26th January 2024 – Hillmans Weekly Update

Welcome to our latest 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

Mastering Cash Flow Forecasting
In the dynamic world of managing a business, one of the most critical elements to success is effective cash flow management. Cash flow forecasting is a fundamental tool for business owners to navigate financial challenges and ensure sustained growth.

In this article, we will delve into the importance of cash flow forecasting and talk about what is needed to master this essential financial practice.

Understanding Cash Flow Forecasting
Cash flow forecasting involves projecting future cash inflows and outflows to determine the financial health of a business. By anticipating cash needs and planning accordingly, you can make informed decisions that will help your business avoid potential pitfalls and enable the business to make the best of opportunities.

Why is Cash Flow Forecasting Crucial for Businesses?

1. Anticipating and Preventing Shortfalls: Unforeseen expenses or delays in receiving payment are a normal part of business and make it imperative to predict potential cash shortages. A cash flow forecast allows business owners to identify and address issues before they escalate, ensuring that there is always enough cash available to cover essential expenses. 
2. Strategic Decision-Making: Cash flow forecasts serve as invaluable tools for strategic decision-making. Whether planning an expansion, investing in new equipment, or hiring additional staff, having a clear understanding of the business's financial position enables you to make informed choices that align with your growth objectives. 
3. Building Credibility with Stakeholders: Lenders, investors, and suppliers are more likely to engage with businesses that demonstrate financial stability. Accurate cash flow forecasts instill confidence in them that your business is well managed. They also provide a way for you to communicate and provide reassurance on your business's financial plans.

Steps to Master Cash Flow Forecasting:

1. Gather Historical Data: Begin by collecting historical financial data, such as income statements and balance sheets. This information serves as a foundation for predicting future cash flows. 
2. Identify Income Sources: List all potential sources of income, such as sales, loans, or investments. Estimate the timing and amounts of these income sources. Be realistic rather than optimistic in your estimating. Consider too whether the income will repeat regularly or not. 
3. Track Fixed and Variable Expenses: List all expenses and split them between those that are fixed and those that are variable. Fixed costs are those that remain constant, such as rent and utilities. Variable costs on the other hand will fluctuate, for example, raw materials or staff costs. Estimate the amount of these costs. The temptation can be to minimise the amount of these expenses, but again, be realistic in your estimating. 
4. Consider Seasonal Trends: If applicable, account for seasonal fluctuations in your business. Adjust your forecast to reflect periods of increased or decreased demand. This will help you ensure your business can navigate both peak and off-peak seasons. 
5. Account for Contingencies: Factor in unexpected events. It is not possible to plan for every possible scenario, and considering too many possible negative factors can discourage you from taking any positive steps. The point is just to build some contingencies into your forecast so that you have a buffer against unforeseen challenges. 
6. Update Regularly: A static cash flow forecast becomes obsolete quickly. Regularly update your projections based on actual performance. This allows you to refine your forecasting techniques and adapt to any changes. 
7. Use Technology: Use your accounting software and financial tools to streamline the cash flow forecasting process. These tools can automate data entry, track expenses, and generate accurate forecasts, saving you time and reducing the margin of error.

In conclusion, cash flow forecasting is indispensable for business owners. Clearly understanding the cash position of your business and accurately projecting future cashflow will give you greater confidence. A robust cash flow forecasting system empowers you to make informed decisions, build credibility with stakeholders, and ensure long-term financial stability.

Please talk to us if you would like any help in this area. We have tools and resources that can help you with your cashflow forecasting and we would be happy to help!
 
UK businesses to save time and money on cross-border legal disputes
Lord Bellamy, representing the UK, has now signed the 2019 Hague Convention, which the UK originally committed to joining in November 2023. Once ratified there is a wait of 12 months for the Convention to come into force in the UK, but at that point, it will apply to any judgments commenced after that date.

The Hague Convention is a private law convention that sets out common rules to recognise and enforce foreign judgments in civil and commercial cases between the signatory states of the Convention. For instance, a judgment made by a court in the UK about a company will be recognised and enforced by the court of another nation that has signed up to the treaty.

Businesses that trade internationally with businesses in other countries that have signed up to the Convention will benefit from this treaty. They will have greater certainty when dealing with litigation on contracts for international business and will save time and money if they need to enforce a judgment in another country.

Lord Bellamy, the Justice Minister, said: "Joining the Hague Convention marks a significant step forward for the UK within private international law and strengthens our appeal to businesses as a centre for dispute resolution. 

"The robust and reliable regime the Convention offers for the recognition and enforcement of judgments will provide confidence to people and businesses who are involved in civil and commercial disputes as they live, work and do business across borders."

Currently, there are 29 parties to the Hague Convention - the 27 EU Member States, the EU and Ukraine. Uruguay also joins from 1 October 2024. Israel, Costa Rica, the Russian Federation, and the United States have also signed the Convention and, like the UK, await ratification before joining.
See: https://www.gov.uk/government/news/uk-citizens-and-businesses-to-be-spared-time-and-money-on-cross-border-legal-disputes?
 
Financial fiasco: Company director given six-year ban after failing to explain spending of £3.5 million
Mr Shakar Habib, director at Vista Training Solutions Limited, has been given a six-year ban following the discovery of significant financial irregularities.

The company, in collaboration with other partner organisations, worked to help students find apprenticeships across London and received most of its funding from the Education and Skills Funding Agency (ESFA). Mr Habib served as sole director of the company from November 2015 through to the company's abrupt liquidation in February 2020.

The company liquidated with a debt due to ESFA of more than £2.5 million. A subsequent investigation, jointly conducted by the Insolvency Service and ESFA, found that Mr Habib was unable to account for a staggering £3.5 million from the company's accounts.

