24th February 2023 – Hillmans Weekly Update

Welcome to our 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!

I hope you have a good weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Power up your business with Innovation!
Innovation has generally been recognised as essential for value creation, both for individual companies and for the UK economy.

The development of new ideas, processes and technologies and their flow across different sectors is a significant driver of economic growth and productivity. Recently, innovation has also been identified as crucial to the transition of the economy away from fossil fuels and carbon-intensive business activities.

There are many factors that affect whether and how businesses innovate, for example the availability of skills and capital and government policy measures such as tax incentives.

However, none are more important that the company’s own culture, capabilities, and internal systems – all of which are aspects of its governance. Unless companies are governed in a way that is conducive to innovation, they are unlikely to be able to take advantage of new opportunities.

Our most innovative clients share some key characteristics:

• they invest in activities with uncertain outcomes for which the likely commercial return is difficult to quantify and the risk of failure is higher than normal
• they have a culture which encourages flexibility, experimentation and a high level of individual decision making
• they require a longer-term time investment horizon than many other kinds of business activity

Research and Development (R & D) is the process of taking an innovative idea and transforming it into a fully-fledged product or procedure. R & D tax credits are a government incentive designed to encourage innovation across multiple industries. If you carry out R & D that aims to make an advance in science or technology, this is an opportunity for you to reduce your corporation tax bill or receive a refund from HMRC based upon the relevant costs your business dedicates to Research & Development. Recently, R &D tax credits have been the subject of additional scrutiny by HMRC, and some rates will be less generous from April 2023, but it could still be a useful tax relief for your company.

If you are looking for long term finance to support innovation then you will need to ensure your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need up to date projections before an expert will consider your application.

Please talk to us about R & D tax credits and long-term finance, our independent experts have many years of experience and success in advising business across a wide range of sectors.
 
Retiring soon? – Check your entitlement to the State Pension now!
If you are planning to claim the UK state pension you should check your national insurance (NI) record before 5 April 2023. At present, voluntary contributions can be made to plug gaps back to April 2006, but this will be curtailed from April.

National insurance (NI) contributions are made by employed and self-employed individuals based on their earnings. To qualify for the maximum ‘new state pension’ (received by those retiring on or after 6 April 2016) a person must have 35 qualifying years of NI contributions. For part payment of the ‘new state pension’ a person must have contributed for at least 10 years. For those whose NI record started before 6 April 2016, different rules may apply; the number of required years of NI contributions/credits to obtain the full state pension may be higher.

If a person has not contributed enough before reaching state pension age, they may not be able to claim state pension, or receive the full state pension amount.

To help protect state pension and other benefits it may be beneficial for people to make voluntary NI contributions to top up their contribution history, potentially increasing the amount of state pension they will receive. We recommend you take financial advice when making that decision as, amongst other factors, it requires predicting what contributions will be made before state retirement.

Normally, it is only possible to make voluntary contributions for the past six tax years. Currently there is an extension in place. Individuals can fill gaps in their NIC history from 6 April 2006 to the present date by making voluntary contributions.

From 6 April 2023, the timeframe for making voluntary contributions will revert to the normal six years. This means that in the 2023/24 tax year, it will be possible to make contributions going back to the 2017/18 tax year only.

See: Check your national insurance record before 5 April 2023 | ICAEW
 
Guidance for small businesses on using facial recognition technology
Facial recognition technology (FRT) identifies or otherwise recognises a person from a digital facial image. Businesses can use FRT in a variety of contexts - for example, in allowing access to devices, taking payments, or allowing entry to secure areas.

Depending on the use, FRT involves processing personal data, biometric data, and special category personal data. Such technologies can intrude on people's privacy, so businesses need to think carefully when deciding if they should implement them.

If you are a small business looking to begin using facial recognition technology, read the ICO's latest FAQ about using FRT for payment, entry, or other security systems.

