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Registered to carry out audit work Association of Chartered Certified Accountants.

www.auditregister.org.uk under number 8011438

Member of the Association of Chartered Certified Accountants
Phone

01332 202660

Blog

Spring Statement 2019

Adrian Mooy - Monday, March 18, 2019

 

The little speculation there was in the days before the Chancellor’s Spring Statement focused more on whether Mr Hammond would find anything of interest to say at all, than on what he would say.

 

The purpose of the Spring Statement is to respond to forecasts from the Office for Budget Responsibility (OBR), although that has not always prevented Mr Hammond from making significant announcements.

 

While arguing that the “economy itself is remarkably robust”, Mr Hammond said that growth projections for 2019 have been revised down by the OBR from 1.6 per cent to 1.2 per cent.

 

Mr Hammond expects 600,000 new jobs to be created by 2023 and he said the OBR has revised wage growth up to around three per cent each year.

 

He announced £100 million to help the police fight knife crime and a commitment to end ‘period poverty’ by providing free sanitary products in secondary schools and colleges.

 

Mr Hammond said that he wanted to “build on the UK’s fundamental strengths”, announcing a £37 billion productivity fund, focusing on improving skills throughout the workforce.

 

He then said that the Government would respond later in the year to a recommendation in an independent review of competition in the digital economy, that rules should be updated for the digital age.

 

Saying that “we need to tackle the scourge of late payments”, he said that listed companies would have to report on their payment practices within their company accounts.

 

Mr Hammond devoted a significant part of his speech to housing and the environment, announcing £3 billion for the Affordable Homes Guarantee Scheme.

 

To allow time for the Commons to consider Brexit, Mr Hammond said that he would make some announcements in a Written Ministerial Statement, published at the end of his speech. This included preventing the abuse of R&D tax relief for small or medium-sized enterprises, draft regulations on the National Insurance Contributions (NIC) Employment Allowance that would restrict the allowance to businesses with an employer NIC bill below £100,000 and a call for evidence on lettings relief and the final period exemption, which extends private residence relief in capital gains tax.

National Living Wage to rise next month

Adrian Mooy - Friday, March 08, 2019

 

 
From 1 April 2019, employers will be required by law to pay their employees a higher minimum wage rate.

 

The increase in the UK’s statutory wage requirements will benefit around 2.4 million workers and means that the annual earnings of a full-time minimum wage worker will have increased by over £2,750 since April 2016.

 

The new rates for National Living Wage are:
           
Year  25 and over    21 to 24     18 to 20     Under 18       App. 
Current        £7.83      £7.38       £5.90       £4.20    £3.70 
April 2019        £8.21       £7.70       £6.15        £4.35    £3.90 

 

For businesses though, the increase in the wage will not only affected their wage bill but will also come at a time when they are required to increase their workplace pension contributions for staff.

 

These contributions are set to rise yet again next month to a minimum of three per cent for employers, and a combined minimum contribution of eight per cent between employers and employees.

 

Those who are unprepared for these changes are likely to be the worst affected by this sudden change in costs, so it is important that they take immediate action if they are not yet prepared.

 

HMRC warns households of rise in landline tax scams

Adrian Mooy - Thursday, March 07, 2019

 

HMRC has urged UK households with a landline number to be vigilant following a significant rise in landline tax scams.

 

HMRC recently moved to crack down on email and SMS phishing scams. As a result, many criminals are now turning to the more traditional method of cold-calling publicly available phone numbers, including landline numbers.

 

The Revenue recently revealed that, in the six months to January 2019, it received more than 60,000 reports of phone scams – an increase of 360% when compared to the previous six months. According to HMRC, phone scams are typically targeted at the elderly and the vulnerable. Criminals often pose as HMRC to 'add credibility' and convince their victims.

 

HMRC has been working with phone networks and regulator Ofcom to close nearly 450 phone lines that have been used by criminals. Ofcom estimates that 26 million homes have a landline, many of which could be at risk from scams.

 

Commenting on the issue, Mel Stride, Financial Secretary to the Treasury, said: 'If you receive a suspicious call to your landline from someone purporting to be from HMRC which threatens legal action, to put you in jail, or payment using vouchers: hang up and report it to HMRC, who can work to take them off the network.' Any suspicious emails, phone calls or text messages received should be reported to HMRC or Action Fraud.

Payroll sector prepares for changes in 2019/20

Adrian Mooy - Wednesday, March 06, 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 April 2020, where an individual is engaged by a medium or large-sized business in the private sector and works through a company, the employer will be responsible for assessing the individual’s employment status under the off-payroll working rules (IR35).
 
Where the rules apply, the business or agency will be responsible for deducting income tax and National Insurance contributions (NICs) via PAYE and will be required to pay employer NICs.
 
Businesses will be able to use the Check Employment Status for Tax (CEST) service, which is available to help businesses determine whether the off-payroll working rules apply. These new rules will not affect small businesses.

 

Postgraduate Loans (PGL) - From April 2019, taxpayers will be required to start repaying PGLs if they meet the threshold of £21,000 (England and Wales only). If they do meet the threshold, a deduction of six per cent will be taken from their wages.
 
The existing starter checklist provided by the Government will be updated to include a section for PGL. Employees’ P60 forms will also be changed to include a new box for PGL deductions, however, the existing P45 form will remain the same.

 

Parental Bereavement Leave and Pay - Employers will have to get to grips with a new workplace right to Parental Bereavement Leave and Pay for parents who lose a child under the age of 18.
 
This new right will include parents who have suffered a stillbirth after 24 weeks of pregnancy.
 
