Hillmans Chartered Accountants Blog

Friday, 17 January 2025

17th January 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Navigating pricing strategies amid rising wage costs: Insights from Next
Tax measures taking effect in April mean that businesses are facing rising wage costs in 2025. As a result, many businesses are looking at whether price increases could help them manage the financial impact without losing customers.

High Street retailer Next recently announced a price increase of 1% on some clothing items to help offset an anticipated £73 million rise in staff wages and taxes. Their strategy and decisions provide some useful lessons.

Why wages costs will increase
Wages are increasing due to changes announced in the 2024 Autumn Budget, that start in April 2025, including:

An increase in employers’ National Insurance contributions from 13.8% to 15%.
A rise in the National Living Wage from £11.44 to £12.21 per hour.

Next’s 1% price increase, despite being below the rate of inflation, reflects a broader trend among businesses. The British Chambers of Commerce business group recently said that over half of companies plan to raise prices in the coming months to cope with higher costs.

A pricing strategy based on a shift in behaviour
For businesses like Next, keeping the price increase modest allows them to avoid alienating their price-sensitive customers. Their decision to target specific product lines – rather than implementing a blanket rise – may help to retain customer loyalty while addressing the immediate financial strain.

Next acknowledged that the price increase is “unwelcome”, however they feel their analysis supports their strategy. They have observed a trend in shoppers choosing mid to higher priced items instead of buying cheaper items. They are not necessarily spending more overall but are buying fewer, slightly more expensive items. This is a trend Next expects to continue in the short term.

This shift in behaviour has influenced Next’s decision on pricing strategy. By targeting price increases on product lines where customers may be less sensitive to paying more, they can maintain value for their customers while managing their margins.

Lessons for businesses
Next’s approach offers valuable lessons for businesses developing pricing strategies in response to rising wage costs.

Incremental adjustments: Small, targeted price increases can help mitigate your cost pressures without overwhelming customers.
Focus on value perception: Shopper trends suggest that emphasising mid-to-higher priced items could help maintain your profitability.
Monitor your customer’s behaviour: Next have undertaken a strategy based on what they’ve observed in their customer’s behaviour. Likewise, if you can understand any shifts in the spending patterns of your customers, this may help you to see where price increases are less likely to alienate them.

There is no doubt that rising wages costs will present challenges to businesses over the coming months. However, if Next have got their sums right, they are expecting to be able to increase their profits by 3.6%. This demonstrates that a carefully planned pricing strategy may also help you to adapt to the rising costs while maintaining competitiveness in these challenging times.

If you need help with an analysis of how changing your pricing strategy could help your business, why not give us a call? We would be happy to help you!
See: https://www.bbc.co.uk/news/articles/cgkxlnlne0po

Tax return filing deadline looms
With the 31 January Self-Assessment tax return filing deadline fast approaching, HM Revenue and Customs issued a press release last week noting that 5.4 million taxpayers are yet to complete their return.

Apparently more than 24,800 people filed their return on New Year’s Day, while a further 38,000 had filed theirs on 31 December. 310 filed their returns between 11pm and midnight.

Missing the 31 January deadline can lead to an initial late filing penalty of £100.

If you need help with your tax return or are not sure whether you need to complete one, please give us a call and we will be happy to help you.

See: https://www.gov.uk/government/news/54-million-yet-to-file-their-tax-return

New digital markets competition regime now in force
Last week, the Competition and Markets Authority (CMA) set out its initial plans for the new digital markets competition regime. The regime is designed to support the UK’s tech sector and has its legal footing in the Digital Markets, Competition and Consumers Act. The Act received royal assent in May 2024 but came into force on 1 January 2025.

The regime is intended to prevent very large, generally global, tech firms using unfair advantages to shut out smaller businesses. Following an investigation, which can take up to a maximum 9 months, the CMA has the power to designate a business as having “Strategic Market Status” (SMS) in relation to a particular digital activity.

Once a business has been designated in this way, the CMA can impose certain conduct requirements on the business, or it can introduce pro-competition interventions for the benefit of UK consumers and businesses.

The CMA have said that they expect to launch investigations in relation to 2 areas of digital activity in January. The next investigation into a third area is likely to begin towards the end of June.

It has not yet been revealed which areas of digital activity are going to be investigated. The CMA have said more detailed announcements on this will be released later in January.

As it launches its investigations, the CMA also plan to provide more detail on how a particular designation is likely to help affected businesses and consumers.
It’s early days for seeing what practical benefits the regime will bring, however it could provide UK tech businesses with opportunities to innovate and grow in a fairer business environment.

To review the CMA’s guide on how the UK’s digital markets competition regime works, see: https://www.gov.uk/guidance/how-the-uks-digital-markets-competition-regime-works

Balancing AI's promise and pitfalls
Artificial intelligence (AI) continues to bring benefits across many industries, including healthcare diagnostics and consumer technology. However, as its applications expand, so do concerns about its accuracy and potential for misuse. Two recent examples—the use of AI in detecting ovarian cancer and its controversial implementation in summarising news—illustrate both the transformative potential and the risks of AI.

AI in early cancer detection
Ovarian cancer is notoriously difficult to detect in its early stages. Early intervention is critical for improving survival rates. However, current methods rarely identify the disease before it spreads.

A breakthrough by Dr Daniel Heller and his team at Memorial Sloan Kettering Cancer Center offers hope. They have developed an AI-powered blood test that uses nanotube technology—tiny tubes of carbon that react to molecules in the blood. These nanotubes emit fluorescent light based on what binds to them, creating a molecular "fingerprint."

The challenge lies in interpreting this data. While the molecular patterns are too subtle for humans to discern, machine-learning algorithms excel at recognizing such complexities. By training AI systems with blood samples from patients with and without ovarian cancer, the team can identify the disease far earlier than conventional methods.

This innovation could revolutionise diagnostics, not just for ovarian cancer but for other diseases, including infections like pneumonia. However, as with any AI system, its effectiveness depends on the quality of the data and algorithms used, which brings us to a story that highlights the risks involved with AI.

The risks of misapplied AI
Apple’s AI-driven news summarising feature on its latest iPhones has drawn criticism for generating inaccurate headlines. This feature is designed to help reduce the number of notifications smartphone users receive, however the BBC said that “these AI summarisations by Apple do not reflect – and in some cases completely contradict – the original BBC content.”

The BBC, as well as the journalism body Reporters Without Borders, have called for Apple to withdraw the feature, citing the dangers of misinformation.

Apple has now announced that a software update in the coming weeks will make it clearer that the summary has been AI-generated, but critics argue this is insufficient. They argue that the responsibility to verify accuracy will remain with users, which complicates their being able to get accurate information and lessens trust in the news.

Lessons for businesses
These two contrasting examples of AI in use offer some valuable lessons to businesses that are looking to integrate AI.

Firstly, ensuring accuracy is paramount. This is especially clear in a high stake healthcare application where a false positive or negative in diagnostics can have life-altering consequences. However, in any application the use of AI needs to be subject to robust testing and validation checks.

There is a need to communicate clearly about your use of AI as miscommunication about AI’s role and limitations can damage trust. Apple’s failure to initially acknowledge the AI-generated nature of its summaries contributed to public confusion and backlash.

AI systems have the potential to disseminate false information. Therefore, they need to be designed with safeguards and checks to prevent this from happening.

Balancing promise with caution
AI has the potential to bring many benefits, however, as the above two examples illustrate, this technology is not without risks.

In the rush to innovate, the lesson is clear. AI is best approached with caution, ensuring its use is rigorously tested and clearly communicated so you can fully harness its benefits without any downsides.

See: https://www.bbc.co.uk/news/articles/cq8v1ww51vno; https://www.bbc.co.uk/news/articles/cge93de21n0o

New Steel Council launched to rebuild the UK’s steel industry
Business Secretary Jonathan Reynolds co-chaired the first meeting of a new Steel Council last week. The Steel Council’s purpose is to help secure the long-term future of steelmaking in the UK.

