Friday 31 March 2023

31st March 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

Are you buying or trading Crypto?
If you are thinking about buying cryptoassets (“crypto”) you need to know the basics and understand the risks before jumping in. And remember, if you decide to invest in crypto then you should be prepared to lose all the money you have invested.

The range and accessibility of crypto have grown rapidly in the last few years, accompanied by a surge in speculative trading – which means people trading just because they have heard it may rise in value, rather than seeing evidence to support a potential rise. A number of people invest simply for fun!

Crypto can be thought of as ‘digital representations of value or rights’ that are secured by encryption and typically use some type of ‘distributed ledger technology’ (DLT). DLT allows data to be recorded and stored across a network of participants. This keeps the data secure and means there is no one single central data storage point or one central authority that grants participants permission to access and participate in the network.

The way some cryptoassets are created and operated makes them very different from what some people would class as ‘tangible’ assets (meaning things that you can physically see and touch) like gold or cash. So called ‘unbacked’ crypto have no tangible assets that sit behind them. Their price can increase or decrease depending on whether other people are willing to buy them. If people stop buying, the price could fall dramatically.  

Whereas central banks – like the Bank of England – issue and oversee the money we use daily (fiat currencies), cryptoassets are developed and run by groups, individuals, or companies. Publicly available information about some of these groups/individuals can be vague, and as crypto activity is not regulated yet in the UK, there is no safety net if things go wrong. 

Currently, using crypto as a means of payment is very limited – they’re accepted by certain IT and travel companies, for example, but you probably won’t be doing your weekly shop or paying your 5-a-side football subs with crypto. The reason for this is that cryptoassets tend to be very volatile, so it’s hard to pinpoint their value from one day to the next, which makes them unreliable as a payment method. However crypto that are are linked to fiat currency can be less volatile and more stable and have the potential to provide faster, cheaper and more efficient payments in the future. Some investors take the view that crypto could possibly one day be accepted in everyday transactions but this is some way off. 

Investing in crypto comes with all kinds of risks, some of which you might not even have thought of. For example, converting crypto to fiat currency can prove challenging and holders must keep a record of their digital keys. Capital gains tax can apply to exchanges and other disposals of crypto, even if fiat currency has not been realised. In 2022, crypto lender, Celsius, filed for bankruptcy and owed its users $4.7 billion, meaning many investors could not get their money out and did not get anything back. 

Following the surge in people’s interest in crypto over the last few years, scammers have been increasingly active in targeting potential investors. Remember - if something sounds too good to be true then it probably is. Find out how to protect yourself and others from investment scams on the ScamSmart site.

If you are trading in crypto be aware HMRC expects you to keep detailed and accurate records of your purchases and sales. In 2021 they published their internal Cryptoassets Manual which outlines how they measure any profit or loss on trading and details the records required. You can see this here: Cryptoassets Manual - HMRC internal manual - GOV.UK (www.gov.uk). It has just been announced in Budget 2023 that new boxes will appear on the self-assessment tax return to prompt crypto disclosures next year.

Anyone trading in Crypto needs to be aware of their tax obligations and when transactions need to be included in their tax return. Please make sure you tell us about any transactions (even if fiat currency has not been received) so that we can assist and include the appropriate amounts in your self-assessment tax return, as required.

See: Crypto: The basics | FCA
 
Employer duties for the change in the tax year
As an employer running payroll, you need to report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April 2023), give your employees a P60, and prepare for the new tax year, which starts on 6 April.

What you need to do                                               When
Send your final payroll report of the year            On or before your employees’ payday
Update employee payroll records                        From 6 April
Update payroll software                                         From 6 April
Give your employees a P60                                   By 31 May
Report employee expenses and benefits                        By 6 July

HMRC have published important information for employers on GOV.UK, which includes help with finishing the tax year 2022 to 2023.

Please talk to us about our payroll services; we offer a secure payroll service that not only saves you time and money but can eliminate the risk of getting something wrong.
 
New ‘Help to Grow’ website for businesses
The Department for Business and Trade (DBT) has unveiled a new centralised website, targeted at helping the UK’s 5.5 million businesses.

The new ‘Help to Grow’ site from DBT is aimed at upskilling both big and small businesses across the country by helping them to:
  • learn new skills,
  • reach more customers, and
  • boost business profits.
See: Homepage - Help to Grow
 
Spring Budget 2023 – GAD’s analysis
Experts at the Government Actuary’s Department (GAD) have focused on pensions taxation, pension fund investment and retirement planning in their analysis of the Spring Budget.

The Chancellor set out plans to deliver on 3 of the Prime Minister’s 5 key priorities: to halve inflation, grow the economy and get debt falling.

Pensions tax reform
GAD’s latest Technical Bulletin examines the government’s announcements on pensions tax reform. The Spring Budget aimed to increase the labour supply and support people to move into employment. There is a particular emphasis on encouraging workers aged over 50 to extend their working lives.

Reforms were announced to the total tax-relieved pension savings an individual can make each year and over their lifetime. These affect the lifetime allowance (LTA), annual allowance (AA), and money purchase annual allowance (MPAA), as well as other tax limits.

Pension fund investment
GAD’s Technical Bulletin also looks at the government’s plans to support high growth sectors of the economy. This will include encouraging investment and smarter regulation.

The Spring Budget set out some initial measures, while the government will work closely with industry and regulators to bring forward a package of measures by the autumn.

Retirement planning
There will be more focus on retirement planning. People in their 40s, 50s and 60s will be encouraged to make more active planning in key areas of work, wellbeing, and money. In the Spring Budget 2023, the government announced it will work with employers and pension providers to encourage people to undertake midlife MOTs.

See: Spring Budget 2023: a GAD technical bulletin - GOV.UK (www.gov.uk)
 
Religious festivals, holy days and observances
In the UK there is a wide range of different religions that both employers and employees may need to have some understanding of and how they may occasionally affect the workplace.

One of the holiest months of the Islamic calendar, Ramadan, which began on Wednesday 22 March and will end on the evening of Friday 21 April. This means Eid al-Fitr 2023 will be celebrated on Friday 21 April. As the commencement of Ramadan is confirmed by moon sighting, these dates may vary by one day.

Ramadan is the ninth month of the Islamic calendar, observed by Muslims worldwide as a month of fasting, prayer, reflection, and community.

Many workplaces have employees from different religious and non-religious backgrounds.

Other examples include:
  • Diwali (Hindu),
  • Guru Nanak (Sikh),
  • Lent (Christian),
  • Pesach/Passover (Jewish), and
  • Vesak (Buddhist).
Encouraging greater awareness and understanding of these backgrounds can be rewarding, particularly in terms of team building.

It can also help to reduce the chance of misunderstanding resulting in complaints or disciplinary action.

See: Acas guide on religion or belief discrimination | Acas

See: Religion or belief: a guide to the law | Equality and Human Rights Commission (equalityhumanrights.com)
 
Fast Growth 50 2023
Fast growth firms - which are normally defined as achieving 20% growth per annum - make up less than 1% of the UK business population but represent 50% of the total SME turnover output.

The UK Fast Growth 50 project will undertake a data-driven approach to identifying the fastest growing firms in each nation and region of the UK. It will research, develop, and publish lists that identify the 50 fastest growing companies in eight UK nations and regions, namely the East of England, London, the Midlands, North of England, Northern Ireland, Scotland, South of England, and Wales.

See: The UK Fast Growth 50 | Ideas Forums Ltd (freshbusinessthinking.com)

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