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
Companies House have reviewed the fees they
charge and have released details of the new charges that will apply from 1 May
2024.
Companies House work on a cost recovery
basis, so the fees are set to cover their costs rather than to make a profit.
Due to the measures introduced by the Economic Crime and Corporate Transparency
(ECCT) Bill, costs for Companies House are increasing and so the fees are being
adjusted in part to cover this.
The increases are quite significant. For
instance, the fee for an annual confirmation statement, if submitted digitally,
will rise to £34. The cost is currently £13. Depending on your current filing
date, it may be worth filing early to pay the lower fee one last time.
For a full list of the prices from 1 May
2024, see: https://changestoukcompanylaw.campaign.gov.uk/changes-to-companies-house-fees/
The twin-cab pickup makes a U-turn: What happened?
In an announcement made on 19 February, the government
confirmed that twin-cab pickup vehicles with payloads of 1 tonne or more will
continue to be treated as goods vehicles for both capital allowances and
benefit-in-kind purposes.
This is an example of what has become known
as a ‘U-turn’. On 12 February, HM Revenue & Customs (HMRC) had updated its
guidance on the tax treatment of twin-cab pickups following a 2020 Court of
Appeal judgment. The guidance had confirmed that, from 1 July 2024, twin-cab
pickups with a payload of one tonne or more would be treated as cars rather
than goods vehicles for both capital allowances and benefit-in-kind purposes.
The updated treatment was extremely unpopular
because goods vehicles attract more beneficial tax treatment than cars. For
example, a business buying a goods vehicle is able to claim more tax relief, in
the form of capital allowances, than if it were to buy a car. Similarly, if an
employee were provided with an employer-owned vehicle, the income tax and
employer’s National Insurance charge on the benefit-in-kind would be lower on a
goods vehicle than on a car.
The government says that it has listened to
carefully to views from the farming and motoring industries and has U-turned
because the 12 February guidance update “could have an impact on businesses and
individuals in a way that is not consistent with the government’s wider aims to
support businesses”.
The U-turn means that that the capital allowances and benefit-in-kind tax treatment of twin-cab pickups with payloads of 1 tonne or more will continue to be aligned with the VAT treatment. For more information, see: Update on HMRC Double Cab Pick Up Guidance - GOV.UK (www.gov.uk)
Update expected to the Code of
Practice on requests for flexible working
The Advisory, Conciliation and Arbitration
Service (ACAS) has released a final draft of a new Code of Practice on requests
for flexible working. The draft Code received consultation in 2023 and is now
awaiting parliamentary approval. If it is approved, then the new Code is
expected to come into force in April 2024.
Flexible working refers to any working
arrangement that meets the needs of the employee and employer on where, when,
and how an employee works. This would include part-time work, homeworking,
hybrid working, job sharing, compressed hours, term-time working and so on.
Employers and employees can make informal arrangements,
but if an employee makes a statutory request for flexible working, then the
Code must be followed.
The new Code introduces a number of new
changes. These include:
Right to request
An employee will now have a statutory right
to request flexible working from the first day of their employment. Currently
they cannot do so until they have given 26 weeks of employment service.
Currently there is a limit of one request
that an employee can make in any 12 month period. However, under the new Code
they will be able to make two statutory requests in any 12-month period, with a
maximum of one live at any one time.
Handling a request
Currently, employers are required to consider
a request and can reject it on the basis of a business reason that is set out
in the Employment Rights Act 1996. The new Code is more positive and
specifically states: “Employers must agree to a flexible working request unless
there is a genuine business reason not to”. The business reasons for rejecting
a request continue to be those set out in the legislation.
The new Code introduces requirements to
prevent discrimination where a request is because an employee is seeking a
reasonable adjustment because of a disability.
While the current Code encourages a
discussion with the employee, particularly where the employer rejects or wants
to modify the request, the new code specifies that unless the employer decides
to agree to the employee’s written request in full, they must now consult the
employee. The new Code provides guidance on how the meeting should be held and
its content.
The new Code requires that a request be
decided on within a statutory two-month period including any appeal. Currently
three months are allowed.
The new Code also now specifies that the
decision is communicated in writing and what this should contain. It also sets
out appeal procedures.
Until the new Code receives parliamentary
approach, then any statutory requests you receive can still be handled in
accordance with the current Code of Practice (https://www.acas.org.uk/acas-code-of-practice-on-flexible-working-requests/html)
However, with parliamentary approval expected
by April, it would be well to be prepared with your policies.
To review the new Code of Practice, please
see: https://www.acas.org.uk/acas-code-of-practice-on-flexible-working-requests/2024
Are you getting minimum wage
payments right?
Last Tuesday, the government named and shamed
524 businesses for failing to pay the minimum wage to their staff.
These failures amounted to a total of nearly
£16 million that had not been paid to their workers. Each of the employers
named has had to repay their staff for the shortfall and have also faced
financial penalties of up to 200% of their underpayment.
The list includes businesses of all sizes,
including some major high street brands. For instance, Estee Lauder, Easyjet,
Greggs, Moss Bros, Currys, and NHS Highland all appear on the list.
It is clear that the government will take
enforcement action against employers that do not pay their staff correctly.