The new Council will feature regular meetings with trade union leaders, industry experts, devolved government representatives, trade associations and steel sector leaders such as CEOs from Tata Steel and British Steel.

The government plans to launch their Steel Strategy in the Spring and the Council will help with this both before the launch and afterwards.
Gareth Stace, Director-General of UK Steel said: “This [steel] strategy is a once-in-a-generation opportunity to foster a competitive business environment that encourages long-term investment and ensures steelmaking remains at the heart of the UK economy.”

See: https://www.gov.uk/government/news/government-sets-out-plan-to-secure-the-long-term-future-of-steelmaking-and-safeguard-steel-communities

Two business rates agents suspended by VOA
The Valuation Office Agency (VOA) have announced the suspension of two business rates agents. These are Rateable Value Experts and Re-Rates UK. The VOA have not specified the exact reasons for the suspension and have simply said that they are investigating a potentially serious breach of their agent standards.

While the suspension is in force, the VOA won’t work with or accept any information from the two agents. This is likely to cause difficulties for any customers that they are representing, and so the VOA have written to customers that are affected.

As part of the announcement, the VOA have reminded businesses of the need to be cautious of agents who:

try to pressure you to make a decision or sign a contract.
say they are acting on behalf of the VOA or forward emails to you that they claim are from the VOA.
demand large sums of money up front.
make claims about ‘unclaimed credits’ or similar.

It is worth noting that there is no need to use an agent to handle your business rates related matters. The VOA provides a free online service where you can challenge your rateable value for yourself.

The VOA also provides a checklist of agents that you can use to select an agent. They point out that using this is safer than allowing an agent to select you.
See: https://www.gov.uk/government/news/temporary-suspension-of-business-rates-agents

Government announces £289 million investment to deliver faster broadband to remote areas
The UK government has announced contracts worth over £289 million to provide gigabit-capable broadband to 131,000 homes and businesses in some of the country’s most remote locations. The initiative is part of the government’s Project Gigabit program, which aims to modernise broadband infrastructure across the country.

The contracts will focus on regions such as the Dee Valley, Isle of Anglesey, and Shropshire Hills, as well as parts of North and Southwest Wales, Herefordshire, Devon, Somerset, Essex, North East England, and Worcestershire.

Project Gigabit: An overview
Project Gigabit seeks to bring high-speed internet to hard-to-reach areas, where commercial providers have traditionally found it challenging to operate.
As of now, over 85% of the UK can access gigabit-capable connections, and more than 1 million premises in rural and remote areas already have access to upgrades. The ultimate goal is full gigabit coverage across the UK by 2030.

Benefits for rural areas
There are many advantages to faster broadband, including improved access to remote healthcare services, online education, and remote working opportunities. High-speed connections can also benefit businesses by enhancing their ability to operate and serve customers online.

Openreach CEO Clive Selley noted that the expansion of full-fibre broadband could boost UK productivity by £73 billion and bring significant social benefits.

See: https://www.gov.uk/government/news/hundreds-of-thousands-of-brits-in-rural-villages-and-towns-to-benefit-from-uk-government-broadband-boost

HSE turns 50
The Health and Safety Executive (HSE) is celebrating its 50th anniversary this month. The HSE was created by the Health and Safety at Work etc Act 1974 and officially launched on 1 January 1975.

In 1974, 651 employees were killed at work. HSE’s statistics for 2023/24 show 138 employees were killed at work and indicates the work that has been done to reduce workplace death and injury in England, Scotland and Wales over the last 50 years.

Marking the occasion, Sarah Albon, chief executive of HSE, said: “Over the past half century, the Health and Safety Executive has led the way in establishing Great Britain as a safe place to work. As we look ahead to the next 50 years, we recognise there is still much for HSE to take on.”

See: https://press.hse.gov.uk/2025/01/01/hse-story-50/

Friday, 10 January 2025

10th January 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Get Britain Working White Paper
Reforms to employment support announced
The government has unveiled some significant reforms to employment support, underpinned by a £240 million investment. The measures aim to address deep-rooted issues of unemployment, economic inactivity, and barriers to work, as detailed in the recently published Get Britain Working White Paper.

Figures quoted in the government’s announcement made for sobering reading. 1.5 million are unemployed, 9 million are economically inactive, and a record 2.8 million are out of work due to long-term illness. Young people, in particular, are disproportionately affected, with one in eight not in education, employment, or training.

The UK is apparently the only major economy that has seen its employment rate fall over the last five years. The government has attributed the reason for the decline to an increase in long-term ill health, as well as an employment support system that is outdated.

Therefore, the White Paper is highlighting the need for a fundamentally different approach to employment, health, and skills support to revitalise Britain’s workforce.

What are the key reforms being proposed?

Revamping jobcentres: These will be transformed into a new “national jobs and careers service”. This overhaul will focus on developing people’s skills and careers rather than simply monitoring benefits.
Tackling economic inactivity from ill health: Health-related issues will be addressed through employing extra NHS staff in 20 areas that have high inactivity so as to cut waiting list times. Mental health support will also be expanded.
A new “Youth Guarantee”: Every 18-to-21-year-old will have access to an apprenticeship, quality training and education opportunities. The current Apprenticeship Levy will be replaced by a more flexible Growth and Skills Levy. Eight youth “trailblazer” areas are to be set up, including in Liverpool, Tees Valley and the East Midlands to help young people in those areas find education, training or work.
Supporting people with disabilities and health conditions: An independent review will be launched into the role of UK employers in promoting health and inclusive workplaces. It will look at what more can be done to enable employers to increase the recruitment and retention of disabled people and those with a health condition. It will also explore early intervention for sickness absence and what may help increase returns to work.
Empowering local communities: Local leaders, including mayors and councils, in areas of England that are not getting a trailblazer will receive up to £15 million to develop their own plans.

How will the reforms affect you?
Based on the changes being proposed, we may begin to see new measures introduced into employer’s obligations towards long-term sickness.

Over the longer term, if these initiatives result in more younger people receiving more training, then this may increase the number of skilled people available for hire.
This could alleviate the difficulty some businesses are finding in locating suitably qualified staff.

To review the White Paper, see here.

Be wary of Self Assessment scams
Scam attempts on the increase
HM Revenue and Customs (HMRC) have issued a reminder to be careful about scam attempts that target people filing Self Assessment tax returns. In the last year, nearly 150,000 scam attempts were referred to HMRC, a 16.7% increase on last year. With the 31 January 2025 filing deadline approaching, fraudsters are likely to step up their activities.

HMRC reports that around half of all scam reports in the last year were fake tax rebate claims. Fraudsters are usually aiming to get hold of personal information and banking details.

If you receive an email, text or phone call from someone claiming to be from HMRC that asks you for personal information or offers you a tax rebate, there is a useful checklist here that can help you identify a scam.

It is helpful to know that HMRC will never leave voicemails threatening legal action or arrest. Neither will they ask for personal or financial information over text message.

HMRC also will not contact you by email, text, or phone to announce a refund or ask you to request one.

If you have been contacted by someone claiming to be from HMRC and feel unsure whether it is a scam, or you would like to check whether you are due a tax refund, call us at any time and we would be happy to help you.

New Fair Payments Code launched
Will it help you get paid quicker?
The government’s promised new Fair Payments Code was launched last month to try and tackle late payment problems that can be particularly harmful to small businesses.

How will the Fair Payment Code help?
The code introduces a gold, silver, and bronze system that smaller firms can use to identify business partners who have made themselves accountable to pay fairly and within certain time limits.

The three award tiers have the following requirements:

Gold award: for businesses paying at least 95% of all invoices within 30 days.
Silver award: for businesses paying at least 95% of all invoices within 60 days, including at least 95% of invoices to small businesses within 30 days.
Bronze award: for businesses paying at least 95% of invoices within 60 days.

Businesses that are granted an award also agree to abide by the principles in the Code of being “Clear, Fair and Collaborative” with their suppliers.

The awards, once granted, last for two years and then must be reapplied for at the conclusion of that time. There will be a “robust” complaint system so that businesses who don’t meet the requirements of their award or otherwise comply with the principles in the Code can be reported.