The information highlights key issues to be aware of, such as:

• what you need to consider before using this technology
• when you must complete a data protection impact assessment
• how to identify and satisfy a special category condition
• what to include in your privacy notice if you use FRT

See: Additional considerations for technologies other than CCTV | ICO
 
Check when you must register for Plastic Packaging Tax
Plastic Packaging Tax (PPT) was introduced on 1‌‌‌ ‌‌April 2022. If you manufacture or import 10 or more tonnes of plastic packaging within a 12-month period you must register for PPT on GOV.UK, even if your packaging contains 30% or more recycled plastic.

You must register for Plastic Packaging Tax if you:

• expect to import into the UK or manufacture in the UK 10 tonnes or more of finished plastic packaging components in the next 30 days
• have imported into the UK or manufactured in the UK 10 tonnes or more of finished plastic packaging components since 1 April 2022

This includes non-resident taxpayers who import finished plastic packaging components into the UK on their own behalf, or manufacture finished plastic packaging components in the UK.

The importer will generally be the consignee on the importation documents, unless they provide records showing they are acting on behalf of someone who’s controlling the import, and are using the consignee to store goods on their behalf.

If you import finished packaging components using incoterms, you should make sure you and other businesses know who is responsible for accounting for Plastic Packaging Tax. The tax becomes chargeable when the goods are imported but is accounted for quarterly in arrears rather than at the time of import.

If you are a partnership or other unincorporated body
You must register if at least one partner (or person carrying out business) will manufacture or import 10 or more tonnes of finished plastic packaging components in the next 30 days or since 1 April 2022. All members will then be joint and severally liable for Plastic Packaging Tax.

If you are a member of a business group
You can register as a group. This allows for only one of the businesses to complete returns and make payments on behalf of all members of the group.

When to register
You must register for Plastic Packaging Tax within 30 days of becoming liable for it. You must pay the tax on all chargeable components from the day you’re liable to register. You may need to pay a penalty if you do not.
See: Check when you must register for Plastic Packaging Tax - GOV.UK (www.gov.uk)
 
Guidance on working in cold and wintry weather
The Health and Safety Executive (HSE) have updated their guidance to make it easier to find and understand advice on how to protect workers in low temperatures. This includes guidance for working outdoors.

It also explains how you can assess the risks to workers and put controls in place to protect them.

With low temperatures and less daylight, winter can make surfaces perilous. As a result, slip and trip accidents increase significantly.

See: Is it too cold or hot to work? (hse.gov.uk)
 
UK announces second Global Investment Summit to create jobs in high tech sectors
Over 200 of the world’s highest profile investors, CEOs and financiers are expected to come to the UK in October for a second Global Investment Summit (GIS 23).

GIS 23 will aim to raise billions of pounds of high value investment to create jobs across the UK, with a special focus on high tech sectors such as innovation, research, and development.

The event will build on the inaugural Global Investment Summit in October 2021, that brought together over 170 CEOs to showcase the UK’s commitment to green investment ahead of COP26.

The 2021 Summit secured £9.7 billion of new foreign investment on the day, creating over 30,000 new jobs and supporting growth in vital sectors such as wind and hydrogen energy, sustainable homes, and carbon capture and storage.

See: UK announces second Global Investment Summit to create jobs in high tech sectors - GOV.UK (www.gov.uk)
 
Fishing industry - new funding to train the next generation
Training programmes to attract new recruits and improve the quality of training in the fishing, seafood, and aquaculture sectors have been awarded funding from the £100million UK Seafood Fund.

Recognising industry concerns over an ageing fishing workforce and with the number of UK fishers having fallen by 1,700 over the past decade, the UK government considers it is now more important than ever to ensure entrants are equipped with the necessary skills to join the sector and understand the opportunities that are available to them.

Coinciding with National Apprenticeship Week, the seven projects include pilot courses at London’s famous Billingsgate market covering technical skills such as the delivery, preparation, and cooking of seafood; practical qualifications for manning fishing boats in Cornwall; and training for school leavers in Scotland going into the seafood industry.

