28th April 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 bank holiday weekend. 

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

60-day Capital Gains Tax Reporting on Property Sales
When a UK resident sells a residential property in the UK, they have 60 days to tell HMRC and pay any Capital Gains Tax (CGT) owed.

A CGT report and accompanying payment of tax may be required where the taxpayer sells or otherwise dispose of:

- a property that they have not used as their main home;
- a holiday home;
- a property which has been let out for people to live in;
- a property that has been inherited and not used as a main home.

There is no requirement to make a report or make a payment of tax when:

- the individual satisfies the test for Private Residence Relief (generally a main residence);
- the sale was made to a spouse or civil partner;
- the gains (including any other chargeable residential property gains in the same tax year) are within the tax free allowance known as the annual exempt amount (£6,000 in 2023/24);
- the property is sold for a loss; or
- the property is outside the UK.
 
Subject to certain exceptions, where there has been a disposal of a residential property, payment on account of the CGT will be due on the filing date for the return, which is generally within 60 days of the day after the date the property sale is completed.
 
The payment on account required is the amount of CGT notionally chargeable at the filing date. This is the tax that would be due if, under the normal rules for calculating chargeable gains for a tax year, the tax year ended at the time the disposal is completed.

In calculating the amount, any unused allowable losses for capital gains purposes incurred by the time the disposal is completed can be used. Available reliefs and the annual exempt amount are applied in the normal way.

The amount of CGT payable on account is the amount after applying the applicable rate of tax to the net gain.

Since the 60-day payment window can make it difficult for some people to provide exact figures, HMRC allow for certain estimates and assumptions to be made. The taxpayer can make a correction once the exact figures are known, most probably when submitting their self-assessment tax return.

If the resulting amount is higher than the amount previously paid, the difference becomes payable to HMRC and interest may be due. If the amount is lower, the difference becomes repayable along with repayment interest from HMRC.

Please talk to us about CGT because we have considerable experience with helping our clients with their CGT disposals and returns.

Building business resilience
Millions of businesses and households are struggling with their energy costs, alongside increases in general taxation, the cost of council tax, water bills and other utilities. 

Is it all doom and gloom or can you plan forward and make adjustments in, and to, your business to factor in these changes?

Our experience tells us that business owners are a resilient bunch and those that are the most successful are also flexible in their planning. Here are some of our recommended actions, based on what we have seen other clients doing recently to firm up their resilience to these tough times:   

• Review your budgets and set realistic and achievable targets for the remainder of 2023. Know your cash flow forecast inside out.
• Review your debtors list and chase up overdue invoices (if appropriate). If applicable, offer existing debtors extended payment terms and/or discounts.
• Make sure your terms of business contain explicit payment terms.
• Assign responsibility to one individual for invoicing and collections.
• Put extra effort into making sure your relationships with your better customers are solid.
• Review your list of products and services and eliminate those that are unprofitable or not core products/services.
• If appropriate, review banking facilities and discuss future needs.
• Know what you are spending and on what. Look at your detailed expense list in your profit and loss account and assess if there is room for negotiation in any of your fixed expenses and/or whether there are alternative suppliers.
• Review and flowchart the main processes in your business (e.g. sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
• Encourage team members to suggest ways to streamline and simplify processes.
• Review efficiency of business processes and consider alternatives such as outsourcing certain activities locally or overseas.
• Establish your key performance indicators (KPI’s) and measure them on a weekly basis.
• Pull everyone together to explain the business strategy and get their buy-in.

The British Business Bank’s Guide to building business resilience contains impartial, practical, and actionable information and support to help smaller businesses manage their costs, boost their long-term profitability, and increase their resilience.

There is guidance on everything from energy efficiency to investing in technology, included to help make your business more innovative and resilient.

Other topics covered in the guide include:
•           Foundations for growth,
•           Managing business costs,
•           Securing funds and controlling debt,
•           Focusing on customers,
•           Optimising your supply chain, and
•           Controlling staff overheads.

See: Guide to building business resilience - British Business Bank (british-business-bank.co.uk)

Giving Shares to Employees
Where companies give shares to employees in the company or group that they work for they will generally be taxed on the difference between the market value of those shares and the amount paid, if any. The transaction also needs to be reported to HMRC by 7 July following the end of the tax year. HMRC provide a template to enable employers to report the transaction online:
See: Other ERS schemes and arrangements: end of year return template, technical note and guidance notes - GOV.UK (www.gov.uk)

Considerations around whether employers need to operate PAYE and whether national insurance contributions are payable depends upon whether the shares are ‘readily convertible assets’. Broadly, this would be where there are trading arrangements in place to quickly sell the shares.