Dealing with late payments can be a challenge to deal with. While the new Fair Payments Code may help, there are a variety of methods you can use to help reduce the effect of late payments. If you need practical help in how to improve how quickly your business is paid, please get in touch and we would be happy to help you.

Coffee bean prices at record high
Will our morning caffeine fix cost more?
Those of us that rely on a coffee-fix to get the day started may see this get more expensive. Coffee prices on international commodity markets soared to their highest level on record in December.

The price for Arabica beans, the most used beans in global production, increased to $3.44 a pound, increasing by more than 80% this year. Robusta beans similarly reached a fresh high in September.

Coffee traders are expecting crops to shrink due to bad weather in Brazil and Vietnam, two of the world’s largest producers. Brazil experienced its worst drought in 70 years during August and September and this was followed by heavy rains in October. Vietnam, where Robusta beans are grown, has also experienced drought and heavy rainfall during 2025.

Meanwhile, the popularity of coffee continues to grow. For example, in China, which is not traditionally a coffee drinking nation, coffee consumption has doubled in the last decade.

In recent years, major coffee roasters have been absorbing price increases to keep customers happy and maintain their market share, however some experts believe this could soon change and consumers will see price increases as a result.

New reporting requirements for online platforms
HMRC confirm there is no change to tax rules
New changes come into effect from January 2025 where online platforms, such as eBay and Airbnb, will start sharing some user sales and personal data with HM Revenue and Customs (HMRC).

Although these reporting requirements have caused concern, HMRC have confirmed that there are no changes to the tax rules for someone selling unwanted possessions online.

Angie MacDonald, who is HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, said: “We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due.”

HMRC have advised that anyone who sold at least 30 items or earned roughly £1,700, or provided a paid-for service, on a website or app in 2024 will be contacted by the digital platform they used in January to say their sales data and some personal information will be sent to HMRC due to new legal obligations.

This does not mean that an individual automatically needs to complete a tax return. However, if the following applies then you would likely need to register for Self Assessment (if you are not already registered) and pay tax.

Buying goods for resale or making goods with the intention of selling them at a profit.
Offering a service through a digital platform – such as delivery driving or letting out a holiday home.
And you generate a total income before deducting expenses of more than £1,000.

If you are concerned about whether you are likely to need to register for self assessment or pay tax, give us a call and we will be happy to help you.

Scottish Budget announcement
Highlights for businesses from the Budget
The Cabinet Secretary for Finance & Local Government, Shona Robinson delivered the 2024/25 Scottish Budget on 4 December.

This Budget was centred on the following priorities to:

eradicate child poverty;
grow the economy;
tackle the climate emergency; and
ensure high quality and sustainable public services.

The following measures will be of particular interest to Scotland’s business community:

Scottish rates of income tax will not be increased and no new bands will be introduced for the remainder of this parliament. From April 2025, the Basic and Intermediate rate thresholds will increase by 3.5%. The Higher, Advanced and Top rate thresholds will be frozen at their current levels.
Business Rates: The Basic Property Rate will be frozen at 49.8p and a 40% relief will be introduced for hospitality premises liable for the Basic Property Rate, capped at £110,000 per business.
Rates and bands of residential and non-residential Land & Buildings Transaction Tax (LBTT) will remain at their current levels, although the Additional Dwelling Supplement (ADS) increases from 6% to 8% from 5 December 2024. The increase will not apply to transactions for which legal missives have been signed on or before 4 December.
Landfill Tax rates will increase from 1 April 2025, in line with those for the rest of the UK.

To review the Scottish Budget in full, see here.

If you would like any help in understanding how the Scottish Budget will affect your business or personal situation, please give us a call at any time and we will be pleased to help you!

Welsh Budget announcement
Highlights for businesses from the Budget
The Welsh budget was announced on 10 December. The key decisions for Welsh businesses and individuals were as follows:

Welsh Rates of Income Tax
The Welsh rates of income tax for 2025/26 will remain at 10p for the three income tax rates (Basic, higher and additional). This means that Welsh taxpayers will pay the same income tax as those in England and Northern Ireland.

Land transaction tax
In disappointing news for purchasers, the higher residential rates of Land Transaction Tax (LTT) are being increased by one percentage point across all bands. This change was made almost immediately, coming into force on 11 December.

Purchasers who have already exchanged contracts prior to this date will pay the former rates provided they comply with transitional rules.

The result of this change is that the higher residential rates of LTT are now five percentage points above the main residential rates.

The current starting threshold for the main residential rates of LTT remains at £225,000. The government estimates that around 60% of residential transactions are below the threshold for paying LTT.

The Budget also includes the intention to limit multiple dwellings relief (MDR) available on purchasing two or more dwellings in Wales. The changes will mean that taxpayers subject to the subsidiary dwelling exemption (SDE) will pay the main residential rates on the total consideration, without the benefit of MDR. It appears that this will not be the only change to MDR, as the relief will be further considered over the next year.

It was also announced that the new LTT special tax sites relief that currently applies to the Celtic Freeport will also be extended to the Ynys Môn Freeport. Senedd approval will be sought on these in January so that the relief is in place when the UK government’s designation regulations come into force.

Landfill Disposals Tax
The standard rate of Landfill Disposals Tax (LDT) will be increased to £126.15 per tonne from 1 April 2025. This matches the increase made to the UK government’s equivalent Landfill Tax.

The lower rate of LDT will be increased to £6.30 per tonne. This means that the lower rate will be 5% of the standard rate, just under double the existing rate.

The new approach to lower rate setting, as well as the substantial increase for next year, is designed to increase the incentive to reduce landfill waste disposals. The intention is to raise the rate further if the volumes of lower-rated waste disposals by way of landfill do not reduce in line with Welsh government objectives. The goal is to become a zero-waste nation by 2050.

The unauthorised rate remains at 150% of the standard rate, and so increases to £189.25 per tonne.

If you would like any help in understanding how the Welsh Budget will affect your business or personal situation, please give us a call at any time and we will be pleased to help you!

Friday, 3 January 2025

3rd January 2025 – Hillmans Weekly Update

Happy New Year, and welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

A fresh start: Reviewing your business goals for the New Year
The start of January marks a time of new beginnings, and for business owners, it’s the perfect opportunity to pause, reflect, and plan ahead. After the whirlwind of the festive season, January offers a quieter moment to consider where your business is headed, how it’s performing, and whether you’re still on track to meet your goals.

Why review your goals now?
Setting goals is one thing – keeping track of them is another. Running a business is often about managing the immediate – urgent emails, pressing deadlines, and day-to-day challenges. Without a clear plan, though, it can be easy to drift away from your bigger goals. This is why it’s so important to intentionally carve out time at the start of the year.

Why not ask yourself:

Are you meeting your financial targets?
Have your priorities changed since you first set your goals?
Are there new opportunities or challenges you need to plan for?

This kind of review isn’t about dwelling on what’s gone wrong; it’s about making sure you’re steering your business in the direction you want to go.

For instance, it can help you clarify what you want to achieve this year. Is it more growth, more stability, or more innovation? It can also help you focus on the areas that truly drive results as well as allow you to prepare for potential problems and have strategies ready to address them.

A word on the role of a budget
Finances often need to be aligned to help you reach your goals. A budget can be an invaluable tool in helping with that.

Even if you’ve never drawn one up before, it’s not as daunting as it might sound. There’s no need to make it complicated. A simple budget can help you understand where your money is going, plan for upcoming expenses, and avoid surprises. Start by reviewing last year’s financial performance and based on that set some realistic income and expenditure targets for the months ahead.

Steps to get started
Here’s how to make the most of this reflective period.

Review your goals: What were your key objectives last year? Did you meet them? If not, why? Use these insights to refine your goals for the coming year.
Set SMART objectives: Make sure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound. For instance, instead of “I want to grow my business,” aim for something like “Increase revenue by 15% by the end of September.”
Plan for action: Break down your goals into actionable steps. What resources do you need? Who will be responsible? Setting milestones along the way can help you track progress.
Monitor and adapt: Remember, a plan is only as good as its execution. Regularly review your progress and be willing to adapt it as new challenges and opportunities present themselves.

