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!
Have a great weekend.Kind regards,
Steve
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk
HMRC Annual Report shows some important trends for business owners
HMRC’s annual report was published last week,
and it shows that they failed to meet many of their key customer services
measures in 2022-23. Customer satisfaction dropped to 79% from 82% last year
and telephone performance has also declined with an average wait of 16 minutes
to get through to an adviser. 63% of callers waited more than 10 minutes, with
an average wait-time of over 20 minutes in January to March 2023. To their
credit, HMRC have improved their correspondence reply time to 73% cleared
within 15 days from 46% in 2021-22.
HMRC thinks the solution lies in the use of online
services by taxpayers and wants to reduce the volume of contact by telephone
and post by 30% before 2025. However, given HMRC’s past record on missing its
technology deadlines, this is probably unlikely without further resources being
made available. Long wait times for taxpayers look likely to continue.
The report highlighted that HMRC have
maintained a long-term reduction in the UK’s tax gap (the difference between
the amount of tax that should, in theory, be paid to HMRC and what is actually collected) from
7.5% of total theoretical tax liabilities in 2005 to 2006, to 4.8% in 2021 to
2022.
To ensure everyone pays the “right” tax, HMRC
have a compliance strategy with 3 elements: preventing non-compliance,
promoting good compliance, and being robust in their response to those who bend
or break the rules. In 2022-23 HMRC delivered £34 billion of compliance yield –
the term for money that would have been lost to the Exchequer if not for HMRC
compliance work. While it’s lower than they aimed for this year, it’s higher
than the 2 previous financial years.
In the last fifteen years, in the wake of the
“Crash” of 2008, the subsequent recession and the Pandemic, the UK National
Debt has risen to the worrying level of 101.7 percent of Gross Domestic
Product. HMRC have been tasked with increasing their efforts to help with this
by recovering as much tax as possible and closing the tax gap even further.
We are seeing HMRC putting increasing
resources into tax investigations, following the investment into their IT
infrastructure and employee numbers – HMRC have been known to launch
investigations into individuals and businesses that leads to little to no tax
being recovered, following investigation. Some recent statistics have revealed
that 2 in 5 taxpayers who were investigated paid no additional tax even though
they had to go through the trauma of an HMRC tax investigation.
It’s a situation faced by thousands of UK
businesses each year, one which has stepped up following the Pandemic as HMRC
seeks to crack down on fraudulent claims for financial support. This has led to
a growing number of UK businesses being randomly selected for investigation,
with even sole traders finding their accounts subject to scrutiny.
Many of our clients protect themselves from
the costs of an HMRC investigation with Fee Protection insurance. Tax fee
protection insurance can save you from the unexpected costs of having your
business accounts investigated. HMRC investigations can run into thousands of
pounds in costs – hundreds of thousands in some cases. Having fee protection in
place gives you the reassurance that your accountant’s costs in dealing with
the investigation will be covered.
If you are not covered, then talk
to us about our comprehensive fee protection insurance and expert advice.
See: HMRC's annual report and accounts 2022 to 2023: performance overview - GOV.UK (www.gov.uk)
The trade digitalisation act
The electronic trade documents act received
Royal Assent last week granting electronic trade documents the same legal
status as physical trade documents, hopefully making trade more efficient,
cleaner, and cheaper for firms.
Existing laws dating back to the 1800s
previously meant that exporters and importers have to use paper documents to
transfer ownership of the goods they are shipping – creating a costly,
inefficient and outdated way of working.
UK businesses, both big and small, have been
calling for paperless trades for decades, especially as the development of
electronic document technologies has become increasingly feasible for the
industry. With less chance of sensitive paper documents being lost, and
stronger safeguards through the use of technology, digitalising trade documents
could give businesses that trade internationally greater security and peace of
mind.
The UK government estimates that the new law
could generate a net benefit of £1.14 billion for the British economy over the
next decade for UK businesses trading across the world.
Takeaway and Restaurant Innovation Expo 2023
From mobile payments and delivery to
sustainability and food waste, the Restaurant and Takeaway Innovation Expo
brings the whole restaurant industry together!
This is an opportunity to interact and
connect with the industry’s visionaries who are shaping the takeaway and
restaurant scene of the future. Find out how to boost your profits, build your
brand and grow your business.
The event takes place on 10 and 11 October
2023 at the ExCel London.
See: Home - Restaurant & Takeaway Innovation Expo
(takeawayexpo.co.uk)
ETIAS - entering EU countries
The European Travel Information and
Authorisation System (ETIAS) is set to be introduced in 2024 after initially
being planned for 2022. The delay was thought to be because of needing to
update travel infrastructures and the onset of the COVID pandemic.
UK travellers will need an ETIAS for most EU
countries. Travel permits will be available to buy online when the scheme
launches and will cost around €7 (£6) for people over 18. Travellers under 18
or over 70 will receive their ETIAS free of charge.
ETIAS will be used to keep track of visitors
from countries who do not need a visa to enter the Schengen Zone, and to
enhance border security.
It is designed for short-term stays of 90
days or less, and includes travel for business, pleasure, medical reasons, or
if you are transiting through the EU to a further destination.
You could be denied an ETIAS if you give the
wrong information online, are a convicted criminal or are on a travel watch
list.
You will need to present the document on
arrival at your travel destination and could be refused to fly or denied entry
into the EU without one.
Similar to a US ESTA, it is expected to be
processed and approved within minutes. It will also be valid for three years
from the date of issue, making it easier for future travel.
The European countries that will require a
valid ETIAS upon arrival at their borders include Austria, Belgium, Bulgaria,
Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta,
the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden, and Switzerland.
