance to provide firms with better protection.

· Address the shortage of UK cyber security professionals and support more training in all workplaces.

· Engage directly with businesses to strengthen confidence in the UK’s digital infrastructure.

Alex Veitch, Director of Policy at the BCC, said: ‘Cyber threats against businesses are growing, and without coordinated action many SMEs will remain at risk. Our report outlines some immediate actions for ministers to engage directly with firms.

‘There’s a lack of specialist digital security knowledge in many smaller companies. Government needs to take the lead and proactively engage with business to raise awareness.

‘Businesses are keen to see the detail of the Cyber Security and Resilience Bill in the coming months. The legislation must send a signal of confidence to the UK’s SMEs and not create unnecessary costs and reporting burdens.’

Business tax compliance costs £15 billion a year

Wed, 12 Feb 2025 12:23:12 GMT

Business tax compliance costs £15 billion a year

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£35 million added to State Pension pots

Wed, 12 Feb 2025 12:22:25 GMT

£35 million added to State Pension pots

People plugging gaps in their National Insurance contributions (NICs) have added £35 million to their State Pensions since last April, according to figures from HMRC.

More than 37,000 online payments have been made through the online service, equating to 68,673 years of contributions.

The average online top-up payment is £1,835 and the largest weekly State Pension increase is £113.76. HMRC says that 65% of the years topped up by customers are from 2017 onwards.

HMRC and the Department for Work and Pensions (DWP) are reminding customers they only have until 5 April to check their NICs record and fill any gaps from 6 April 2006 onwards.

From 6 April 2025, people will only be able to make voluntary NICs for the previous six tax years, in line with normal time limits.

The Check your State Pension forecast service on GOV.UK is the quickest and easiest way to check if action is required, HMRC said. The HMRC app can also be used.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said: ‘There are just two months left to check and fill any gaps in your NICs record from 2006 onwards to boost your State Pension entitlement. Don’t delay - it is quick and easy to check your NICs record on GOV.UK and it could help your finances in retirement.’

Pension reforms to ‘unlock billions’ in government growth agenda

Wed, 05 Feb 2025 11:01:33 GMT

Pension reforms to ‘unlock billions’ in government growth agenda

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British household wealth increases to £13.6 trillion

Wed, 05 Feb 2025 11:00:50 GMT

ritish household wealth increases to £13.6 trillion

Data published by the Wealth and Assets Survey (WAS) has showed that British household wealth hit a record high of £13.6 trillion in the two years to March 2022.

The survey found that British household wealth grew at a faster pace than the size of the UK economy.

It also revealed that there are ‘growing wealth gaps’ between generations – between 2018 to 2020 and 2020 to 2022, typical financial wealth for an individual aged between 65 and 74 rose by £3,300 compared to an increase of just £800 for a person aged between 25 and 34.

Think tank the Resolution Foundation suggested that high inflation and rising interest rates are likely to have eroded the real value of household wealth during the cost-of-living crisis.

Simon Pittaway, Senior Economist at the Resolution Foundation, said: ‘New data shows British household wealth reached £13.6 trillion on the eve of the cost-of-living crisis – six times larger than the size of the economy.

‘While this wealth creation is good news for many, the increases in wealth were not equally shared, with financial wealth for someone aged between 65 and 74 increasing by £3,300 in real terms, compared with just £800 for someone aged between 25 and 34.’

11.5 million file self assessment by 31 January deadline

Wed, 05 Feb 2025 11:00:08 GMT

11.5 million file self assessment by 31 January deadline

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Business group outlines pro-growth measures

Wed, 22 Jan 2025 10:47:41 GMT

Business group outlines pro-growth measures

The Federation of Small Businesses (FSB) has proposed a set of pro-growth measures to some of the UK’s leading regulators.

The measures are designed to ‘unlock small business growth’ and are aimed at seven UK regulators, including the Financial Conduct Authority (FCA), the Finance Reporting Council (FRC), Ofgem, Ofwat, Ofcom, the Competition and Markets Authority (CMA) and the Information Commissioner’s Office (ICO).

In a letter to the regulators, the FSB said it believes they ‘have a duty to take a long hard look at current activities in their sphere for their impact on economic growth – to be pro-growth and pro-investment in their undertakings’.

Tina McKenzie, Policy Chair at the FSB, said: ‘Regulators must grasp this opportunity to propose small business growth measures within their activities and remits. We’re also keen to see ministers and all public bodies put their shoulders to the wheel on growth, alongside business and industry.

‘Regulating for growth doesn’t always mean deregulation – sometimes it means better protection for small firms as consumers.’ The FSB’s measures can be read in full here.

Flexibility in English and Maths rules would increase take up of apprenticeships

Wed, 22 Jan 2025 10:46:42 GMT

Flexibility in English and Maths rules would increase take up of apprenticeships

Almost three quarters of UK business say they should be able to decide whether adult apprentices should be required to undertake English and Maths qualifications, according to a recent poll by the Institute of Directors (IoD).

The December 2024 survey of IoD members also found that a third of respondents thought that this flexibility would make their organisation more likely to offer an apprenticeship.

Alex Hall-Chen, Principal Policy Advisor for Skills at the IoD, said: ‘Apprenticeships are a vital tool in tackling the UK’s persistent skills shortages, yet apprenticeship starts have almost halved since 2015. Removing any unnecessary barriers to apprenticeship uptake should be a priority for the government.

‘This research shows that giving employers flexibility when it comes to English and Maths qualifications for adult apprentices has the potential to be an impactful first step in reversing this decline.

‘While it is crucial that literacy and numeracy skills are embedded in all apprenticeships, employers are well-placed to judge whether English and Maths qualifications are the most appropriate route to evidence or develop the literacy and numeracy skills needed for success in the given career path.’

IMF upgrades UK outlook

Wed, 22 Jan 2025 10:46:05 GMT

MF upgrades UK outlook

The International Monetary Fund (IMF) has upgraded its growth forecast for the UK economy this year.

The global institution upgraded its prediction for UK growth to 1.6% for this year from its previous estimate of 1.5%.

As well as upgrading its outlook for the UK, the IMF suggested the UK economy would perform better than European economies such as Germany, France and Italy over the next two years.

However, the latest IMF figures suggested the UK economy had weaker growth last year than the organisation had expected.

Chancellor Rachel Reeves said: ‘The UK is forecast to be the fastest growing major European economy over the next two years and the only G7 economy, apart from the US, to have its growth forecast upgraded for this year.

‘I will go further and faster in my mission for growth through intelligent investment and relentless reform and deliver on our promise to improve living standards in every part of the UK through the Plan for Change.

Government to ‘unleash’ AI to boost growth

Wed, 15 Jan 2025 10:05:40 GMT

Government to ‘unleash’ AI to boost growth

Prime Minister Keir Starmer has indicated that the government intends to use Artificial Intelligence (AI) to help boost UK growth.

In a recent speech, Mr Starmer outlined how the government will utilise AI across the UK to boost growth and efficiently deliver services.

The AI Opportunities Action Plan will create 13,250 new jobs and is endorsed by top technology businesses, a number of which have contributed £14 billion towards data centres and tech hubs.

The government has highlighted how it will make use of AI to help the public sector spend less time doing admin and more time delivering services. It also stated that the AI plan will create ‘AI Growth Zones’ around the UK, which will generate new jobs and big building projects.

In the speech, the Prime Minister said: ‘Britain is going to shape the future. We are going to make breakthroughs, we are going to create the wealth and we are going to make AI work for everyone in our country.’

92% of employers ‘concerned about Employment Rights Bill

Wed, 15 Jan 2025 10:04:53 GMT

92% of employers ‘concerned about Employment Rights Bill

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Have you made your financial New Year’s resolutions?

Thu, 02 Jan 2025 10:25:22 GMT

Have you made your financial New Year’s resolutions?

With 2025 just around the corner, you may wish to consider creating some financial New Year’s resolutions to ensure that you remain on course for a profitable and successful year ahead.

It is important to make the most of your personal and business wealth, and ensure you make the most of any allowances and reliefs that may be available to you. Inadequate financial planning may mean that you aren’t able to make use of tax-saving opportunities.

Stay on track to achieve your financial goals by analysing your financial planning strategies thoroughly.

As your accountants, we can assist you in applying strategies to improve your business’s bottom line. We will also recommend a handful of ways to minimise your tax bill.

We understand that organising your finances often poses an unwelcome burden. That is why we are on hand, helping you to manage your personal and business finances and stay on track in 2025.

For more information on how we can assist you during 2025 and beyond, please contact us.

Insurer issues Christmas scams warning

Thu, 02 Jan 2025 10:24:25 GMT

Insurer issues Christmas scams warning

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Don’t forget to file your self assessment tax return

Thu, 02 Jan 2025 10:23:43 GMT

Don’t forget to file your self assessment tax return

HMRC has urged taxpayers to file their self assessment tax returns early.

Self assessment taxpayers need to complete their tax return and pay any tax owed by the 31 January 2025 deadline or risk having to pay a penalty.

Those who file their return before 30 December may also have the option of paying any tax owed through their PAYE tax code.

HMRC is reminding people to get their 2023/2024 self assessment tax return wrapped up early so they can make the most of the festive season.

Filing early means if taxpayers owe money, they have plenty of time to decide which of the payment options available is best for them by visiting GOV.UK. Customers should include their bank account details so that if HMRC needs to repay them it can be done quickly and securely.

We can help with all aspects of self assessment, including filing returns on your behalf. Please contact us.

Economic slowdown affecting employment

Tue, 24 Dec 2024 11:40:08 GMT

Economic slowdown affecting employment

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£1.31 billion paid in Stamp Duty in November

Tue, 24 Dec 2024 11:39:20 GMT

£1.31 billion paid in Stamp Duty in November

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Spring Forecast to take place in March

Tue, 24 Dec 2024 11:38:44 GMT

Spring Forecast to take place in March

Chancellor Rachel Reeves has confirmed that the Spring Forecast will take place on Wednesday 26 March 2025.

The Chancellor confirmed that the Office for Budget Responsibility (OBR) has been commissioned to publish an Economic and Fiscal Forecast, which will also be issued on 26 March. The OBR is legally mandated to publish two forecasts every financial year.

Ms Reeves stated: ‘I intend to respond to the March forecast with a parliamentary statement.

‘This is in line with my commitment to deliver one major fiscal event a year, to give families and businesses the stability and certainty they need and, in turn, to support the government’s growth mission.’

A multi-year Spending Review is also due in 2025, and the Chancellor has indicated that this will require the government to make savings amounting to 5% of spending.

HMRC urged to improve low resolution rates

Wed, 18 Dec 2024 11:28:44 GMT

HMRC urged to improve low resolution rates

The Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to address ten recommendations it has made for improving the Revenue’s customer services.

In a joint report with the Chartered Institute of Taxation (CIOT), the ICAEW stated that it is ‘widely acknowledged’ that HMRC struggles to meet the needs of taxpayers and agents.

The report found that agents often face difficulties contacting HMRC and when they do get through they can’t resolve the query on the first attempt.

Other issues include insufficient technical knowledge on behalf of HMRC’s advisers and problems with HMRC’s implementation of digital services.

The ICAEW and the CIOT have outlined ten recommendations to help HMRC improve its services.

‘Problems with HMRC customer service are well-documented, so it’s not a surprise that our research shows that although agents can generally connect with HMRC advisers through the phonelines, there are still significant challenges,’ said Frank Haskew, Head of Taxation at the ICAEW.

‘In particular, wait times are notably long and resolution rates are poor, with only a third of contact attempts fully resolved during the first call.

‘In our view, one of the most effective ways to reduce pressure on HMRC's traditional support channels is to minimise the need for agents to call in the first place. We found that over a third of calls to HMRC are for progress chasing and we’d like to see the introduction of a dedicated mechanism to meet this demand.’ The ICAEW’s recommendations can be read here.

Chancellor must ‘confront range of challenges’ in Spending Review

Wed, 18 Dec 2024 11:28:08 GMT

Chancellor must ‘confront range of challenges’ in Spending Review

Think tank the Resolution Foundation has stated that Chancellor Rachel Reeves will need to ‘confront the good, the bad and the ugly’ in the upcoming Spending Review.

The Foundation said the ‘good’ challenge will be allocating £100 billion of capital spending announced at the Autumn Budget on 30 October. It said that where this money is spent will help to determine whether the UK is able to boost economic growth over the medium-term.