A resolution worth keeping
January is more than just a fresh start; it’s a chance to be intentional about where your business is headed. Taking the time out for a review of your goals will help to make sure that your efforts are aligned with your ambitions.

Make this the year you take control of your business’s future. With clear goals, a solif plan, and the discipline to follow through, 2025 could be your best year yet.

Christmas tax filing: Getting ahead of the deadline
HM Revenue and Customs (HMRC) have revealed that 4,409 people chose Christmas Day to file their tax returns, ensuring their 2023-2024 tax affairs were in order well before the 31 January deadline.

In total, 40,072 taxpayers submitted their returns over the Christmas break, proving that even amidst the festive cheer, there’s always time for a little financial housekeeping.

Festive filing highlights
The holiday filing statistics offer a glimpse into the habits of those who opted to tackle their tax obligations during the break:

Christmas Eve: This was the busiest day, with 23,731 returns filed, as some chose to avoid the chaos of last-minute shopping. The most popular filing hour was 11:00 to 11:59, when 3,458 taxpayers submitted their returns.
Christmas Day: 368 people filed their returns during the most popular hour of 15:00 to 15:59.
Boxing Day: 11,932 customers prioritised tax returns over leftover turkey sandwiches, with the busiest hour being 16:00 to 16:59, when 1,108 submissions were made.

Why file early?
Filing early can bring peace of mind knowing that the job is done for another year. However, it can also allow more time for planning how to pay any tax that will be due on January 31^st.

If you could do with help filing your tax return or are not sure whether you need to fill one in, give us a call at anytime and we would be happy to help you!

See: https://www.gov.uk/government/news/its-a-self-assessment-wrap-for-40000-festive-filers

Greener flights in 2025
Flights leaving the UK will now be greener due to the Sustainable Aviation Fuel (SAF) Mandate coming into force on January 1^st.

For all jet fuel used in flights taking off from the UK in 2025, 2% must be SAF. This percentage will increase by 2 percentage points each year so that it is 10% by 2030 and then 22% by 2040.

SAF is fuel that is sourced sustainably and includes household waste and used cooking oil. According to government provided statistics, fuel sourced from such materials produces an average of 70% less carbon emissions than traditional fossil-based aviation fuel.
Mike Kane, Minister for Aviation, said: “From this moment on, aviation will be a greener, more sustainable form of travel and today marks a significant milestone for the UK SAF industry.”

To read more about the Mandate, see: https://www.gov.uk/government/collections/sustainable-aviation-fuel-saf-mandate

New year resolution: A fitter workforce?
The benefits of exercise on our physical and mental health are well known. The healthier and fitter we are the better we work on our business. A healthier, fitter workforce are also much more likely to be productive and happier. Yet, many of us struggle to find the time or energy to do enough exercise.

The Department of Health and Social Care and the NHS revealed that 8.7 million NHS Couch to 5K runs were completed in 2024, with a total of 790,000 people downloading the NHS fitness app.

The app is designed to help beginners gradually build up to running 5 kilometres. Andrew Gwynne, Public Health Minister, said: “The NHS Couch to 5k app is a great way to get fitter and build sustainable running habits.”

Regular running is a proven way to reduce the risk of long-term illnesses, such as heart disease, type 2 diabetes and stroke. It also helps in maintaining a healthier weight and improving your mood.

Users of the app get a guided commentary from a celebrity coach that they can choose and can track their progress by doing 3 runs a week. Users also receive celebration videos and progress summaries as they complete each running challenge. There is also guidance and support for those who have setbacks.

The app also now features ‘graduation’ content to help motivate people to make running a habit.

Of course, running is not the only form of exercise. Some may prefer cycling, swimming, walking, going to the gym, swimming, or playing sports.

However, regardless of the type of exercise, being able to exercise with someone else or making a commitment to someone else provides extra motivation to persist with an exercise habit. The workplace can be a good source of ‘buddies’ to give that motivation.

In view of the benefits available, could promoting the NHS Couch to 5K app or an exercise club not only help improve your and your staff’s health and well being but also benefit your business?

See: https://www.gov.uk/government/news/record-numbers-complete-nhs-couch-to-5k-app

ICO highlights data privacy to new startups
January can often be the time of year when entrepreneurs start to make plans for a new business. The Information Commissioner’s Office (ICO) has published some guidance to help entrepreneurs think about data protection when setting up their business, so they get it right from the start.

The ICO has an e-learning site that provides videos and advice for small organisations. This can be found here and is well worth a look.

The ICO also provides a couple of helpful online tools that can take a lot of the guesswork out of what you need to do.

Privacy notice
The ICO highlights that every organisation that holds people’s information needs to explain why it holds it and what it does with it. This is usually provided through a privacy notice, which can be placed on the business’ website or included in other communications.

Helpfully, the ICO have a privacy notice generator that can help you create bespoke privacy notices for your organisation. It takes 10 to 15 minutes and can help you create privacy notices for your customer and supplier information and for your staff/volunteers.

Direct marketing advice generator
If you advertise or communicate marketing messages to particular people or organisations, you are involved in direct marketing. If so, you will need to comply with the Privacy and Electronic Communication Regulations (PECR) and the UK GDPR.

The ICO’s direct marketing advice generator can provide you with reliable compliance advice that is tailored to your direct marketing activities. This makes it easier to know what you need to do to stay compliant with the law and stick to contacting people who are happy to hear from you.

The idea of tackling data protection can seem overwhelming when starting a new business. However, these new tools can be very helpful in reducing this stress.

See: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2025/01/new-year-new-start-ups-get-data-privacy-right-from-the-start/

The importance of right to work checks continues to be emphasised
Recent immigration enforcement activity has highlighted the need for employers to ensure their workers have the right to work in the UK. With thousands of enforcement visits, arrests, and hefty fines being issued, businesses that neglect their responsibilities risk serious consequences.

Crackdown on illegal working
Immigration Enforcement teams have been targeting sectors prone to illegal employments, such as car washes, nail bars, supermarkets, and constructions sites.

Between July and November last year, enforcement teams conducted thousands of visits across the UK. These led to 770 arrests in London alone, with nearly 1,000 premises inspected.

Employers found guilty of hiring workers without the right to work face fines of up to £60,000 per worker, along with reputational damage and potential criminal charges.

How to stay compliant
Employers are required to carry out right to work checks before employing someone.

You need to:

Request sight of original documents: Review the worker’s passport, visa, or other approved documents that prove their right to work in the UK.
Verify authenticity: Confirm that the documents are genuine, belong to the individual, and haven’t expired.
Keep records: Retain copies of the documents, including the date you verified them, for at least two years after employment ends.
Use the Home Office’s online service: The Home Office offers an online right to work checking service for non-UK nationals. This can provide you with confirmation of a worker’s status.

For further guidance on conducting right to work checks, see: https://www.gov.uk/government/publications/right-to-work-checks-employers-guide/employers-guide-to-right-to-work-checks-23-september-2024-accessible-version

Additional financial support for Bradford’s cultural year
The government has announced that it will provide an additional £5 million of support to Bradford, which is the 2025 UK City of Culture.

The funds, which bring total support provided to £15 million, will be used to help in delivering a programme of events and support a legacy of cultural regeneration. It is expected that 6,500 jobs will be created in the area as a result of Bradford being UK City of Culture.

Around 1,000 events are being organised for 2025. These are expected to attract an additional 3.3 million visitors to the area, and it is anticipated that this will bring around £140 million into the local economy as a result.

It is also hoped that the increased exposure will bring about additional growth for the Bradford area.

To see more information about the programme, see: https://bradford2025.co.uk/

Friday, 20 December 2024

Merry Christmas

Merry Christmas

Merry Christmas and a Happy Prosperous New Year from all the team at Hillmans Chartered Accountants.

I wish you and those close to you the happiest and safest of Christmases.

