Digital Security by Design: Technology Access Programme

Applications remain open until 6 March 2022.

Digital Security by Design (DSbD) challenge and Digital Catapult have launched a new programme for developers and organisations to experiment with DSbD technologies.

The Technology Access Programme has been developed to build a pipeline and community of developers and technology companies to trial and experiment with the new DSbD technologies, to addresses the cyber security challenges faced by embedded product and software companies.

What is available?

To support a six-month experimentation period with the DSbD technologies within their own organisations, programme participants will have access to:

• the Morello Board and CHERI prototype architecture and hardware
• technical guidance
• £15,000 in funding
• collaboration and mentoring opportunities
• industry and technical advisors

Businesses will also get an opportunity to access Digital Catapult’s Future Networks Lab with state-of-the art IoT and 5G networks testing facilities, allowing them to test the impact of DSbD technologies on other areas of their products and services.

There will be four open call opportunities during the overall timeframe of the Technology Access Programme for organisations to apply.

See:  Technology Access Programme - Digital Security by Design (https://www.dsbd.tech/technology-access-programme/)

25th February 2022 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Where does the money go?
• Payrolling Benefits in Kind
• Changes to Accounting for VAT on Imports for Users of Flat Rate Scheme
• Open Digital Solutions for Net Zero Energy

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a great weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Payrolling Benefits in Kind

HMRC are encouraging more employers to payroll employee benefits in kind rather than declaring benefits on the end of year P11D. They have included guidance on registering to use the scheme in their latest employer bulletin.

If employers haven’t already done so they should register online now or before 5 April 2022 to payroll employee benefits for the 2022/23 tax year.

The advantages of payrolling benefits in kind are:

• employers no longer need to submit P11D and P46(Car) forms to HMRC
• simpler PAYE codes mean HR teams receive fewer queries from employees regarding tax
• tax deductions in monthly payroll will be more accurate
• tax codes for individuals should change less frequently
• fewer forms for employers to complete at year-end

If you are not yet in a position to move to payrolling you can still move away from legacy paper P11D forms by submitting them online.

Changes to Accounting for VAT on Imports for Users of Flat Rate Scheme

There are important changes from 1 June 2022 for small businesses using the Flat Rate Scheme who are importing goods and using postponed VAT accounting.

Those businesses using the Flat Rate Scheme must currently add the value of imported goods to the total of all their supplies before they carry out the scheme calculation.

For VAT return periods starting on or after 1 June 2022, they should no longer include import VAT accounted for using postponed VAT accounting in their flat rate turnover. The VAT due on any imports should be added to box 1 of the return after completing the Flat Rate Scheme calculation.

HMRC have issued the following updated guidance:

Complete your VAT Return to account for import VAT - GOV.UK (https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat#if-you-use-a-vat-accounting-scheme)

Importers not using the VAT Flat Rate Scheme

HMRC have also updated their guidance for VAT registered importers not using the Flat Rate Scheme:-

Complete your VAT Return to account for import VAT - GOV.UK (https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat)

These traders must account for postponed import VAT on their VAT returns for the accounting period which covers the date they imported the goods. The normal rules apply for what VAT can be reclaimed as input tax and the trader’s monthly statement will contain the information to support their claim.

HMRC is aware of the problems some importers are having when trying to access their monthly VAT statements. If you cannot access your statement or you’re having problems when viewing your statement, you should follow the guidance on how to complete a VAT Return if you’re having problems with your monthly statements (https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat#access).

As long as you take reasonable care to follow the guidance, there will be no penalty for errors.

Where does the money go?

With ever increasing supplier prices, managing your businesses cash and understanding the flow are now vital tools in maintaining resilience and being able to adopt flexible strategies for success.

Fund flows are a reflection of all the cash that is flowing in and out of a business. Owners can look at the direction of the cash flows for insights about the health of specific products or services and overall market patterns.

Some types of business are more likely to run into cash flow problems, while other types appear to be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is, you can still have problems with cash flow. Here are our thoughts on managing the flow of cash in your business:

The first stage of understanding and predicting how funds flow is to perform a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down you might need to take action. Prepare a funds flow statement so you know where the money goes.