See: Fishing industry nets new funding to train the next generation - GOV.UK (www.gov.uk)
 
Grants for small specialist charities
Small and local charities, working with people facing complex issues and barriers, can apply for grant funding from Lloyds Bank Foundation for England and Wales.

Specialist charities with an annual income between £25,000 and £500,000 can apply for a three-year, unrestricted grant of up to £75,000.

The Foundation will support charities that understand the complexity of the issues people face and are best placed to make a genuine difference to people’s lives.

The open themes are:

• Addiction
• Asylum Seekers and Refugees
• Care Leavers
• Domestic Abuse
• Homelessness
• Offending
• Sexual abuse and exploitation
• Trafficking and Modern Slavery

The deadline for applications is 5pm, 3 March 2023.

See: Apply for funding (lloydsbankfoundation.org.uk)

17th February 2023 – Hillmans Weekly Update

Welcome to our 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!

I hope you have a good weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Managing your cash flow is essential right now!
With ever increasing supplier prices, a recent rise in interest rates, and a looming recession, managing your business’s cash and understanding the flow are now vital tools in maintaining resilience and being able to adopt flexible strategies for success.


Cash flows reflect 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 cash 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 and 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.

Please talk to us about preparing a cash flow statement and annual budget so that you can work on your business for maximum success!
 
Households, businesses, and organisations who are “off the gas grid” to receive energy bill support over the coming weeks
From Monday last week, households across Great Britain who don’t use mains gas for heating started to receive £200 towards their energy bills as the Alternative Fuel Payment (AFP) scheme launched. Most will get the £200 AFP automatically as a credit on their electricity bill, but some customers will need to apply for the support later this month.

Nearly 2 million households who use alternative energy sources such as heating oil, biomass, and liquefied petroleum gas (LPG) to warm their homes will receive the support.

The vast majority, including many homes in rural areas, will get it automatically through their electricity supplier as a credit on their bill throughout February. A small minority of customers, such as those living in park homes or on static houseboats with no direct energy supplier, will need to apply to receive the payment through an online portal that will launch later this month.

Meanwhile, energy suppliers are also able to start making payments to businesses and both public and voluntary sector organisations that use alternative fuels to heat their buildings. A credit of £150 will be provided to eligible customers across the UK through the Non-Domestic Alternative Fuel Payment scheme (ND-AFP). Suppliers will deliver this support up to 10 March, with most customers expected to receive it later this month. There is no need to contact your supplier.

See: Households, businesses and organisations off the gas grid to receive energy bill support over the coming weeks - GOV.UK (www.gov.uk)
 
New law gives employees and other workers more say over their working hours
The UK government has supported the recently introduced “Predictable Terms and Conditions” Bill, which will bring forward changes for tens of millions of workers across the UK.

The move, which would apply to all workers and employees including agency workers, comes after a review found many workers on zero hours contracts experience ‘one-sided flexibility’.

This means people across the country are currently left waiting, unable to get on with their lives in case of being called up at the last minute for a shift.

With a more predictable working pattern, workers will have a guarantee of when they are required to work, with hours that work for them.

If a worker’s existing working pattern lacks certainty in terms of the hours they work, the times they work or if it is a fixed term contract for less than 12 months, they will be able to make a formal application to change their working pattern to make it more predictable.

The move comes as part of a package of policies the UK government is supporting to further workers’ rights across the country, such as:

• supporting parents of babies who need neonatal additional care with paid neonatal care leave
• requiring employers to ensure that all tips, gratuities, and service charges received must be paid to workers in full
• offering pregnant women and new parents greater protection against redundancy
• entitling unpaid carers to a period of unpaid leave to support those most in need
• providing millions of employees with a day one right to request flexible working, and a greater say over when, where, and how they work.

The government states that these policies will increase workforce participation, protect vulnerable workers, and level the playing field, ensuring unscrupulous businesses don’t have a competitive advantage.