Our Christmas Opening Hours

Our office will be closed for the Christmas and New Year period from 5pm on Friday, 20th December 2024, re-opening at 9am on Thursday, 2nd January 2024.

20th December 2024 – Hillmans Weekly Update:

Welcome also to the final round-up of tax news and updates for 2024. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

GET READY FOR MAKING TAX DIGITAL FOR INCOME TAX
Prior to the Autumn Budget, there was hope that the new Labour Government might further delay the introduction of Making Tax Digital for Income Tax (MTD for IT). However, such hopes were dashed on Budget day, with confirmation of the previously-announced timescales and an additional announcement that individuals with income from trading or property of over £20,000 will be mandated to comply with MTD for IT requirements in future. The mandate timescales are as follows:

From April 2024: Eligible individuals can voluntarily participate in the MTD for IT testing programme.
From April 2026: MTD for IT will be mandated for landlords and self employed individuals with combined trading and property income over £50,000.
From April 2027: MTD for IT will be mandated for landlords and self employed individuals with combined trading and property income over £30,000.
From a future date (TBC): MTD for IT will be mandated for landlords and self employed individuals with combined trading and property income over £20,000.

At present, no mandate deadlines have been set for partnerships.

Complying with the requirements of MTD for IT will involve keeping business records in specialist compatible software and then using that software to submit the business results to HMRC on a quarterly basis.

The introduction of MTD for IT is just over one year away, so now is the time to start thinking about the changes it will bring to your business, if you are self-employed (but not in a partnership) or receive rental income. We are here to help, so please talk to us to find out how MTD for IT will affect you!

CORPORATE TAX ROADMAP
The Government published a ‘Corporate Tax Roadmap’ as part of Autumn Budget 2024. The Roadmap is designed to give corporate businesses (and, in some areas, non-corporate businesses) certainty about the tax framework ahead to give confidence in business decisions being made now. The Roadmap sets out the areas in which the Government intends to maintain the status quo for the duration of this parliament, as well as areas in which change is expected.

Starting with corporation tax rates, the Government have committed not to increase the rates of corporation tax paid by small or larger companies and to keep the rates under review to ensure they remain competitive. This means that small companies (those with profits below £50,000 a year) will continue to pay at 19% and larger companies (with profits above £250,000 a year) will continue to pay at 25%, with marginal relief given from the 25% rate for companies with profits between the two thresholds. No changes have been made to the ‘associated company’ regime so, to ensure the correct rate of corporate tax is applied, it remains crucial to fully identify group companies and those under the control of the same individual(s).

Turning to capital allowances and of interest to unincorporated businesses as well as companies, the Government have committed to maintaining the rates of writing down allowances in the main and special rate plant and machinery pools, as well as the availability of the very valuable 100% annual investment allowance for up to £1 million of qualifying expenditure each year. For companies, the unlimited ‘full-expensing’ regime will also be maintained for expenditure on brand-new and otherwise qualifying plant and machinery, with a continued hope of seeing the qualification criteria expanded.

For companies, the two mechanisms for obtaining tax relief for revenue research and development (R&D) expenditure that have been in place since 1 April 2024 will also be maintained. This remains a very complex area so please do reach out to us if you need support in this area or are considering whether you may be able to make a claim.

PAYROLLING BENEFITS IN KIND
‘Payrolling benefits in kind’ means that employee benefits in kind (e.g. company cars and medical insurance) are reported to HMRC through the employer’s payroll. Employees’ tax codes are amended so that any income tax due on the benefits is paid throughout the tax year. If a benefit has been payrolled, it does not need to be included on form P11D.

Payrolling is possible for all benefits in kind, except for employer-provided living accommodation and beneficial (interest-free or low-interest) loans; these must still be reported on the P11D.

If an employer wishes to payroll benefits, they must register with HMRC before the start of the tax year in which they plan to start.

Regardless of whether benefits are included in the payroll or on a P11D, the employer must still include them in summary form P11D(b) and pay Class 1A National Insurance Contributions on the total taxable benefit value across the workforce. The deadline for filing the P11D(b) and paying the Class 1A NIC due is 6 July following the end of the tax year.

From 6 April 2026, payrolling benefits in kind will become mandatory for all employers for all benefits except for beneficial loans and living accommodation, although these will be able to be included in the payroll on a voluntary basis. It is hoped that this will bring simplification and clarity for employers and employees. As mentioned above, it is possible to choose to enter the regime one year early, from 6 April 2025, on a voluntary basis. Please talk to us if you are considering this or otherwise have any questions about future obligations.

HMRC SCAM WARNING
With the 31 January self assessment deadline fast approaching, HMRC has warned taxpayers to be alert to fraudsters. In the past year, there has been a 16.7% increase in scam referrals to HMRC, with almost 150,000 received in the year to November 2024. A significant proportion of those referrals were fake tax rebate claims. HMRC say that they never ask for personal or financial information via text message, nor will they leave voicemails threatening legal action or arrest. If you receive communication claiming to be from HMRC that asks for your personal information or is offering a tax rebate, check the advice on GOV.UK to help identify if it is scam activity (https://www.gov.uk/guidance/identify-hmrc-related-scam-phone-calls-emails-and-text-messages).

Friday, 13 December 2024

13th December 2024 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Just an advance courtesy note to advise our office will be closed for the Christmas and New Year period from 5pm on Friday, 20th December 2024, re-opening at 9am on Thursday, 2nd January 2025.

Have a great weekend.

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Spread the cost of your Self Assessment tax bill with HMRC's Time to Pay
With the holidays and end of the year fast approaching, it’s a good time to plan your finances for the new year. For those who file Self Assessment tax returns, the prospect of having to make a heavy tax payment at the end of January 2025 may be causing you concern.

Did you know that HM Revenue & Customs (HMRC) provides an option to spread the cost of your tax bill with their Time to Pay system?

What is Time to Pay?
Time to Pay is an HMRC service that allows taxpayers to spread the cost of their Self Assessment bill over regular monthly payments. It’s designed for those who can’t pay their bill in full by the deadline. By using Time to Pay, you can avoid further late payment penalties, provided you stick to the agreed payment plan.

Key points to know:

Eligibility: If your tax bill is less than £30,000, then a payment plan can be set up online without needing to contact HMRC. If you owe more than £30,000, you’ll need to contact HMRC to discuss your options.
Deadline: The tax return and payment deadline for the 2023 to 2024 tax year is 31 January 2025. To use Time to Pay, you must first file your tax return before you can set up a Time to Pay arrangement.
Payment Terms: You can spread payments over a maximum of 12 months, making budgeting more manageable. However, you must ensure you budget for the monthly payments, as missed payments will result in interest and penalties.

HMRC reports that over 15,000 taxpayers have already set up Time to Pay plans for the 2023 to 2024 tax year.

Planning ahead and understanding your options can make tax return filing less stressful. If you’re worried about how you will pay your tax bill, Time to Pay may be a practical option for you to consider.

If you would like any help agreeing payment arrangements with HMRC or with filing your Self Assessment, please get in touch and we will be happy to help you!

See: https://www.gov.uk/government/news/festive-finances-budget-for-christmas-and-spread-the-cost-of-tax-bills

Online marketplaces and vape producers to help fund recycling costs
The UK Government has announced new measures to ensure online marketplaces and vape producers contribute fairly to the costs of recycling electrical waste. Circular Economy Minister Mary Creagh revealed the plans last week, marking a significant step towards creating a circular economy and supporting UK retailers.

Levelling the playing field
Currently, UK-based retailers bear most of the financial burden for recycling electrical items such as toasters, hair curlers, and vapes. This has placed them at a disadvantage compared to online marketplaces that often avoid such costs. The new rules will require online retailers to pay their share, providing a fairer system for all businesses.

Minister Creagh stated: “Electrical equipment like vapes are being sold in the UK by producers who are failing to pay their fair share when recycling and reusing of dealing with old or broken items. Today we’re ending this: creating a level playing field for all producers of electronics, to ensure fairness and fund the cost of the treatment of waste electricals.”