Next create a yearly budget and look where cash could become tight and months where you can save to cover off the quieter times. Look at those quieter months and think about flexible work scheduling, new products or services or other activities to tide you over.

Finally make sure you collect your money from those who owe you quickly. Reward customer loyalty by offering early bird discounts, set credit limits and payment terms to ensure customers follow the rules. If you take on new customers make credit checks. Penalise late payers and request up front deposits or payment.

Talk to us about preparing a funds flow statement and annual budget so that you can work on your business for maximum success!   

Open Digital Solutions for Net Zero Energy

Innovate UK has launched a competition for organisations to apply for a share of £1.2 million to develop open solutions to accelerate decarbonisation of energy in the UK. This is a Small Business Research Initiative (SBRI) competition funded by UK Research and Innovation (UKRI).

The competition will stimulate the development of collective equity for the sector and the creation of communities to support the development of reusable and open net zero energy solutions.

Your open solutions should accelerate the delivery of net zero energy in the UK. The outputs should be adopted by first users and have potential to be supported and adopted by the wider community and other users across the energy sector.

You can develop an open solution, across the value chain, for any of the following net zero energy sectors:

• power
• hydrogen
• carbon capture, use and storage
• heat
• transport
• buildings
• industry
• whole system integration

Your open solution can be:

• software
• hardware
• firmware
• data solution

Innovate UK expects to fund four projects - each contract will be up to £300,000 and cover each project for up to nine months.

See: Competition overview - SBRI Competition – Open Digital Solutions for Net Zero Energy - Innovation Funding Service (https://apply-for-innovation-funding.service.gov.uk/competition/1078/overview)

Storm Eunice

For the safety of our team and clients our Worle office will be closed today (18th Feb 2022) due to Storm Eunice.

Our team will be working from home and we will be able to help as usual over the phone or online.

Reach us on 01934 444100, or at team@hillmans.co.uk.

Stay safe! 

18th February 2022 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• The importance of a shareholders agreement
• Eureka Eurostars 3: call for innovative SMEs
• Poor Take-up of Tax Free Childcare Accounts
• Employers’ PPE responsibilities extended to ‘workers’ from April 2022

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a great weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Eureka Eurostars 3: call for innovative SMEs

UK-registered SMEs can apply for a share of up to £2.5 million for collaborative research and development projects with partners from Eurostars member countries.

The Eurostars 3 programme is Eureka network's funding programme. It aims to support collaborative research and development (CR&D) projects led by innovative SMEs in participating countries.

Call 2 of Eurostars 3 programme has now opened and is accepting applications from UK micro, small or medium-sized enterprises (SMEs).

To be eligible, CR&D projects must focus on industrial research. They must have high market potential and develop at least one of the following:

• innovative products
• technology-based applications
• technology-based services

To apply, you must also fulfil seven eligibility criteria.

In the UK, only UK-registered innovative SMEs are eligible for funding provided that they meet competition conditions. More than one UK SME can be involved in each project.

UK SMEs can apply for a total grant of up to 360,000 euros for each eligible UK project partner or 60 per cent of total eligible project costs, whichever is the least.

Projects must be collaborative and can last up to 36 months. Your project start date depends on the national funding procedures of the Eureka Eurostars members involved in the selected projects.

See: Competition overview - Eureka Eurostars 3: call 2 - Innovation Funding Service (apply-for-innovation-funding.service.gov.uk)

Poor Take-up of Tax Free Childcare Accounts

The government are concerned about the lack of take up of tax-free childcare accounts, with HMRC estimating that less than 22% of families eligible for the scheme had joined in March 2021. With many parents returning to work following the pandemic they should be encouraged to set up a tax free childcare account to help with their childcare costs. HMRC are suggesting that employers should make their employees aware of the support available to families with young children. With many parents working from home for part of the week tax free childcare accounts are more flexible than childcare vouchers.

Childcare vouchers continue to be available for employees who joined a qualifying scheme before 4 October 2018 and applies to children up to age 16.