See: New law gives tens of millions more say over their working hours - GOV.UK (www.gov.uk)
 
HMRC late payment interest rates to be revised after Bank of England increases base rate
The Bank of England Monetary Policy Committee announced on 2 February 2023 that it would increase the Bank of England base rate to 4% from 3.5%.
HMRC interest rates are linked to the Bank of England base rate.

As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will increase.

These changes will come into effect on:

• 13 February 2023 for quarterly instalment payments
• 21 February 2023 for non-quarterly instalment payments.

Late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit - or ‘minimum floor’ - of 0.5%.

The differential between late payment interest and repayment interest is in line with the policy of other tax authorities worldwide and compares favourably with commercial practice for interest charged on loans or overdrafts and interest paid on deposits.

See: HMRC late payment interest rates to be revised after Bank of England increases base rate - GOV.UK (www.gov.uk)
 
Innovate UK Smart Grants
Innovate UK, part of UK Research and Innovation, is investing up to £25 million in the best game-changing and world-leading ideas.

Ideas need to be designed for swift, successful commercialisation and be genuinely new and novel, not just disruptive within their sector.

All proposals must be business-focused, with deliverable, realistic, adequately resourced plans to achieve return on investment, growth, and market share following project completion.

Applications can come from any area of technology and be applied to any part of the economy, such as, but not exclusively:

• net-zero
• the arts
• design and media.

To be in scope, your proposal must demonstrate (amongst other things):

• a game-changing, innovative, and disruptive idea that will lead to new products, processes or services
• an idea that is significantly ahead of others in the field, set for rapid commercialisation
• clear potential to positively impact the UK's position, productivity, and competitiveness within the global economy.

See: Competition overview - Innovate UK Smart grants: January 2023 - Innovation Funding Service (apply-for-innovation-funding.service.gov.uk)
 
‘Here to help’: Commission launches new push on trustee guides as sector faces challenging year
The Charity Commission is launching the next stage of its campaign to raise awareness of core trustee duties and guidance available as the sector faces challenges ahead.

The Commission has developed a collection of short guidance on issues ranging from safeguarding people to managing conflicts of interest. Dubbed the ‘5-Minute Guides’, the collection serves as a basic toolkit for trustees who are managing the many demands of running a charity.

The latest phase of the campaign, running to 16th March, aims to raise awareness of, and boost use of, the 5-minute guides. The regulator hopes this will increase knowledge and understanding of essential trustee duties. This comes as charities face additional challenges due to cost-of-living pressures.

The Commission’s latest research shows that around 98% of trustees feel ‘very’ or ‘somewhat’ confident in managing or governing their charity but, when questioned on basic role requirements, on average, trustees answered just 7 out of 10 questions correctly - demonstrating a knowledge gap that could lead to unintentional governance failings.

The core suite of 5-minute guides covers the following subject areas:

• Delivering purpose – advice on how to use your charity’s governing document, how to deliver on your charity’s purposes and the law.
• Managing finances – advice on how to ensure your charity’s money is safe, properly used and accounted for.
• Conflicts of interest – advice on how to identify and deal with conflicts of interest in your charity.
• Making decisions – advice on how to make valid trustee decisions that are in your charity’s best interests.
• Reporting information – advice on how and what you need to report to the Commission.
• Safeguarding people – advice on your responsibilities to keep everyone who comes into contact with your charity safe from harm.
• Political activity & campaigning – advice for charities that want to support, or oppose, a change in government policy or the law.

See: Advice and guidance for Charity Trustees – Getting the most out of being a charity trustee
 
What is inclusive leadership?
There have been numerous studies into the relationship between diversity and inclusion and company performance, and many of them have come to the same conclusion - diversity and inclusion is good for business.

The biggest advantage of inclusive leadership is that inclusive leaders know how to unleash individual potential and create an environment where all talent can thrive and grow. The more people feel included, the more they speak up, go the extra mile, and collaborate — all of which ultimately lifts organisational performance.

Inclusive leadership is emerging as a unique and critical capability helping organisations adapt to diverse customers, markets, ideas, and talent.

The workshop will include:

• What inclusion means
• What makes an inclusive leader
• How to make that happen
• How an organisation can create inclusive leadership.