Those who qualify for the new right, which will commence from 6 April 2020, will be entitled to two weeks of paid Parental Bereavement Leave.
 
During this period, they will be paid at the statutory flat weekly rate of £145.18 or 90 per cent of average earnings (whichever is lower), if the person has at least 26 weeks continuous service at the date of their child’s death and earnings above the Lower Earnings Limit.

 

Just over half of businesses are prepared for MTD

Adrian Mooy - Monday, March 04, 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 landmark change in taxation.

 

Initially, the new system will only apply to the recording and reporting of VAT on a quarterly basis for those VAT-registered businesses over the VAT threshold (£85,000).

 

However, the Government intends to extend the system out to other areas of taxation and to other businesses from April 2020 at the earliest.

 

Businesses will be offered a “soft landing” period of a year during which they won’t be fined if they don’t comply with the reporting requirements in time.

 

HM Revenue & Customs has also recently confirmed that during this period “where a digital link has not been established between software programs, HMRC will accept the use of cut and paste as being a digital link for these VAT periods.”

 

Despite its recent communications HMRC has been heavily criticised for not doing enough to make businesses aware of the new regime, with it only launching its social media and email campaign to small businesses in Autumn last year.

Tax returns - do all directors need to submit?

Adrian Mooy - Thursday, February 28, 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 individuals determine whether they need to submit a tax return.
 
However, the requirement is not enshrined in law and has been repeatedly contradicted by tribunal rulings.
 
HMRC now says directors are not required to file Self-Assessment tax returns if they have been taxed under PAYE and do not need to pay tax on other income.
 
However, if HMRC issues a notice to file a Self-Assessment tax return, a director must do so, unless a request to HMRC to withdraw the notice is accepted. HMRC is not obliged to withdraw the notice, even if there is no tax to pay.
 
Guidance on the gov.uk website has now been updated to reflect HMRC’s new position.

 

Automatic Enrolment contributions to increase

Adrian Mooy - Wednesday, February 27, 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 from five per cent to eight per cent.

 

The minimum contribution only applies to employees earning £10,000 a year or more and percentage contributions will be calculated using only the employee’s earnings between £6,136 and £50,000 from April. This is an increase from the existing income threshold of £6,032 to £46,350.

 

For the purposes of AE pension contributions, earnings include:

 

  • Salary
  • Wages
  • Commission
  • Bonuses
  • Overtime
  • Statutory sick pay
  • Statutory maternity pay
  • Ordinary or additional statutory paternity pay
  • Statutory adoption pay

 

It is important to ensure that your payroll processes take account of the changes. The penalties for non-compliance can be severe.

Taxpayers treated unfairly by HMRC - House of Lords

Adrian Mooy - Thursday, February 07, 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 system. It has demanded that the Government reviews the current arrangements.

 

Lord Forsyth of Drumlean, the committee’s chairman, said that, while the tax authority was right to challenge tax evasion and aggressive tax avoidance, “a careful balance must be struck between clamping down and treating taxpayers fairly.”

 

The committee believes that the evidence it uncovered suggests that “this balance has tipped too far in favour of HMRC and against the fundamental protections every taxpayer should expect.”

 

Although the report covers a number of areas of taxation, the committee gave special consideration to “disturbing evidence” on the approach to the loan charge.

 

This new fee is intended to prevent disguised remuneration schemes, where workers have been paid via a loan with the intention of avoiding tax and national insurance contributions.

 

However, the committee is concerned that the retrospective nature of the charge could affect those that were unaware of the risks or forced to use this arrangement by their employer.

 

It has recommended that HMRC urgently reviews these cases where the only remaining consideration is the individual’s ability to pay and establishes a dedicated helpline to support those adversely affected by the loan charge.

 

The committee has also called on Parliament to consider how it scrutinises the powers it gives to HMRC.

Online tool to assess self-assessment requirement

Adrian Mooy - Thursday, January 24, 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 a return.

 

Typically, an individual must submit a tax return if, in the last tax year, they were self-employed as a ‘sole trader’ and earned more than £1,000, or a partner in a business partnership.

 

Most taxpayers will not need to send a return if their only income is from their wages or pensions, which are recorded by employers via PAYE.

 

However, some individuals may need to submit one if they have any other untaxed income, such as:

 

money from renting out a property

tips and commission

income from savings, investments and dividends

foreign income

 

Taxpayers should be aware that if they use the tool their details will not be sent to HMRC. If you are unsure whether you need to submit a tax return, please click here to use the tool.

Taxpayers treated unfairly by HMRC says House of Lords

Adrian Mooy - Wednesday, January 23, 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 system. It has demanded that the Government reviews the current arrangements.

 

Lord Forsyth of Drumlean, the committee’s chairman, said that, while the tax authority was right to challenge tax evasion and aggressive tax avoidance, “a careful balance must be struck between clamping down and treating taxpayers fairly.”

 

The committee believes that the evidence it uncovered suggests that “this balance has tipped too far in favour of HMRC and against the fundamental protections every taxpayer should expect.”

 

Although the report covers a number of areas of taxation, the committee gave special consideration to “disturbing evidence” on the approach to the loan charge.

 

This new fee is intended to prevent disguised remuneration schemes, where workers have been paid via a loan with the intention of avoiding tax and national insurance contributions.

 

However, the committee is concerned that the retrospective nature of the charge could affect those that were unaware of the risks or forced to use this arrangement by their employer.

 

It has recommended that HMRC urgently reviews these cases where the only remaining consideration is the individual’s ability to pay and establishes a dedicated helpline to support those adversely affected by the loan charge.

 

The committee has also called on Parliament to consider how it scrutinises the powers it gives to HMRC.


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