According to the Resolution Foundation, the government also needs to outline how it intends to cut day-to-day spending by £8.4 billion after 2025/26.

It warned that these spending decisions may have to be made against a ‘backdrop of a weaker economic outlook’. The Foundation stated that the Office for Budget Responsibility (OBR) may downgrade its outlook for productivity. It warned that just a 0.2% cut in the OBR’s forecast for trend productivity growth would increase borrowing by around £20 billion.

James Smith, Research Director at the Resolution Foundation, said: ‘The Chancellor will need to use the Spending Review to confront the good, the bad and the ugly of UK economic policy. The £100 billion of extra investment announced at the Autumn Budget was hugely welcome, but it will need to spent well to boost growth.

‘Even more challenging will be finding further savings from already stretched departments while ensuring that the quality of public services improves over the parliament.’

HMRC urges self assessment taxpayers to spread the cost

Wed, 18 Dec 2024 11:27:28 GMT

HMRC urges self assessment taxpayers to spread the cost

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Number of taxpayers caught in 60% ‘tax trap’ rises

Wed, 11 Dec 2024 11:50:19 GMT

Number of taxpayers caught in 60% ‘tax trap’ rises

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No tax changes for online sellers

Wed, 11 Dec 2024 11:29:59 GMT

No tax changes for online sellers

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Interest rates ‘set to be higher for longer’

Wed, 11 Dec 2024 11:28:45 GMT

No tax changes for online sellers

The Organisation for Economic Co-operation and Development (OECD) has warned that interest rates will be higher for longer due to the recent Autumn Budget.

The OECD said that whilst the Budget would help to boost the UK economy in the short-term, changes to tax policy and spending mean that borrowing costs will fall more slowly.

OECD forecasts suggest that the economy will grow more slowly this year than previously anticipated. According to the OECD, the UK economy will grow by 0.9% this year, down from a previous prediction of 1.1%. The economy will then grow by 1.7% in 2025 and 1.3% in 2026.

Responding to the forecast, Chancellor Rachel Reeves said: ‘Growth is our number one priority.

‘Growth only matters if it’s matched by more money in people’s pockets.

‘This government will get our economy growing with our National Wealth Fund, reforming the remits of our regulators and pension megafunds to attract better investment, as well as reforming our planning laws – all so that we can rebuild Britain for good.

Business groups respond to Get Britain Working white paper

Wed, 04 Dec 2024 11:38:58 GMT

Business groups respond to Get Britain Working white paper

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CBI calls for action to ‘turbocharge growth’

Wed, 04 Dec 2024 11:38:05 GMT

CBI calls for action to ‘turbocharge growth’

The Confederation of British Industry (CBI) has warned that business margins are being squeezed and profits are being hit as a result of the measures announced by Chancellor Rachel Reeves at the Autumn Budget.

A post-Budget survey carried out by the business group showed that two thirds of firms believe that the measures announced will damage UK investment, with half of businesses seeking to reduce headcount as a result.

The CBI has called on the government to take action on the ‘pressing challenges’ facing business, including reforming the business rates system, improving flexibility of the Apprenticeship Levy and building for the long-term by using the Industrial Strategy to ‘mobilise the everyday economy’.

Speaking at the CBI’s Annual Conference, Rain Newton-Smith, CEO of the CBI, said: ‘Tax rises like this must never again be simply done to business. That’s the road to unintended consequences. From now on we need an elevated partnership for a higher purpose.

‘Too many businesses are having to compromise on their plans for growth.

‘National Insurance Contribution (NIC) rises are one lever government has chosen to pull that’s piled on the pressure. So we must open a valve to ease that.’

Retailers write to Chancellor over Autumn Budget measures

Wed, 27 Nov 2024 13:17:07 GMT

Retailers write to Chancellor over Autumn Budget measures

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Intergenerational transfers ‘having profound impact on people’s economic prospects’

Wed, 27 Nov 2024 13:16:26 GMT

Intergenerational transfers ‘having profound impact on people’s economic prospects’

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BCC calls for industrial strategy that benefits all parts of UK

Wed, 27 Nov 2024 13:15:39 GMT

BCC calls for industrial strategy that benefits all parts of UK

The British Chambers of Commerce (BCC) has called for an industrial strategy that ‘brings benefits to businesses and people in all parts of the UK’.

The industrial strategy is set to be published in the Spring of 2025 alongside the Spending Review.

In a submission to a government consultation, the business group advised ministers to ‘integrate each nation and region’s strengths’ into a new strategy and provide a focus on sectors.

Ministers should ‘identify growth-driving priority sectors’, the BCC said. It also called for the industrial strategy to ‘clearly identify how the UK’s competitive advantage can be leveraged’.

The BCC said the new industrial strategy must drive investment, support workforces and encompass the transition to net-zero.

Commenting on the matter, Jonny Haseldine, Policy Manager at the BCC, said: ‘The industrial strategy is a much-needed opportunity to boost economic growth and investment.

‘With millions of businesses now facing increased costs following last month’s Budget, even more is now riding on the government’s strategy. Firms in every corner of the UK need this plan to deliver at pace for their needs and their communities.’

Permanent business rate cut for high street on the way

Wed, 20 Nov 2024 10:23:48 GMT

Permanent business rate cut for high street on the way

The government has published draft legislation to permanently cut business rates for retail hospitality and leisure properties from 2026.

The tax cut will be funded by a tax rise for the very largest business properties, such as online sales warehouses, the government added.

Until then, 250,000 retail, hospitality and leisure (RHL) properties will receive 40% relief off their business rates bills up to £110,000 per business to help smooth the transition to the new system.

This support is alongside the Budget announcement to freeze the small business multiplier, together with Small Business Rates Relief protecting over a million properties.

James Murray, Exchequer Secretary to the Treasury, said: ‘For too long the business rates system has been working against our high streets.

‘[This] is a major step towards our new system that will support retail, hospitality and leisure businesses on our high streets to succeed.

‘This Bill paves the way for a permanent cut to their tax rate, helping to level the playing field between them and online and out-of-town businesses.’

Hybrid working the ‘new normal’ for a quarter of adults

Wed, 20 Nov 2024 10:23:00 GMT

Hybrid working the ‘new normal’ for a quarter of adults

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Pension reforms ‘must unlock growth’

Wed, 20 Nov 2024 10:22:16 GMT

Pension reforms ‘must unlock growth’

Pension reforms announced by Chancellor Rachel Reeves must unlock growth, the British Chambers of Commerce (BCC) recently said.

Pension megafunds will be created as part of the biggest set of pension reforms in decades. The government says this will unlock billions of pounds of investment in exciting new businesses and infrastructure and local projects.

The radical reforms, which will be introduced through a new Pension Schemes Bill next year, will create megafunds through consolidating defined contribution schemes and pooling assets from the 86 separate Local Government Pension Scheme authorities.

These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential, which could deliver around £80 billion in investment in exciting new businesses and critical infrastructure while boosting defined contribution savers’ pension pots.

Shevaun Haviland, Director General at the BCC, said: ‘Increased investment in the UK economy is crucial if businesses are to deliver the growth we all want to see.

‘And with firms facing into a wall of fresh costs after a tough Budget, it is important that the Chancellor looks at the options to unlock more funding.

‘UK pensions can be a crucial component in doing that. They can generate billions for investment in infrastructure projects and the businesses of the future.’

Government bank referral scheme ‘secured loans for just one in 20 companies’

Thu, 14 Nov 2024 16:58:49 GMT

Government bank referral scheme ‘secured loans for just one in 20 companies’

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Business frustrated at halt in rollout of digital trade platform

Thu, 14 Nov 2024 16:58:02 GMT

Business frustrated at halt in rollout of digital trade platform

Businesses will be frustrated by the government’s decision to pause work on the Single Trade Window, according to the Institute of Directors (IoD).

When fully operational, the Single Trade Window will provide a gateway between businesses and UK border processes and systems, allowing users to meet their import, export and transit obligations by submitting information once, and in one place.

However, the government now says that in the context of financial challenges, it is pausing delivery of the UK Single Trade Window in 2025/26.

Emma Rowland, Trade Policy Advisor at the IoD, said: ‘It is frustrating to see the government’s decision to halt the development of the Single Trade Window due to financial constraints following the Budget, particularly given extensive industry engagement and the project’s proximity to completion.

‘According to our own data, paperwork remains the largest obstacle for organisations involved in international exports. The Single Trade Window, designed to streamline border processes through a unified platform, has the potential to significantly ease this administrative burden on firms, making importing and exporting more efficient. Additionally, it could enhance data collection to better monitor and understand UK trade flows.

‘We urge the government to prioritise the Single Trade Window in the upcoming Spring Spending Review to facilitate trade for all UK companies.’

Almost half of UK adults have not written a will

Thu, 14 Nov 2024 16:57:26 GMT

Almost half of UK adults have not written a will

Nearly half UK of adults have not written a will, nor are they currently in the process of doing so, according to research published by insurer Canada Life.

Over a quarter said they do not have enough assets or wealth to warrant making a will, closely followed by 20% who believe they still have plenty of time to make one.

Additionally, the research found that 15% do not want to pay to write a will, while 14% believe their loved ones will inherit their assets automatically.

Stacey Love, Tax and Estate Planning Specialist at Canada Life, said: ‘Passing away without a will in place can place a significant burden on our loved ones. However, our research highlights that, up and down the country, people are not planning ahead or having conversations about the future.

‘No matter your age, writing a will should be a priority, even if you don’t think you have any real wealth to pass on. It’s also very important to have open, honest conversations with your loved ones about your inheritance plans, so they know what to expect.

‘Once your will is written, remember to review it every few years to make sure it remains accurate. Family circumstances can change over time, and so your will needs to reflect this.’

2024 Autumn Budget – the economic picture

Thu, 31 Oct 2024 10:57:08 GMT

2024 Autumn Budget – the economic picture

Within her Autumn Budget speech, Chancellor Rachel Reeves announced that the UK economy will grow by 1.1% this year, 2% next year and by 1.8% in 2026.

According to the Office for Budget Responsibility (OBR), the government’s official forecaster, inflation is predicted to average 2.5% this year and 2.6% in 2025.

It stated that Budget policies temporarily boost output in the near term, but leave GDP ‘largely unchanged’ in five years.

It also said that Budget policies increase spending by nearly £70 billion a year over the next five years. Half of the increase is funded through tax rises and the other half by a £32 billion a year increase in borrowing.

The OBR stated that borrowing is projected to rise from £122 billion last year to £127 billion this year and is predicted to fall to £71 billion in 2029. Additionally, net debt falls as a share of GDP, from 98.4% this year to 97.1% by the end of the decade.

2024 Autumn Budget – the political reaction

Thu, 31 Oct 2024 10:56:34 GMT

2024 Autumn Budget – the political reaction

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2024 Autumn Budget – the business reaction

Thu, 31 Oct 2024 10:56:01 GMT

2024 Autumn Budget – the business reaction

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More than £570 million stolen by criminals in first half of 2024

Wed, 30 Oct 2024 11:18:56 GMT

More than £570 million stolen by criminals in first half of 2024

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Real Living Wage goes up by 5%

Wed, 30 Oct 2024 11:18:20 GMT

Real Living Wage goes up by 5%

The Real Living Wage is set to rise by 5% giving almost half a million workers a pay rise to £12.60 an hour, the Living Wage Foundation has announced.

In London, the Living Wage will increase to £13.85 as over 15,000 employers across the UK follow the increase.

The Real Living Wage is different to the government’s minimum wage rate, which for those over the age of 21 is called the National Living Wage (NLW) and is currently £11.44 an hour. It is a higher, voluntary rate that is independently calculated based solely on the actual cost of living.

A full-time worker earning the Real Living Wage would earn £2,262 a year more than a worker earning the current NLW and £1,170 more than their current pay.

Katherine Chapman, Living Wage Foundation Director, said: ‘Low paid workers have been hardest hit by the cost-of-living crisis and are still struggling to stay afloat amidst persistently high prices.

‘The Real Living Wage remains the only UK wage rate calculated based on actual living costs, and the new rates . . . will make a massive difference to almost half a million workers who will see their pay increase.

‘It's a challenging time for businesses too, which is why it is so encouraging to see the Living Wage movement continue to grow at pace.’