It is generally more tax efficient for the employee if the company awards them shares under a tax-advantaged share incentive scheme such as under the Enterprise Management Incentive (EMI) scheme or a Share Incentive Plan (SIP).
Contact us if you would like more information about these schemes.

Corporation Tax relief for Employee Share Acquisitions
Provided certain conditions are satisfied, the employing company will obtain a corporation tax deduction when employees acquire shares in the company or group that they work for, whether they acquire the shares directly or under a share option agreement.

The amount of the deduction is the difference between the market value of the shares and the amount paid by the employee and will often mirror the amount taxed on the employee. This is a statutory deduction and will be available irrespective of whether there is a deduction for the transaction in the company’s profit and loss account.

Awarding shares to employees is a complex area so please contact us before you consider such arrangements.
 
Working Capital Finance explained
Working capital finance solutions offer businesses the opportunity to improve cash flow. The world of commercial finance and asset-based lending (ABL) is complex and expansive with products, terminology, and contractual interpretation varying from lender-to-lender.

The benefits of arranging working capital are:

• Up to 90% of outstanding invoice value can be advanced within 24 hours;
• Flexible lending – funding increases in line with your growth (UK and Export);
• Confidentiality – lenders can offer a completely confidential service – your customers need not know you have a facility in place;
• Lenders allow you to manage your funding at all times;
• Sector-specific finance is often available;
• Structured ABL – funding for management buy-outs/management buy-ins; and
• Trade finance & supply chain finance solutions.

Specialists in this area can advise on:

• Invoice Finance - an effective way of quickly accessing a proportion of the value (up to 90%) of your invoices. Effectively a business ‘sells’ its invoices to the lender in return for accessing cash at the point products and services are sold. Specific sector-based offerings are available, as is the ability to arrange finance for selected invoices only;
• Structured ABL - generate a higher level of funding by unlocking the maximum value tied up in the combined assets within your business, including Debtors, Inventory, Plant & Machinery, and Property. Additional forms of funding can be structured in addition to this, such as top up loans to drive growth; and
•  Trade Finance - supply chain finance with various options, enabling the purchasing of goods from overseas where you are otherwise unable to obtain credit from suppliers.

Typically, 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 finance; our working capital finance experts have many years of experience and success in advising business across a wide range of sectors in obtaining working capital finance solutions.
 
Pub is the Hub Community Services Fund
Isolation and loneliness are very prevalent in rural areas where transport and amenities are scarce, so Pub is The Hub is making funding available to pubs prepared to support their local residents.

If you would like to consider ways in which your pub could diversify and support your local community then please read on!

• Would you like more information on developing your pub into a hub for your community?
• Would access to experts in the licensing trade be something you would value before making any decisions on diversifying?
• Would you like this support to be free of charge?
• Would you welcome a grant of up to £3,000, subject to meeting guidelines, to support any project you had identified?
• Would you welcome PR and Media coverage free of charge?

See: Community Services Fund - Pub is The Hub
 
Manufacturing Awards 2023
The Make UK Manufacturing Awards 2023 is recognising and awarding manufacturers and their apprentices who have done exceptional work in the sector. 

Share your stories of resilience and transformation and shine a light on the incredible efforts of your people and business. Whether you’ve implemented a new export strategy; developed a new product; or have taken great leaps in your journey towards net zero – you are all manufacturing heroes. With 5 apprentice categories and 7 business categories, there is an award for you and your business. It’s free to enter, and you can apply to multiple categories. Application is quick and simple via an online form

See: | Make UK
 
Businesses can sign the Armed Forces Covenant
The armed forces covenant is a pledge that together we acknowledge and understand that those who serve or who have served in the armed forces, and their families, should be treated with fairness and respect in the communities, economy, and society they serve with their lives.

The covenant focusses on helping members of the armed forces community have the same access to government and commercial services and products as any other citizen. 

Reservists and veterans bring a variety of transferable skills and qualities to the civilian workplace, developed throughout their military careers.

Businesses, charitable, and public sector organisations of all sizes who wish to support the armed forces community can sign the covenant. You make your own promises on how you will demonstrate your support.

See: Businesses - Armed Forces Covenant
 
New holiday let rules to protect local people and support tourism – Consultation
Short-term lets are now a significant part of the UK’s visitor economy. They provide increased choice and flexibility for tourists and business travellers and those attending major sporting and cultural events.