Investigators found that Mr Habib had not kept adequate company accounts, and records from April 2019 onwards were missing altogether. This meant that it was impossible to verify whether or not the £3.5 million were legitimate expenses of the company.
In addition, because there were no financial records, the investigators could not account for £525,000 in assets. Work is continuing to see whether it is possible to recover any of the money.

Mr Habib's ban prevents him from promoting, forming, or managing a company without the court's permission.

Of course, it is difficult to imagine that these financial irregularities were just the result of poor record keeping. However, it is a good reminder that directors have a legal obligation to keep proper accounting records. If you are finding it a challenge to keep your accounts up to date, why not give us a call and see how we can help?

See: https://www.gov.uk/government/news/six-year-ban-for-boss-of-collapsed-training-company-who-failed-to-explain-35-million-spending?
 
Nuclear power to expand in the UK
The UK government has announced plans for expanding nuclear power in the UK. The Civil Nuclear Roadmap sets out how the UK will increase generation of nuclear-powered electricity so that by 2050 it is enough to provide a quarter of the UK's electricity needs.

Prompted by price volatility, increasing uncertainty abroad, and environmental concerns, the roadmap will help to continue the UK's efforts to have a more secure electricity supply and meet carbon neutral targets.

The roadmap acknowledges that investment in nuclear energy has fallen back in recent decades but commits to reverse this trend.
Besides the projects currently being developed at Hinkley Point and Sizewell, there are plans to explore a further large-scale reactor project.

There are also plans to deploy Small Modular Reactors (SMR). These are reactors that are smaller and can be manufactured in factories rather than on-site - as is currently the case with Large-Scale Nuclear Reactors such as Hinkley Point and Sizewell. It is hoped that these will make construction faster and less expensive.

Investment is also planned in research and development on more efficient means of producing nuclear power, as well as producing nuclear fuel for use in the UK and sale overseas.

These ambitious plans will create opportunities for businesses and developers that are in or linked to the Civil Nuclear industry.

See: https://assets.publishing.service.gov.uk/media/659fb2783308d200131fbe17/6.8610_DESNZ_Civil_Nuclear_Roadmap_report.pdf

HMRC approve tax bill payment plans for 44,800 taxpayers
HM Revenue and Customs (HMRC) have announced that nearly 44,800 people have sorted their upcoming 31 January tax bill by setting up a payment plan.

HMRC provide the option of a monthly payment called Time to Pay (see link below). Provided taxpayers owe less than £30,000, they can use HMRC's affordability checker for help to decide on what arrangement will work best for them.

This arrangement must be set up before 31 January to avoid facing a penalty. Interest will be applied to any outstanding balances from 1 February.
If you need help working out how to make your tax payment or to set up a payment arrangement, please call us and we will be happy to help!

See: https://www.gov.uk/difficulties-paying-hmrc/pay-in-instalments
 
Post Office Horizon scandal: A stark reminder to prioritise people over systems
The recent Post Office Horizon scandal, given further exposure by the related TV drama, provides a cautionary tale about the perils of overlooking the human impact of technology decisions.

The Post Office's Horizon accounting system erroneously implicated postmasters in financial irregularities and led to severe consequences, including loss of reputation and even imprisonment, for innocent individuals.

These mistakes have underscored the importance of emphasising the human element in decision-making processes and the danger of relying too heavily on technology. This is a particularly pertinent reminder in view of the increased use of AI in business processes.

For business owners keen to avoid a similar pitfall, it would be prudent to give adequate thought to key questions such as:

• What safeguards and oversight mechanisms do we have in place to prevent unintended consequences that could harm individuals or communities? 
• Before implementing new technologies or systems, have we done thorough due diligence to assess the potential consequences on individuals, customers, and employees? 
• Do we conduct a reasonableness check before accepting a conclusion direct from a technology source? 
• Are we so reliant on technology that we would not be able to tell whether a mistake has been made?

Looking at the ramifications and costs of the scandal, placing people at the forefront of decision-making processes is not just ethically sound but could be vital for the ongoing success and sustainability of the business.
 
CMA publishes provisional approach to implementing the new Digital Markets competition regime
The Competition and Markets Authority (CMA) has published an overview of its provisional approach to implementing the new Digital Markets competition regime.

UK parliament is currently considering the Digital Markets, Competition and Consumers Bill (the DMCC Bill). This legislation is designed to tackle the problem of many digital services across digital markets being provided by the same small number of tech firms and recognising that current anti-competition legislation does not adequately cater for digital markets.

The overview sets out how the CMA plan to apply the legislation. They are committed to using a targeted, evidence-based, and proportionate approach, but it is clear that they are keen to make use of the legislation to level the competition playing field. They already plan to start 3 to 4 investigations within the first year, looking at whether the business concerned has Strategic Market Status in relation to one or more digital activities.

Where the CMA detects that a business is leveraging its status for an unfair competitive edge, it will take action to address this behaviour. This may include imposing conduct requirements.

Examples of these requirements might include prohibiting the business from giving preferential treatment to their own products and services, allowing interoperability of products and services from other businesses with their own offerings, or compelling them to enhance transparency around certain aspects of their algorithms.

If approved, the new digital markets competition regime will help tech challenger businesses compete and help all - businesses and consumers alike - to be more confident of getting great choices and fair deals when buying digital services.

See: https://www.gov.uk/government/publications/overview-of-the-cmas-provisional-approach-to-implement-the-new-digital-markets-competition-regime
 
Inflation up but interest rate cuts still expected
Inflation figures for December show a small increase to 4% from 3.9% in November.

Economists had expected inflation to fall slightly, but a 12.9% increase in prices for alcohol and tobacco were behind the rise.

Expectations for the Bank of England to cut the base rate later in the year remain though. Energy bills are predicted to drop in 2024 and inflation has fallen from its peak of 11.1% in October 2022 more quickly than the Bank predicted.