New Growth and Skills Levy must end ‘cycle of failure’

Wed, 16 Oct 2024 09:44:07 GMT

New Growth and Skills Levy must end ‘cycle of failure’

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‘Strong case for capital gains tax reform’, says IFS

Wed, 16 Oct 2024 09:43:23 GMT

‘Strong case for capital gains tax reform’, says IFS

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UK Finance urges government to deliver economic growth in Budget submission

Wed, 16 Oct 2024 09:42:38 GMT

UK Finance urges government to deliver economic growth in Budget submission

Trade association UK Finance has called on the government to deliver economic growth in the upcoming Autumn Budget.

In its Autumn Budget submission, UK Finance has focused on helping to deliver economic growth; clean energy and the transition to net-zero; and tackling fraud to keep people safe.

UK Finance has called for the roadmap for business taxation to include a specific plan for banks; the creation of a new, cross-government taskforce to tackle financial abuse; and the maintenance of the threshold at which first-time buyers pay Stamp Duty.

It also urged the government to make technology, social media and telecoms companies contribute to the cost of tackling economic crime.

In regard to net-zero, UK Finance called for investment roadmaps for key sectors of the economy to be published and a Stamp Duty rebate scheme to be introduced to ‘incentivise homeowners to upgrade the energy efficiency of their homes’.

Commenting on the Budget submission, David Postings, Chief Executive of UK Finance, said: ‘The new government has been clear that it is focused on delivering sustained economic growth, and financial services are vital in achieving that goal.

‘The upcoming Budget is an important opportunity for the government to set out a clear plan for the UK. In our submission, we have called on the government to not only introduce measures to bolster growth, but also a range of ideas to help support households and businesses up and down the country.

Government cracks down on late payments

Thu, 03 Oct 2024 11:37:28 GMT

Government cracks down on late payments

The government has announced a crackdown on late payments to small businesses and the self-employed.

Late payments cost SMEs £22,000 a year on average, according to Smart Data Foundry, while the Federation of Small Businesses says it leads to 50,000 business closures a year.

The government will consult on new laws that will hold larger firms to account and aim to get cash flowing back into businesses.

In addition, new legislation being brought in the coming weeks will require all large businesses to include payment reporting in their annual reports - putting the onus on them to provide clarity in their annual reports about how they treat small firms. This will mean company boards and international investors will be able to see how firms are operating.

Anna Leach, Chief Economist at the Institute of Directors (IoD), said: ‘For small businesses in particular, the time taken to pay an invoice matters. Companies that are paid swiftly can raise their productivity by spending more time on projects of economic value and less time chasing invoices.

‘We know from our research that there is a significant lack of awareness amongst businesses of the ability to check on the payment practices of large employers, and even fewer feel able to take enforcement action against their customers.

‘By ensuring that there is increased visibility of payment practices, reputational pressure will spur change in poorly performing firms, rather than smaller suppliers needing to try and negotiate in isolation.’

Young people reminded to reclaim government savings

Thu, 03 Oct 2024 11:36:19 GMT

Young people reminded to reclaim government savings

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Government announces apprenticeship reforms

Thu, 03 Oct 2024 11:35:39 GMT

Government announces apprenticeship reforms

The government has announced an overhaul of the UK’s apprenticeship system.

A new growth and skills levy will replace the existing apprenticeship levy and include new foundation apprenticeships.

The government says these new apprenticeships will give young people a route in to careers in critical sectors, enabling them to earn a wage whilst developing vital skills.

The new levy will also allow funding for shorter apprenticeships, giving learners and employers greater flexibility over their training than under the existing system – where apprenticeships must run for at least 12 months.

The training eligible for funding under the new levy will develop over time, informed by Skills England’s assessment of priority skills needs, the government adds.

The Department for Education will set out further details on the scope of the offer and how it will be accessed in due course.

Alex Veitch, Director of Policy at the British Chambers of Commerce (BCC), said: ‘Skills shortages continue to be a major concern for businesses and a drag on economic growth.

‘The proposed new Growth and Skills Levy was a key part of the government’s plans at the election. It is welcome ministers have acted early to give more details about skills reform.

‘We’ve long argued that the current Apprenticeship Levy needs urgent reform to make it more flexible. Businesses need a simple, coherent and responsive system that properly incentivises employer investment in training.’

Savers added £42 billion into cash ISAs in first half of 2024, data shows

Wed, 25 Sep 2024 14:55:57 GMT

Savers added £42 billion into cash ISAs in first half of 2024, data show

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Chancellor hits the right notes in Conference speech

Wed, 25 Sep 2024 14:55:11 GMT

Chancellor hits the right notes in Conference speech

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HMRC urged to take action to ‘defuse side hustle time bomb

Wed, 25 Sep 2024 14:49:05 GMT

HMRC urged to take action to ‘defuse side hustle time bomb’

The Low Incomes Tax Reform Group (LITRG) has urged HMRC to take action in order to make sellers aware of the fact that they may need to file a tax return and pay tax on their online trading income.

In a new paper, the LITRG said that although there is no change to existing tax rules, HMRC will have more information on who is earning income via online platforms and will be more able to find out who owes tax on their earnings.

The LITRG argues that the new reporting rules could ‘cause chaos’ for taxpayers when the first reports are sent to HMRC and sellers in early 2025.

It has called on HMRC to strengthen its guidance for sellers using online platforms and standardise information so that users can easily understand it and report earnings by tax year.

Commenting on the matter, Claire Thackaberry, Technical Officer at the LITRG, said: ‘There are just over three months to go until HMRC starts getting information about the income and activities of people who use online platforms to make money. We are concerned that we will see the same chaos and confusion that arose when the rules first came into effect.

‘Time is running out for HMRC to defuse this ticking time bomb. The information that HMRC will receive from platforms will be presented by calendar year, therefore covering more than one tax year. This could make it more difficult to work out when tax is due.’

Pension pot needed for basic retirement rises to nearly £110,000

Wed, 11 Sep 2024 11:59:10 GMT

Pension pot needed for basic retirement rises to nearly £110,000

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Scam complaints reach highest ever level, data shows

Wed, 11 Sep 2024 11:58:23 GMT

Scam complaints reach highest ever level, data show

Data published by the Financial Ombudsman Service has revealed that fraud and scam complaints have hit their highest ever level.

The data showed that more than 8,700 scam cases were reported in a three-month period, with more than half of these being related to online bank transfers.

The Financial Ombudsman Service said that fraud is becoming ‘more complex and convincing’, with criminals involving multiple bank accounts.

In the first quarter of this financial year, 8,734 complaints were made regarding fraud and scams. Over half of these were related to customer-approved online bank transfers, termed authorised push payment scams.

Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, said: ‘Being a victim of a fraud and scam is a horrendous experience – not just financially, but emotionally too. That’s why it’s disappointing to see complaint levels rising to even higher levels.

‘We often hear from people embarrassed to have fallen victim to a fraud, but these crimes can be complex and incredibly convincing, and nobody should be afraid to come forward.’

HMRC sends ‘nudge letters’ to crypto investors

Wed, 04 Sep 2024 16:19:59 GMT

HMRC sends ‘nudge letters’ to crypto investors

HMRC has ‘sent nudge’ letters to crypto investors who it suspects have failed to pay the correct tax on their gains, according to the Chartered Institute of Taxation (CIOT).

Many crypto investors are unaware of their tax obligations due to uncertainty over tax rules and limited understanding of the nature of crypto assets.

A chargeable disposal occurs when individual:

· Sells crypto assets for fiat currency.

· Exchanges one crypto asset for another.

· Uses crypto assets to buy goods or services.

· Gives away crypto assets to someone other than spouse or civil partner (in this instance, the individual is deemed to receive the value of the asset even if they do not actually receive anything).

Gary Ashford, Chair of the CIOT’s Crypto Assets Working Group, said: ‘Many investors may be unaware that profits from crypto assets are subject to income tax or capital gains tax (CGT) like any other asset, depending on how they’re held.

‘If you receive a ‘nudge letter’ from HMRC, it's important to take it seriously. Even those who don’t receive a letter should review their crypto activity and file a tax return or use the capital gains real time transaction service if necessary.

‘Sometimes tax can be due even where the investor does not think his or her investments have been profitable. Selling, lending or ‘staking’ crypto assets – or potentially even just transferring assets between crypto sites and portfolios – will usually trigger a disposal in the tax year in question.’

HMRC debunks top five self assessment ‘myths

Wed, 04 Sep 2024 16:19:28 GMT

HMRC debunks top five self assessment ‘myths’

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UK has record number of self-employed workers aged 60 or over

Thu, 29 Aug 2024 07:49:11 GMT

UK has record number of self-employed workers aged 60 or over

The number of self-employed people aged 60 or over has reached a record of almost a million, according to analysis by Rest Less.

These numbers have increased by over a third in the past decade, totalling 991,432 self-employed people aged 60 or over in 2023.

The analysis found that while the number of self-employed workers in their 50s and older has grown since 2021, it is those in their 60s who have set the new high.

The total number of workers who are self-employed is about 4.3 million, after a two-year recovery following a sharp fall during the pandemic, according to the research

Stuart Lewis, Chief Executive of Rest Less, said: ‘With the state pension age soon to be 67 and set to go higher still, many people are choosing to work beyond the point of traditional retirement.

‘For many, self-employment is a great option as it allows people to remain active and engaged in the community and workforce whilst also providing greater flexibility – leveraging their skills, experience and network to make an impact.’

2024 could see ‘record number’ of company creations

Thu, 29 Aug 2024 07:48:30 GMT

2024 could see ‘record number’ of company creations

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Government contracts ‘out of reach’ for SMEs, business group warns

Wed, 14 Aug 2024 12:05:11 GMT

Government contracts ‘out of reach’ for SMEs, business group warns

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£19 billion in unpaid taxes ‘unlikely to be recovered’

Wed, 14 Aug 2024 12:04:23 GMT

£19 billion in unpaid taxes ‘unlikely to be recovered’

HMRC has stated that it is ‘unlikely to recover’ over £19 billion in unpaid taxes, which have accumulated as as a result of uncollected tax debt and a plethora of HMRC customer service failures.

HMRC’s latest annual report showed that the total amount of unpaid taxes has risen to £43 billion. According to HMRC, the proportion of these unpaid taxes now considered unlikely to be recovered has increased to 45% from 32% in 2023.

According to the report, HMRC customer service failures have also contributed to the issue. The report showed that every customer service target set by the previous government has been missed.

Data revealed that almost 56,000 taxpayers were cut off after being on hold to HMRC for over an hour, and the average wait time for phone calls to HMRC rose to 23 minutes and 14 seconds – representing a 42% increase when compared to 2023.

A spokesperson for HMRC said: ‘We do everything we can to help those who engage with us to get out of debt. With research and development claims, public money is at stake, which is why we have increased compliance activity.’

Chancellor refuses to rule out CGT rise

0064444792 (Amreth Sharma) — Wed, 14 Aug 2024 12:03:39 GMT

Chancellor refuses to rule out CGT rise

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HMRC failing on responsiveness, says Charter report

Wed, 07 Aug 2024 15:39:01 GMT

HMRC failing on responsiveness, says Charter report

HMRC is failing on the key metrics of responsiveness, ease and accuracy, according to the annual HMRC Charter report.

The report reviewed HMRC’s performance against its Charter from April 2023 to March 2024.

The survey received over 1,600 responses, with complaints about service levels a recurring theme.

· ‘Being responsive’ scored the lowest of the Charter standards, with an average score of just 2.4 out of 10.

· ‘Making things easy’ and ‘getting things right’ also scored poorly, at 2.8 and 3.5 respectively.

· The remaining standards – ‘being aware of your personal situation’, ‘treating you fairly’, “recognising that someone can represent you’, ‘mutual respect’ and ‘keeping your data secure’ – scored higher at 4.1, 5.0, 5.7, 5.6 and 6.8 respectively.

Richard Wild, the Chartered Institute of Taxation’s Head of Tax Technical, said: ‘Significant time is lost every day for members, their clients, and indeed HMRC themselves, due to delays and inefficiencies in dealing with HMRC.

‘The three standards on responsiveness, ease and accuracy were by far the lowest scoring, which is disappointing as between them they represent the health of the tax system.

‘Businesses are prevented from operating effectively due to the inability to obtain timely registrations or responses. Taxpayers’ legitimate refunds are withheld or delayed. Guidance and correspondence from HMRC is misleading or incorrect. All these things are inhibitors on growth and investment.’