Organised by “Fairplay Employer”, the next date for this free 45-minute webinar is Monday 13 March.

See: What is inclusive leadership? Tickets, Mon 13 Mar 2023 at 13:30 | Eventbrite
 
The digital pound consultation
HM Treasury and the Bank of England are consulting on a potential digital pound, or central bank digital currency (CBDC).

If introduced, a digital pound would be issued by the Bank of England and could be used by households and businesses for everyday payments in-store and online. It would also be interchangeable with cash and bank deposits, complementing cash.

No decision has been taken at this stage to introduce a digital currency.

See: The digital pound: A new form of money for households and businesses? - GOV.UK (www.gov.uk)
 
Free practical forestry training courses made available
Government-funded courses are now available, teaching skills such as chainsaw maintenance, coppicing, woodland management, and marketing and selling timber.

The Forestry Training Fund is for people considering a change of career or those who are seeking to build and diversify their skills in forestry. The UK forestry and primary wood processing sectors support 32,000 jobs and contribute £2 billion to the economy every year, whilst secondary wood processing businesses support a further 60,000 jobs.

The government has committed to increasing tree-planting across the UK to 30,000 hectares a year by the end of the Parliament to reach net zero emissions by 2050.

The short, practical training courses will be paid for by a £700,000 allocation from the £750m Nature for Climate Fund and will help grow the forestry sector so that we have enough people with the right skills to plan, plant and manage new woodlands.

Examples of courses which are covered by the fund include:

• coppicing
• chainsaw maintenance and cross-cutting
• managing your woodland
• planning and planting a new woodland
• marketing and selling timber
• fence and hedge laying.

Courses will be available until March 2025. Applications are now open.

See: To view a list of training providers and apply for funding visit GOV.UK
 
Countryside Stewardship Higher Tier application window opens for 2024 agreements
From  7 February farmers and land managers can submit new applications for the Countryside Stewardship Higher Tier, rewarding them for their actions to protect and improve their natural environment.

Countryside Stewardship Higher Tier offers multi-year agreements and one-off grants for over 250 different actions farmers can take to enhance the environment alongside their farming business, from planting and maintaining new hedgerows or woodland through to restoring peatland and moorlands.

The start of the application window comes after Defra announced an average increase of 10% for Countryside Stewardship revenue payment rates – covering ongoing activity such as habitat management. Capital payment rates, which cover one-off projects such as hedgerow creation, were also increased by an average of 48%.

To support farmers and land managers with applications and to help encourage them to take action on their land, changes have been made to the application process. These include:

• For the first time, a new Higher Tier capital-only offer has been introduced, awarding grants to help support the most environmentally significant sites and woodlands, including preparatory works for the creation and restoration of priority habitats and priority species. Successful applicants will now have three years to complete their activity and submit claims;
• An annual claim declaration, which means that agreement holders will not have to complete a burdensome annual claim form. Instead, they will be able to declare online that they are fulfilling the obligations of their agreement, reducing the administrative burden on farmers and landowners and making the claim for payment process quicker and more straightforward.
• Where farmers or land managers are already in Higher Level Stewardship (HLS) agreements, they can also apply for a Countryside Stewardship Higher Tier agreement to start from 1 January 2024, as long as they are undertaking actions that are different to and do not conflict with their Higher Level Stewardship agreement.

See: Higher Tier grants 2023: Countryside Stewardship - GOV.UK (www.gov.uk)

10th February 2023 – Hillmans Weekly Update

Welcome to our 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!

I hope you have a good weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

UK Government to crack down on ‘fire and rehire’ practices
The government is taking action against unscrupulous employers that use the controversial practice of ‘fire and rehire’, it has announced.

Last year P&O Ferries sought to evade the law by sacking 786 seafarers without due consultation. Having made no efforts to inform the Business Secretary at the time, they failed to follow best practice or do the right thing for their employees. As a result, the transport Secretary introduced a 9-point plan including primary legislation to tackle these issues.