The Bank's target is 2%, so December's inflation figure of 4% is still double the target.

Deputy chief UK economist at Capital Economics, Ruth Gregory, has been quoted as saying that she expects inflation to have fallen below 2% by April and feels that interest rates could be cut by June.

The Bank of England's base rate is currently 5.25%.

See: https://www.bbc.co.uk/news/business-67993276
 
Consultation on proposals for a new threshold for businesses to be able to access the Energy Ombudsman
A UK government consultation is in process looking at introducing a new threshold for bringing cases to the Energy Ombudsman that will include small businesses.

Currently, most small businesses that have a dispute with their energy supplier are unable to access the Energy Ombudsman for help with dispute
resolution.

The consultation proposes that there be a new small business definition that will expand access to businesses with:

• up to 50 employees; and
• less than £6.5 million annual turnover or £5 million balance sheet total; or
• annual electricity consumption of less than 500,000kWh; or
• annual gas consumption of less than 500,000kWh

The consultation proposals and details for how to respond are available at: https://www.gov.uk/government/consultations/new-threshold-for-businesses-accessing-the-energy-ombudsman
 
Changes to import procedures for Irish goods from 31 January
The Border Target Operating Model sets out the UK's final plans for a new approach to importing goods into Great Britain. The changes will be introduced progressively from 31 January 2024.

Where goods are being imported directly from Ireland (and not being moved from or through Northern Ireland), there will be new checks and controls in place. This will apply, for instance, to goods being moved from Dublin and Rosslare ports to Liverpool and Holyhead ports.

New biosecurity and security controls are being introduced from the end of January for all imported goods. However, full customs controls are being brought in for Irish goods being imported directly from this date too. This is a change to current arrangements.

When moving these goods, it will generally be necessary to make import customs declarations at the point of import. Ports will not release goods unless they have received customs clearance.

Where these regulations apply to your business, it is important that you or your staff know what to do from 31 January 2024.

See: https://www.gov.uk/government/publications/the-border-target-operating-model-august-2023?&utm_source=te&utm_medium=stk_email&utm_campaign=northern_ireland&utm_content=07_11_2023

19th January 2024 – Hillmans Weekly Update

Welcome to our latest 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

Adapting to Change: Essential Strategies for Business Success
With all the changeable weather we have been having recently we hope you have been able to stay dry and warm!

Change is not only confined to the weather, but it is also an inevitable facet of the business landscape. Whether prompted by technological advancements, market fluctuations, or internal restructuring, the ability to manage and navigate change effectively is crucial for sustained success. Businesses that embrace change as an opportunity rather than a threat are better positioned to thrive in today's dynamic environments.

What can help us to adapt to change successfully?

Understanding the Need for Change:
The first step in managing change is acknowledging the need for it. Recognise the factors driving change - be they evolving consumer preferences, disruptive technologies, or competitive pressures. A thorough understanding of what is causing the change enables businesses to develop a proactive approach that may even be able to control the effects of the change, rather than simply reacting, which often means acting too late.

Effective Communication:
Communication lies at the heart of successful change management. Transparent and open communication help to convey the reasons behind change, its potential impact, and the vision for the path forward. Engage with your employees, stakeholders, and partners, fostering a culture where ideas, concerns, and feedback are valued.

Leadership and Vision:
Strong leadership is pivotal during times of change. Leaders need to articulate a compelling vision that inspires and motivates the workforce. A clear direction provides a sense of purpose and will help guide everyone through the transition so that everyone’s efforts stay aligned with the end goals.

Embrace Flexibility and Adaptability:
Flexibility is key in adapting to change. Businesses must be prepared to pivot, adjust strategies, and adopt new approaches as circumstances evolve. An agile, flexible mindset allows a business to respond quickly to challenges and opportunities.

Empower and Involve Employees:
Involve your employees in the change process. Invite their input, involve them in decision-making, and provide training and skill development opportunities so that they are equipped for what the changes will bring. Empowered employees become advocates of the change you want and will help to drive implementation from within.

Manage Resistance Effectively:
Resistance to change is natural, so it is important to acknowledge concerns and address them sympathetically. Encourage open discussion, providing support where necessary. Offer clarity on how the change will benefit individuals and the business as a whole. If you can address resistance early, you can prevent it from becoming a roadblock.

Evaluate and Learn:
It is crucial to continuously evaluate and learn throughout the change process. Monitor progress, gather feedback, and be willing to make adjustments as necessary. Avoid viewing setbacks as failures; instead see them as an opportunity to learn lessons that will help you in the future.

Celebrate Milestones:
Recognize and celebrate achievements and milestones reached during the change journey. This promotes a sense of accomplishment, boosts morale, and reinforces the positive aspects of change, motivating individuals for future endeavours.

In conclusion, managing change in business is not just about navigating through it, but rather it can be embraced as an opportunity for your business to grow and innovate. Your successfully managing change not only ensures resilience but positions your business for sustained success in an ever-evolving marketplace.

We have useful tools and checklists to help you assess your systems and manage change. Please talk to us about how we can help you to continue making your business a success!
 
Holiday pay and entitlement reforms
Coming into force from 1 January 2024, the Working Time Regulations, as amended by The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, introduced reforms that simplify holiday pay and entitlements.

Following Brexit, any European laws that were retained in the UK automatically expired on December 31 unless legislation was brought in to keep them.
The Employment Rights Regulations 2023 do just that and are applicable across the UK. As well as reinstating some EU laws, these regulations make several changes to existing laws.

These reforms include changes that affect rates of holiday pay and annual leave. They also cover handling irregular hours and part-year workers, accrual of COVID-19 carryover of leave, and rolled-up holiday pay.

Holiday entitlement
The Regulations define what an irregular hours or part-year worker is and makes changes for how their holiday entitlement for holiday years beginning 1 April 2024 and onwards are accrued.