A consultation published recently by the Department for Levelling Up, Housing and Communities will propose introducing planning permission for an existing home to start to be used as a short term let – helping support local people in areas where high numbers of holiday lets are preventing them from finding affordable housing.

It will also consider whether to give owners flexibility to let out their home for up to a specified number of nights in a calendar year without the need for planning permission.

The consultation seeks views on whether it would be helpful to expressly provide a degree of flexibility for home owners to be able to let out the home they live in for a number of nights a year before planning permission for a change of use may be required.

They are consulting on whether this should be 30, 60 or 90 nights a year.

See: Introduction of a use class for short term lets and associated permitted development rights - GOV.UK (www.gov.uk)

21st April 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 inheritance tax
Like many other taxes, inheritance tax (or IHT) allowances have been frozen. This sounds generous of the chancellor at a time when the government is strapped for cash. But it actually means that we are paying more. Data from HMRC has revealed that Inheritance tax collected between April 2022 and February 2023 totalled £6.4bn, which is £900m higher than the same period last year. 

The rise is actually due to the frozen tax-free allowance for inheritance tax (also known as the nil-rate band) – coupled with the rocketing rise of house prices.

It’s estimated 10,000 more families could end up paying IHT, while the Treasury could receive nearly £8 billion a year over the next few years. 

How can you reduce your inheritance tax bill?
When you die, your estate is valued, and this value is subject to inheritance tax (IHT). Generally, any excess over the nil-rate band (currently £325,000) is chargeable to inheritance tax at 40%. But there are ways to reduce your inheritance tax bill.

1. Give it away
The easiest way to pass your wealth onto your loved ones without paying tax is simply to give it to them. 

• You can give up to £3,000 to loved ones each tax year without it becoming liable for IHT. If you didn’t use the allowance last year, you can combine it and pass on £6,000. 
• Gifts of £5,000 to children for a wedding are also protected from IHT; grandchildren can have up to £2,500.

If you die within seven years of making a larger gift, IHT will be payable. There’s a sliding scale. Die three to four years after giving, the IHT rate lowers to 32%. At six to seven years it falls to 8%.  

There is another way to give. Donate at least 10% of your estate to charity and get a 4% discount on your IHT rate for the rest of your estate, lowering it from 40% to 36%. 

2. Put it in a pension 
Your pension, depending on the type of pension plan you hold, if it is kept invested could be used to pass on wealth as it is usually excluded from your estate for IHT purposes. Nominate beneficiaries for your pension should you pass away before you receive it, and IHT isn’t normally payable. 

If you die after the age of 75 your beneficiaries will need to pay income tax on the money they take out. 

3. Invest it (carefully)
Making the right kind of investments might help you avoid IHT. An individual savings account (ISA) can’t help. ISAs are exempt from income tax and capital gains tax, but they form part of your estate for IHT.

There could be other solutions such as with Alternative Investment Market (AIM) holdings.

The companies listed on AIM tend to be smaller and more highly speculative in nature, in part due to AIM’s relaxed regulations and listing requirements. However, Investing in AIM companies tends to be high risk investing and is not a route most people should consider. You should seek independent financial advice before considering investing in this market, remembering that, when investing, your capital is at risk and you could lose some or all of your investment.

4. Put it in trust 
Setting up a trust to hold your assets could keep them out of your estate, and out of the taxman’s reach – but the position has become more complicated in recent years, and it might not always be suitable. They may still have their uses. The trustee can control the assets, rather than them being passed onto the beneficiaries right away. This might help if your beneficiaries are not known for financial prudence or are young children. You should seek Independent financial/legal advice before establishing a trust.

5. Insure it 
You can take out a whole of life insurance policy large enough to mitigate some or all of your IHT liability. You may need to regularly review the level of cover if your estate increases in value as the original sum assured may not cover the whole IHT liability. Alternatively, you may choose a plan where the cover increases with inflation. Whichever option is chosen, have it written in trust. Your beneficiaries won’t struggle with a huge inheritance tax bill when you die, but while you are alive you will be paying monthly premiums.  

6. Get some help
Expert advice can be vital to help work out the total value of an estate, calculate how much inheritance tax is likely to charged and understand what options are available to manage that tax bill. Advice on writing up a will to be tax efficient is also essential.

Please talk to us about any tax related questions you may have and if you need a financial adviser, we can pass you the contact details of a local IFA.
 
ICO offers new Innovation Advice Service
The Information Commissioner's Office (ICO) has launched a new service for UK organisations looking to use personal data in new and innovative ways

As part of their commitment to helping organisations innovate and grow, the ICO is trialling a new Innovation Advice Service, designed to answer specific data protection questions.

