Entrepreneurs’ Relief changes fail to meet up to the test

February 1, 2019: During the last Budget, the Government announced new conditions to entrepreneurs’ relief that would take immediate effect to change the definition of a “personal company” for shareholders who claim entrepreneurs’ relief. By introducing these changes, they hope to restrict shareholders relief to those with a genuine material stake of at least five per cent in... Read more

Just over half of businesses are prepared for Making Tax Digital

February 1, 2019: A new study into preparations for Making Tax Digital amongst businesses has found that only 57 per cent of firms are ready to comply with the new regime by 1 April 2019. Despite the various delays and changes to the Government’s new digital tax system, businesses have had several years to prepare themselves for this... Read more

Late payers to be flagged up to businesses under new proposals

February 1, 2019: The Small Business Commissioner, Paul Uppal, has recommended a new “traffic light” system that will warn smaller firms which businesses have a consistent record of late payment and those most likely to request longer payment terms. It is thought that around £2.5 billion is lost annually within the economy due to late payments and they... Read more

HM Revenue & Customs drops insistence that all company directors must submit tax returns

February 1, 2019: HM Revenue & Customs (HMRC) has dropped its insistence that all company directors must submit tax returns following a series of tribunal rulings. For several years, HMRC has advised in its guidance on the gov.uk website that company directors should register for Self-Assessment and this has also been part of online tools designed to help... Read more

Automatic Enrolment contributions to increase

February 1, 2019: The next increase in Automatic Enrolment (AE) pension contributions for both employees and employers will take place from 6 April 2019. The minimum employer contribution will increase from two per cent to three per cent, while the employee contribution will rise from three per cent to five per cent – taking the total minimum contribution... Read more

Payroll sector prepares for key changes in 2019/20

February 1, 2019: The next 12 months will see a number of new changes to payroll policy that could have an impact on a wide range of businesses. To give an overview of how businesses could be affected by these changes, below are some of the highlights that employers will need to prepare for.  Private Sector IR35  From... Read more

Debt recovery costs small businesses an average of £9,000

January 10, 2019: The cash flow difficulties that late payments cause small businesses are well known. However, the cost of recovering late payments is less well publicised, despite being a major and growing expense – coming in at around £9,000 last year for an average business. Research by Bacs Payment Schemes found that the cost of recovering late... Read more

Brexit uncertainty sends small business confidence to a seven-year low

January 10, 2019: Confidence amongst small businesses has tumbled to a seven-year low – in part due to the uncertainty of Brexit. A survey carried out by the Federation of Small Businesses (FSB) has found that nearly one in three small exporters think that sales to overseas customers will fall during the early part of this year. Meanwhile,... Read more

An end to the Entrepreneurs’ Relief ‘dilutions dilemma’?

January 10, 2019: As a business takes off, the level of investment it needs in order to expand can significantly outpace growth in revenues and profits. One of the options open to entrepreneurs at this stage in the development of a business is to issue new shares that secure new investment, without the financial pressures that come with... Read more

Tax rates rise twice as fast in the UK than the international average

January 10, 2019: According to the Organisation for Economic Co-operation and Development (OECD), UK tax revenue as a percentage of GDP rose to 33.3 per cent in 2017. This was up from 32.7 per cent in the previous year and was more than double the average rate of increase for nations covered by the OECD’s research. Of the... Read more

Taxpayers offered online tool to assess their self-assessment requirement

January 10, 2019: It should seem obvious whether an individual must submit a self-assessment tax return annually. Yet, each year, thousands of people find themselves brought into the regime unwittingly. To help taxpayers prepare their affairs accordingly, HM Revenue & Customs (HMRC) is offering a free online tool to help people find out whether they need to submit... Read more

Taxpayers treated unfairly by HMRC, says House of Lords report

January 10, 2019: The House of Lords Economic Affairs Committee has criticised some of the powers granted to HM Revenue & Customs (HMRC), describing them as disproportionate and lacking effective taxpayer safeguards. The committee’s latest report says that HMRC’s powers are now too broad and the penalties too high, deterring taxpayers from appealing and creating injustice within the... Read more

Smaller estates should not have to file Inheritance Tax paperwork, says Office for Tax Simplification

December 4, 2018: The Office for Tax Simplification (OTS) has said that smaller and less complex estates should not be subject to the requirement to file Inheritance Tax (IHT) paperwork. The call was part of a review into IHT, which Chancellor Philip Hammond ordered earlier this year. While just five per cent of estates are subject to IHT,... Read more

Unwrapping Christmas tax gifts

December 4, 2018: Christmas is a time for giving, but many businesses may not be aware that their gifts can be made in a tax-efficient manner, which could make raising festive spirits that little bit cheaper. While Christmas parties may not be for everyone, HM Revenue & Customs (HMRC) does provide an allowable tax deduction of up to... Read more

Big increase in P2P lending

December 4, 2018: The fifth annual UK Alternative Finance Industry Report has revealed a 65 per cent year-on-year increase in peer-to-peer (P2P) lending. The P2P lending market is now worth £2 billion and small and medium-sized enterprises (SMEs) appear to be the dominant force behind it. To put the rise of P2P lending into context, its value is... Read more

180,500 first-time buyers benefit from relief on Stamp Duty Land Tax (SDLT)