Through a planned statutory code of practice, the government is protecting employees and cracking down on employers that use controversial dismissal tactics. The code, subject to a consultation first, will make it explicitly clear to employers that they must not use threats of dismissal to pressurise employees into accepting new terms, and that they should have honest and open-minded discussions with their employees and representatives.

‘Fire and rehire’ refers to when an employer fires an employee and offers them a new contract on new, often less-favourable terms. The government has been clear on its opposition to this practice being used as a negotiating tactic and is now making it clear how it expects employers to behave.

This new statutory code of practice will set out employers’ responsibilities when seeking to change contractual terms and conditions of employment, including that businesses must consult with employees in a fair and transparent way when proposing changes to their employment terms.

Once in force, Courts and Employment Tribunals will be able to take the code into account when considering relevant cases, including unfair dismissal. They will have the power to apply a 25% uplift to an employee’s compensation in certain circumstances if an employer is found to not comply with the statutory code.

See: Government cracks down on ‘fire and rehire’ practices - GOV.UK (www.gov.uk)
 
Minimum wage rates increase from 1 April 2023
Employers should be aware that all minimum wage rates increase on 1 April of each year. This includes all National Minimum Wage rates and the National Living Wage rate.

See the table below that shows the current minimum wage rates and new rates from April 2023:

 

See: National Minimum Wage and National Living Wage rates - GOV.UK (www.gov.uk)
 
Selling online and paying taxes
If you regularly sell goods or services through an online marketplace, you could be classed as a ‘trader’.

And if you earn more than £1,000 before deducting expenses through your trading, you will need to pay Income Tax on this.

For tax, an online marketplace is any website or mobile phone app that handles and enables the sale of goods and services from individuals and/or businesses to customers.

If you only sell items occasionally, you can check if you need to tell HMRC about this income.

If you’ve never declared income through a Self-Assessment tax return, you can register for HMRC Online Services.

Please talk to us if you need any advice in this area.

See: Selling online and paying taxes - information sheet - GOV.UK (www.gov.uk)
 
 
UK sets out plans to regulate cryptoasset activities – Consultation announced
Plans to protect consumers and grow the economy by regulating cryptoasset activities have been announced by the UK government.

Cryptoassets – commonly known as ‘crypto’ – are a relatively new, diverse, and constantly evolving class of assets that have a range of potential benefits, as well as posing risks to the consumer.

As is common in emerging technology markets, the crypto sector continues to experience high levels of volatility and a number of recent failures have exposed the structural vulnerability of some business models in the sector.

Under plans set out by the government last week, it will seek to regulate a broad suite of cryptoasset activities, consistent with its approach to traditional finance.

These proposals will place responsibility on crypto trading venues for defining the detailed content requirements for admission and disclosure documents – ensuring crypto exchanges have fair and robust standards.

The proposals will also strengthen the rules around financial intermediaries and custodians – which have responsibility for facilitating transactions and safely storing customer assets.

In addition, to address industry concerns about the small number of Financial Conduct Authority (FCA) authorised cryptoasset firms who can issue their own promotions, HM Treasury is also introducing a time limited exemption. Cryptoasset businesses that are registered with the FCA for anti-money laundering purposes will be allowed to issue their own promotions, while the broader cryptoasset regulatory regime is being introduced.

This approach delivers on the original policy intention of the measure to promote innovation, enhance consumer protection and ensure that cryptoasset promotions can be held to equivalent standards as promotions of financial services products with similar risk profiles.

The government’s approach to regulation mitigates the most significant risks, while harnessing the advantages of crypto technologies. They state that this enables a new and exciting sector to safely flourish and grow, boosting jobs and investment.

See: UK sets out plans to regulate crypto and protect consumers - GOV.UK (www.gov.uk)
 
Six weeks for developers to sign contract to fix unsafe buildings
Developers have received legally binding contracts that will commit them to pay to repair unsafe buildings. The government has set a six-week deadline for developers to sign the legal agreements and is warning that companies who fail to sign and comply with the terms of the contract will face significant consequences.