Tackling waste and boosting recycling
Each year, the UK discards around 100,000 tonnes of household electrical items, with many valuable materials such as copper and gold lost in landfills. Improper disposal also poses health and safety risks to the waste industry. The government’s initiative aims to reduce waste and recover these valuable resources.

Research from Material Focus estimates that 100,000 tonnes of smaller household electrical items, such as kettles and lamps, are incorrectly thrown away every year.

Alex Baldock, CEO of Currys said: “We welcome the Government’s new measures to help level the playing field for responsibility for waste, making online marketplaces do their part. Low value, low quality, and unsustainable tech is piling up in landfills, and it’s good to see Government doing something to tackle that.”

Changes to regulations
Under the new plans:

Online Marketplaces: Platforms will need to register with the Environment Agency and report data on UK sales of their overseas sellers. This data will determine their financial contributions to recycling costs.
Vape Producers: A new category will be created for vapes, ensuring producers pay for recycling these items.

Circular Economy Taskforce
The government has also established a Circular Economy Taskforce to develop a comprehensive Circular Economy Strategy for England. This is set to be published next year. The strategy will outline sector-specific measures to promote sustainability and reduce waste.

This initiative complements other efforts, such as the upcoming deposit return scheme for drinks containers and extended producer responsibility for packaging. Together, these reforms aim to reduce waste, stimulate recycling infrastructure, and create thousands of green jobs.

A call to action
These new measures mark a further step in tackling the throwaway culture and transitioning towards a sustainable economy. These changes aim to protect the environment, support UK businesses, and recover resources that would otherwise go to waste.

See: https://www.gov.uk/government/news/online-giants-to-pay-their-fair-share-for-electrical-waste

HMRC introduces new interactive tool for self-employed people
HM Revenue and Customs (HMRC) have announced the launch of a new interactive online tool and clearer guidance for those who are already self-employed and those considering it.

The new tool explains what records a self-employed person may need to keep, taxes that may apply to their business, and includes other useful information, such as how to pay a tax bill.

HMRC’s new Set Up as a sole trader: step by step guide can help people who work for themselves understand the situations in which they may need to register as a sole trader and how they can do so.

The tools can be used on an anonymous basis and are only for information purposes. Using them will not result in being registered as self-employed, and the government have said that they do not collect or store any information about the user.

If you are unsure about whether you may need to register as self-employed, please feel free to contact us. We will be happy to help you.
See: https://www.gov.uk/government/news/new-support-for-small-business-from-hmrc

Coffee prices at record high
Those of us that rely on a coffee-fix to get the day started may see this get more expensive. Coffee prices on international commodity markets soared to their highest level on record last week.

The price for Arabica beans, the most used beans in global production, increased to $3.44 a pound, increasing by more than 80% this year. Robusta beans similarly reached a fresh high in September.

Coffee traders are expecting crops to shrink due to bad weather in Brazil and Vietnam, two of the world’s largest producers. Brazil experienced its worst drought in 70 years during August and September and this was followed by heavy rains in October. Vietnam, where Robusta beans are grown, has also experienced drought and heavy rainfall during 2025.

Meanwhile, the popularity of coffee continues to grow. For example, China, which is not traditionally a coffee drinking nation, has doubled its consumption in the last decade.

In recent years, major coffee roasters have been absorbing price increases to keep customers happy and maintain their market share, however some experts believe this could soon change and consumers will see price increases as a result.

See: https://www.bbc.co.uk/news/articles/c36pgrrjllyo

British pork producers secure return to Chinese market
British pork producers are celebrating a major breakthrough as China’s Covid-era restrictions on UK unprocessed pork exports were ended. Industry estimates suggest this development could boost revenues by around £80 million, offering significant benefits to UK farmers and the economy.

A lucrative market reopens
The lifting of restrictions means British bangers and other premium pork products can once again be exported to China. Major UK producers have already received the green light to restart exports. This allows them to seize opportunities in a market that purchased £180 million worth of pigmeat in 2023. China could therefore potentially be the UK’s biggest non-EU customer.

This achievement follows top-level talks during the Foreign Secretary’s recent visit to China.

The announcement adds to another recent victory for British agriculture. Earlier this year, the government secured access to the US market for UK beetroot growers, estimated to be worth £150,000 annually in increased exports.

See: https://www.gov.uk/government/news/british-pork-producers-to-bring-home-the-bacon

Chancellor promotes reset of UK-EU trade relations
Chancellor Rachel Reeves spoke last week at a meeting of EU finance ministers as part of the government’s attempt to perform an economic reset with the EU. It was the first time a UK chancellor has attended such an event since the UK left the EU.

The Chancellor spoke about tackling shared challenges including the war in Ukraine, championing free trade as a driver of economic competitiveness, and strengthening bilateral economic partnerships. She said she was looking for a reset that would break down barriers to trade, create opportunities to invest and help businesses in both the UK and EU countries to sell in each other’s markets.

The speech was part of a trip where the Chancellor attended a series of bi-lateral meetings with European counterparts.

No return to the single market, the customs union, or freedom of movement is planned. However, the President of the European Commission, Ursula von de Leyen and Keir Starmer agreed on October 2 to strengthen the UK-EU relationship and put it on a more solid, stable footing.

The business community waits to see how these discussions will translate into concrete changes with EU trading partners.

See: https://www.gov.uk/government/news/chancellor-calls-for-business-like-relationship-with-eu

New Business Growth Service launched
A new Business Growth Service has been launched that is designed to help businesses across the UK to get quicker and easier help, support and advice.

The new service has been initiated in response to small businesses finding the business support landscape fragmented and complex. Only 26% of UK SME employers reported that they sought external advice or information in 2023.

The Business Growth Service will develop a revamped web offering that will launch in the first half of 2025. This will be developed and will work in partnership with small businesses as well as governments, local and devolved, across the UK to try and ensure that the service will provide the information and resources that smaller businesses need from government.

It is estimated that a small business owner, on average, spends over 33 hours each month on internal business admin. The service aims to help decrease this time by providing practical help to small businesses.

See: https://www.gov.uk/government/news/government-growth-service-to-save-small-business-time-and-money

Friday, 6 December 2024

6th December 2024 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Salary vs dividends: The best way to extract profit in 2025/26
If you trade as a limited company, then you will likely know that balancing salary and dividends is key to extracting profit from your company in the most tax-efficient way. Both methods have distinct implications. and the right mix will depend on your specific circumstances.

The Autumn Budget, with its changes to employers national insurance rates and the employment allowance has further complicated the picture.

Here we set out some of the factors you need to keep in mind.

Salary: What to consider
A salary is a straightforward way to pay yourself from your company, and it offers a few advantages. However, it also comes with specific tax and national insurance obligations.

Here are some of the advantages:

Eligibility for state benefits: Taking a salary is a way of ensuring that you qualify for state benefits, such as the State Pension. However, the salary needs to be above a minimum level for this to apply.
Tax-deductible for the company: Salaries are treated as an allowable expense for your company and so reduce your company’s corporation tax bill.

There are disadvantages though:

Salaries are subject to both income tax and national insurance contributions. Depending on the salary amount, the overall tax burden can be higher than other methods.
Your company may need to pay employers national insurance contributions on your salary.
Salaries have to be processed through PAYE (Pay As You Earn), which means your company will have some additional compliance and reporting responsibilities.

Dividends: What to consider
Dividends are another popular way for small business owners to withdraw profits from their company.

Here are some of the advantages:

Dividends are not subject to national insurance contributions, which can make them tax-efficient. However, dividend tax and corporation tax rates have eroded this advantage.
Unlike salaries, dividends don’t require PAYE processing. They must still be properly documented, but generally this is much simpler to do than operating PAYE.

Dividends are paid from post-tax profits, meaning the company must have sufficient retained earnings to be able to distribute dividends. Also, an over reliance on dividends could reduce your contributions towards state benefits.

The combined approach
Many business owners find that a combination of salary and dividends offers the best balance. For example, a modest salary can ensure your eligibility for state benefits while minimising the national insurance you pay. Dividends can then be used to supplement that income in a tax-efficient manner.