The service is aimed at organisations planning to use the personal data of people living in the UK, to drive a new or innovative product, service, or business model that is not currently live.

The service is open to organisations of any size and in any sector.

You can ask questions at any stage of planning, designing or development of your project. However, the ICO may prioritise questions where their response has the greatest potential to influence your thinking and planning, or where it could be helpful to lots of other organisations.

Your question must be about specific aspects of your new or innovative use of data. The ICO will not accept questions that are vague or generic.

See: Innovation advice service | ICO
 
What is Greenwashing?
Greenwashing is the practice by which companies claim they are doing more for the environment than they actually are. 
Greenwashing has increased as:

• companies’ climate commitments are on the rise;
• consumers increasingly seek to buy more sustainable products;
• companies are incentivised to make products more attractive to consumers; and
• employees are attracted to work for companies with strong sustainability credentials.

Making false environmental claims hampers decarbonisation progress and impact. If greenwashing is not addressed, it will undermine the efforts of genuine leaders, creating confusion, cynicism, and a failure to deliver urgent climate action. It is a collective problem which requires collective action.

Watch The Carbon Trust’s webinar on how to avoid greenwashing and read their top tips on how to counter greenwashing through transparent communications for your business.

See: Briefing: how to counter greenwashing with transparent communications | The Carbon Trust
 
Consultation: The Border Target Operating Model
The United Kingdom Government, in collaboration with the Scottish and Welsh Governments, has published its draft Border Target Operating Model (TOM), setting out a new model for importing goods from all countries into Great Britain, including the EU, in line with their 2025 Border Strategy.

The draft TOM proposes a new approach to security controls (applying to all imports), and sanitary and phytosanitary controls (applying to imports of live animals, animal products, plants and plants products) at the border. It sets out how controls will be simplified, digitised and, over time, delivered through the UK’s new Single Trade Window.

The Cabinet Office will run a programme of engagement with stakeholders from all nations of the UK and international partners. It will consist of sector specific workshops and international events, as well as wider stakeholder groups and bespoke sessions, covering all aspects of the TOM.

• Tuesday 18 April 2023, 2pm to 4pm – Cabinet Office Seaports and Airports Workshop (online)
• Monday 24 April 2023, 2pm to 4pm – Cabinet Office Carriers Workshop (online)
• Wednesday 26 April 2023, 2pm to 4pm – Cabinet Office Hauliers, Logistics & Customs Intermediaries Workshop (online)
• Wednesday 17 May 2023, 2pm to 4pm – Cabinet Office Final Workshop, Stakeholder Reflections (online)

See: The Border Target Operating Model: Draft for Feedback - GOV.UK (www.gov.uk)
 
Volunteering: guidance for employers on how to manage the risks
The Health and Safety Executive (HSE) has guidance on how to manage the risks to volunteers.

The guidance explains how health and safety law applies to volunteering.

There is also information on:

• when to report incidents involving volunteers, and
• including volunteers in your risk assessments.

The pages provide some specific advice for volunteers who manage non-domestic premises such as village and community halls, as well as guidance on charity retail and fundraising.

See: Volunteering: How to manage the risks - HSE
 
Grant to boost domestic tree production re-opens
Applications are now open for the Forestry Commission’s Tree Production Capital Grant. The funding will drive the production of tree seed and saplings through developments in machinery, automation and the expansion of facilities.

In line with the aims of the England Trees Action Plan and Government ambitions to treble tree planting rates by the end of this Parliament, the Tree Production Capital Grant will support efforts to build nursery capacity and grow long-term tree seed and sapling supply.

The grant will enable suppliers to boost production rates at pace and has been designed to complement the Tree Production Innovation Fund, which provides support for research projects that enhance UK tree production methods.

Successful projects will be awarded up to £175,000 in grant funding to cover up to 50% of costs, with money coming from the Tree Production Capital Grant as part of the Government’s £750 million Nature for Climate Fund. In comparison to the 2022 application process, the minimum grant value which can be applied for has reduced from £10,000 to £5,000, enhancing accessibility for smaller projects.

Examples of eligible projects include investments in seed trays, developments in machinery such as transplanting systems and grading machines, improved polytunnel infrastructure and irrigation systems, or in biosecurity through improved water treatment and refrigeration equipment. Applications are encouraged from tree seed and sapling suppliers of all sizes and sectors, as well as new entrants looking to diversify into the area.