Tax-free childcare is available for working families (including the self-employed) who are not receiving tax credits, universal credit or childcare vouchers. It can also be used at the same time as the 15 or 30 hours of free childcare in England. Key points:

• For working families, including the self-employed, in the UK
• Earning at least £142 per week (equal to 16 hours at the National Minimum or Living Wage) each
• Who aren't receiving Tax Credits, Universal Credit or childcare vouchers
• With children aged 0-11 (or 0-16 if disabled)
• For every £8 you pay into an online account, the government will add an extra £2, up to £2,000 per child per year

Note that the tax-free childcare scheme is not available if either partner expects to individually earn more than £100,000 a year.

For every £8 paid into an online account, the government adds an extra £2, up to £2,000 per child per year (£4,000 for disabled children). For example, for childcare costs of £500 per child per month, the family would pay £400 into their childcare account and the government would pay in £100 per child. This would be an annual saving of £1,200 per child.

The account can be used to pay for nursery fees, breakfast clubs, after school clubs, summer camps and OFSTED registered childminders.

For an overview of government childcare support see:

https://www.childcarechoices.gov.uk/

The importance of a shareholders agreement

For limited companies, when it comes to making decisions, Company Law states shareholders who own more than 50% can pass a motion at a company meeting regardless of the views of other shareholders and if shareholder(s) owns more than 75% of the shares they control the company outright and can veto the decisions of all other shareholders. 

This may not suit all business situations, especially where you have two or more founders holding equal share capital or a group of owners with varying amounts of capital, some of whom are directors and some who are not, but who are all working together for the company’s success.

A shareholders’ agreement is entered into between all or some of the shareholders in a company. It regulates the relationship between the shareholders, the management of the company, ownership of the shares and the protection of the shareholders. They also govern the way in which the company is run.

A shareholders agreement can help define how a business makes decisions to the benefit of all owners and is recommended where:

• A small number of owners want to reach collective and fair decisions for the benefit of all
• Some owners may want to be able to influence decisions that are particularly relevant to them
• Some shareholders may not be directors and cannot influence operations on a day to day basis

Typically it is seeking to deal with the three “D’s” of death, disability and disagreement. It may also cover a variety of other significant areas, for example, retirement and buy back of shares. 

Key areas for any shareholder agreement

This is not a comprehensive list as each situation is different, but it may help you collect the thoughts of all shareholders before you draw up an agreement.

1. Company details including structure, directors and officers
2. Purpose and aims of the company
3. Equity split of shareholders
4. Parties to the agreement
5. Shareholders rights, obligations and commitments
6. Decision making processes on major issues, required voting majorities and day to day operating decisions
7. Restrictions on the sale of shares
8. Rights of first refusal and pre-emptive rights to acquire shares on leaving, retirement, death or disability
9. Death, disability and other retirement compensation payments
10. Management contracts, director approval and remuneration amounts
11. Insurance and other protective requirements
12. Professional advisers and change of professional advisers
13. Dispute resolution
14. Changes to and termination of the agreement
15. Buy out provisions for leaving shareholders
16. Valuation of shares on changes and valuations of the business

Our view is that a shareholders agreement is an essential document for any limited company and an equitably drafted agreement should provide comfort to all parties to the agreement.

Please talk to us if you need help in planning for an agreement, especially where there are several shareholders, a new company is being formed, a shareholder wants to sell their shares or pass them to their children, someone is nearing retirement, or the company has borrowed money from a shareholder. We can help with share and company valuations and putting the shareholders wishes into an agreement with a local solicitor.

Employers’ PPE responsibilities extended to ‘workers’ from April 2022

From April 2022, employers will be obliged to provide personal protective equipment (PPE) to workers, as well as employees, who may be exposed to health and safety risks at work.

An amendment to the Personal Protective Equipment at Work Regulations 1992, will come into force on 6 April 2022.

Organisations will need to undertake a risk assessment to establish whether a worker requires PPE to carry out their work tasks. If they do, the employer will need to carry out a PPE suitability assessment and provide protective equipment or clothing to them free of charge, as they do for employees.

Organisations will also be responsible for the maintenance, storage and replacement of any PPE they provide, while workers will be responsible for reporting any loss or damage to their PPE.