Legislation will be brought forward in the spring, giving the Secretary of State powers to prevent developers from operating freely in the housing market if they fail to sign and comply with the remediation contract.

The contract, which has been drawn up by the Department for Levelling Up, Housing and Communities, will protect thousands of leaseholders living in hundreds of buildings across England. These innocent households would otherwise face costly repairs for serious safety defects, including non-cladding related issues.

Under the contract, developers will commit an estimated £2 billion or more for repairs to buildings they developed or refurbished over the past 30 years. This means that together with the Building Safety Levy, industry is directly paying an estimated £5 billion to make their buildings safe.

The contract also requires developers to reimburse taxpayers where public money has been used to fix unsafe buildings.

See: https://www.gov.uk/government/news/six-weeks-for-developers-to-sign-contract-to-fix-unsafe-buildings
 
Business Charity Awards 2023
The Business Charity Awards provide the perfect platform to reflect on your efforts, share best practice and reward your achievements within the community.

The Awards recognise the outstanding contribution made by UK businesses to good causes. The awards not only recognise the role that individuals, teams and entire companies play in supporting charitable activity both at home and abroad, but also help to educate the wider business community about the best ways to support good causes.

Charities may enter on behalf of their corporate partners and joint entries from companies and their corporate foundations will also be accepted for their work with charity partners. 

The awards are open to companies of all sizes and across all industries.

The deadline for entries 23 February 2023.

See: Home - Business Charity Awards

3rd February 2023 – Hillmans Weekly Update

3rd February 2023 – Hillmans Weekly Update:

Welcome to our 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!

I hope you have a good weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Pre-April tax planning reminder
The new tax year starts 6 April 2023, so you have a couple of months to consider your options, once we pass this date the majority of the tax planning options for Income Tax and Capital Gains Tax purposes will cease unless actioned before the 6 April.

Do you fall into any of these categories?

• You have or are thinking about a change in your personal status (single, married, separating, joining or dissolving a civil partnership).
• You are thinking about selling a capital asset, such as shares or a property. From 6 April 2023 the Capital Gains Tax annual exempt amount reduces from £12,300 to £6,000.
• You or your child’s other parent claims Child Benefit and the income of either parent is likely to exceed £50,000 for the first time during tax year 2022-23;
• Your annual income is approaching or above £100,000;
• You have not yet topped up your pension contributions for tax year 2022-23;
• You are self-employed with a 31 March 2023 year-end;
• You are self-employed and are thinking about the purchase of equipment or vehicles; or
• You are the director and/or shareholder of a limited company and have not yet considered voting final dividends or bonuses for 2022-23.

If you do we can help you discuss your options ahead of the 6 April deadline!

The above list is not comprehensive, and we specialise in helping clients with all taxes including PAYE, NIC, VAT, Corporation, Capital Gains, and Income tax. Please do not hesitate to contact us.

New Tax Year Basis Goes Ahead
Although the start of MTD for ITSA has been delayed to 2026 at the earliest, the start date of the new regime for taxing the profits of unincorporated businesses on a tax year basis has not been delayed and the transition will still take effect in the tax year to 5 April 2024.

This will be a major change for those unincorporated businesses that prepare their accounts to a date other than 5 April or 31 March. From 6 April 2024 such businesses will need to compute their taxable profits from 6 April to 5 April each year, regardless of their accounting end date.

So, for a sole trader or partnership making up accounts to 31 December each year, their 2024/25 profits would be calculated as 9/12ths of their profits for the year ended 31 December 2024 plus 3/12ths of their profits for the year ended 31 December 2025.

This will invariably require the inclusion of an estimate of the profits of the later period with subsequent amendment once the final figures are known. For this reason many businesses may wish to consider changing their accounting date and we can of course advise you of the tax consequences.

More imminent is the change in the way that profits are to be taxed for the 2023/24 tax year. The upcoming tax year is scheduled to be a “transitional year” with complicated rules for calculating business profits. For many businesses the change will result in a higher tax bill and, if you can supply us with estimated figures, we can work with you to calculate the impact on your cash flow.