See: Grant to boost domestic tree production re-opens - GOV.UK (www.gov.uk)

14th April 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
With increasing supplier prices and economic uncertainty, 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 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 - 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. Set credit limits and payment terms to ensure customers follow the rules or reward customer loyalty by offering early bird discounts. 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!  
 
Energy Bills Discount Scheme for non-domestic customers
The Energy Bills Discount Scheme runs for 12 months from 1 April 2023 to 31 March 2024.

This scheme replaces the Energy Bill Relief Scheme which supported businesses and organisations between 1 October 2022 and 31 March 2023. The scheme is made up of 3 different parts:

1. The baseline discount will provide some support with energy bills for eligible non-domestic customers in Great Britain and Northern Ireland – this support will be applied automatically.
2. The Energy and Trade Intensive Industries (ETII) discount will provide a higher level of support to businesses and organisations in eligible sectors – you will need to register to get this support.
3. The Heat Network discount will provide a higher level of support to heat networks with domestic end consumers – you need to register to get this support.

Most eligible non-domestic customers receiving the baseline discount should expect to see it in their May bill.
See: Energy Bills Discount Scheme - GOV.UK (www.gov.uk)
 
Rates and thresholds for employers 2023 to 2024
Employers should be aware that from April 2023 several statutory payment rates increase for the 2023-24 financial year.
Statutory Maternity, Paternity, Shared Parental and Adoption Pay

From Sunday 2 April 2023, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay, Statutory Adoption Pay and Statutory Bereavement Pay all increased from £156.66 to £172.48 per week.

Statutory Sick Pay
From Thursday 6 April 2023, Statutory Sick Pay increased from £99.35 to £109.40. The lower earnings limit remains at £123.

Statutory Redundancy Payment
From Thursday 6 April 2023, the Statutory Redundancy Payment was limited to £669 a week. The maximum Statutory Redundancy Payment payable is now £20,070.  

See: Rates and thresholds for employers 2023 to 2024 - GOV.UK (www.gov.uk)
 
New tools available to help SMEs tackle cyber security issues
The National Cyber Security Centre (NCSC) has launched new online tools for small organisations to help find and fix any cyber security issues.

The NCSC unveiled the services to coincide with the latest phase of its Cyber Aware campaign, which is aiming to raise awareness of cyber security among the UK's small businesses, organisations, and sole traders.

With official statistics showing more than a third of small businesses suffered a cyber-attack last year, the NCSC urged them to make use of their Cyber Action Plan and Check Your Cyber Security tools.

The Cyber Action Plan can be completed online in under five minutes and results in tailored advice for businesses on how they can improve their cyber security.

Check your Cyber Security – which is accessible via the Action Plan – can be used by any small organisation including schools and charities and enables non-tech users to identify and fix cyber security issues within their businesses.
Small businesses are a common target for cyber criminals, with the government's last cyber breaches survey revealing that 38% of the UK's small businesses suffered a cyber incident over a 12-month period.

The range of attacks can vary widely, from business email compromise to denial of service and ransomware attacks.

See: Introduction - NCSC.GOV.UK
 
UK joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
Last week, the UK government announced that the UK will join the Indo-Pacific trade block, the CPTPP.

The agreement follows two years of negotiations by the Department for Business and Trade and the UK is the first European member and first new member since CPTPP was created.  The CPTPP includes 11 Pacific nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The bloc is home to more 500 million people and will be worth 15% of global GDP once the UK joins. It is estimated that joining will boost the UK economy by £1.8 billion in the long run, with wages also forecast to rise by £800 million compared to 2019 levels.

Being part of CPTPP could support jobs and economic growth across the country. More than 99 percent of UK goods exports to CPTPP countries will now be eligible for zero tariffs, including UK exports such as cheese, cars, chocolate, machinery, gin, and whisky.

Total UK exports to CPTPP countries were already worth £60.5 billion in the 12 months to the end of September 2022 and are set to grow under CPTPP. The services industry will also benefit from reduced red tape and greater access to growing Pacific markets with an appetite for high-quality UK products and services.

See: UK strikes biggest trade deal since Brexit to join major free trade bloc in Indo-Pacific - GOV.UK (www.gov.uk)

Draft Code of Practice on dismissal and re-engagement
With a planned statutory code of practice, the UK Government aims to protect employees and crack down on employers that use controversial dismissal tactics.

The code, subject to a consultation first, will make it 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.

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.

See: Government cracks down on ‘fire and rehire’ practices - GOV.UK (www.gov.uk)
 
The Goldman Sachs 10,000 Small Businesses UK programme
The programme is designed to provide high-quality, practical education and business support to leaders of high-growth small businesses and social enterprises across the UK.