See: ETIAS - European Travel Information and Authorisation
System (schengenvisainfo.com)
Innovation Loans Future Economy
competition - round 10
UK registered businesses can apply for loans
for innovative projects with strong commercial potential to significantly
improve the UK economy.
Innovate UK is offering up to £25 million in
loans to micro, small, and medium-sized enterprises (SMEs). Loans are for
highly innovative late-stage research and development (R&D) projects with
the best potential for the future. There should be a clear route to
commercialisation and economic impact.
Your project must lead to new products,
processes or services that are significantly ahead of others currently
available or propose an innovative use of existing products, processes, or
services. It can also involve a new or innovative business model.
Innovate UK is particularly interested in
projects that focus on the future economy areas included in the Innovate UK plan for action.
You must be able to show that you:
- need public funding,
- can cover interest payments, and
- will be able to repay the loan on time.
The funding available will be allocated
across a series of competitions:
- round 10 - opened 15 July 2023,
- round 11 - opens 14 September 2023, and
- round 12 – opens 9 November 2023.
UK announces further support to seafarers’ rights and welfare
More seafarers will be guaranteed fair wages,
proper rest periods and suitable training from a new Seafarers’ Charter launched by the UK government last week.
Building on government action already taken,
the charter – backed by DFDS Ferries, Condor Ferries, Brittany Ferries and
Stena – is part of the government’s wider Nine-point plan to protect seafarers and boost employment protections,
ensuring they’re paid and treated fairly – irrespective of flag or nationality.
This is at the heart of the UK’s response to
P&O Ferries’ decision to fire nearly 800 of its staff without consultation
or notice last year.
The UK government’s charter will be launched
alongside a similar initiative by the French government during a visit by
Maritime Minister Baroness Vere to Paris today to meet her counterpart,
Minister Berville.
See: UK announces historic boost to seafarers’ rights and
welfare - GOV.UK (www.gov.uk)
Travel update for families entering the UK border this summer
This summer more families arriving into the
UK will benefit from quicker entry to the UK using eGates, thanks to an
expansion of the service to 10 and 11 year olds.
Following successful trials across major
ports including Gatwick, Stansted, and Heathrow Airports this spring, from
Monday 24 July 2023, more families returning and eligible visitors to the UK
over the school summer holiday will now benefit from the use of eGates as a
faster way to travel through the UK border, with a recent YouGov poll showing
that 42% of the UK public plan to jet abroad over the summer.
With passenger volumes expected to return to
2019 levels this summer – and some ports exceeding those volumes – Border Force
expects to see over 34 million air arrivals coming through UK passport control
over the coming months.
This new eGate change is expected to benefit
thousands of families this summer, with over 400,000 children aged 10 and 11
years old projected to use eGates this year.
See: Smoother travel for families through the UK border this
summer - GOV.UK (www.gov.uk)
Government clamps down on unfair
bank account closures
Banks will be forced to explain and delay any
decision to close an account under new rules, protecting freedom of expression.
The government has stepped in to address
fears that banks are terminating accounts because they disagree with someone’s
political beliefs.
The changes will increase the notice period
to 90 days – giving customers more time to challenge a decision through the
Financial Ombudsman Service or find a replacement bank.
Banks will also be required to spell out why
they are terminating a bank account – boosting transparency for customers and
aiding their efforts to overturn decisions.
The changes were announced last week.
See: Government clamps down on unfair bank account closures -
GOV.UK (www.gov.uk)
Acas Consultation – Code of
Practice on handling requests for flexible working
Acas is updating its statutory Code of
Practice on handling requests for flexible working, to reflect the anticipated
reforms to legislation, significant shift in flexible working in the workplace
and changing views since their existing Code was published in 2014. Their
non-statutory guidance will also be updated, which sits alongside the Code.
The aim of the Code is to provide employers,
employees, and representatives with a clear explanation of the law on the
statutory right to request flexible working, alongside good practice advice on
handling requests in a reasonable manner.
Contributions are welcome from all interested
individuals and organisations. This includes employers, employees, trade unions,
business representative groups, legal representatives, and any other
organisations or individuals with an interest in flexible working practices and
good employment relations.
The consultation closes on 6 September 2023.
See: Acas consultation on the draft Code of Practice on
handling requests for flexible working | Acas
Training providers across England
can bid for a share of £8.85 million government funding to offer courses in
retrofitting and installing insulation
Thousands of people are to be equipped with
the right skills to make homes more energy efficient, as training courses will
be rolled out across the country.
Training providers, such as colleges and
accreditation providers, will be able to bid for a share of £8.85 million to
help up to 8,000 people – whether current installers or those new to the
industry – develop the skills and expertise needed to retrofit homes with
energy saving measures.
The courses will be free or provided at low
cost and will cover a range of key energy efficiency measures, from putting in
loft insulation to draft proofing measures. This will not only help drive
household energy bills down and reduce emissions but represents key employment
opportunities for people to stay in and progress in work.
Training providers will have until 25 August
2023 to apply for the funding to deliver the courses, with training places
expected to open later this year.
See: Thousands to be trained to boost energy efficiency in
homes across the country - GOV.UK (www.gov.uk)
Social Investment - Growth Impact
Fund
The Growth Impact Fund provides social
investment for early stage, growing social businesses that are:
- led by diverse leaders and teams;
- looking to grow their trading income; and
- looking to help tackle inequality.
The Fund was developed by Big Issue Invest
and UnLtd with support from Shift, who are all committed to tackling the
structural barriers within social investment and offers between £50,000 and
£1,500,000 of investment.
There are three flexible investment types
aimed to meet your needs:
- Equity - Shares in your organisation;
- Revenue Share - Repayments based on your
organisation's revenue performance; and
- Patient Debt - Regular repayments set at an agreed
interest rate over several years.
See: Growth Impact Fund - Investing for impact. Made for
diverse-led organisations
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