Employers will need to calculate holiday entitlement for such workers at 12.07% of the hours worked in any pay period. This does not apply to the calculations for regular hours workers.

Holiday pay
The Regulations specify that all full-year workers are legally entitled to 5.6 weeks of paid statutory holiday entitlement per year. These are split into two pots.

• Four weeks - the original EU leave entitlement - must be paid at the employee's 'normal' rate of pay and the regulations now specify that this includes overtime pay, commission and allowances.
• The remaining 1.6 weeks - an addition made by the UK - only have to be paid at the employee's 'basic' rate of pay.

The government has produced guidance containing examples and calculation methods based on the legal minimums set out in the Regulations.

Of course, many workers have contracts that entitle them to holiday that exceeds the statutory minimum. Or the changes may make the standard holiday clauses used in an employer’s employment contract no longer legal. Businesses are therefore encouraged to first check individual employment contracts, and if necessary, seek independent legal advice.

If you need any help with running your payroll, please get in touch with us. We will be very happy to help you!

See the guidance here: https://www.gov.uk/government/publications/simplifying-holiday-entitlement-and-holiday-pay-calculations/holiday-pay-and-entitlement-reforms-from-1-january-2024
 
Self Assessment tax return and payment of tax bill due by 31 January 2024
The deadline for filing Self Assessment tax returns and paying tax bills for the 2022/23 tax year is Wednesday 31 January 2024 at 11:59pm.

HM Revenue and Customs is encouraging taxpayers to get their tax return filed as early as possible so that they can know how much tax they owe and be ready to make the payment by 31 January.

Support is available for taxpayers that are unable to pay in full. However, failing to file and pay tax by the deadline will result in penalties and interest.

If you need any help with filing your Self Assessment tax return, please call us and we will be happy to help!
 
Pilot project to help directors deal with cyber security risk
Arculus Ltd, a cyber security consultancy, has been tasked by the UK government to lead a pilot project that is aimed at helping directors of UK organisations in managing their cyber security risks.

The government are looking to improve the cyber resilience of organisations and this project will help inform policy that can help with this.

Arculus is actively seeking participants from organisations of all sizes and sectors. They are looking for directors, non-executive directors, and senior leaders who are responsible for managing cyber security risks in their organisations. This could include heads of departments, business owners, or charity trustees.

What will be involved?
Participants will be asked to implement suggested cyber governance principles within their organisation and then share their feedback based on their experiences.

A non-technical questionnaire will need to be completed at the start of the project, and then again at the end. There will be multiple online sessions for
feedback discussions.

The government and Articulus have reassured participants that their involvement is entirely confidential and voluntary, and no specific IT knowledge or technical expertise is needed.

The project is scheduled to run from early January to early March 2024. A detailed report on the findings will be publicly released on gov.uk, however any participating organisations will remain anonymous on the report.

For inquiries or to register interest in participating, email: copresearch@dsit.gov.uk

See: https://www.gov.uk/government/publications/uk-cyber-governance-project?utm_source=pocket_saves
 
Make your wellbeing a priority in 2024
Many of us make resolutions in January to try and reduce work-related stress and improve our wellbeing. But they can quickly fall by the wayside once we get back into the swing of work and running our business.

Are there any simple practical steps you could take to improve your wellbeing and that of your staff in 2024?

1. Set boundaries
Technology has brought many gains in productivity and efficiency, but it has also meant that we are more connected to work than ever. Being constantly available can make it difficult to switch off and may lead to feelings of burnout.

Setting boundaries so that work doesn't invade your home life can give you proper rest and help you to feel more energised. Exactly where those boundaries lie is likely to be unique to you, so the important thing is to decide what is right for you and then communicate that to others.

Why not try:

• Using your status message on Teams, or 'out of office,' to show when you are or aren't available?
• Having separate communication methods - email address or messaging apps - for your work and private life?
• If you work from home, creating a workspace environment where you can shut the door at the end of the day and finish work?
• Scheduling down time and treating that time as important and urgent as any work appointment?

2. Stay connected
We can feel that a situation we are going through or an experience we have had is unique to us. However, this is rarely the case. Often there are others in our network, whether professional or personal, who have undergone or are undergoing something similar. Tapping into this resource can help us to find successful coping strategies.

Therefore, rather than isolating and trying to work even harder when under stress, why not try reaching out to others?

Could you regularly take some time out for a coffee or lunch with someone you have not seen for a while? Do you belong to (or could you join) a professional organisation that has networking opportunities?

Building up in-person connections can help you to gain a greater sense of community and a feeling of being connected that will make a huge difference to your wellbeing.

3. Give back
Giving not only benefits the recipient, but also has considerable effects on the wellbeing of the giver.

Work can provide many opportunities for giving back. Why not try:

• Offering to help a colleague or business contact with something?
• Making a coffee for colleagues?
• Giving a card or small gift to a colleague who has been through a life event?
• Volunteering to mentor or coach someone, whether in the workplace or via a voluntary role in a membership organisation you belong to?

Caring for wellbeing is a constant balancing act, but setting boundaries that allow you to get proper rest, staying connected with others, and finding opportunities to give back can all help!
 
Great Taste Awards - Entries open in January 2024
For food or drink producers, the Guild of Fine Food's Great Taste awards can be an excellent way to promote products and get them noticed by more consumers. Entries for the 2024 awards have now started.

According to the Guild, winning a Great Taste award encourages confidence and commercial success for small businesses, as well as motivating your team and generating greater awareness for products. Entering also provides an opportunity to get cost-effective feedback from industry experts since each entry will be given constructive feedback, regardless of whether the produce gets an award.

A panel of over 500 experts will be used to test food or drink who then issue a star rating. 1, 2, and 3-star winners can then use branded labels, bunting, and aprons to promote their products. Logo artwork and certificates are also available. The Guild will also help with finding potential UK stockists.