Participants of the programme will benefit from:

• specialist workshops,
• one-on-one business advising,
• business coaching,
• access to professional experts,
• networking opportunities, and
• a network of graduates.

The closing date for applications is spring 2023, interviews will be held summer 2023 and the programme will begin autumn 2023.

See: Goldman Sachs | United Kingdom
 
Changes to reporting material discrepancies to Companies House
From 1 April 2023, the way obliged entities can report a material discrepancy has changed.

An obliged entity is one which must carry out due diligence checks under anti-money laundering regulations. Obliged entities include, amongst others, financial and credit institutions, independent legal professionals, and estate agents.

Obliged entities carry out due diligence checks on companies under anti-money laundering regulations. They must report differences between the information they gather, and the information held at Companies House.

Specifically, obliged entities must report differences in information about:

• people with significant control (PSC) of a company,
• PSCs of a limited liability partnership (LLP),
• PSCs of an eligible Scottish partnership, and
• the registrable beneficial owner of an overseas entity (from 1 April 2023).

This difference is called a material discrepancy.

See: Changes to reporting material discrepancies to Companies House - GOV.UK (www.gov.uk)
 
Driver Certificate of Professional Competence (DCPC) changes
This consultation seeks views on proposed changes to the Driver Certificate of Professional Competence (DCPC). If these changes are implemented, they will only apply to drivers completing journeys within Great Britain, and Northern Ireland if authorities there agree, as DCPC is a devolved matter.

Drivers wishing to drive to, from, or within the EU will still need to comply with the existing requirements due to arrangements within the UK/EU Trade and Cooperation Agreement (TCA), as well as other relevant UK international obligations.

Proposed changes will therefore create 2 parallel qualifications for driving in GB and, potentially, NI:

• a national DCPC (N-DCPC) – the subject of this consultation, and
• an international DCPC (I-DCPC) – the existing TCA-compliant regime.

See: Driver Certificate of Professional Competence (DCPC) changes - GOV.UK (www.gov.uk)
 
Non-domestic rating list for England and Wales, 2023 Revaluation
The non-domestic rating list and official statistics have been published for the 2023 revaluation. 

The rating list sets out all rateable values for non-domestic properties in England and Wales. It is used by local authorities to help determine business rates. Note that your rateable value isn’t the same as your business rates bill. 

The official statistics for Revaluation 2023 have been updated. They show the changes in rateable values of all non-domestic properties since the last revaluation in 2017.

The publication of the 2023 non-domestic rating list means that the 2017 list has now closed. There are only limited circumstances in which changes may be made to your previous rateable value.  

Read more about the closure of the 2017 list.

You are now able to check the information used for your valuation in the 2023 list and tell the Valuation Office Agency (VOA) if anything is wrong. This is called a Check. 

You can also challenge your new rateable value if you think it is too high. 

See: 2023 rating list is now live - GOV.UK (www.gov.uk)
 
Changes to business rates rules for self-catering properties
From April 2023, new eligibility rules for business rates will apply to self-catering properties in England and Wales. If you don’t meet these rules, your property will become eligible for paying Council Tax. The rules will be used in assessments from 1 April 2023. Information about lettings during the 2022/23 operating year will be used to determine whether a property is eligible.

The new eligibility rules are different depending on whether your property is in England or Wales.

If your property is in England:
To continue to be eligible for business rates, from 1 April 2023 your property must be:

• available for letting commercially for short periods that total 140 nights or more in the previous and current year; and
• actually let commercially for 70 nights or more in the previous 12 months.

If your property is in Wales:
To continue to be eligible for business rates, from 1 April 2023 your property must be:

• available to let commercially for short periods that total 252 nights or more in the previous and current year; and
• actually let commercially for 182 nights or more in the previous 12 months.

The VOA looks at whether the property was occupied immediately before midnight to establish whether a property was let on a certain night.

For example, this means that a property let out from Friday evening to Sunday morning would have been let for two nights for the purposes of meeting the self-catering criteria.

See: Changes to business rates rules for self-catering properties - GOV.UK (www.gov.uk)

7th April 2023 – Hillmans Weekly Update

7th April 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!

Just a courtesy note that our office will be closed for the Easter weekend, closing at 5pm on Thursday 6th April and reopening at 9am on Tuesday 11th April. 

I hope you have a great Easter. 