Digital trade deal hailed as big win for business

Wed, 07 Aug 2024 15:38:25 GMT

Digital trade deal hailed as big win for business

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HMRC to send Simple Assessment tax statements to pensioners

Wed, 07 Aug 2024 15:37:51 GMT

HMRC to send Simple Assessment tax statements to pensioners

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Business group outlines five ‘key priorities’ for removing barriers to trade

Wed, 31 Jul 2024 14:54:18 GMT

Business group outlines five ‘key priorities’ for removing barriers to trade

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320,000 individuals ‘pushed into poverty’ as result of interest rate rises

Wed, 31 Jul 2024 14:53:16 GMT

320,000 individuals ‘pushed into poverty’ as result of interest rate rises

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Chancellor announces Autumn Budget date

Wed, 31 Jul 2024 14:52:32 GMT

Chancellor announces Autumn Budget date

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Government urged to remove tax burdens for charities

Wed, 24 Jul 2024 10:34:51 GMT

Government urged to remove tax burdens for charities

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King’s Speech unveils raft of bills designed to ‘unlock economic growth’

Wed, 24 Jul 2024 10:33:37 GMT

King’s Speech unveils raft of bills designed to ‘unlock economic growth’

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More than 500,000 individuals caught in 60% tax trap

Wed, 24 Jul 2024 10:32:13 GMT

More than 500,000 individuals caught in 60% tax trap

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UK’s economic recovery putting down roots

Wed, 17 Jul 2024 10:16:29 GMT

UK’s economic recovery putting down roots

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HMRC launches VAT Registration Estimator

Wed, 17 Jul 2024 10:15:45 GMT

HMRC launches VAT Registration Estimator

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British Business Bank launches Growth Guarantee Scheme

Wed, 17 Jul 2024 10:15:06 GMT

British Business Bank launches Growth Guarantee Scheme

The British Business Bank has launched the Growth Guarantee Scheme to help smaller businesses access finance.

The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme and is expected to support around 11,000 smaller businesses.

The British Business Bank has so far accredited 41 lenders for the scheme which will run until March 2026.

The scheme supports term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities. Not all lenders will be able to offer all products.

Minimum facility sizes start at £1,000 for asset finance, invoice finance and asset-based lending and £25,001 for term loans and overdrafts. The maximum facility sizes are up to £2 million per business.

Martin McTague, National Chair of the Federation of Small Businesses (FSB) said: ‘We are delighted that the British Business Bank has officially launched the Growth Guarantee Scheme, to get much-needed finance to start-ups and scale-ups, so they can grow.

‘The new scheme will help small firms get the funding they require to be able to achieve their dreams.

‘The Growth Guarantee Scheme will be an important part of the funding landscape for small firms, whose growth will be an indispensable ingredient in overall economic recovery in the UK.’

Self assessment payment on account due on 31 July

Wed, 10 Jul 2024 10:59:27 GMT

Self assessment payment on account due on 31 July

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Rachel Reeves named as the UK’s first female Chancellor

Wed, 10 Jul 2024 10:57:40 GMT

Rachel Reeves named as the UK’s first female Chancellor

Rachel Reeves, MP for Leeds West, has been named as the first female chancellor in the UK’s history.

Her appointment comes 45 years after the country’s first female Prime Minister was elected.

Ms Reeves is the 109th Chancellor to hold the position since the role was created in the 16th century.

Ms Reeves studied philosophy, politics, and economics (PPE) at the University of Oxford.

She worked at the Bank of England as an economist before moving to the British Embassy in Washington DC. Reeves was elected to Parliament in 2010 and appointed shadow Chancellor in 2021.

The Chancellor said: ‘Our manifesto was clear: sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.

‘Where governments have been unwilling to take the difficult decisions to deliver growth – or have waited too long to act – I will deliver.

‘It is now a national mission. There is no time to waste.

‘I want to outline the first steps this new government has taken to fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.’

Business ready to work in partnership with Labour government

Wed, 10 Jul 2024 10:56:25 GMT

Business ready to work in partnership with Labour government

The UK's business groups have pledged to work in partnership with the new Labour government to revitalise the nation's economy.

Labour leader Sir Keir Starmer is the UK's new Prime Minister after leading the party to a decisive win in the General Election.

Shevaun Haviland, Director General of the British Chambers of Commerce, said: 'Congratulations to the Labour Party on their victory after a long and hard-fought campaign.

'How we revitalise our economy was hotly debated . . . , and it is encouraging to see they have many policies which clearly align with our recommendations.

'But after a gruelling election the really hard work starts now. We need to see action from day one on pulling together a coherent industrial strategy for the long-term, which places a strong emphasis on harnessing green innovation.

'Closing the skills gap, growing exports, boosting productivity and harnessing the power of AI won't happen overnight.'

The Confederation of British Industry (CBI) also congratulated Mr Starmer and Labour on their victory.

Rain Newton-Smith, CBI Chief Executive, said: 'Delivering sustainable growth should be the defining mission for the new government. Business stands ready to bring its innovation, ideas, and investment to make that shared mission a reality.

'Building a partnership for prosperity between government and business holds the key to unlocking a revitalised pitch to global investors.

'By working with business, the new government can deploy the capability and capacity of industry to deliver the connected transitions across net zero, the digital economy, and the future of work needed to put the economy on a pathway to sustainable growth.'

Average earnings ‘just £16 a week higher than they were 14 years ago

Wed, 03 Jul 2024 15:20:42 GMT

Average earnings ‘just £16 a week higher than they were 14 years ago

Average earnings ‘just £16 a week higher than they were 14 years ago’

Research carried out by the Resolution Foundation has found that real average earnings are just £16 a week higher than they were 14 years ago.

The Resolution Foundation said that the UK’s labour market backdrop to the General Election is a ‘prolonged pay squeeze’ that has left real average wages

just £16 a week higher than in 2010. It stated that this has been caused by ‘three shocks to pay packets’, including the financial crisis, the Brexit

referendum and the cost-of-living crisis.

According to the Resolution Foundation, in the 14 years prior to the 2010 election, average real wages grew by £145 a week in total.

Commenting on the issue, Hannah Slaughter, Senior Economist at the Resolution Foundation, said: ‘Britain’s prolonged pay depression has left average

earnings just £16 a week higher than they were back in 2010, despite the welcome return of rising real wages in recent months.

Worryingly, Britain’s decade-long jobs boom during the 2010s has also gone bust, with the UK one of only a handful of countries where employment has yet to

return to pre-pandemic levels.

50% of savers unaware they are charged fees on their pension pots

Wed, 03 Jul 2024 15:19:51 GMT

50% of savers unaware they are charged fees on their pension pots

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Next government warned

Wed, 03 Jul 2024 15:18:44 GMT

Next government warned

The Confederation of British Industry (CBI) has warned the new government that the UK economy cannot be separated from net-zero.

The business group stated that the next government can’t be pro-growth and deliver for people and communities without being pro-green.

A report published by the CBI entitled ‘Going for Green’ revealed that the next government could add as much as £57 billion to the UK economy from green

growth by 2030. It outlined five steps to ‘recharge’ the economy, including:

* Making net-zero part of a revitalised pitch for ‘brand Britain’

* Creating an Office for Net-Zero

* Generating a Net-Zero Investment Plan

* Making use of transformational technology

* Backing rapid grid growth.

Rain Newton-Smith, Director General of the CBI, said: With input and knowhow from every sector, we feed into government how it can fine-tune our economic

performance, supercharge our strengths and help the UK get ahead of the competition and win in the race for green growth.

UK’s investment performance ‘worse than every other G7 country’

Wed, 26 Jun 2024 11:40:52 GMT

UK’s investment performance ‘worse than every other G7 country’

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Business group warns tax rises will be ‘difficult to avoid’ over next five years

Wed, 26 Jun 2024 11:40:15 GMT

Business group warns tax rises will be ‘difficult to avoid’ over next five years

The Institute for Fiscal Studies (IFS) has warned that tax rises will be difficult to avoid in the next five years.

The IFS recently stated that it will be a ‘considerable surprise’ if taxes do not increase over the coming five years.

According to the IFS, whoever wins the upcoming General Election faces a ‘trilemma’ - raise taxes by more than previously indicated in party manifestos, implement cuts to some areas of spending or borrow more and allow debt to rise for longer.

Paul Johnson, Director of the IFS, said: ‘Huge decisions over the size and shape of the state will need to be taken, that those decisions will, in all likelihood, mean either higher taxes or worse public services.

‘Despite a damaging rush to rule out increases in all sorts of tax rates, it will be a considerable surprise if no other taxes are increased over the next five years.’

Tax gap at record high

Wed, 26 Jun 2024 11:39:39 GMT

Tax gap at record high

The UK’s tax gap rose to a record to £39.8 billion in 2022/23, up by £1.7 billion as small businesses accounted for almost two thirds of unpaid tax, according to HMRC’s data.

The tax gap was 4.8%, which is the difference between the amount of tax that should be paid to HMRC and what is actually paid.

There was a significant rise in the amount of corporation tax not being paid by small businesses. This has risen to £10.9 billion, up from £3.7 billion five years ago.

The tax gap for corporation tax was £13.7 billion, up almost £3 billion from the previous year. This figure has soared in the last five years from £5.6 billion in 2018/19 and is the worst total ever recorded.

John Barnett, Chair of CIOT’s Technical Policy and Oversight Committee, said: ‘Critics of HMRC can point to a record amount – nearly £40 billion – not being collected, but HMRC can legitimately point out that they are bringing in a record share of the expected tax take.

‘That both these things can be true simultaneously tells us more about current tax levels than anything else.

‘These figures show there is plenty of work for HMRC to do in a range of areas to reduce the tax gap. However, we should not lose sight of the fact that their record, collecting more than 95% of tax due, compares well internationally.’

HMRC ‘has not fined a single ‘enabler’ of offshore tax evasion’, data reveals

Wed, 19 Jun 2024 12:01:11 GMT

HMRC ‘has not fined a single ‘enabler’ of offshore tax evasion’, data reveals

A Freedom of Information (FOI) request has revealed that HMRC has not fined a single ‘enabler’ of offshore tax evasion in five years.

The revelation comes despite HMRC having landmark powers, which were introduced in 2017, to impose hefty fines.

The data, which was released to the Bureau of Investigative Journalism (TBIJ), suggests that HMRC is failing to target the creators of offshore tax evasion schemes and instead pursues clients of such schemes. According to the FOI request, HMRC has not fined a single partnership or company for enabling tax evasion since the change in the law in 2017.

Commenting on the matter, Dan Neidle, founder of think tank the Tax Policy Associates, said: ‘The never-ending stream of new HMRC powers . . . are pointless if the powers aren’t then used.’

A spokesperson for HMRC stated: ‘We have a strong track record in tackling offshore noncompliance. Since the launch of our ‘no safe havens’ strategy in 2019, we have secured almost £700 million from offshore initiatives.’

Next government ‘should extend company car benefit in kind taxation tables’

Wed, 19 Jun 2024 11:59:54 GMT

Next government ‘should extend company car benefit in kind taxation tables’

The next government should prioritise extending the company car benefit-in-kind (BIK) taxation tables, the Association of Fleet Professionals recently stated.

The Association said that it has been two years since the current company car BIK tax tables were announced and they run only until the 2027/28 tax year. It stated that companies ordering vehicles today don’t know the tax rate drivers will be charged at the end of this decade.

It has urged the next government to settle company car tax until ‘at least’ the 2029/30 tax year.

Paul Hollick, Chair of the Association of Fleet Professionals, said: ‘There’s been something of a structural change in recent years, with the popularity of electric company cars on fleets meaning businesses have started operating longer replacement cycles to help offset their higher purchase cost, rising from typically three years to four or five.

‘This means that we need the benefit in kind tables to extend longer into the future than was previously the norm.’

HMRC collected £1.39 billion in unpaid inheritance tax

Wed, 19 Jun 2024 11:59:10 GMT

HMRC collected £1.39 billion in unpaid inheritance tax in last five years, data shows

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Action needed to help firms ‘navigate digital future’

0064444792 (Amreth Sharma) — Wed, 12 Jun 2024 09:51:45 GMT

Action needed to help firms ‘navigate digital future’

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Next government will need to build trust between HMRC and self-employed

Wed, 12 Jun 2024 09:50:40 GMT

Next government will need to build trust between HMRC and self-employed

The next government must take a direct hand in rebuilding trust between HMRC and the self-employed, according to the Association of Independent Professionals and the Self-Employed (IPSE).

The call is part of IPSE’s manifesto for the General Election on 4 July.