Guild members have a fortnight head start on entry and a lower entry cost during 8 - 22 January. General entry opens on 22 January 2024 and closes on 6 February 2024.

Judging will take place during March to June 2024 with results being announced and feedback given on 30 July 2024.

To find out more and enter please see: https://gff.co.uk/for-producers/great-taste/
 
Discover Digital Transformation – A free online training programme
Innovate UK BridgeAI is funding an online training course to help businesses and organisations explore digital, data-driven and AI technologies.

The training course is designed with decision-makers in mind, in businesses and organisations of any size in agriculture, creative industries, construction, and transportation. It will help you decide what your organisation needs and put together an action plan for making your business digital ready.

This introductory-level series will explain why and how to implement AI to best benefit your business.

There are five sessions that can be taken individually or as a series. The sessions include:

• Making data work for you
• AI applications in industry
• Modelling: A fundamental capability
• Why digital twins?
• Scalable platforms supporting digital transformation

The 5 sessions are first being run in a weekly series starting Wednesday 24 January 2024. A second series begins on Tuesday 2 April 2024, with a third series commencing Wednesday 18 September 2024.

The training programme is free and you can register on this page: https://iuk.ktn-uk.org/opportunities/discover-digital-transformation-training-programme/?dm_i=2VFU,1FVAJ,8U1M3N,5PJA3,1
 
Second call for Digital Innovation Fund
A second round of funding has been launched by Smart Manufacturing Data Hub (SMDH) for their Digital Innovation Fund. This funding is available to all small and medium sized businesses across the UK.

SMDH state that this second call "focusses on developing rapid demonstrator solutions that enable SMEs to advance their smart manufacturing journeys, de-risking major investment yet enabling growth."

Small and medium sized businesses in the manufacturing sector that can demonstrate demand for a new data driven solution can apply for grant funding of up to £50,000.

The funding can then be used to help develop the concept into a market ready solution. A requirement of the grant is that this be done within 6 months of the grant award.

Further information about the grant and how to apply can be found here: https://smdh.uk/demonstrator
 
Funding for needle free medicine delivery available
Innovate UK, a part of UK Research and Innovation, are aiming to invest up to £1 million in projects that will support developing and manufacturing needle free technologies to administer medicine.

The funding is available for feasibility studies that investigate the technologies enabling administering medicine without needles.

A grant funding request must be between £50,000 and £100,000 and needs to show how the project will improve the productivity, competitiveness and growth for at least one UK micro, small or medium sized enterprise involved in the project.

The deadline for applications is 11am on 14 February 2024.
 
Further details about what is involved and how to apply can be found here: https://apply-for-innovation-funding.service.gov.uk/competition/1832/overview/3430c599-f5e8-4eb3-9693-8b7e12cb0a20
 
Support for flood damage available
Storm Henk caused widespread flooding and damage across England during the first few days of 2024, affecting households and businesses alike.

Following this, the government has announced that financial support is available to eligible areas in England that have experienced exceptional localised
flooding.

In these eligible areas, the following help will be made available to significantly affected and eligible businesses:

• 100% business rates relief for at least 3 months;
• Up to £2,500 from the Business Recovery Grant that can be applied for by small-to-medium sized businesses to help quickly return to business as usual;
• £5,000 from the Property Flood Resilience Repair Grant Scheme to help business property owners make their business more resilient to future flooding; and
• £25,000 through the Farming Recovery Land towards repair and reinstatement costs for farmers suffering uninsurable damage to their land.

This help is available through a scheme called the Flood Recovery Framework. This framework is used to help support councils and communities in exceptional circumstances after severe flooding.

The support can be accessed through councils in the eligible areas. The councils will announce additional details on who is eligible and how to apply.

12th January 2024 – Hillmans Weekly Update

Happy New Year, and welcome to our latest 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

2024 - A year for flexibility?

Looking back at 2023, we have been amazed at the resilient way our clients have handled the uncertain economy. You have demonstrated to us how we can all be flexible and readily adapt to a change in circumstances!

We hope that by this time next year we all will be looking back on a more settled 2024. However, we have to admit that uncertainty is an inevitable part of business life.

With this in mind, for January, we are encouraging all clients to take time to prepare a 2024 Strategic Plan. A plan that will set you on a course to success.
"A sailor without a destination will never get a favourable wind!"

We all know this simple truth: It is easier to get to your destination with a plan. When you are driving from A to B, it helps to know where B is and the direction you need to take to get there.

If you have a vision of what you want your business to look like when it is "complete" then you will be able to 'drive' your business towards that vision and monitor how you are doing as you go along.

Without a strategic plan, you could end up like flotsam in the sea; being blown 'this way and that way' without any control.

On the other hand, a plan helps you to keep your business focused on the things it is good at doing. It helps you determine where to spend time, resources and money for the best effect.

How do you put together a strategic plan?

• Take time to review your own personal objectives. The business is there to provide you with what you want from life. Do not forget this.
• Look at where you are now. Assess your strengths, weaknesses, opportunities, and threats. Identify your position in the marketplace, the competition, your systems, and what you are good (and not good) at. 
• Focus on where you want to be. Look ahead (say) 2 years. What do you want your business to look like when it is running profitably and successfully? This will help you determine your priorities - the big issues on which you need to focus. This is the strategic plan! 
• Write your vision down (or type it up!). Define what must be achieved and the actions you need to take.
• Allocate responsibility. Specify who is responsible for doing what. 
• Monitor, review and adjust. Monitor how you are doing each month against your plan and consider what needs to be done to keep you moving forward. If your plan begins to look unrealistic, be prepared to review and adjust it.

We have useful tools and checklists to help you analyse where you are now, set a strategy, agree actions and then monitor them. Please talk to us about how we can help you achieve your goals - we have helped many other businesses grow and succeed!
 
