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Tuesday 19th July 2022

Issue 3 2022

The articles in this edition include capital gains tax negligible value claims and HMRC reviewing Covid support claims.

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Wednesday 18th May 2022

Issue 2 2022

The latest version of the newsletter leads with the changes to the National Insurance regime and a guide to the Spring Statement

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Thursday 7th April 2022

Tax Rates 2022/23

A summary of the Tax Rates for 2022/23

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Tuesday 8th February 2022

Issue 1 2022

This edition highlights the tax benefit of capital spending in your business and a round up of pension news.

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Thursday 28th October 2021

Autumn 2021

The Autumn addition details the changes to National Insurance and potential changes to Income Tax Administration

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Wednesday 4th August 2021

Summer 2021

This edition includes articles on how HMRC will be reviewing/checking the Self-employment Income Support Scheme claims and the expansion of the Making Tax Digital programme in the coming years.

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Wednesday 2nd June 2021

May 2021 Newsletter

This edition leads on the changes to the Job Retention Scheme and Self Employed Income Support. In addition there is an article on the "super deduction" for capital allowances being introduced.

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Monday 15th February 2021

February 2021

The first issue of 2021 provides details of the deferred VAT payments and Corporation tax to go digital

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Thursday 27th August 2020

August 2020

This edition of the newsletter provides an update on some tax changes as a result of Covid-19

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Thursday 4th August 2022

The level at which people start paying national insurance rose from 6 July.

The level at which people start paying national insurance rose from £9,880 to £12,570 from 6 July.

According to the government, 30 million people across the UK will benefit from this tax cut. It says the increase will lift 2.2 million people out of paying any personal tax.

The threshold change means that 70% of UK workers will pay less national insurance, even after accounting for the Health and Social Care Levy, the government added.

Prime Minister Boris Johnson said:

'We know it's tough for many families across the UK, but we want you to know that this government is on your side.

'Today's tax cut means around 70% of British workers will pay less national insurance - even after accounting for the Health and Social Care Levy that is funding the biggest catch-up programme in NHS history and putting an end to spiralling social care costs.

'So whether you are a receptionist, work in hospitality or are a delivery driver, this tax cut is likely to make you and your family better off.'

Internet links: HM Treasury press release

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Thursday 4th August 2022

The International Monetary Fund (IMF) has warned that the UK faces the slowest rate of growth in the G7 next year.

The International Monetary Fund (IMF) has warned that the UK faces the slowest rate of growth in the G7 next year.

The IMF predicts that UK economic growth will fall to 0.5% in 2023, which is considerably lower than its previous prediction of 1.2%, which was forecast in April.

Russia's invasion of Ukraine and the Covid-19 pandemic has caused the global economy to shrink, the IMF stated. It has consequently cut its 2022 global growth forecast to 3.2%.

It also said that rising prices and higher borrowing costs are continuing to squeeze households and businesses around the world. The data revealed that in the three months to July, global economic growth contracted, marking the first decline since the onset of the pandemic.

The IMF predicts a 15% probability of recessions in the G7 economies, which include Germany, France, the US, the UK, Japan, Canada and Italy. This is almost four times higher than usual, according to the IMF.

Pierre-Olivier Gourinchas, Economic Counsellor and the Director of Research at the IMF, said:

'The global economy, still reeling from the pandemic and Russia's invasion of Ukraine, is facing an increasingly gloomy and uncertain outlook.

'Higher-than-expected inflation, especially in the United States and major European economies, is triggering a tightening of global financial conditions. China's slowdown has been worse than anticipated amid Covid-19 outbreaks and lockdowns, and there have been further negative spillovers from the war in Ukraine. As a result, global output contracted in the second quarter of this year.

'The outlook has darkened significantly since April. The world may soon be teetering on the edge of a global recession, only two years after the last one. Multilateral cooperation will be key in many areas, from climate transition and pandemic preparedness to food security and debt distress.'

Internet links: IMF website

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Thursday 4th August 2022

The British Chambers of Commerce (BCC) has called for action to help firms employ more staff amidst recruitment difficulties.

The British Chambers of Commerce (BCC) has called for action to help firms employ more staff amidst recruitment difficulties.

A survey carried out by the business group revealed that 61% of firms are looking to recruit more employees, but many are facing difficulties in doing so.

According to the BCC, the construction sector is facing the most severe recruitment challenges, with 83% of construction businesses reporting issues with recruiting skilled workers.