Under its proposals, a Cabinet minister would be charged with directly overseeing the tax office. Taxpayers would also be offered more recourse when the department has acted carelessly or unfairly.

The manifesto also calls for the prevention of ‘obscenely’ long payment terms and the scrapping of the off-payroll rules.

IPSE also wants to see an end to shortfalls in support for self-employed parents and better incentives for people to adopt side hustles.

Derek Cribb, IPSE’s CEO, said: ‘The self-employed vote is very much up for grabs at this election – more than at any election in living memory.

‘The sector is bursting with potential to get more people working, plug skills gaps and grow the economy. But this potential is being squandered by the devastating impact of late payments, careless tax enforcement, and a lack of proactive policymaking catered to the millions of people who work for themselves.

‘At this election, the party that fully embraces the self-employed stands to gain their support. The proposals in our manifesto offers the parties the chance to do just that.’

Savers ‘dangerously underestimating’ minimum cost of retirement

Wed, 12 Jun 2024 09:49:53 GMT

Savers ‘dangerously underestimating’ minimum cost of retirement

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Last 15 years ‘worst for income growth in generations’, says IFS

Wed, 05 Jun 2024 10:49:42 GMT

Last 15 years ‘worst for income growth in generations’, says IFS

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BCC outlines five-point plan for ‘immediate action’ by new government

Wed, 05 Jun 2024 10:47:19 GMT

BCC outlines five-point plan for ‘immediate action’ by new government

The British Chambers of Commerce (BCC) has set out a five-point plan for ‘immediate action’ by the new government.

The business group’s plan includes an industrial strategy ‘with green innovation at its heart’; better skills planning; business rates reform to ‘encourage growth and investment’; improved relations with the EU; and a government-appointed AI champion for small and medium-sized enterprises (SMEs) to ‘spearhead uptake of new technology’.

The plan forms part of the BCC’s Future of the Economy manifesto, which focuses on the key economic challenges facing the UK.

Shevaun Haviland, Director General of the BCC, commented: ‘A General Election is an important time for our country, our economy and our businesses.

‘The companies we represent are the drivers of economic growth and the employers of millions of people. They need to know that politicians have got their back. Once the votes are counted – we want government to know how to help business. Our five-point-plan is clear.

‘As companies play their part in the UK’s net-zero journey, we desperately need an industrial strategy with green innovation at its heart.

‘Firms are constantly telling us they can’t get the skills they need. We need better strategic planning on skills that helps business and training providers work together.’

Government urges workers to check tax codes following ‘costly mistake

Wed, 05 Jun 2024 10:46:38 GMT

Government urges workers to check tax codes following ‘costly mistake

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Generative AI could widen corporate inequalities business group warns

Wed, 29 May 2024 10:55:58 GMT

Generative AI could widen corporate inequalities business group warns

The Institute of Directors (IoD) has warned that generative AI could ‘widen corporate inequalities’.

In a paper published in collaboration with London Business School and Evolution Ltd, the IoD found that sectors prone to market consolidation will see the most significant shifts as a result of the use of generative AI.

The IoD has called on the government to redesign the educational system for a post generative AI world; develop targeted support and regulatory adjustments for identified vulnerable sectors; and enhance legal frameworks for intellectual property and data privacy.

It also made a series of recommendations for businesses, including ‘managing the hype of AI when adopting new technologies and practices’.

Commenting on the paper, Faisal Khan, Chair of the IoD’s Science, Innovation and Technology Expert Advisory Group, said: ‘Depending on the sector a business operates within, it is vital that company directors assess not only the opportunities and risks presented by generative AI, but also take stock today of the factors upon which the sector itself will transform.’

Tax receipts totalled £75.4 billion in April data shows

Wed, 29 May 2024 10:55:24 GMT

Tax receipts totalled £75.4 billion in April data shows

Data published by HMRC has shown that total tax receipts for April 2024 are £75.4 billion, which is £4.2 billion higher than the same period in 2023.

The data revealed that overall cash receipts were higher mainly as a result of income tax, capital gains tax (CGT) and National Insurance Contributions (NICs). VAT cash receipts were lower by £0.3 billion.

HMRC found that income tax, CGT and NIC receipts for April 2024 totalled £44.4 billion - £3.5 billion higher than in 2023.

Meanwhile, VAT receipts for April 2024 are £17.7 billion. HMRC said that receipts in 2022 to 2023 may have been influenced by both high levels of inflation and subsequent changes in real consumer expenditure.

Inheritance tax (IHT) receipts hit £700 million in April, which is £85 million higher than the same time last year. Rising house prices, high asset values and the frozen IHT tax threshold mean that more estates are becoming liable to the charge.

Next government will need to partner with business

Wed, 29 May 2024 10:54:41 GMT

Next government will need to partner with business

Whichever party forms the next UK government will need to partner with business to fire up the UK economy, says the Confederation of British Industry (CBI).

Prime Minister Rishi Sunak recently called a General Election for 4 July, firing the starting gun on six weeks of campaigning.

The UK’s business groups have responded to the announcement with their agendas for the next government.

Rain Newton-Smith, CBI Chief Executive, said: ‘This General Election needs to be about how our political leaders will get the UK economy firing on all cylinders and deliver sustainable growth for the benefit of our society.

‘Whoever forms our next government can’t tackle these momentous challenges alone – they will have to partner with business.

‘Our members want to see politicians having grown-up conversations about how we foster the investment we need to have a labour market which delivers higher living standards, to accelerate our transition to net zero and make the UK an attractive place to run and grow business.’

Martin McTague, National Chair of the Federation of Small Businesses (FSB), said: ‘There will be fierce competition for their votes at this election, and those competing will need a convincing plan to bring down the cost of doing business, support small businesses to grow, and create the right conditions to encourage new businesses to start up. As the campaign begins, each party will need to put forward a clear small business offer or manifesto.’

HMRC to receive extra £51 million in phone funding

Wed, 15 May 2024 10:59:19 GMT

HMRC to receive extra £51 million in phone funding

The government has announced an extra £51 million in new funding to bring HMRC’s phoneline service back up to the published target of 85% of calls to its advisers being answered.

Last year, 75% of people who phoned HMRC had to wait an average 24 minutes for anyone to answer with 650,000 calls abandoned before they were answered.

In response, HMRC told the Parliament’s Public Accounts Committee that it did not have the resources to meet rising demand for its phone services.

The extra funding was confirmed in a written statement from Nigel Huddleston MP, Financial Secretary to the Treasury.

Victoria Todd, Head of the Low Incomes Tax Reform Group (LITRG), said: ‘The government is right to give HMRC extra resources to better manage demand for its telephone helplines.

‘We hope this will mean that taxpayers can have greater confidence that their queries will be answered, and they can continue to comply with their tax responsibilities.

‘Moving more taxpayers online is a laudable aim, but more work is needed to improve HMRC's digital services to support that shift. It is likely going to take HMRC some time to deploy this additional resource, meaning things may get worse before they get better.

‘In the longer term, funding to maintain customer service levels by phone and post needs to continue until such time as HMRC’s digital services are good enough to give taxpayers who can use them the support they need.’

Retirees report £119,000 shortfall in pension savings

Wed, 15 May 2024 10:58:14 GMT

Retirees report £119,000 shortfall in pension savings

UK adults face a significant shortfall in their pension savings at retirement compared to what they wanted to retire on, according to research from Standard Life.

Standard Life’s Retirement Voice Report found that, on average, retirees had hoped to build up a pension pot of £250,0001. However, the average amount that they accumulated by retirement was £131,000 – leaving a £119,000 shortfall.

Based on current annuity rates, a pot of £250,000 could lead to an income of £1,007 monthly, or £12,091 a year, assuming a retirement age of 66.

A pot of £131,000 could result in a monthly income of £527 in retirement, or £6,332 yearly - £480 month, or £5,759 a year less.

However, the not insignificant £250,000 pot falls short of a ‘moderate’ standard of living in retirement according to the PLSA, including the State Pension.

Dean Butler, Managing Director for Retail Direct at Standard Life said: ‘It can be hard to work out how much you need to save to achieve your desired standard of living in retirement, particularly earlier on in your career. It’s even harder to stick to it, as everyday expenses and those one-off costs that come up in life constantly threaten to move long-term saving down the priority list.

‘Clearly there’s a big gap between what people hope to save, and what they actually do – this is unsurprising, particularly when looking at it during a cost-of-living crisis, however the result can be a significantly reduced standard of living in retirement.’

300,000 file tax returns in the first week of the tax year

Wed, 15 May 2024 10:56:21 GMT

300,000 file tax returns in the first week of the tax year

Almost 300,000 self assessment taxpayers filed their return in the first week of the new tax year, HMRC has revealed.

The early filers were almost 10 months ahead of the 31 January 2025 deadline.

Almost 70,000 people filed their return on the opening day of 6 April this year.

HMRC is encouraging people to file early and avoid the stress of last-minute filing.

The tax authority says early filing can also help with budgeting. A budget payment plan helps spread the cost of tax bills with weekly or monthly payments.

In addition, refunds of overpaid tax will be paid as soon as the return has been processed.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: ‘Filing your self assessment early means people can spend more time growing their business and doing the things they love, rather than worrying about their tax return.

‘You too can join the thousands of customers who have already done their tax return for the 2023-24 tax year by searching ‘self assessment’ on GOV.UK and get started today

Business leaders’ economic confidence rose in April

0064444792 (Amreth Sharma) — Thu, 09 May 2024 11:18:56 GMT

Business leaders’ economic confidence rose in April

Optimism amongst UK business leaders in regard to the UK economy rose in April 2024, data published by the Institute of Directors (IoD) has revealed.

The IoD’s Directors’ Economic Confidence Index showed that optimism in prospects for the UK economy rose to -10 in April 2024 from -12 in March.

The business group said that the latest figure ‘sustains the leap upwards that the Index experienced in March’, and ‘continues its steady recovery from its recent low point of -31 in June 2023’.

Optimism regarding businesses’ net investment plans for the upcoming year also increased from +18 in March to +21 in April.

Dr Roger Barker, Director of Policy at the IoD, said: ‘It remains the case that business leaders are, on balance, pessimistic about UK economic prospects. However, since March, the pessimists have been in retreat. Confidence has been edging upwards and is now within striking distance of a more neutral perspective.

‘According to IoD members, the fundamentals are in place for some kind of UK economic recovery.’

UK economy will see slowest growth in G7 next year

Thu, 09 May 2024 11:18:06 GMT

UK economy will see slowest growth in G7 next year

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New customs rules cause confusion and uncertainty

Thu, 09 May 2024 11:17:24 GMT

New customs rules cause confusion and uncertainty

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Business group calls on Ofgem to ‘take action’ on standing charges

Wed, 01 May 2024 10:47:13 GMT

Business group calls on Ofgem to ‘take action’ on standing charges

The Federation of Small Businesses (FSB) has called on the energy regulator Ofgem to ‘take action’ on the standing charges paid by UK small firms.

According to the FSB, many small businesses have seen the daily fixed price they pay soar over recent months, regardless of usage levels.

The FSB stated that it has written to Ofgem’s Chief Executive to alert him to the issue and to ‘recognise the specific negative impact standing charges are having on small firms’.

It also said that small firms located in rural areas have been ‘disproportionately’ affected by standing charge increases, exacerbating the existing rural-urban divide.

Commenting on the issue, Tina McKenzie, Policy Chair at the FSB, said: ‘We want Ofgem to do a thorough review of standing charges for businesses as well as consumers, for better transparency and to discern whether energy companies are behaving fairly towards their small firm clients.

‘Small business energy customers behave in a way more akin to consumers than big businesses, lacking the resources, the expertise and the buying power necessary to get the best possible deal out of their energy suppliers.’

HMRC clarifies tax rules for WFH commuting

Wed, 01 May 2024 10:46:33 GMT

HMRC clarifies tax rules for WFH commuting

HMRC has updated guidance on when tax relief is available on travel expenses for staff who work from home.

The tax authority is responding to the growth of flexible and hybrid basis working contracts, particularly since the Covid-19 pandemic.

HMRC confirmed that ‘under such arrangements, the employee will have a base office and journeys from home to that location will be ordinary commuting’.

These trips are not eligible for tax relief.

Whether or not an employee’s home is a workplace does not affect the availability of tax relief for travel expenses.

Travel expenses from home to a permanent workplace will only qualify for tax relief if the journey qualifies as travel in the performance of the duties of the employment.