Zero emission vehicle transition by 2035 now law
The government has set a pathway towards all new cars and vans being zero emission by 2035. This zero emission vehicle mandate became law on 3 January 2024.

The press release marking the commencement of the new laws comments that the UK now has the most ambitious regulatory framework for the switch to electric vehicles of any country in the world. The mandate is expected to help the car industry and manufacturers to have certainty and be able to safeguard jobs.

Originally the ban on new diesel and petrol cars was set to come into force in 2030, however this was pushed back to 2035 by the Prime Minister, Rishi Sunak, in September 2023. Availability of new electric cars, high costs, concerns about practicality from small businesses, and a lack of nationwide charging infrastructure were cited as the main reasons for the decision.

The postponement took the pressure off businesses and consumers alike but added uncertainty for businesses and investors involved in electric cars and the related technology. By making the mandate law it seems the government hopes to demonstrate a solid commitment to their pathway for zero emission vehicle transition by 2035.

In addition to setting the end date, the zero emission vehicle mandate also specifies the percentage of new zero emission cars and vans that manufacturers will have to produce each year up until 2030. The mandate requires that 80% of new cars and 70% of new vans sold in Great Britain be zero emission by 2030. This will then increase to 100% by 2035.

The UK's charging network continues to grow. The government reports that there are now over 50,000 public chargepoints, a 44% increase on this time last year. The target is 300,000 chargepoints by 2030.

Businesses should therefore be considering this mandate when reviewing company car and van purchases. There are tax advantages to having an electric vehicle as a company car with reduced benefit in kind costs, although these need to be weighed against the purchase cost.

It is also worth remembering that there is a plug-in van grant of up to £2,500 for small vans and £5,000 for large vans available at least until 2025 that can help defray the cost. For guidance on the grant, click here: Plug-in Van Grant guidance

If you would like any help with assessing the costs and tax on electric vehicles, please feel free to contact us. We would be happy to help!

See: https://www.gov.uk/government/news/pathway-for-zero-emission-vehicle-transition-by-2035-becomes-law
 
Draft business guidance to boost skills and unlock the benefits of AI
Businesses across the UK are to receive new support in unlocking the full potential of AI within their workforce.

As part of the UK government's National AI Strategy, The Alan Turing Institute is developing guidance designed to empower businesses and individuals to embrace AI. They published a draft version of the new guidance last month and held a brief public consultation inviting feedback from employers and training providers.

According to The Alan Turing Institute, this document is "the first step towards developing a full framework, which aims to support employers, employees, and training providers to identify upskilling routes and understand the competencies required to deliver value from AI."

The guidance is a high-level reference that sets out the competences needed across five key areas and will help employers to identify upskilling needs across their workforce.

You can download a copy of the draft "AI Skills for Business Competency Framework" document here: https://iuk.ktn-uk.org/wp-content/uploads/2023/11/Final_BridgeAI_Framework.pdf

Given the growing use of AI in businesses across the country, this could serve as a useful tool for employers to ensure their business harnesses the potential of AI technology. By upskilling workers, businesses will also ramp up productivity and ensure their workforce can focus on the tasks that will make the biggest impact.

This first step will be followed up by further consultation with the business community to develop sector-specific case studies and resources and a full skills framework.

See: https://iuk.ktn-uk.org/news/ai-skills-for-business-guidance-feedback-consultation-call-from-the-alan-turing-institute/
 
Data protection - UK-US data bridge - a factsheet for UK organisations
Following a review of the current handling and protection of personal data, the UK and US have established a "data bridge". This allows personal data to freely move between UK businesses and certified organisations in the US.

International data transfers are central to the transactions of many businesses, and under previous arrangements, any transfer of personal data to the US required costly contract clauses to ensure privacy and protection standards.

Now, where the US organisation is appropriately certified, the new bridge removes this burden.

A US organisation is placed onto the Data Privacy Framework List (DPF list) on the DPF website once they have been certified. They can then receive UK personal data through a UK-US data bridge.

UK businesses will need to ensure they update their privacy policies and document their data processing activities to reflect any changes in how they transfer personal data to the US.

See: https://www.gov.uk/government/publications/uk-us-data-bridge-supporting-documents/uk-us-data-bridge-factsheet-for-uk-organisations
 
Is it too cold to work?
This winter has been one of the mildest on record so far, but there is still time for a cold snap, and this often raises questions about whether it is too cold to work. In fact, this question is one of the most popular topics on the HSE website.

The Workplace (Health, Safety and Welfare) Regulations puts a requirement on employers to provide a reasonable indoor temperature in the workplace.

Clearly this will depend on what work is being done and the environmental conditions, but for an indoor workplace, the minimum temperature should normally be at least 16 degrees Celsius. This drops to 13 degrees Celsius where the work involves rigorous physical effort.

Under the same Regulations, employers have to assess the risks to workers and put in place controls to protect them. Temperature, whether indoors or outdoors, is one of those risks.

This means that employers need to be alert to ensuring that the heating in each workroom is capable of maintaining a comfortable temperature. The heating system too needs to be well maintained so that it doesn't give off dangerous fumes or offensive smells.

It may also help to check that doors and windows can be closed properly to prevent cold drafts. Flexible working hours or early/late starts may help staff to avoid low temperatures. And relaxing formal dress codes may help staff be able to dress more appropriately for the temperature.

Further guidance is available on the HSE website.

See: https://www.hse.gov.uk/temperature/employer/index.htm
 
4,757 festive tax return filers
HMRC announced that 4,757 taxpayers filed their Self Assessment tax return on Christmas Day.

This added to 8,876 being filed on Christmas Eve and a further 12,136 being filed on Boxing Day. Apparently, the peak time was between 12 and 1pm on Boxing Day when HMRC received 1,121 returns.