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

Mitigating the long-term effect of inflation   
With continuing inflation in the UK, many of us and our businesses have been put “off track” in the short to medium term. The Bank of England recently increased interest rates by a quarter of a percentage point to 4.25 per cent, despite the turmoil that has engulfed banking in recent weeks. The rise was as expected by economists in view of the latest data showing inflation rising to 10.4 per cent in February and annual food prices spiralling to 15 per cent last month.

Andrew Bailey, the Bank of England governor, said last week that recent financial turmoil would not stand in the way of the central bank controlling inflation with higher interest rates. 

Inflation is a problem for most of us. Savers find that the value of their cash is being rapidly eroded. At 10% inflation, the £100 you save today will only buy £90 worth of goods in a year’s time. Many people find that their household budgets are stressed.

If you are struggling with your mortgage repayments and can’t get back on track, it’s important you don’t ignore the problem.
There’s a lot of help available. Money Helper has a 5-step guide and a budget planner to help manage your money. See:
Mortgage arrears or problems paying your mortgage | MoneyHelper

Even borrowers, who might be expected to benefit from inflation when the value of what they owe is falling, suffer when inflation triggers increases in interest rates.

So, what can you do to protect your long-term finances and combat inflation?

1. Protect your retirement income
Inflation has an enormous impact on how long retirement savings will last. The income that seems more than adequate when your start your golden years can look less than generous after 10 years of inflation, and a recipe for misery after 20.  A basic level annuity will mean having the buying power of your income eroded every year. An inflation-linked annuity will start off providing a much smaller income, but one that keeps increasing over time. A drawdown pension – where your pension pot remains invested, and you draw down an income as you need it - is more flexible, but you will still need to take care to avoid running out of cash.

2. Avoid locking your cash savings away
Savers should benefit when higher inflation leads to the Bank of England increasing the Bank Rate. But beware – although the rates offered by savings providers are rising, they have not yet done so enough to come anywhere near inflation.
However, with the Bank Rate forecast to rise further and with savings deals forecast to follow, there could be better deals to be had over the next few months. Shop around for the best deal – and avoid locking your savings into a long-term deal, because it could mean missing out on much better rates in the near future. 

3. Look at your investment strategy
In an inflationary world, investing – where your cash is used to buy something which could appreciate in price – could be more rewarding than saving.

While inflation erodes the value of cash savings, it actually works to boost the value of some investments. But how should you invest? Bond investment becomes less attractive in times of inflation, as the income provided by bonds is subject to inflation.
Investors can protect themselves by buying index-linked bonds, where the interest paid rises in line with inflation. Some business sectors will suffer during inflationary periods. Oil and mining companies can tend to do well as rising commodity prices are good for their bottom lines. Utility groups often pay dividends linked to inflation. However, inflation could be bad for others such as retailers and supermarkets, which may lack the ability to increase prices. Luxury goods may be shunned when households tighten their belts.

4. Secure a low-rate mortgage before rates rise
Inflation has already triggered rate rises, and mortgages are substantially more expensive than they were last year. This process could continue – the Bank of England has hinted as much. To avoid increasing interest costs which could mean that buying your home becomes difficult or even impossible, it makes sense to try and secure the lowest rate you can for your mortgage, fixed for the longest possible period.

5.  Get some expert help.
Managing money in inflationary times can be challenging – but the challenges can be much more manageable if you have an expert to call on, so talk to your financial adviser. If you don’t have one see: Choosing a financial adviser | MoneyHelper
 
UK and EU formally adopt the Windsor Framework
Last week, the Foreign Secretary, James Cleverly, and Vice President to the European Commission, Maroš Šefčovič, met to sign off the Windsor Framework at the Withdrawal Agreement Joint Committee in London.

The meeting follows the vote in the House of Commons, where MPs supported legislation on the Stormont Brake. The Brake introduces a democratic safeguard that will give Northern Ireland institutions, once restored, a role in the decision on whether significant new goods rules should apply in Northern Ireland.

The EU also formally agreed to the key elements of the Windsor Framework during a Council of the EU.

See: UK and EU to formally adopt the Windsor Framework - GOV.UK (www.gov.uk)
 
UK Employer taxes update – Online P11D reporting
As the new tax year approaches, we highlight some important employer developments and changes to legislation and allowances relating to UK employer taxes, especially about online P11D submissions.

Spring Budget 2023
On the 15 March, the Chancellor of the Exchequer, the Rt Hon Jeremy Hunt MP, made his Spring Budget announcements.
Headline tax measures announced include reforms to capital allowances, changes to the pension allowances and a series of rate changes.

Information on all the measures announced can be found in the Budget Red Book. You can also read an overview of tax legislation and rates announced.