HMRC states: ‘Even though it may have been accepted that the employee’s home is a workplace, it does not necessarily follow that they’ll be entitled to tax relief for the cost of travel between their home and a permanent workplace.’

This is because the place where an employee lives will ordinarily be down to their personal choice, not an objective requirement of the job.

HMRC launches online voluntary national insurance payment service

Wed, 01 May 2024 10:45:16 GMT

HMRC launches online voluntary national insurance payment service

HMRC has launched a new online voluntary national insurance payment service.

The government stated that the new service, which is available from 29 April, will make it ‘easier for customers to check for and fill any gaps in their national insurance record to help increase their State Pension’.

It also said that the new Check your State Pension service has been enhanced to include an end-to-end digital solution. The service shows customers by how much their State Pension could increase and outlines the voluntary national insurance contributions (NICs) they would need to pay to achieve this.

The service also allows people under the State Pension age to view gaps in their national insurance record and pay voluntary contributions to fill the gaps.

Nigel Huddleston, Financial Secretary to the Treasury, said: ‘Having peace of mind when planning for retirement is crucial to ensure people can enjoy later life. That’s why HMRC has launched this new online service today, making a real difference for thousands of pensioners in their retirement while providing certainty to those in their middle years and those still planning ahead.’ The Check your State Pension forecast tool can be found here.

Small firms confused over upcoming import rules

Wed, 24 Apr 2024 14:15:50 GMT

Small firms confused over upcoming import rules

The government has been accused of heaping confusion on small firms before new import rules on plant and food products are introduced, according to the Federation of Small Businesses (FSB).

The FSB says the government has bypassed formal channels and left small firms out of the conversation, leaving them unsure as to who they can trust.

Officials from the Department for the Environment, Food and Rural Affairs (DEFRA) say new checks – due to come in on April 30 – may not be turned on as expected.

However, small firms have not been formally told of the changes, and instead found out after a document was leaked to the press.

Martin McTague, National Chair of the FSB, said: ‘It’s left them unsure as to who they can trust. Many have invested considerable time and money making sure they’re getting it right, but now they’re left scratching their heads at the conflicting messages coming out of Whitehall – will they or won’t they face these checks and have to start paying on April 30?

‘Government has had years to get this right. Small firms deserve clarity, and they really do not have time to decode messy and unclear Whitehall messages that contradict each other.

‘The government really ought to put small firms, the most affected by these changes, at the heart of the conversation.’

Business price pressures persist, warns BCC

Wed, 24 Apr 2024 14:14:17 GMT

Business price pressures persist, warns BCC

Business price pressures persist despite the UK’s inflation rate falling to its lowest level since September 2021.

The business group warned that uncertainty remains amongst UK small firms, with its recent Quarterly Economic Survey showing that almost half of firms polled expect their prices to rise over the next three months.

Labour costs were cited as being one of the main drivers of price increases, and political and global uncertainty are also adding to firms’ worries.

Commenting on the data, David Bharier, Head of Research at the BCC, said: ‘[The] figures confirm inflation is continuing to slowly head in the right direction. That’s good news for both consumers and businesses.

‘Businesses will be keen to see how this data translates into changes on interest rate policy. More than a third of SMEs we surveyed at the start of the year have seen increased borrowing costs because of the current interest rate.’

HMRC launches MTD for Income Tax pilot

Wed, 24 Apr 2024 14:13:27 GMT

HMRC launches MTD for Income Tax pilot

HMRC’s pilot scheme for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) launched on 22 April.

Accountants and agents are now able to sign up to the pilot and test the programme out. The pilot aims to assess the MTD for ITSA reporting environment, with an initial focus on clients who are self-employed and landlords with annual income exceeding £50,000.

These clients will be mandated to keep digital records and submit quarterly updates on their income and expenditure to HMRC via MTD-compatible software from April 2026.

HMRC has urged accountants and agents seeking to participate in the pilot to ensure that their record keeping software is up to date and compatible with MTD prior to signing up. Accountants’ clients must also have MTD-compatible software.

A spokesperson for HMRC said: ‘Taking part in testing is a good opportunity to familiarise yourself and a small number of your clients with MTD for ITSA well ahead of 2026. This will help you to prepare your business and be ready to support the rest of your clients.’

Small firms ‘treading water’ on investment, BCC warns

Wed, 17 Apr 2024 09:34:05 GMT

Small firms ‘treading water’ on investment, BCC warns

The British Chambers of Commerce (BCC) has warned that UK small firms are ‘treading water’ on investment.

The BCC’s Quarterly Economic Survey found that there was no improvement in business conditions in the first quarter of 2024 as measured by sales, cashflow and investment. It showed that levels of business confidence remained unchanged – 56% of businesses expect an increase in turnover in the coming 12 months.

Firms also anticipate hiking their prices in response to volatile inflation. Meanwhile, economic headwinds ‘continue to impact heavily on business investment’, with ‘large sectoral disparities’ in investment levels.

David Bharier, Head of Research at the BCC, commented: ‘Although business confidence remains buoyant at the start of the year, most SMEs are still not reporting any tangible improvement to business conditions.

‘The lack of investment among most SMEs is a real concern. Inflation, skills shortages, and an almost endless list of new trade barriers with the EU, coupled with a lack of clear direction on infrastructure and technology investment at the government level, have led to paralysis for many businesses.’

More than seven million adults still struggling to pay bills, finds FCA

Wed, 17 Apr 2024 09:33:16 GMT

More than seven million adults still struggling to pay bills, finds FCA

Around 7.4 million people in the UK struggled to pay a bill or a credit repayment in January, according to the Financial Conduct Authority (FCA).

The figure is lower than last year but is still significantly higher than before the cost-of-living crisis began.

According to the FCA, in January 2023, after the Russian invasion of Ukraine and the subsequent start of the cost-of-living crisis, the number of people in financial difficulty almost doubled to 10.9 million.

The FCA survey also suggested 5.5 million people had missed a bill or credit payment in the six months to January 2024.

In addition, one in nine people also had no disposable income, the FCA said.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said: ‘Our research shows many people are still struggling with their bills, though it is encouraging to see some benefiting from the help that’s available.

‘If you’re worried about keeping up with payments, reach out to your lender straight away. They have a range of support options and will work with you to agree the best one for you. You can also find free debt advice through MoneyHelper.

Only five MTD for ITSA software products ready for testing

Wed, 17 Apr 2024 09:31:24 GMT

Only five MTD for ITSA software products ready for testing

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Accessing finance getting more difficult for SMEs

Wed, 10 Apr 2024 09:33:37 GMT

Accessing finance getting more difficult for SMEs

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Government urged to implement reforms to R&D tax system

Wed, 10 Apr 2024 09:32:47 GMT

Government urged to implement reforms to R&D tax system

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PAC challenges HMRC on governance and accountability of MTD

Wed, 10 Apr 2024 09:29:15 GMT

PAC challenges HMRC on governance and accountability of MTD

The Public Accounts Committee (PAC) has challenged HMRC on the governance and accountability of the Making Tax Digital (MTD) initiative.

MPs in the PAC have called for HMRC to reconsider its response to the PAC’s concerns regarding MTD. Writing to HMRC’s Managing Director, Jim Harra, Meg Hillier, Chair of the PAC, requested additional information on how HMRC intends to address MTD issues highlighted in the PAC’s report on the initiative, which was published in November 2023.

Ms Hillier called for HMRC to outline what it is doing differently to ensure MTD processes work more effectively than they have in the past. The PAC has also urged HMRC to carry out a ‘robust assessment’ of how frequent submissions of self assessment information and digital submissions will affect HMRC’s tax revenue.

In the letter, Ms Hillier commented: ‘You have not attempted to demonstrate consideration of further robust testing of the financial information underpinning your programme, for example, controlled behavioural experiments to ascertain the difference that more regular filing can make to the accuracy of returns. VAT returns were already provided quarterly and cannot provide this assurance.’

HMRC said that it intends to ‘ensure that it strikes the right balance between ensuring competition, quality and access to software for its MTD for VAT and self-assessment customers’.

1.6 million pensioners expected to fall into income tax net, according to research

Wed, 03 Apr 2024 15:58:08 GMT

1.6 million pensioners expected to fall into income tax net, according to research

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Research suggests SMEs are ‘bracing’ themselves for tough months ahea

Wed, 03 Apr 2024 15:57:28 GMT

Research suggests SMEs are ‘bracing’ themselves for tough months ahead

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AI could replace up to 8 million UK jobs, warns report

Wed, 03 Apr 2024 15:56:40 GMT

AI could replace up to 8 million UK jobs, warns report

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Small businesses still hampered by late payments, warns FSB

Wed, 27 Mar 2024 10:41:38 GMT

Small businesses still hampered by late payments, warns FSB

Small UK firms are still being hampered by late payments, warns the Federation of Small Businesses (FSB).

The business group found that the proportion of small firms whose late payments worsened in the final quarter of 2023 rose from over one in four to over a third.

The FSB said that small businesses have ‘dampened’ growth expectations for 2024.

It also found that the percentage of firms seeking to increase their capital investment stayed flat between the third quarter of 2023 and the fourth quarter.

Martin McTague, National Chair of the FSB, said: ‘Late payment is a scourge, and one that shouldn’t exist – there’s no excuse, with modern business banking methods, for large companies to hold onto money due to small suppliers.

‘Overdue invoices cause uncountable amounts of stress and harm to small business owners, leading to sleepless nights and lost productivity. Large companies should make their payment performance a board-level issue, and include it in annual reports, to improve accountability and transparency.

‘Small firms contain the dynamism and the ambition to grow that will get the economy up and running, if they are given the right conditions to flourish, invest, and make their mark.’

NMW is the ‘single most successful economic policy in a generation’, says think tank

Wed, 27 Mar 2024 10:40:29 GMT

NMW is the ‘single most successful economic policy in a generation’, says think tank

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HMRC halts helpline closures

Wed, 27 Mar 2024 10:39:48 GMT

HMRC halts helpline closures

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New measures aim to ‘break the spell’ of fraudsters

Wed, 20 Mar 2024 13:08:25 GMT

New measures aim to ‘break the spell’ of fraudsters

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New HMRC R&D tax relief guidance ‘could be clearer’, says ICAEW

Wed, 20 Mar 2024 13:07:46 GMT

New HMRC R&D tax relief guidance ‘could be clearer’, says ICAEW

The Institute of Chartered Accountants in England and Wales (ICAEW) has stated that new guidance from HMRC on research and development (R&D) tax relief guidance ‘could be clearer’.

HMRC’s draft guidance covers the restriction applying for contractor payments and payments for externally provided workers (EPWs) where the R&D activity takes place overseas; and the new rules for contracted-out R&D.

The ICAEW’s Tax Faculty believes that additional clarity would be ‘helpful’ on a few of the new points.

It also said that the guidance ‘does not fully address the implications of an arrangement between the customer and the contractor that is governed by multiple contracts’. The Institute has called for the guidance to explain how to determine if the contractor took R&D into consideration at the time of the contract when multiple contract dates exist.

The ICAEW also called for clarity on the requirement that the carrying-on of R&D needs to be the primary objective of the customer in engaging the contractor if the customer is to claim the associated R&D tax relief.

Budget introduces increase in Landfill Tax rates

Wed, 13 Mar 2024 11:49:24 GMT

Budget introduces increase in Landfill Tax rates

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Think tank warns Budget tax cuts will not compensate for price rises

Wed, 13 Mar 2024 11:48:05 GMT

Think tank warns Budget tax cuts will not compensate for price rises

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2024 Spring Budget – the economic picture

0064444792 (Amreth Sharma) — Thu, 07 Mar 2024 11:58:11 GMT

2024 Spring Budget – the economic picture

Within his Spring Budget speech, Chancellor Jeremy Hunt announced that the UK economy is set to grow ‘slightly faster than expected’.

According to the Office for Budget Responsibility (OBR), the government’s official forecaster, the economy will grow by 0.8% this year and by 1.9% in 2025.

The Chancellor stated that the economy is ‘turning a corner’, with inflation expected to fall to target next quarter, wages consistently rising faster than prices and better growth than other European countries.

Higher growth gave the Chancellor extra leeway in the Budget, which he used to announce a continuation of the freeze on alcohol and fuel duties; an employee national insurance tax cut from 10% to 8% in April for 27 million working people; and an increase to the High Income Child Benefit Charge from £50,000 to £60,000.