Myrtle Lloyd, HMRC's Director General for Customer Services, used the opportunity to encourage all to file their return in good time when he said: "Our Christmas Day filers proved that there is no time like the present to get started on Self Assessment ... There's no need to delay, getting it done ahead of the 31 January deadline means less stress and longer to work out payment options."

If you need help with your tax return, or haven't let us have your tax return information yet, please don't hesitate to get in touch. We will be happy to help you complete this essential job!

See: https://www.gov.uk/government/news/many-happy-returns-from-4757-festive-filers-on-christmas-day
 
Government reforms on reuse and recycling of electrical goods
The government has announced new UK-wide plans designed to make it easier to recycle electrical goods.

A range of measures are proposed, including:

• Collecting waste electrical items directly from households. These collections would be financed by the manufacturers, and not the taxpayer. 
• Free of charge collection drop points for electrical items being provided by large retailers, without a need to buy a replacement product from the retailer. 
• When delivering replacement large electrical items, such as fridges and cookers, the retailer being responsible for collecting the old one.

The proposals mean that recycling of electrical goods can be a convenient part of a person's regular routine.

It is estimated that 155,000 tonnes of smaller electrical items, including cables, toasters, kettles, and power tools, are currently thrown in the bin each year with no thought to recycling. In addition, it is estimated that a further 527 million unwanted electrical items are currently sitting unused in UK homes but contain valuable materials such as gold, silver, and platinum that could be reused.

Just during the Christmas period, 500 tonnes of Christmas lights are thrown away each year in the UK.

The scale of the problem and the potential for reuse of materials mean these proposals have the potential to drive further growth in the UK's treatment and re-use sector and benefit those businesses working or expanding into this area.

The announcement also reports on a recent study on public attitudes and behaviours around recycling. The study found that around 86% of people in the UK think that recycling and the associated time it takes to do this properly is worthwhile. More than 77% of householders would see a retailer offering an electrical recycling service as more environmentally responsible.

Therefore, being able to demonstrate an environmentally conscious approach is likely to benefit any business and is well worth considering in your business plans and marketing.

See: https://www.gov.uk/government/news/government-reforms-set-to-spark-greater-reuse-and-recycling-of-electrical-goods
 
Paying tax on cryptoasset transactions
HMRC recently launched a new campaign targeted at crypto investors as part of a crackdown on tax evasion. They have introduced a new disclosure and payment service for taxpayers to voluntarily disclose and pay any unpaid taxes associated with cryptoassets.

Cryptoassets (also known as tokens or cryptocurrencies) include exchange tokens (for example, bitcoin), non-fungible tokens and utility tokens.

HMRC view the profits or losses incurred from buying and selling such cryptoassets as liable for capital gains tax. Only in exceptional circumstances would they recognise crypto trading as a taxable 'business' trade.

Many who own cryptoassets may not be aware of the tax obligations on these digital assets. This voluntary disclosure service provides an opportunity to put things right with potentially lower penalties than if HMRC discover the underpayment for themselves.

Such a discovery is likely to become easier for HMRC. Tax avoidance from using cryptoassets is a subject of international concern, and there are moves to require crypto platforms to share taxpayer information with tax authorities.

If you or anyone you know needs any advice or help in this area, please don't hesitate to contact us!

See: https://www.gov.uk/guidance/tell-hmrc-about-unpaid-tax-on-cryptoassets
 
Minimum wage rates increase from 1 April 2024
Employers should be aware that all minimum wage rates increase on 1 April of each year. For 2024, these increases are substantial. The increases apply to all National Minimum Wage rates and the National Living Wage rate.

Another change that comes with the new rates is that the National Living Wage is being extended to include those aged 21 years old and over.

Minimum wage - increased rates from April 2024

See the table below that shows the current minimum wage rates and new rates from 1 April 2024:

 

If you would like help with your payroll, please don’t hesitate to call us; we are here to help!
 
Date set for Spring Budget 2024

The Chancellor Jeremy Hunt has commissioned the Office for Budget Responsibility to prepare an economic and fiscal forecast to be presented to Parliament alongside his Spring Budget on 6 March 2024.

We will keep you updated with any announcements that could affect you or your business.

See: https://www.gov.uk/government/news/spring-budget-2024-date-confirmed
 
£7 million funding boost to level up high streets
A new government pilot, the High Street Accelerators programme, will be trialling efforts to regenerate high streets in 10 areas across England.
The idea is that communities will work in partnership with local authorities and businesses to tackle problems such as empty shops, anti-social behaviour and a lack of foot traffic on the high street.

The 10 selected areas will each receive an initial £237,000 to kickstart their partnerships. However, they can also apply for a share of a further pot totalling £5 million to improve green spaces and pleasant socialising environments for residents.

Over the next 2 years this funding will be spent and the impact it has on the designated high streets will be evaluated. This will help the government decide on what further action can be taken to revive high streets in these and other areas.

This pilot programme is just one initiative that the government is using to try and revive England’s high streets. New High Street Rental Auctions regulations are also to be introduced later this year that will give local authorities the ability to sell off the rental rights for empty properties to willing tenants. These could include businesses and community groups.

See: https://www.gov.uk/government/news/high-streets-levelled-up-with-7-million-funding-boost
 
The Levelling Up Home Building Fund
Home England is providing development loans from £250,000 to £10 million to housebuilders based in England that are finding it difficult to borrow from traditional lenders.

Whether building for sale or rent, the loans can be used to cover the development costs. Community-led housing projects, serviced plots for custom and self-builders, off-site manufacturing, new builders, and groups of small firms working together can all access this financing.
Home England state that their flexible approach, along with their in-depth knowledge of the housing sector, put them in a good position to help businesses deliver homes.

The Fund is available to UK-registered corporate entities and limited liability partnerships if they plan to build five or more homes on a site in England. A controlling interest in the land along with outline planning permission is also a must.