Reporting expenses and benefits for the tax year ending 5 April 2023

For existing employers who already submit the original P11D and P11D(b) returns online, there is no change. For those remaining employers who have submitted paper returns in previous years, from 6 April 2023, they will need to submit their original P11D and P11D(b) returns online.

HMRC is changing legislation to mandate the submission of original P11D and P11D(b) returns online through one of the following:

• PAYE Online for Employers
• payroll software that is recognised by HMRC

HMRC will no longer accept paper P11D and P11D(b) forms. This includes lists. For employers who need to submit up to 500 P11D and P11D(b) returns, the free HMRC PAYE online services can be used. For anything more, 3rd party software is required.
HMRC will publish electronic versions of the P11D and P11D(b) forms on GOV.UK, which will enable employers and agents to submit amended forms electronically from 6 April 2023.

No software changes are required, as this electronic form is not part of the current online services.

Paper P11D and P11D(b) (original or amendment) forms submitted from 6 April 2023
If an employer submits a paper P11D or P11D(b) (original or amendment) from 6 April 2023 the form will be rejected on the basis that it has not be submitted to HMRC in the prescribed manner. The employer or agent will be notified of the rejection and sign-posted to the correct process.

Please talk to us about any of these changes to legislation and submitting your returns, we will be delighted to assist!
 
Extending the “Income tax cash basis” for the self-employed
This HM Revenue & Customs (HMRC) consultation seeks views and feedback on proposals to increase eligibility and use of the income tax cash basis for the self-employed. These proposals aim to increase the number of businesses able to benefit from the simplifications the regime offers, making the rules easier to apply and understand, and to help businesses spend less time filing their tax returns.

What is income tax cash basis?
The cash basis is a simplified regime for calculating taxable profits for businesses with straightforward tax affairs. The regime allows businesses to calculate their taxable profit as the difference between income and expenditure when money is actually received or paid out. This eliminates accounting and tax complexities such as accruals and most capital allowances and simplifies reporting.

There are four policy proposals
The consultation will focus on the four following policy proposals, but welcomes other ideas:

• increasing the turnover thresholds for businesses to use the cash basis;
• setting the cash basis as the default, with an opt-out for accruals;
• increasing the £500 limit on interest deductions in the cash basis; and
• relaxing restrictions on using relief for losses made in the cash basis.

Who should respond to this consultation?
HMRC would like to hear from businesses, particularly self-employed businesses that use or would be eligible for the cash basis, their advisers, representative bodies, software providers, and other interested parties.

See: Expanding the cash basis - 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 23 March 2023 to increase the Bank of England base rate to 4.25% from 4%.

HMRC interest rates are set in legislation and 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:

• 3 April 2023 for quarterly instalment payments, and
• 13 April 2023 for non-quarterly instalments 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%.

See: HMRC late payment interest rates to be revised after Bank of England increases base rate - GOV.UK (www.gov.uk)
 
Consumer warning on pre-paid probate plans
Pre-paid probate plans are unregulated in the UK. The Financial Conduct Authority (FCA) strongly advise that you consider carefully whether these products meet your needs and offer value before buying as there are no regulatory protections in place for you. 

In England, Wales and Northern Ireland, probate is the legal right to deal with someone’s property, money and possessions (their ‘estate’) when they die. It is usually required when the person who died owned property or significant assets in their own name.
The equivalent in Scotland is called Confirmation.

The FCA have seen increased marketing of pre-paid probate plans in recent months, including from firms and individuals associated with funeral plan firms that they did not authorise, and whose customers lost money when they collapsed. 

When designed and marketed appropriately, pre-paid probate plans could help people organise administration arrangements ahead of their death. But as the FCA do not regulate pre-paid probate firms, or the pre-payment of probate costs, there are no regulatory protections in place for you.

You should note in particular:

• Pre-paid probate plans are not protected by the Financial Services Compensation Scheme. This means that should the company fail, there is no guarantee that you will receive your money back.
• Commission is often included in the fee you pay. This increases the price of the plan. There is no commission ban on the sale of pre-paid probate plans (as there is for funeral plans).
• Your money may not be safe if the firm should fail as there are no rules requiring the money paid into plans to be held in trust or backed by insurance. 

See: Consumer warning on pre-paid probate plans | FCA
 
Bank Holiday Reminder - The Coronation of His Majesty The King
The UK Government has announced an additional bank holiday for 2023 in honour of the coronation of His Majesty King Charles III. The bank holiday will fall on Monday 8 May following the coronation on Saturday 6 May.

See: Coronation of His Majesty The King & Her Majesty The Queen Consort