See: Personal protective equipment (PPE) at work (https://www.hse.gov.uk/ppe/index.htm)

11th February 2022 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Additional Restrictions Grant – Apply Now
• Geovation Accelerator Programme is now open for applications
• Directors may be liable for overclaimed CJRS grants
• What’s your growth strategy?
• Selling your Business via a Management Buy-Out

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a great weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Additional Restrictions Grant

The Additional Restrictions Grant (ARG) is aimed at businesses that have been significantly financially impacted due to the Government’s response in December 2021 to the new COVID-19 Omicron variant, introducing international travel restrictions and implementing the Government’s Plan B restrictions.

This additional fund is aimed at businesses with ongoing fixed costs that are significantly financially affected by the latest COVID-19 restrictions.

Eligibility

The following eligibility criteria applies and businesses must:

• have been trading on 30 December 2021
• not be eligible for an Omicron Hospitality and Leisure Grant
• have 49 employees or less
• have ongoing fixed monthly business costs in North Somerset (e.g. rent, insurances, utilities, equipment rental)
• not have exceeded state subsidy levels
• have been significantly affected by the Government’s response to the new Omicron variant
• be registered with HRMC if a home-based business and provide their Company Unique Taxpayer Reference and a copy of their most recent tax return.
• must not be in administration, insolvent or subject to a striking-off notice

Potential eligible businesses include:

• Cafes not paying business rates
• Breweries
• Freelance and mobile businesses (inc. caterers, events)
• Coach tour operators
• Tour operators
• Personal care (hair dressing & beauty)
• Travel agents
• Wedding industries
• Taxi driver
• Driving instructors
• Guest houses not paying business rates
• Holiday apartments, Cottages or bungalows not paying business rates
• B&Bs not paying business rates
• Catered holiday homes not paying business rates
• Holiday homes not paying business rates

Eligibility for grants is restricted to specific businesses that have seen a significant impact in their turnover due to the recent Omicron COVID-19 outbreak.

How to claim and when?

If you previously received an Additional Restrictions Grant (ARG) for businesses in the hospitality, accommodation or leisure sectors you may be eligible for this new grant and North Somerset Council will email you directly with a link to the online application form.

If you do not receive an email inviting you to claim the Omicron Hospitality and Leisure Grant but you believe that you are eligible you can apply via the North Somerset Council website below: 

https://www.n-somerset.gov.uk/my-services/community-safety-crime/emergency-management/covid-19-north-somerset-together/information-organisations-businesses-groups/restrictions-support-grants-businesses/additional-restrictions-grant 

Geovation Accelerator Programme is now open for applications

The Geovation Accelerator Programme is backed by Ordnance Survey and HM Land Registry. The Programme offers 6 months intensive support, structured to each start-ups needs, aimed at helping founders grow their business. Start-ups receive up to £20,000 grant funding and the equivalent to over £100,000 in benefits on the Programme.

Applications for the Spring 2022 intake are now open and are seeking start-ups working in PropTech, as well as start-ups using location data in the energy and mobility industries, especially with a sustainability angle.

The deadline to apply is 28 February 2022.

See: https://geovation.uk/accelerator/

Directors may be liable for overclaimed CJRS grants

Where HMRC believe a company (including LLPs) is insolvent or about to become insolvent, and overclaimed CJRS grants owed will not be paid, they may give a notice making an individual (or individuals) jointly and severally liable for the relevant tax liabilities. This means that all individuals given a notice will be jointly and severally liable with the company for paying these liabilities.

HMRC have issued guidance setting out the conditions that need to be present in order to use their powers:

a. An officer of HMRC may give a joint and several liability notice to an individual if they are satisfied that all 4 of the conditions A to D set out in the legislation have been met

b. the company is subject to an insolvency procedure, or there is a serious possibility of becoming subject to one

c. the company is liable to an income tax charge as a result of receiving a COVID-19 support payment it was not entitled to receive

d. the individual was responsible for the management of the company at the time the tax first became chargeable, and the individual knew (at that time) that the company was not entitled to the relating COVID-19 support payment

e. there is a serious possibility that some or all of the income tax liability will not be paid

See: Overview of joint and several liability notices for the taxation of coronavirus (COVID-19) support payments - GOV.UK (https://www.gov.uk/guidance/overview-of-joint-and-several-liability-notices-for-the-taxation-of-coronavirus-covid-19-support-payments)

What’s your growth strategy?

A company might have a great product or service but without a business growth strategy to help it define, articulate and communicate where it is going, it may not grow at all!