In its latest forecast, which was prepared for the Budget, the OBR said that borrowing will rise in the next financial year, and then remain broadly in line with its previous forecasts.

However, the OBR also warned that the UK’s debt will rise over the coming four years before falling in the fifth year. Debt as a proportion of GDP will still be 92.9% in 2028/29, the OBR also forecasted.

The government stated that the measures announced in the 2024 Spring Budget ‘will reduce inflation in 2024/25 and bring the equivalent of over 100,000 people into the workforce by 2028/29’.

2024 Spring Budget – the political reaction

Thu, 07 Mar 2024 11:57:15 GMT

2024 Spring Budget – the political reaction

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2024 Spring Budget – the business reaction

Thu, 07 Mar 2024 11:56:31 GMT

2024 Spring Budget – the business reaction

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Jeremy Hunt cuts NICs again in the Spring Budget

Thu, 07 Mar 2024 11:55:47 GMT

Jeremy Hunt cuts NICs again in the Spring Budget

The Chancellor made further changes to NICs following the cuts made in the Autumn Statement 2023. The rates for NICs will be cut by two percentage points for both employees and the self-employed from 6 April 2024.

This will see Class 1 employee NICs reduced from 10% to 8% from 6 April 2024, down from 12% at the end of last year. Meanwhile, Class 4 self-employed NICs are cut from 9% to 6% from 6 April 2024.

Mr Hunt made a number of other changes that will relieve the tax burden on businesses, families and motorists. He cut the higher rate of capital gains tax on residential property disposals from 28% to 24%. The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band.

The threshold for VAT registration will be lifted from £85,000 to £90,000 from 1 April 2024. According to the government, this will mean 28,000 businesses will no longer be VAT registered in 2024/25.

Fuel duty will remain at its current rate and be frozen for 2024/25. Alcohol duty is also frozen for 2024/25.

The Budget saw the creation of a new ISA that will allow people to invest in UK-focused assets. The new UK ISA creates an allowance of £5,000. This will be in addition to the £20,000 that can be subscribed into an ISA. The government will consult on the details.

The Chancellor made his cut to NICs possible with a series of tax raising measures. These include the abolition of the Furnished Holiday Lettings regime and Multiple Dwellings Relief, alongside a new duty on vaping and an increase in tobacco duty.

In addition, the Chancellor announced a one-off adjustment on Air Passenger Duty (APD) rates for non-economy passengers.

The government is also extending the Energy Profits Levy, also known as the windfall tax on oil and gas companies, by an additional year to March 2029 as gas prices are forecast to remain ‘abnormally high’ until that time.

The UK’s tax rules for non-UK domiciled individuals will be replaced with a residence-based regime that Mr Hunt says will raise £2.7 billion in revenue.

This new regime will commence on 6 April 2025 and applies UK-wide. Individuals who opt in to the new regime will be exempt from UK tax on foreign income and gains for their first four years of residence in the UK, while the government will make transitional arrangements for existing non-doms.

HMRC’s tough approach to IR35 has ‘chilling effect’ on economic activity, warns IPSE

Wed, 06 Mar 2024 10:02:10 GMT

HMRC’s tough approach to IR35 has ‘chilling effect’ on economic activity, warns IPSE

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March is top month for Marriage Allowance claims

Wed, 06 Mar 2024 10:01:03 GMT

March is top month for Marriage Allowance claims

HMRC has revealed that March is the most popular month for Marriage Allowance applications, with almost 70,000 couples applying in the third month of 2023.

As well as reducing a couple’s tax bill for the 2023/24 tax year by up to £252, there is the option to backdate the claim for the previous four tax years. This means eligible couples could receive a lump-sum payment worth more than £1,000.

The Marriage Allowance saves couples money by allowing the lower or non-earner to reduce the amount of tax their partner pays by transferring up to £1,260 of their Personal Allowance to their husband, wife or civil partner.

To benefit from the tax relief, one partner must have income less than the Personal Allowance of £12,570, and the higher earning partner’s income must be between £12,571 and £50,270 (£43,662 in Scotland). People can find out in 30 seconds if they are eligible by using the online Marriage Allowance calculator.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: ‘The Marriage Allowance keeps money in your pocket by reducing the amount of tax you and your spouse pay by up to £252 a year.’

Reports suggest air travel tax could rise in Spring Budget

Wed, 06 Mar 2024 09:59:31 GMT

Reports suggest air travel tax could rise in Spring Budget

Chancellor Jeremy Hunt could raise revenue on Air Passenger Duty (APD) in the Spring Budget, reports suggest.

Reports have hinted that the Chancellor is considering a range of options that would permit him to make billions of pounds of personal tax cuts. One of these options is to increase APD for business travel, which would mean a rise in business class air fares.

Mr Hunt is also said to be considering a tax on vapes and abolishing the non-dom tax status.

Commenting on the upcoming Budget, Mr Hunt stated: ‘It is going to be a prudent and responsible Budget for long-term growth.

‘When it comes to tax cuts, I do believe that if you look around the world, countries with lower tax tend to grow faster - North America, Asia - and so I do think in the long run we need to move back to being a lower taxed, more lightly regulated economy.

‘It would be deeply unconservative to cut taxes in a way that increased borrowing, wasn't fully funded.’

Number of tax fraud cases opened by HMRC fallen by more than half

Wed, 28 Feb 2024 11:51:52 GMT

Number of tax fraud cases opened by HMRC fallen by more than half

The number of civil investigations into alleged tax fraud has fallen by more than a half, data has shown.

The number of investigations into wealthy, offshore and corporate taxpayers fell from 1,417 in 2018/19 to just 627 in 2022/23. According to HMRC, its fraud investigation units focus on the ‘highest value’ tax fraud.

It stressed that the number of investigations into wealthy, offshore and corporate taxpayers does not take into account overall compliance activity, which saw 300,000 investigations started in 2022/23.

Robert Palmer, Executive Director at Tax Justice UK, commented: ‘We know HMRC is underfunded and resources have been diverted for work on Covid and Brexit.

‘Parliamentary research shows that when the government invests in HMRC, the return on investment is significant. Until the department is properly funded, vast sums of money owed, often by the richest people and companies, will go unrecovered.’

A spokesperson for HMRC said: ‘These specific figures relate solely to the work of our fraud investigation service and do not take account of our overall compliance activity. In 2022/23, we opened 300,000 compliance interventions across a range of tax risks, including avoidance and evasion, and secured £34 billion in additional tax revenue.’

500 firms named and shamed for underpaying staff

0064444792 (Amreth Sharma) — Wed, 28 Feb 2024 11:50:44 GMT

500 firms named and shamed for underpaying staff

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HMRC publishes guidance

Wed, 28 Feb 2024 11:49:21 GMT

HMRC publishes guidance on MTD for ITSA for sole traders and landlords

HMRC recently published guidance on the Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) requirements for sole traders and landlords.

MTD for ITSA will require businesses and landlords with qualifying income to maintain digital records and update HMRC each quarter via compatible software.

In the guidance, HMRC stated that MTD for ITSA will be introduced in two phases:

· from April 2026 for those with qualifying income over £50,000

· from April 2027 for those with qualifying income over £30,000.

HMRC said that MTD ‘exploits the opportunities offered by digitalisation to make it easier for everyone to get tax right’. It said that digitalising government tax services helps to reduce the risk of unintentional customer errors; save taxpayers time when they submit their tax returns; supports wider productivity and less time managing paperwork; and enables HMRC to better tailor its services to its customers.

In its latest guidance, HMRC estimates a transitional cost to business of around £561 million and a net increase in the continuing costs of tax compliance of around £196 million for businesses mandated to use MTD for ITSA. The guidance can be found here.

Business group urges Chancellor to outline ‘sustainable growth plan’

Wed, 21 Feb 2024 11:28:32 GMT

Business group urges Chancellor to outline ‘sustainable growth plan’

The British Chambers of Commerce (BCC) has urged Chancellor Jeremy Hunt to use the Spring Budget to outline a ‘sustainable growth plan’.

It said the government must work in partnership with business to develop a plan to help firms combat ‘multiple economic crises’.

The BCC’s Quarterly Economic Survey for quarter four of 2023 revealed that many firms are seeing no improvement to sales, cashflow or investment.

Commenting on the matter, Shevaun Haviland, Director General of the BCC, said: ‘The Chancellor has shown he is in listening mode. At the Autumn Statement we were pleased to see Full Expensing made permanent and business rate relief. The Budget is an opportunity to build on that good work and further accelerate help for business.

‘Our latest research shows that many SMEs are struggling because of business rates, and are limiting their expansion plans because of the VAT threshold. The Chancellor should use his statement next month to announce plans to make rates fairer and restart the VAT registration review.’

AAT outlines top asks in Budget representation

Wed, 21 Feb 2024 11:26:06 GMT

AAT outlines top asks in Budget representation

The Association of Accounting Technicians (AAT) has outlined its wishlist for the upcoming Spring Budget on 6 March.

The AAT has called on Chancellor Jeremy Hunt to create a ‘simpler, fairer and more effective’ tax system that ‘benefits everyone in the country’. It has called for the creation of a new body, separate from government, dedicated to the design, administration and delivery of tax policy.

It said that simplifying and streamlining tax obligations for small and medium-sized enterprises (SMEs) can help alleviate costs and ‘reduce the time spent on tax issues, allowing them to focus on growing their business’.

Additionally, the AAT said that late payments are ‘an increasing threat to SMEs’, and called for the government to take further action to ensure large businesses are held accountable for paying their suppliers on time.

The AAT also called for ‘continual delays’ in the implementation of Making Tax Digital (MTD) to be addressed immediately. It said the pilot schemes for the next phase of MTD must start as soon as possible. The AAT’s full Budget submission can be found here.

HMRC warns self assessment taxpayers as scam referrals rise

Wed, 21 Feb 2024 11:25:08 GMT

HMRC warns self assessment taxpayers as scam referrals rise

HMRC is warning people to be wary of bogus tax refund offers following the self assessment deadline on 31 January.

The tax authority says that fraudsters could set their sights on self assessment taxpayers, with more than 11.5 million submitting a tax return by last month’s deadline.

HMRC warns that taxpayers who completed their tax return for the 2022/23 tax year by the 31 January deadline might be taken in by an email, phone call or text message offering a tax rebate.

These phishing scams are designed to use personal details for selling on to criminals, or to access people’s bank accounts, says HMRC.

The warning comes after HMRC responded to 207,800 referrals from the public of suspicious contact in the past year to January. This is a 14% increase from the 181,873 reported for the previous 12 months. More than 79,000 of those referrals offered bogus tax rebates.

Kelly Paterson, HMRC’s Chief Security Officer, said: ‘With the deadline for tax returns behind us, criminals will now try to trick people with fake offers of tax rebates.

‘Scammers will attempt to dupe people by email, phone or texts that mimic government messages to make them appear authentic.’

NAO publishes findings on HMRC’s monitoring of effectiveness of tax reliefs

0064444792 (Amreth Sharma) — Wed, 14 Feb 2024 15:25:53 GMT

NAO publishes findings on HMRC’s monitoring of effectiveness of tax reliefs

The National Audit Office (NAO) has published recommendations on how HMRC monitors the effectiveness of tax reliefs.

In a recent report, the NAO stated that HM Treasury and HMRC ‘still do not monitor or evaluate reliefs closely enough to understand if they cost too much or achieve their intended economic impacts’.

The NAO said that, as at December 2023, there were 341 ‘non-structural’ tax reliefs that were designed to achieve social or economic objectives. In the 2022/23 tax year, the total cost of 104 non-structural tax reliefs was around £204 billion.

It said that the largest non-structural reliefs, which include tax reliefs for pensions, capital gains tax (CGT) tax relief on main homes and zero-rated VAT on food, do not specifically target economic growth.

According to the NAO, it has taken ‘a number of years’ for the government to amend reliefs where analyses found that they were of limited effectiveness.

Commenting on the findings, Gareth Davies, Head of the NAO, said: ‘Tax reliefs are an important policy tool for government, but their number and cost makes administration a significant task.

‘The government should carry out sufficient evaluation and compliance work to understand whether claims are legitimate and reliefs are working, and act promptly to get reliefs back on track if problems are identified.’

British families facing a ‘triple savings challenge’, Foundation warns

Wed, 14 Feb 2024 15:24:31 GMT

British families facing a ‘triple savings challenge’, Foundation warns

A report published by the Resolution Foundation has warned that UK families are facing a ‘triple savings challenge’ of insufficient ‘rainy day’ savings of at least £1,000.