The BCC has outlined a three-point plan to help businesses recruit. This plan includes encouraging firms to 'find new ways of unlocking pools of talent'; helping employers invest in training; and reforming the Shortage Occupation List (SOL).

Jane Gratton, Head of People Policy at the BCC, said:

'Businesses remain under huge pressure to fill jobs, but record levels of recruitment difficulty are showing no signs of improvement. Solutions are urgently needed so that firms can keep their doors open throughout these tough times.

'We have written to the government outlining a three-point plan on how they can work with businesses to solve this.'

Internet link: BCC website

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Thursday 4th August 2022

The Institute of Directors (IoD) has called on the government to extend the capital allowances super-deduction.

The Institute of Directors (IoD) has called on the government to extend the capital allowances super-deduction.

Data published by the IoD found that the super-deduction has had 'a positive and measurable impact' since it was introduced at Budget 2021. The data showed that 13% of firms reported that the super-deduction had had a direct impact on their level of investment undertaken between 2021and 2023. For half of these businesses, it was entirely new investment as a direct result of the super-deduction.

Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from new first year capital allowances.

Under this measure a company will be allowed to claim:

  • a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
  • a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.

The relief is not available for unincorporated businesses.

The business group is urging the government to make the super-deduction permanent.

Kitty Ussher, Chief Economist at the IoD, said:

'Our data shows the positive impact the super-deduction has already had in doing just that. We are therefore calling for the Chancellor to make it a permanent feature of doing business in Britain.

'It is wrong to look at declining overall levels of business investment in recent months and conclude that the super-deduction has not worked. Instead, our data shows that even less investment would have taken place if the super-deduction did not exist.'

Internet link: IoD website

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Thursday 4th August 2022

Insurer Zurich UK has stated that there has been a significant increase in the number of fraudulent claims as a result of the cost-of-living crisis.

Insurer Zurich UK has stated that there has been a significant increase in the number of fraudulent claims as a result of the cost-of-living crisis.

Zurich found that between 1 January and 31 May 2022, the number of fraudulent property claims rose by 25% compared to the same period in 2021. It also stated that in the last five months, it has prevented fraud amounting to £4.2 million, which equates to more than £40,000 a day.

TVs, mobile phones and jewellery were some of the most common items fraudsters claimed to have had stolen or to have lost.

Scott Clayton, Head of Claims Fraud at Zurich UK, said:

'Sadly, many more people are facing hardships as a result of the cost-of-living crisis, which is contributing to an increase in fraudulent claims. Since the start of the year, we've seen a significant rise in bogus property claims as households and businesses come under increased financial strain.

'While exaggerating or faking a claim might seem like a chance worth taking, the consequences can be severe, with fraudsters facing criminal prosecution and potentially even a prison sentence.'

Internet link: Zurich website

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Thursday 4th August 2022

The government has introduced legislation to Parliament, which it says will enhance the competitiveness of the UK financial services sector and unlock tens of billions of pounds of investment.

The government has introduced legislation to Parliament, which it says will enhance the competitiveness of the UK financial services sector and unlock tens of billions of pounds of investment.

The Financial Services and Markets Bill repeals hundreds of pieces of EU retained law to deliver a 'comprehensive model of regulation for the UK'.

The government says this will establish a 'coherent, agile and internationally respected approach to financial services regulation that works in the interests of British people and businesses'.

The Bill will implement the government's vision for the sector that is 'open, green, technologically advanced and globally competitive – while maintaining high levels of consumer protection'.

Commenting on the legislation, David Postings, Chief Executive of banking industry group UK Finance, said:

'A successful financial services sector is critical for achieving economic growth and benefits the whole country – it is one of our most important industries, delivering jobs, investment and growth across every region.

'To ensure the sector continues to be successful, alongside maintaining the pace of reform, there needs to be a keen focus on international competitiveness from the next government.'

Internet link: HM Treasury press release

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Thursday 4th August 2022

More than £20 billion could be added to the UK economy in the future from the number of additional businesses created during the pandemic, according to research carried out by the Confederation of British Industry (CBI).

More than £20 billion could be added to the UK economy in the future from the number of additional businesses created during the pandemic, according to research carried out by the Confederation of British Industry (CBI).

Around 800,000 companies were registered in the first year of the pandemic, a 22% increase compared with the previous year. Only 13% of these start-ups cited regulation as a challenge when starting their business.

However, access to finance was a key concern for many burgeoning business leaders, with 55% highlighting this post-2020, compared with 42% pre-Covid.

The research also found that businesses born during the pandemic are 20% more likely to embrace sustainability than firms established prior to 2020.