December 4, 2018: Figures released by HM Revenue & Customs (HMRC) have revealed that 180,500 first-time buyers have benefited from the Government’s changes to Stamp Duty Land Tax (SDLT). HMRC estimates that first-time buyers have saved a total of more than £426 million since Chancellor Philip Hammond announced the First-Time Buyers’ Relief (FTBR) in November 2017. At Budget... Read more

Italian e-invoicing requirements make Making Tax Digital look like a walk in the park

December 4, 2018: While a series of false starts and changes of direction have made Making Tax Digital (MTD) seem more complicated than it might need to be, new e-invoicing requirements that come into effect in Italy from 1 January 2019 make it look like a walk in the park. The Italian tax authorities will require VAT-registered businesses... Read more

House of Lords calls for a delay to Making Tax Digital

December 4, 2018: The House of Lords Economic Affairs Committee has criticised HM Revenue & Customs (HMRC) for its handling of Making Tax Digital (MTD) and called for a delay to some of the regime’s mandatory requirements. The majority of VAT-registered businesses with taxable turnover above the VAT registration threshold of £85,000 will need to keep digital records... Read more

UK takes second spot for tax compliance in G20

December 4, 2018: New research from the World Bank has revealed that the UK has the second most effective tax system amongst the G20 nations for tax compliance and ease of paying corporate taxes. According to the survey, companies take an average of 105 hours per year to prepare and file their taxes in the UK, which equates... Read more

National Living Wage to rise in April 2019

November 1, 2018: In his latest Budget speech to the Commons, Chancellor Philip Hammond announced that the National Living Wage and National Minimum Wage would increase from April next year. However, despite many employees across the UK welcoming this sudden pay rise, small business owners across the UK are being left to pick up the bill. From April... Read more

Public pilot of Making Tax Digital for VAT opens

November 1, 2018: HM Revenue & Customs (HMRC) has opened a public pilot of Making Tax Digital (MTD) for VAT. The pilot is open to sole traders and companies that are up-to-date with VAT, who have not received a default surcharge in the last two years. Some other groups will need to wait to join, including those: trading... Read more

Entrepreneurs’ Relief rules to be tightened

November 1, 2018: Despite rumours that the Chancellor might scrap Entrepreneurs’ Relief (ER) all together in the Autumn Budget, Philip Hammond decided to retain the tax relief but has made fundamental changes to who qualifies for it. Mr Hammond said that “encouraging entrepreneurs must be at the heart” of the Government’s strategy but he recognised the relief as... Read more

Research reveals Inheritance Tax hotspots across the UK

November 1, 2018: New research has revealed that the affluent area surrounding Guildford in Surrey has the highest proportion of people paying Inheritance Tax (IHT). The study showed that 658 estates were subject to the tax the town in 2015/16, paying on average £231,000 each. In comparison, Wigan in Greater Manchester saw just 31 estates liable for IHT... Read more

R&D Tax Credit system to be reviewed in light of fraudulent claims

November 1, 2018: According to figures released in the Autumn Budget, HM Revenue & Customs (HMRC) has prevented around £300 million of fraudulent R&D tax credit claims since the relief was introduced. In a bid to prevent further abuse of this tax relief, Philip Hammond has promised to clamp down on fraudulent claims by reintroducing a Pay As... Read more

HM Revenue & Customs to review and rework some 2016-17 self-assessment tax returns following error

November 1, 2018: The Chartered Institute of Taxation (CIOT) has warned that HM Revenue & Customs (HMRC) is to review and potentially rework as many as 30,000 self-assessment tax returns that were filed online for 2016-17 owing to concerns that its tax calculator may have wrongly computed the tax liability. The review will begin on 19 November 2018... Read more

Payee names to be required for bank transfers in effort to combat fraud and errors

November 1, 2018: From next year, payee names will be checked when making bank transfers in order to ensure that funds are being sent to the correct recipient. Currently, only the sort code and account number are checked when making a transfer, something which has been exploited by fraudsters to trick people into transferring tens of thousands of... Read more

Autumn Budget 2018

October 29, 2018: The sun was already edging behind the London skyline by the time Chancellor Philip Hammond rose to the despatch box to deliver the first Monday Budget since 1962 – pushed back to 3.30pm because of later Parliamentary sitting times on Mondays. Officially, the traditional Wednesday slot was dispensed with this year to allow as much... Read more

CIOT reports increase in R40 refund errors

October 9, 2018: According to a new report by the Chartered Institute of Taxation (CIOT), there have been a growing number of R40 computation errors on refunds processed by HM Revenue & Customs (HMRC). Individuals can use R40 forms to claim tax refunds on tax deducted from savings income. Following the CIOT report, HMRC has now confirmed that... Read more

Workers miss out on £15.6 million in pay through minimum wage breaches

October 9, 2018: Minimum wage breaches, including breaches of the National Living Wage, have cost workers from across the UK a combined total of £15.6 million in lost wages. Figures released by the Government show that around 200,000 workers were affected in 2017/18, in what was the highest underpayment since the National Minimum Wage was introduced. In total,... Read more

HMRC finally launches MTD communications plan and simplified guidance

October 9, 2018: With only six months left until the launch of Making Tax Digital for VAT, HM Revenue & Customs (HMRC) has finally begun sharing information with businesses about the new regime. While accountants and professional advisers across the UK have been making clients aware of the new digital system for more than two years, the nation’s... Read more