Since it can be easy to unintentionally underpay a worker, such as when they
hit 18 or 21 when there is a mandatory increase, it is a good idea to regularly
review your payment rates.
This is especially important as we come to
the start of a new tax year on 6th April as the rates of pay are
increasing as set out in the table below.
For the fiscal year 2023/24, the rates are as
follows:
The National Living Wage for those aged 21
and over (previously for those 23 and over) is £10.42.
For individuals aged 18 to 20, the rate is
£7.49.
For those under 18, the rate is £5.28.
The Apprentice rate is also £5.28.
The Accommodation Offset rate is £9.10.
For the fiscal year 2024/25, the rates will
be:
The National Living Wage for those aged 21
and over increases to £11.44.
For individuals aged 18 to 20, the rate will
be £8.60.
For those under 18, the rate will increase to
£6.40.
The Apprentice rate will also be £6.40.
The Accommodation Offset rate will be £9.99.
If you need any help with your
payroll or reviewing whether your wage payments are correct please feel free to
contact us we would be happy to help you!
See: https://www.gov.uk/government/news/over-500-companies-named-for-not-paying-minimum-wage
The Body Shop goes into administration
The latest casualty of the difficulties
hitting the high street is The Body Shop, which entered administration on 13 February
2024.
Administration can be a worrying time for
employees as well as customers and suppliers. However, administration is not as
serious as when a company immediately goes into liquidation. Let us explain.
When a company goes into administration, it
essentially means that it is placed under the management of licensed insolvency
practitioners. These insolvency practitioners, known as administrators, help
salvage the business or its assets. This process is typically started when a
company is struggling financially and cannot pay its bills or other financial
obligations.
During administration, the administrators
take control of all the company’s operations, finances and assets. Their goal
is to maximise the returns for creditors. This might involve restructuring the
business, selling off parts of the business, or seeking new investment that
will stabilise the company’s financial position.
Going into administration provides the
company with protection from legal action by creditors, giving it breathing space
to weigh up its options and find a solution. It can also help to preserve jobs.
And because it allows for a more orderly resolution of the financial
difficulties the company is facing, it helps to keep more value for the various
stakeholders in the business.
Ultimately, the aim of administration is
either to rehabilitate the company and return it to a solvent trading position,
or to achieve a better outcome for creditors than would be possible through an
immediate liquidation.
If you have any concerns about your company’s
financial position, please contact us at your convenience. We will be happy to
talk and guide you through the options available to you.
Cuts to National Insurance: Reminders
about changes
In November 2023’s Autumn Statement, the
government announced some National Insurance (NI) changes. Some of these
changes went into effect in January 2024, whereas others will come into effect
on 6 April 2024. Here is a reminder of the changes.
Cut to the main rate of Class 1
employee NI contributions from 12% to 10%
This reduction received the most headlines.
This change went into effect from 6 January 2024, and you have likely already
made this adjustment.
In some cases, employers were not able to
make the change in time due to software not being ready. If that is the case
for you then an incorrect amount of NI will have been deducted from your
employees and this will need correcting. Details on how to do so are here: https://www.gov.uk/payroll-errors/correcting-your-fps-or-eps But, please feel free to contact us if you need any help.
HM Revenue and Customs (HMRC) have recently
confirmed that the 2% cut also applies to the married woman’s reduced rate of
NI contributions, where the rate has dropped from 5.85% to 3.85%. The married
woman’s reduced rate of NI contributions applies to married women who opted in
before the scheme ended in April 1977.
Cut to the main rate of Class 4
self-employed NI contributions from 9% to 8%
Class 4 NI applies to the taxable profits of
a self-employed business. It is calculated when your self-assessment tax return
is prepared and collected as part of your income tax bill.
This cut comes into effect for profits earned
from 6 April 2024 onwards. There is nothing you need to do to benefit from this
cut, it will be automatically applied when your tax bill is calculated.
Removal of liability to pay Class
2 self-employed NI
Sometimes known as the self-employed ‘stamp’,
Class 2 NI has been a feature for self-employed taxpayers for many years. It is
quoted by HMRC as a weekly rate (£3.45 per week for the 2023/24 tax year) and
is usually collected as part of your self-assessment tax bill.
From 6 April 2024 the liability to pay this
has been removed. For 2024/25, if your trade profits are above £6,725, you will
accrue entitlement to state benefits without paying Class 2 NICs so the charge
effectively becomes £nil. However, if your trade profits are below £6,725 and
you wish to continue accruing entitlement to state benefits, you’ll need to pay
class 2 NICs on a voluntary basis.
If you have any concerns or questions about the NI you are paying, please contact us, we will be happy to help you!
Resources on learning to export
The Department for Business & Trade has
made available learning resources for businesses to help with what is involved
with exporting. These resources are designed both for new and experienced
exporters.
The resources cover:
·
Learning how to identify
opportunities abroad and find the best target markets;
·
Preparing to sell into a new
country, such as how to find customers and win bids;
·
Understanding international rules
and how to get your goods to their destination; and
·
Learning how to raise funds, get
paid and manage exchange rates.
There is an opportunity to sign up and gain
some additional benefits.
Exporting can also involve additional Customs
and VAT requirements. If you need any help with this or would like to discuss
your plans, please feel free to contact us!
For more about this resource, please see: https://www.great.gov.uk/learn/categories/
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