The Foundation also warned that families face an ‘inability to cope financially with bigger life events’ and inadequate retirement incomes.

It said that these issues can be addressed by ‘building on the success of auto-enrolment into pension saving’. The Resolution Foundation has called for auto-enrolment contributions to be gradually increased from 8% to 12%.

Molly Broome, Economist at the Resolution Foundation, commented: ‘Families across Britain face a triple savings challenge – not saving enough for rainy days, bigger life events, or for a decent income in retirement.

‘One-in-three families in the country have less than £1,000 in savings – which left many people exposed during the cost-of-living crisis – while around 13 million individuals aren’t saving enough for an adequate income in retirement.

‘We can address all three challenges by building on the success of pensions auto-enrolment to opt more people into both easy access and long-term saving.’

CBI calls for Chancellor to use Budget to ‘build momentum' in the economy

0064444792 (Amreth Sharma) — Wed, 14 Feb 2024 15:23:17 GMT

CBI calls for Chancellor to use Budget to ‘build momentum' in the economy

In its Spring Budget submission, the Confederation of British Industry (CBI) has called on Chancellor Jeremy Hunt to ‘continue building momentum’ in the UK economy and ‘put the country on the path to sustainable growth’.

The CBI stated that the Spring Budget is ‘a crucial opportunity to firm up the foundations of growth to deliver a prosperous future for the country’.

According to the business group, the Chancellor should extend Full Expensing to cover leased and rented assets; deliver the planned expansion of eligibility to 30 hours of funded childcare; cap the increase in the business rate multiplier for England for another year; and increase the total that can be raised from Enterprise Investment Scheme (EIS) investments for knowledge intensive companies from £20 million to £30 million.

Rain Newton-Smith, Chief Executive at the CBI, commented: ‘The Chancellor needs to perform a tricky ‘high wire balancing act’ of giving momentum to the economy without sacrificing hard-earned credibility. With the Autumn Statement signposting us to the right path towards stability and growth, political leaders need to stay the course and not give in to short-term political headwinds.

‘Businesses are impatient for the economy to pick up steam. UK PLC needs a budget that prioritises economic momentum over election giveaways, giving firms the confidence to invest and avoiding the economy remaining on standstill until election day.’

Small businesses ‘finding it harder to access finance

0064444792 (Amreth Sharma) — Wed, 07 Feb 2024 09:52:27 GMT

Small businesses ‘finding it harder to access finance’

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Record 11.5 million taxpayers file tax returns by 31 January deadline

Wed, 07 Feb 2024 09:48:30 GMT

Record 11.5 million taxpayers file tax returns by 31 January deadline

Data published by HMRC has revealed that a record 11.5 million taxpayers filed their 2022/23 self assessment tax returns by midnight on 31 January.

HMRC stated that 12.1 million individuals were expected to file their tax returns and pay any tax owed.

The peak hour for filing on 31 January was between 16:00 and 16:59 when 61,549 taxpayers submitted their returns. 32,958 filed between 23:00 and 23:59.

HMRC has urged anyone who missed the deadline to submit their tax return as soon as possible – late filing and late payment penalties apply for those who failed to submit by the deadline. It stated that there are many ways to pay, including online, using the HMRC app, by bank transfer or via a Time to Pay payment plan.

Commenting on the figures, Myrtle Lloyd, Director General for Customer Services at HMRC, said: ‘Thank you to the millions of self assessment customers and agents who met the deadline. Anyone who has yet to file and is concerned that they cannot pay in full may be able to spread the cost of what they owe with a payment plan. Search ‘pay your self assessment’ on GOV.UK to find out mor

Employment Allowance should be increased at Spring Budget

Wed, 07 Feb 2024 09:44:03 GMT

Employment Allowance should be increased at Spring Budget

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Only a third of UK adults confident with self assessment

Fri, 02 Feb 2024 15:23:08 GMT

Only a third of UK adults confident with self assessment

Just 35% of UK adults are confident they could complete the self assessment tax return form correctly, according to research Standard Life.

Three in ten UK adults admit they do not feel confident they could complete the form correctly. A further 18% said they felt neither confident nor unconfident while 17% were not sure.

The research highlighted a widespread lack of awareness around self assessment timings, with more than half not knowing when the deadline for filing is.

In addition, among those who are currently, or soon will be, in the higher income tax bracket, 41% are unaware that they might need to fill in a self assessment tax return to claim all their pension tax relief.

Dean Butler, Managing Director for Retail Direct at Standard Life, said: ‘The deadline for filing self-assessment tax returns is fast approaching, with returns needing to be submitted online by midnight on 31 January. So, if you’re one of the categories of people who needs to send a tax return then now is the time to act.

‘Tax returns can be tempting to put off, but it’s important to understand what’s required and file it on time to avoid any penalties which can be costly. Tackling the forms in advance, rather than leaving it to the last minute, will give you the time to gather the information needed and make the submission as stress free as possible.’

If you require advice or assistance with self assessment please get in touch.

Clarity on new border checks is vital, says BCC

0064444792 (Amreth Sharma) — Fri, 02 Feb 2024 15:21:44 GMT

Clarity on new border checks is vital, says BCC

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Fall in government borrowing ‘increases possibility of tax cuts’ in Budget

Fri, 02 Feb 2024 15:20:20 GMT

Fall in government borrowing ‘increases possibility of tax cuts’ in Budget

Data published by the Office for National Statistics (ONS) has revealed that government borrowing fell to £7.8 billion in December 2023, increasing the possibility of tax cuts in the upcoming Spring Budget.

Experts have suggested that the latest figures may give Chancellor Jeremy Hunt additional ‘wiggle room’ for tax cuts in the Spring Budget on 6 March. During the World Economic Forum’s annual meeting in Davos, Switzerland, Mr Hunt hinted that he wants to cut taxes, and stated that low-tax economies are ‘more dynamic, more competitive and generate more money for public services’.

The ONS data also showed that interest payments on government debt fell to £4 billion, down by £14.1 billion when compared to December 2022.

Commenting on the data, a spokesperson for the Treasury said: ‘We are focused on creating a more productive public sector, not a larger one, by reducing admin workloads, introducing early interventions and safely bringing in new tech like AI. This will stop the state growing ever larger and ensure taxpayers’ money is spent on the public’s priorities.’

Raise VAT threshold to £100,000, says FSB

Wed, 24 Jan 2024 11:07:09 GMT

Raise VAT threshold to £100,000, says FSB

The government should raise the turnover threshold for VAT from £85,000 to £100,000, according to the Federation of Small Businesses (FSB).

The business group said that this would give firms stepping into the VAT-paying ring crucial breathing space. It would also be an incentive to grow their turnover without fear of having to charge customers an extra 20% overnight, the FSB added.

The FSB also suggested bringing in a smoothing mechanism to ease the transition for small firms, owner-managed companies and some of the self-employed who go just over the threshold.

At the moment, thousands of small firms keep their turnover just below the £85,000 threshold, according to the Office for Budget Responsibility (OBR).

The OBR said that hundreds of millions of pounds of potential economic activity could be lost due to this ‘bunching’ just below the threshold.

Tina McKenzie, FSB’s Policy Chair, said: ‘VAT compliance flattens small firms by stifling their growth and emptying their coffers. It’s crying out for a modern makeover to match today’s economic landscape.

‘The flaws in our current system are glaringly obvious. We are at a breaking point – a drastic overhaul of VAT is needed.

‘Raising the threshold to reflect inflation, introducing a buffer to soften the blow for those just over the limit and demystifying the rules to save small business owners from a VAT-induced headache could unlock hundreds of millions in extra economic activity.’

IMF warns AI will affect jobs and worsen inequality

Wed, 17 Jan 2024 12:19:59 GMT

IMF warns AI will affect jobs and worsen inequality

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Cost of student loan system ‘has increased by more than £10 billion’, IFS finds

Wed, 17 Jan 2024 12:18:36 GMT

Cost of student loan system ‘has increased by more than £10 billion’, IFS find

Research carried out by the Institute for Fiscal Studies (IFS) has revealed that the cost associated with financing the UK’s student loan system has increased by more than £10 billion per year.

The IFS attributes the increase to higher interest rates and changes in government borrowing over the past two years.

It said that funding student loans has become ‘substantially more expensive’ for the government, and its official measures of the cost of student loans do not reflect the increase.

The business group said that if the government can borrow at a lower interest rate than the interest it charges on student loans, then lending money to a student who subsequently repays their loan in full will prove to be a profitable transaction for the government.

In its report, the IFS stated: ‘In recent years, the government’s borrowing costs have always been lower than the interest rates it charged on student loans. This is now expected to change.

‘Yields on gilts (government bonds) have risen substantially over the past two years and are now higher than expected RPI inflation, which will determine the interest rate on newly issued student loans. As a result, as well as making a loss on the loans that are not repaid, the government can now also expect to make a loss on the loans that are.’

Value of tax penalties surged by 25% between 2022 and 2023, data shows

Wed, 17 Jan 2024 12:17:11 GMT

Value of tax penalties surged by 25% between 2022 and 2023, data shows

A Freedom of Information request has revealed that the value of tax penalties rose by 25% between 2022 and 2023.

The data also showed that HMRC issued £851 million in penalties between November 2022 and October 2023 – a significant rise from the figure of £681 million in 2021/22. The latest figure is the highest value on record for tax penalties.

Experts have warned that the increase in penalties only piles further pressure on businesses and individuals already combating high interest rates and the cost-of-living crisis.

Commenting on the matter, a spokesperson for HMRC said: ‘We’re committed to helping customers pay the tax they owe, on time.

‘We charge penalties to encourage customers to meet their obligations, while acting as a sanction for those who don’t.

‘If customers are unable to pay on time, they can contact us to discuss their options.’

Businesses and individuals struggling to pay their tax can enter into a Time to Pay arrangement if their tax debts are under £30,000. Such arrangements allow taxpayers to set up a payment plan in order to pay their tax in instalments.

Over 50s bucking decline in freelance numbers

Wed, 10 Jan 2024 11:29:31 GMT

Over 50s bucking decline in freelance numbers

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National Insurance contributions cut from 6 January

Wed, 10 Jan 2024 11:28:03 GMT

National Insurance contributions cut from 6 January

The government cut the main rate of Class 1 employee National Insurance contributions (NICs) from 12% to 10% on 6 January 2024.

The government says that this will reduce NICs by more than 15%. This provides a tax cut for 27 million working people, with the average worker on £35,400 receiving a cut in 2024/25 of over £450.

The cut was first announced by Chancellor Jeremy Hunt in the 2023 Autumn Statement.

The Chancellor also announced that, from 6 April 2024, the government will abolish Class 2 self-employed NICs.

Speaking on 6 January, Prime Minister Rishi Sunak said: ‘We have made tough decisions on the economy, supporting people through global shocks such as the pandemic and Putin’s illegal invasion of Ukraine. It is because of the tough decisions this government has taken that . . . we are able to cut taxes for 27 million people across the UK.

‘[The] tax cuts will directly reward hard working people, putting £450 back in the pocket of the average worker and helping them make ends meet.’

HMRC targets side hustles as online platforms share information

0064444792 (Amreth Sharma) — Wed, 10 Jan 2024 11:26:30 GMT

HMRC targets side hustles as online platforms share information

A ‘side hustle tax’ came into force on 1 January aimed at those who sell second-hand goods online or let out their spare rooms.

The new measures aim to target people who evade taxes by failing to declare their income to the authorities.

Marketplaces including eBay, Airbnb and Etsy will now be required to report what their users earn to HMRC.

The crackdown applies to those who earn more than £1,000 a year through online transactions - such as by selling clothes, delivering takeaway food or renting out accommodation.

Once a seller exceeds this threshold, they must register as self-employed and file a tax return at the end of the year.

It comes after the UK signed up to a global agreement by the Organisation for Economic Cooperation and Development (OECD) that allows tax officials to share information with authorities in other countries.

A HMRC spokesperson said: ‘Implementing the OECD rules will enable HMRC to exchange information with other tax authorities to access data from platforms based outside the UK quickly and efficiently.

‘The rules will also make it easier for sellers on these platforms to comply [with tax laws] and will help HMRC to detect and tackle tax evasion when they do not.’

Higher earners in Scotland to pay increased rate of income tax

Wed, 03 Jan 2024 15:12:42 GMT

Higher earners in Scotland to pay increased rate of income tax

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