A growth strategy starts with identifying and accessing opportunities within your market. The strategy addresses how your company is going to evolve to meet the challenges of today and in the future. A growth strategy gives your company purpose, and it answers questions about your long-term plans.

Having a growth strategy is important because it keeps your company working towards goals that go beyond what is happening in the market today. They keep both owners and employees focused and aligned, and they allow you to think long-term.

The first step is to look at five important areas that will help you develop a growth strategy:

1. Think long term – invest time in understanding where the market is going and what this means for your customers. Short term decisions do not help grow a business.

2. Having a good value proposition is essential – this states the relevance of your product or service, what it does and why customers need it. What is yours? 

3. Expanding your reach – who is your target customer and what do you need to do to let them know you exist and that your product or service is relevant to them?

4. Growth means new people, systems and (maybe) different ways of doing things. Grow at a pace you can manage.

5. How will your marketing get your value proposition to relevant customers?

Once you have taken some time to write out your growth strategy and where you want your business to be in (say) 2 years, the next step is to work out your marketing plan.

A marketing plan is a business document outlining your marketing strategy and tactics. It is often focused on a specific period of time (i.e., over the next 12 months) and covers a variety of marketing-related details, such as costs, goals, and action steps. But like your business plan, a marketing plan is not a static document. This should outline:

1. How you are going to keep existing customers happy and returning to buy more often
2. What the goals are for getting new customers
3. The marketing methods you are going to use to achieve 1 and 2

Please talk to us about helping you formulate your expansion plans; we have considerable experience in helping our clients grow their businesses.

Selling your Business via a Management Buy-Out

Have you considered selling your business to your management team?

In a typical management buy- out the existing management would set up a new company which would then raise finance to acquire your current business, so this is essentially the same as a sale to a third party, except the management team will know quite a bit about your business already. They would still nevertheless need to carry out due diligence and require you to provide warranties and indemnities as in a third party sale.

An increasingly popular alternative to the classic management buy-out referred to above would be to sell your company to an Employee Share Ownership Trust (ESOT).

SALE OF COMPANY TO EMPLOYEE SHARE OWNERSHIP TRUST

This alternative to the classic management buy-out enables the shareholders of a trading company to sell their shares free of CGT to a trust set up for the benefit of the employees. This has become more popular as an exit route since the lifetime limit for CGT business asset disposal relief (formerly entrepreneurs relief) was reduced from £10 million to just £1 million.

This tax break has recently been used by the owners of a number of well-known companies including Richer Sounds and Riverford Organics, and is similar to the structure in place at John Lewis.

Like business asset disposal relief, the company must be a trading company. The outgoing shareholders are only allowed limited participation in the company following the disposal of their shares. There are a number of other conditions that need to be satisfied. If you are interested in going down this route, contact us to discuss whether it would be suitable for you or your company.

COMPANY BUY BACK OF SHARES AS AN ALTERNATIVE EXIT

Another potential exit for shareholders would be for the company to buy back their shares. This would normally be taxed on the shareholder as a dividend unless certain conditions are satisfied resulting in the payment being taxed as a capital gain.

Clearly CGT treatment is preferable as the rate could be just 10% compared to up to 38.1% on dividends.

Consequently, HMRC need to be satisfied that the share buy-back benefits the company’s trade, and a large cash payment may be difficult to justify if that depletes cash flow. With careful planning it may be possible to stage the buy back over a number of years, but it is recommended that you get advance clearance from HMRC to confirm capital treatment.

4th February 2022 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Personal tax planning ahead of April 2022
• Planning To Sell Your Business In 2022?
• Passing On Your Business To The Next Generation
• HMRC guidance on VAT place of supply of services

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a great weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Passing On Your Business To The Next Generation

If you do not wish to sell your business but are looking to reduce your involvement, you may be considering passing on your business to the next generation, or maybe your management team.

Where you are passing on the business or some of your shareholding, there are generous tax reliefs that facilitate the transfer of ownership without tax charges arising. These tax reliefs are currently available on the transfer of a trading business although it may also be possible to pass on an interest in an investment business with careful planning.

We can of course discuss your plans with you to ensure that you are able to take advantage of all available tax reliefs.