Please note that although MTD for ITSA will only apply to the self-employed and landlords initially, these tax year basis changes apply to all unincorporated businesses, including partnerships and LLPs, and those with profits of less than £50,000.

As mentioned before, those already preparing accounts to 31 March or 5 April are not affected.

New VAT Penalty Regine
A new, and arguably fairer, system for determining penalties for late returns and late payment of VAT applies to return periods commencing on or after 1 January 2023. The same system will also apply to the returns to be submitted under MTD for income tax, when it eventually starts!

Under the new regime, taxpayers will accumulate points for late submissions, and only after reaching a certain threshold will an automatic penalty be imposed. The threshold will depend on how regularly the taxpayer is required to submit a return. For a typical business submitting VAT returns quarterly an automatic £200 penalty will apply when 4 penalty points are accumulated. The system is designed to penalise persistent defaulters rather than those businesses that have an occasional lapse.

130% Super Deduction Ends Soon
Companies considering the acquisition of new plant and machinery need to be aware that the temporary ‘super-deduction’ of up to 130% for the cost of acquiring new plant ends on 31 March 2023.

Consequently, corporate businesses may wish to bring forward planned expenditure to take advantage of this enhanced tax deduction, utilising hire purchase agreements if funds are otherwise unavailable.

Important R&D Changes from April 2023
The government are committed to a number of important changes to Research & Development (R&D) tax relief from 1 April 2023. It also looks increasing likely that the two existing systems will be merged into a single system in future years and we hope to hear more in the March 2023 Budget.

We already know that there will be a significant reduction in the tax relief available to qualifying SME companies from 1 April 2023, with the current 230% tax relief reducing to just 186%. The effect of this change combined with the reduction in the credit rate will reduce the repayable credit for loss making SMEs from £33.35 per £100 spend to just £18.60. Companies affected should consider the timing of their R&D expenditure.

For non-SME companies the R&D Expenditure Credit (RDEC) is being increased from 13% to 20% as part of the gradual alignment.

There are also important changes to the claims notification procedure from April 2023.

Want to Reduce Your 2021/22 Tax Bill?
If you would like to legitimately reduce your 2021/22 tax bill that you have just paid, or your bill for 2022/23, you might want to consider investing in shares in qualifying Enterprise Investment Scheme (EIS) companies.

Under this HMRC approved scheme every £1,000 you invest reduces your tax bill by £300 (30%), provided you are not connected with the company. Broadly you are not allowed to be an employee or control more than 30% of the company.

The reduction in your tax bill is available in the tax year in which the shares are issued, however you may elect to treat some or all of the shares as issued in the previous year and claim tax relief in that previous year.

If you are prepared to take more of a risk by investing in small start-up companies, the Seed EIS scheme provides a 50% tax deduction on up to £100,000 of investments.

Although we can advise you on the tax advantages of investing in EIS and Seed EIS companies you will need to consult with a suitably qualified Independent Financial Adviser who will help you find investments appropriate to your needs.

Cost of Living Payments from Spring 2023 – Low income households
The Department for Work and Pensions (DWP) has announced more detail on the payment schedule for the next round of cost of living support.
The cash for means-tested benefits claimants, including those on Universal Credit, Pension Credit and tax credits, starts in Spring and will go direct to bank accounts in three payments over the course of the financial year. 

Exact payment windows will be announced closer to the time but are spread across a longer period to ensure a consistent support offering throughout the year. They will be broadly as follows:

• £301 – First Cost of Living Payment – during Spring 2023
• £150 – Disability Payment – during Summer 2023
• £300 – Second Cost of Living Payment – during Autumn 2023
• £300 – Pensioner Payment – during Winter 2023/4
• £299 – Third Cost of Living Payment – during Spring 2024

See: Millions of low-income households to get new Cost of Living Payments from Spring 2023 - GOV.UK (www.gov.uk)