Tony Danker, Director General of the CBI, said:

'Pandemic-born businesses – led by ambitious, resilient entrepreneurs – have innovated in so many ways, and at such speed, giving me great sense of optimism. It's crucial we give these leaders the support they need to grow and succeed.

'Rising energy prices, supply chain challenges, an uncertain economic outlook and cost-of-living crisis mean we've some testing months, and possibly years, ahead. For start-ups which count their experience in months, not years, that environment is even tougher.

'That said, even if the cost of doing business is rising, the cost of starting a business shouldn't. The UK needs the ideas and ingenuity of entrepreneurs to help us grow.'

Internet link: CBI website

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Tuesday 5th July 2022

HMRC is extending the pilot for Making Tax Digital for Income Tax Self Assessment (MTD ITSA) to more self-employed workers and landlords.

HMRC is extending the pilot for Making Tax Digital for Income Tax Self Assessment (MTD ITSA) to more self-employed workers and landlords.

From July, those taking part will be able to test MTD ITSA before April 2024, including their own internal processes for managing MTD.

Agents and customers are already taking part, and HMRC wants more agents to start signing up a small number of their clients to trial the system. It is noted that clients will need to have an accounting period that aligns with the tax year in order to take part in the pilot.

From April 2024, all businesses with annual income from self employment or property above £10,000 will have to follow MTD rules.

Under MTD, the quarterly reporting is a summary, providing a total of the incomes and outcomes going through the business per quarter. As a result, there is not necessarily a need to report under each property address as it is an accumulation of all the data that is required, HMRC said.

It commented:

'We want to ensure this is well tested before mandation, and that agents and customers have opportunities to feedback on how it will work in practice. That's why we're running a pilot, inviting agents to recommend clients who can help us test and learn.

'The pilot is still a test environment. Those taking part have the benefit of testing the MTD ITSA before April 2024, including their own internal processes for managing MTD.

'Agents and customers are already taking part, and we would like to encourage more agents to start signing up a small number of their clients.'

Internet links: GOV.UK

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Tuesday 5th July 2022

HMRC needs to demonstrate that off-payroll working rules, commonly known as IR35, can operate effectively and fairly in the real world, according to a report by the Public Accounts Committee (PAC).

HMRC needs to demonstrate that off-payroll working rules, commonly known as IR35, can operate effectively and fairly in the real world, according to a report by the Public Accounts Committee (PAC).

The tax authority should also investigate whether the costs and unintended consequences of IR35 are proportionate to the additional tax revenue that the reforms raise.

The PAC concluded that it is too difficult for workers to challenge incorrect status determinations.

It also said that HMRC is not doing enough to understand the impact of the reforms on workers and labour markets.

Dame Meg Hillier MP, Chair of the PAC, said:

'While workers in the gig economy have challenged their work and tax status in the courts, there is no recourse for workers deemed subject to IR35 tax rules despite the confusion and non-compliance that persist even in central government itself.

'After years of fiddling with these reforms and with central government spending hundreds of millions of pounds to cover tax for individuals wrongly assessed as self-employed, the fundamental problems underlying UK taxation of work remain.

'It is now up to HMRC to demonstrate that the system can work fairly in the real world; to prove that it is correctly claiming revenues under the system and that the additional revenues raised are worth the costs and unintended consequences in the labour market.'

Internet links: UK Parliament website

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Tuesday 5th July 2022

UK inflation rose to 9.1% in May from 9% in April as the cost-of-living crisis continues, according to data from the Office of National Statistics (ONS).

UK inflation rose to 9.1% in May from 9% in April as the cost-of-living crisis continues, according to data from the Office of National Statistics (ONS).

It was a slight increase on the 9% figure of the previous month, which was driven upwards by April's unprecedented rise in the energy price cap and is estimated to be the highest since 1982.

The ONS said rising prices for food and non-alcoholic drinks, compared with falls a year ago, pushed up the inflation rate. In monthly terms, consumer prices were up 0.7% in May.

Economists expect the rate to lurk within the 9%-10% range in the coming months before leaping again in October when the next adjustment to the energy price cap is implemented.

Chancellor Rishi Sunak said:

'I know that people are worried about the rising cost of living, which is why we have taken targeted action to help families, getting £1,200 to the eight million most vulnerable households.

'We are using all the tools at our disposal to bring inflation down and combat rising prices - we can build a stronger economy through independent monetary policy, responsible fiscal policy which doesn't add to inflationary pressures, and by boosting our long-term productivity and growth.'

Internet link: ONS website

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