The exact split will depend on your personal circumstances.

If you would like help determining what the best approach is for extracting an income from your company in 2025/26, please give us a call. Our expert tax team have tools to assess the optimal balance and will be happy to help you minimise your tax liabilities and support your long-term financial wellbeing.

New Fair Payments Code launched
The government’s promised new Fair Payments Code was launched last week to try and tackle late payment problems that can be particularly harmful to small businesses.

How will the Fair Payment Code help?
The code introduces a gold, silver, and bronze system that smaller firms can use to identify business partners who have made themselves accountable to pay fairly and within certain time limits.

The three award tiers have the following requirements:

Gold award: for businesses paying at least 95% of all invoices within 30 days.
Silver award: for businesses paying at least 95% of all invoices within 60 days, including at least 95% of invoices to small businesses within 30 days.
Bronze award: for businesses paying at least 95% of invoices within 60 days.

Buying goods for resale or making goods with the intention of selling them at a profit; or
Offering a service through a digital platform – such as delivery driving or letting out a holiday home; and
You generate a total income before deducting expenses of more than £1,000.

If you are concerned about whether you are likely to need to register for self assessment or pay tax, give us a call and we will be happy to help you.

See: https://www.gov.uk/government/news/no-tax-changes-for-online-sellers

Better finance access for disabled entrepreneurs
In the runup to Small Business Saturday last week, a new Disability Finance Code was launched.

Research indicates that if opportunities were improved for disabled founders, it could unlock an additional £230 billion for the UK economy in growth and jobs.

Barclays, HSBC, Lloyds and NatWest have all signed up to this new scheme that is designed to help more disabled entrepreneurs get access to finance and support to start their own business.

Joseph Williams, CEO and co-founder of small business Clu said: “When disabled entrepreneurs are given equal access to finance, society gains in ways that go far beyond individual success. Inclusive entrepreneurship drives innovation, creates diverse workplaces, and encourages economic growth that benefits everyone.”

If you would like help in knowing where to go to access finance for your new business idea, why not get in touch? We would be happy to help you make your dreams a reality.

See: https://www.gov.uk/government/news/new-plans-revealed-to-save-small-firms-22000-a-year-and-improve-access-to-cash

South Western Railway: The first railway service to be renationalised
Following Royal Assent of the new Passenger Railway Services (Public Ownership) Act 2024, the Transport Secretary has revealed that South Western Railway’s services will be the first to transfer into public ownership in May 2025.

C2C will be transferred in July 2025, with Greater Anglia following in autumn 2025. The Department for Transport expects to transfer all passenger services that are currently being operated under contracts to public ownership within the next 3 years.

The publicly run services will eventually be run by Great British Railways (GBR), a body that the government will set up, but initially will be handled by DfT Operator Limited.

The government plans to reform the railways and believes that a transition to public ownership will improve reliability and support for the railway. They also believe it will help to boost economic growth and save taxpayers £150m per year in fees.

While the move is expected to help reduce cancellations and lateness, Transport Secretary Heidi Alexander made no comment on whether renationalisation will result in cheaper fares.

See: https://www.gov.uk/government/news/first-train-services-to-return-to-public-ownership-revealed

Are you prioritising mental health in the workplace?
In a survey of 1,025 employees carried out by ACAS, 9 in 10 said they thought it was important for mental health to be prioritised at work.

As a result, ACAS is encouraging employers to have empathetic conversations with their staff to ensure mental wellbeing is supported in the workplace.
Many do not like to talk about mental health and not everyone will show obvious signs of poor mental health. So, how can you detect if someone is suffering?

ACAS highlighted the following possible signs:

They appear tired, anxious or withdrawn.
They are late to work (especially if this is a change) or have increasingly been off work sick.
Their focus on tasks or standard of work drops.
They seem less interested in tasks they previously enjoyed.
Their behaviour with others changes.

ACAS Head of Inclusive Workplaces Julie Dennis has reminded employers that “some people with poor mental health can also be considered disabled under the Equality Act, which means an employer must make reasonable adjustments at work.”

Figures provided by the Office for National Statistics show that 18.5 million work days were lost in 2022 because of mental health conditions.

Being sensitive to mental health conditions may help you to both improve your employees wellbeing but also increase productivity.

See: https://www.acas.org.uk/9-in-10-employees-want-bosses-to-prioritise-mental-health-at-work

Are you employing seasonal winter staff?
In the run up to the winter holidays, you may be considering taking on additional temporary staff to help with the workload. While these staff may only be with you for a short period, you still need to consider them for pension purposes each time you pay them.

Staff need to be put into a pension scheme based on their ages and how much they earn. This applies to family members too.

Generally, any staff that are aged between 22 and State Pension age and earn more than £192 a week or £833 a month, need to be put into a pension scheme that you pay into.

Your payroll software can be a big help if it is capable and set up for automatic enrolment as it will assess staff each time they are paid.

The Pensions Regulator has provided an online tool that you can use to work out what legal duties apply to you and what you need to do.

If you are unsure about handling payroll for seasonal staff, please get in touch with our expert payroll team who will be happy to help you.

See: https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/work-out-who-to-put-into-a-pension/employing-seasonal-or-temporary-staff

Friday, 29 November 2024

29th November 2024 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Inflation on the rise: What October's figures mean for businesses
The latest inflation figures from the Office for National Statistics (ONS) reveal that the Consumer Prices Index (CPI) for October 2024 rose to 2.3%, up from 1.7% in September. This marks the first increase in inflation since July, and it has sparked interest among business owners, economists, and policymakers alike.

The rise in inflation was widely anticipated, and as a result the Bank of England have already signalled that any future cuts to the base rate will happen gradually. However, the latest CPI figures make it unlikely that the Bank will reduce rates any further when they meet in December.

What’s driving the numbers?
According to the ONS, the rise in inflation for October was largely driven by higher energy costs. However, other factors helped to balance the increase:

Falling ticket prices: Live music and theatre ticket prices dropped.
Lower business costs: Raw material costs for businesses have been falling.

Despite these offsets, some sectors faced steeper price increases:

Services inflation: Inflation in the services sector, which includes services like haircuts, hotels, and airfares, rose to 5%.
Alcohol and tobacco: Prices for these items rose sharply. Encouragingly though, food inflation remained unchanged from September.

What does this mean for your business?
The rise in inflation, though modest, signals shifts that businesses may need to navigate carefully:

Energy costs: You should revisit your energy usage and consider whether you might be able to reduce costs, either through using energy more efficiently, or considering whether a different supplier or price plan could meet your needs at a lower cost.
Pricing strategies: Businesses in the services sector should prepare for potential challenges as rising costs affect consumer spending patterns. Balancing price increases with value will be key to maintaining customer loyalty.
Cost control: With raw material costs easing, this may be a good time for manufacturers and retailers to lock in supply contracts or reassess margins.

A broader economic context
While inflation has ticked upwards, this is in line with the Bank of England’s forecast that inflation will temporarily rise again before reducing in 2025. For now, businesses can take heart that interest rates are unlikely to rise sharply in the near term. However, with base rate cuts now likely to come more slowly than had been hoped earlier in the year, borrowing costs will remain a factor for planning and investment.

Also, while October’s figures suggest only a modest uptick, sector-specific changes - particularly in services and energy - highlight the importance of staying agile in your pricing and how your business operates.

This period of mild inflationary growth is an opportunity for forward-thinking businesses to fine-tune their strategies for the months ahead.

See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest

New UKEF guarantee boosts opportunities for UK engineering, design and technical services firms
UK Export Finance (UKEF), the UK’s export credit agency, has launched a new initiative aimed at helping British engineering, design, and technical services firms secure international contracts. The Early Project Services Guarantee (EPSG) is designed to make UK expertise more attractive to overseas buyers while filling a key financing gap for the early stages of major projects.