More information on how to apply can be found in the Home England guidance. They also provide some case studies of situations where the financing has been used.

See: https://www.gov.uk/government/news/find-out-how-the-levelling-up-home-building-fund-can-support-you

5th January 2024 – Hillmans Weekly Update

Happy New Year, and welcome to our latest 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

NEW YEAR RESOLUTIONS TO SAVE TAX

At this time of year, we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5^th April.
 
An obvious tax planning point would be to maximise your ISA allowances for the 2023/24 tax year (currently £20,000 each). You might also want to consider increasing your pension savings before 5 April 2024, as the unused annual pension allowance from 2020/21 lapses after three years.

Many of us get together with the family at Christmas and that prompts us to think about making or updating our Will.
 
TIME TO REVIEW, OR MAKE A WILL?

At the top of the New Year to do list for many individuals is to make or update their Will. Many think this is something to leave until later in life, but it is important to get things in place once property is acquired or when children come along.
 
In the absence of a will there are statutory rules which dictate how your assets are distributed on death. Those statutory intestacy rules may not be tax efficient, and you might to want to make specific provision in your Will for your unmarried partner or for the guardianship of your children.
 
People often think that if they die without making a Will, their spouse (or civil partner) will automatically inherit everything, but this is not necessarily the case. According to the laws of intestacy in England, for deaths occurring on or after 26 July 2023, the surviving spouse would inherit a statutory legacy of £322,000, all of the personal effects, and half of the remaining estate. The deceased’s surviving children (or their descendants) would split the remaining half of the estate equally. If those descendants are under the age of 18, their inheritance is kept back for them until they turn 18. Note that intestacy rules are different in Scotland, Wales and Northern Ireland.
 
PASSING ON THE FAMILY HOME
 
When considering the wording of your Will, you should note that the inheritance tax (IHT) nil rate band continues to be frozen at £325,000, subject to any announcements in the Spring Budget. There is currently an additional nil rate band of up to £175,000 for passing on the family home to direct descendants on death. We can work with your solicitor to make sure your Will is tax efficient.
 
Where some of the nil bands are unused on the death of the first spouse, the balance is available on the death of the surviving spouse, potentially allowing a married couple (or civil partners) to pass on assets of up to £1 million at today’s rates without paying IHT.
 
The residence nil band is even available when you downsize to a cheaper property. For example, if a married couple currently live in a large house worth £500,000 and downsize to a flat worth £300,000, they could give away some of the proceeds during their lifetime and yet still benefit from inheritance tax relief based on the higher valued property. They could even sell the house and move into a rental property or a care home and still benefit from this nil band.
  
LEAVING MONEY IN YOUR WILL TO CHARITY
 
If you leave at least 10% of your estate to charity, the rate of Inheritance tax on the amount chargeable Is reduced from 40% over the nil rate bands to just 36%. This would reduce the amount passing to other beneficiaries and needs to be carefully considered.
 
YEAR END INHERITANCE TAX PLANNING
 
Many were expecting an announcement from the Chancellor in the Autumn Statement about cuts to, or the possible abolition of, inheritance tax (IHT). Maybe he is saving that for his Spring Budget, but in the meantime, it may be worth utilising the £3,000 gifts annual exemption for 2023/24 and, if available, the unused amount from 2022/23. Note that £3,000 is the overall exemption for the tax year, not the amount for each done. More generous amounts can be given away by taking advantage of the exemption for regular gifts out of income.
 
REGULAR GIFTS OUT OF YOUR INCOME CAN SAVE IHT
 
One tax planning opportunity that many thought the chancellor might restrict was the exemption from inheritance tax for regular gifts out of an individual’s surplus income. Inheritance tax is designed to tax transfers of capital, so if the donor can demonstrate that the gifts are made out of surplus income then the transfers are not taken into consideration for IHT. The exemption applies where there is a regularity to the payments, such as a standing order to pay school fees or pension contributions on behalf of children or grandchildren. HMRC will also require proof that the payments are paid out of post-tax income and do not limit the donor’s normal lifestyle. Detailed records are required, and we can help you with a suitable spreadsheet.
 
PENSION CONTRIBUTIONS ON BEHALF OF OTHERS
 
Normally an individual’s payments into a pension scheme are limited to their relevant earnings in a given tax year. This restriction does not apply where the contributions are less than £3,600 gross, allowing parents and grandparents to make payments on behalf of children and grandchildren with limited income. Payments of £2,880 a year would attract a 25% uplift from the government which could grow to a substantial amount by the time the child reaches retirement age (currently age 55, but increasing to 57 in 2028). The parent or grandparent may be able to justify that the payments qualify for the regular gifts out of income exemption from inheritance tax mentioned above if a standing order was set up for no more than £240 a month.
 
UPDATE PAYROLL SOFTWARE FOR THE JANUARY NIC CUT
 
The chancellor’s announcement of a 2% cut in national insurance contributions (NICs) for employees applies to payments on or after 6 January 2024. That doesn’t allow much time to update payroll software, particularly with the Christmas holidays in between. Note that for employees other than directors, NIC is not calculated on a cumulative basis so, where over-deductions are made, the error is not automatically corrected in later months.
 
ADVISORY FUEL RATE FOR COMPANY CARS
 
The table below sets out the HMRC advisory fuel rates from 1 December 2023. These are the suggested reimbursement rates for employees' private mileage using their company car.
 
Where the employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.

Where there has been a change the previous rate is shown in brackets.
 
You can also continue to use the previous rates for up to 1 month from the date the new rates apply.

Note that for hybrid cars you must use the petrol or diesel rate.

For fully electric vehicles the rate is 9p (10p) per mile.
 
DIARY OF MAIN TAX EVENTS
JANUARY/ FEBRUARY 2024