HMRC guidance on VAT place of supply of services

HMRC have recently updated their internal VAT manual to clarify the “place of supply” rules for services. This is one of the most complex areas of VAT legislation and of course the rules changed significantly since the UK left the EU.

The country where a supply is deemed to be made is called the ‘place of supply’ and is the place where it is liable to VAT, if any. These rules are necessary to ensure that VAT, where payable, is paid only in the correct country and to avoid the possibility of supplies being taxed more than once or not at all.

Although there are numerous exceptions depending on the nature of the services, the general rule is that services supplied between businesses (B2B) are taxable where the customer belongs. If the supplier and customer belong in the UK then the UK supplier accounts for VAT on his supply. However, where the supplier is in the UK and the customer is outside the UK the supply will be outside the scope of UK VAT.

Where the supply is to a non-business customer (B2C), the general rule is that the place of supply is the place where the supplier belongs.

Where the place of supply of a service is in an EU member state, that supply is outside the scope of UK VAT and is liable to the VAT rules in that member state and in no other country. If the place of supply of a service is outside the UK and EU, that supply is described as outside the scope of VAT altogether.

It is important to establish whether a supply of services is made to a relevant business person (B2B) or non-business customer (B2C). A person is a relevant business person in relation to a supply of services if:

(a) the person carries on a business, and
(b) the services are not received by the person wholly for private purposes.

For the updated internal HMRC guidance see: https://www.gov.uk/hmrc-internal-manuals/vat-place-of-supply-services

Note that the simplified guidance on the HMRC website has not been updated since December 2020:
https://www.gov.uk/guidance/vat-how-to-work-out-your-place-of-supply-of-services

Personal tax planning ahead of April 2022

The costs of keeping the country running through covid were huge and inflation is expected to add to the country’s debt. The Office for Budget Responsibility has indicated that the treasury will need to find £45bn in interest, before even thinking about paying off the debt itself. As taxpayers we will be providing the extra cash!

From April, the Chancellor is not directly increasing the rates of income tax we pay, he is freezing the thresholds at which basic and higher rates of income tax are paid from April 2022 to April 2026, effectively increasing the amount we actually pay as inflation pushes up earnings.

There will also be an additional 1.25% contribution added to both employee and employer National Insurance from April and a similar additional charge on dividends. This is referred to as the Health and Social Care Levy. From April 2023 it will be extended to employees above the state pension age.

The changes will not end there. The Treasury has issued a raft of consultations which could all mean extra costs.

There will be greater scrutiny if you are self-employed, or if you become a new landlord, with the onus on you to report your new venture even before it turns a taxable profit.

There could also be increasing pressure for ‘timely payment’ or in other words, collecting tax sooner. This is still just a consultation at this stage, but the government is understandably keen to raise funds quickly.

These changes mean that it will be more important than ever to ensure that you are not paying too much tax – and there are two key areas to look at:

Are you claiming all your allowances?

Tax is complicated, and we may tend to simply rely on HMRC to tell us what we owe them. The fact is that they are only human and HMRC does make mistakes. In particular, they may have forgotten an allowance or two, particularly if your income has fluctuated over the past few months.

It can be well worth looking at your tax return. If you do find errors, there is a relatively simple way to query them.  HMRC has a well-developed and surprisingly efficient appeals system which you can find here: https://www.gov.uk/tax-appeals/decision

Can you reduce your tax liabilities?

If you find that your current assessment is right, it might be time to take a more proactive approach to reducing your tax.

It could be time to:

• Maximise your pension contributions to make full use of tax relief
• Get a detailed pension forecast – to see the effect changes will have
• Make full use of your ISA entitlements
• Look at your investment portfolio and (if practicable) ensure you take advantage of the full £12,300 CGT allowance before 5 April 2022
• For Shareholder/directors, consider the timing of bonuses and dividends to mitigate the planned 1.25% rate increase
• Look at Salary sacrifice arrangements which can be particularly effective in mitigating income tax and national insurance contributions

These steps are all entirely legitimate, but the rules and regulations are complicated. Getting expert help may be vital. Please contact us about planning for the April tax changes. We can provide a full tax review which will help identify the marginal tax traps waiting for you – and help you to avoid them.