How the EPSG works
The EPSG provides overseas buyers of UK services with access to private finance by guaranteeing payments to lenders. This assurance makes it easier for international buyers to choose UK firms for essential scoping and design work in the planning phase of projects.

Beyond this initial stage, the EPSG also opens the door for buyers to refinance their loans as part of the larger financing for the project’s construction phase. This creates a life-cycle financing advantage, giving UK firms an edge in securing contracts for both the early and later stages of international projects.

The EPSG addresses a long-standing gap in market provision for financing the preparatory phases of major projects. By supporting the services sector, UKEF aims to drive export growth across all UK regions.

What this means for your business
For UK businesses offering engineering, design, and technical services, the EPSG could be a game-changer in helping you explore opportunities in international markets. It could be the key to unlocking new contracts and expanding your global reach.

If you would like help with how your business could take advantage of this new scheme, or would like some broader advice on exporting, feel free to get in touch with us. We’re here to help you seize opportunities and grow your business.

See: https://www.gov.uk/government/news/new-export-guarantee-champions-uk-engineering-and-design-services

Government proposes crackdown on “subscription traps”
The UK Government has launched a consultation to tackle so-called “subscription traps,” aiming to make it easier for consumers to cancel unwanted subscriptions and secure refunds. These proposals are designed to simplify cancellation processes and improve transparency, potentially saving UK families up to £1.6 billion annually.

The problem: Trapped in subscriptions
“Subscription traps” occur when consumers are misled into signing up for subscriptions, often via free trials or introductory offers, only to find themselves locked into costly plans due to unclear terms or complex cancellation procedures.

New figures reveal that nearly 10 million of the UK’s 155 million active subscriptions are unwanted, costing an average of £14 per subscription per month. From magazines to beauty boxes, many businesses employ cumbersome cancellation methods, including lengthy phone calls or restrictive opening hours, leaving consumers feeling trapped.

Proposed solutions
The consultation seeks input on measures to protect consumers while ensuring businesses can still offer subscription-based services. Key proposals include:

Simpler cancellation processes: Looking at the arrangements businesses need to put into place to help customers conveniently cancel a contract.
Clearer communication: Consumers would receive reminders about trial periods ending or auto-renewals for long-term contracts.
Improved refund rights: Proposals explore how refunds should work when consumers exercise their right to cancel within the statutory 14-day cooling-off period or if businesses fail to meet their obligations.

Next steps
The consultation is open to businesses offering subscription services, consumer groups, and enforcement agencies, so that all perspectives can be considered.

To see further information about the consultation and participate, see: https://www.gov.uk/government/consultations/consultation-on-the-implementation-of-the-new-subscription-contracts-regime

Stay safe during Black Friday season
The National Cyber Security Centre (NCSC) has reported that shoppers lost over £11.5 million to online criminals between November 2023 and January 2024. Each victim lost an average of £695. A total of £10.6 million was lost the previous year.

The Black Friday season can be a good time to find bargains for businesses as well as individual shoppers. However, it’s evident that online criminals are doing their best to take advantage of the increased shopping activity.

It’s important then that you and your business exercise vigilance during this time. NCSC advise that criminals will often create false urgency by using limited-time offers or promoting items that seem scarce or not widely available.

Anyone involved in purchasing should be made aware that if they see or hear anything that doesn’t seem quite right, they should immediately:

Break the contact and don’t click on any links.
Research the company or seller by looking at reviews on trusted review sites.

Another important step that the NCSC recommends taking is to enable two-step verification on any online accounts you have. You should also make sure that all online accounts are protected with a memorable but secure password.

By taking these essential measures you will help protect yourself and your business from fraud while you track down any bargains!

To review the report and guidance in full, see: https://www.ncsc.gov.uk/news/black-friday-warning-figures-reveal-rising-losses-scams

Are you ready for new B2B parcel arrangements between Great Britain and Northern Ireland?
New arrangements will apply to business to business (B2B) parcels sent from Great Britain to Northern Ireland under the Windsor Framework, effective from 31 March 2025. The changes were originally due to come into effect from 30 September 2024, but this was delayed to March next year.

Businesses will need to make sure they are prepared for these changes, which include distinct processes for business-to-business (B2B) and business-to-consumer (B2C) shipments.

What are the key changes?
For B2B Parcels, information must be submitted via the Customs Declaration Service (CDS). Your parcel carrier will handle this but may ask you to provide the additional information they need to do this. You may also need to pay duty. If you haven’t done so already, speak to your parcel carrier so that you are clear on how they will be handling this new procedure.

A UK Internal Market Scheme (UKIMS) authorisation enables eligible goods to move without full customs declarations or duty. UKIMS can be used if your goods are for sale to, or final use by, end consumers located in the UK and aren’t subject to an EU trade remedy.

If you don’t hold one already you will need to apply for UKIMS authorisation. In view of the March 2025 deadline, we recommend starting this as soon as you can.

B2C parcels
When goods are sent to consumers (B2C) in Northern Ireland for their personal use, there are no individual customs declarations, duty or presentation of goods to customs authorities. However, your parcel carrier will need to collect some additional data from you, such as the recipient’s details and a description of the goods.

Next steps for businesses
In view of the different processes between B2B and B2C, you will need to know whether your customer is a business or a consumer.

You may already know whether your customer is a business, but if you don’t then the onus is on you to find out. The customer holding a business account with you, requiring a VAT invoice, or the volume or type of goods ordered from you could all be indications that they are a business.

You may also want to apply for UKIMS authorisation to simplify your B2B parcel movements and avoid unnecessary costs.
Talking with your parcel carrier is also important to ensure that you understand their systems and how you can provide the information they will need in a practical way.

To review the guidance, see: https://www.gov.uk/government/publications/moving-parcels-from-great-britain-to-northern-ireland-under-the-windsor-framework

Business rates reforms continue: What it means for you
The government has now published the legislation to deliver the business rates changes announced in the recent Budget. These reforms, set to take effect from the 2026/27 tax year, are designed to create a more balanced system, with notable benefits for smaller retail, hospitality, and leisure (RHL) businesses.
Here’s what you need to know and how it might affect your business.

Relief for retail, hospitality, and leisure
Businesses in the RHL sectors with properties valued below £500,000 will benefit from “two permanently lower business rates multipliers”. This means a reduced tax bill for smaller high-street businesses, which could free up funds for growth, staffing, or other operational priorities.

Of course, RHL properties have already been receiving temporary relief to their business rates charges. However, the legislation will make permanent adjustments so this should provide greater stability of RHL businesses to plan.

Any relief here is likely to be welcome since high-street businesses are facing tough competition. The BBC recently reported that footfall in Ipswich town centre fell by a third in the past year. So, the high street is under significant pressure to find and maintain sales.

Larger properties to shoulder more
From 2026/27, properties with rateable values of £500,000 or above will see their rates increase, as a higher multiplier will apply. If you operate in higher-value premises, it’s worth factoring this into your financial planning.

This move is because the government intends to fund the reduced rates for smaller businesses sustainably by shifting some of the tax burden to higher-value properties. This may particularly be aimed at large warehouses used by the online giants, but isn’t limited to these firms.

How to prepare
Although these changes are still a couple of years away, there are steps you can take now to ensure you’re ready:

Assess your properties: Review the rateable values of your properties to understand where you will fall under the new system.
Review your current rates bill: Make sure that your property is currently being valued and assessed correctly. Agreeing necessary changes with the local authority can take time and effort, but will be worthwhile to make sure that you are getting any relief your business is due.
Plan for rate increases: Larger businesses, particularly those in premium or urban locations, should start budgeting for the higher multiplier to avoid surprises when the changes take effect.

Looking ahead
Precise definitions of which businesses qualify for the lower rates, as well as the exact multipliers, will be confirmed by Autumn 2025. This clarity will be crucial for understanding the full impact of the reforms on your business.

For now, the key takeaway is that relief is on the horizon for many smaller RHL businesses, while larger property holders should begin preparing for increased costs.

If you’d like to discuss what these changes might mean for your business, please get in touch. We would be happy to help!

See: https://bills.parliament.uk/bills/3887

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