29th November 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

Inflation on the rise: What October's figures mean for businesses 
The latest inflation figures from the Office for National Statistics (ONS) reveal that the Consumer Prices Index (CPI) for October 2024 rose to 2.3%, up from 1.7% in September. This marks the first increase in inflation since July, and it has sparked interest among business owners, economists, and policymakers alike.
 
The rise in inflation was widely anticipated, and as a result the Bank of England have already signalled that any future cuts to the base rate will happen gradually. However, the latest CPI figures make it unlikely that the Bank will reduce rates any further when they meet in December. 

What’s driving the numbers? 
According to the ONS, the rise in inflation for October was largely driven by higher energy costs. However, other factors helped to balance the increase: 

• Falling ticket prices: Live music and theatre ticket prices dropped.
• Lower business costs: Raw material costs for businesses have been falling.

Despite these offsets, some sectors faced steeper price increases: 

• Services inflation: Inflation in the services sector, which includes services like haircuts, hotels, and airfares, rose to 5%. 
• Alcohol and tobacco: Prices for these items rose sharply. Encouragingly though, food inflation remained unchanged from September. 

What does this mean for your business? 
The rise in inflation, though modest, signals shifts that businesses may need to navigate carefully: 

• Energy costs: You should revisit your energy usage and consider whether you might be able to reduce costs, either through using energy more efficiently, or considering whether a different supplier or price plan could meet your needs at a lower cost. 
• Pricing strategies: Businesses in the services sector should prepare for potential challenges as rising costs affect consumer spending patterns. Balancing price increases with value will be key to maintaining customer loyalty.  
• Cost control: With raw material costs easing, this may be a good time for manufacturers and retailers to lock in supply contracts or reassess margins. 

A broader economic context 
While inflation has ticked upwards, this is in line with the Bank of England’s forecast that inflation will temporarily rise again before reducing in 2025. For now, businesses can take heart that interest rates are unlikely to rise sharply in the near term. However, with base rate cuts now likely to come more slowly than had been hoped earlier in the year, borrowing costs will remain a factor for planning and investment. 

Also, while October’s figures suggest only a modest uptick, sector-specific changes - particularly in services and energy - highlight the importance of staying agile in your pricing and how your business operates. 

This period of mild inflationary growth is an opportunity for forward-thinking businesses to fine-tune their strategies for the months ahead.

See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
 
New UKEF guarantee boosts opportunities for UK engineering, design and technical services firms 
UK Export Finance (UKEF), the UK’s export credit agency, has launched a new initiative aimed at helping British engineering, design, and technical services firms secure international contracts. The Early Project Services Guarantee (EPSG) is designed to make UK expertise more attractive to overseas buyers while filling a key financing gap for the early stages of major projects. 

How the EPSG works 
The EPSG provides overseas buyers of UK services with access to private finance by guaranteeing payments to lenders. This assurance makes it easier for international buyers to choose UK firms for essential scoping and design work in the planning phase of projects. 

Beyond this initial stage, the EPSG also opens the door for buyers to refinance their loans as part of the larger financing for the project’s construction phase. This creates a life-cycle financing advantage, giving UK firms an edge in securing contracts for both the early and later stages of international projects. 

The EPSG addresses a long-standing gap in market provision for financing the preparatory phases of major projects. By supporting the services sector, UKEF aims to drive export growth across all UK regions. 

What this means for your business 
For UK businesses offering engineering, design, and technical services, the EPSG could be a game-changer in helping you explore opportunities in international markets. It could be the key to unlocking new contracts and expanding your global reach.

If you would like help with how your business could take advantage of this new scheme, or would like some broader advice on exporting, feel free to get in touch with us. We’re here to help you seize opportunities and grow your business.

See: https://www.gov.uk/government/news/new-export-guarantee-champions-uk-engineering-and-design-services
 
Government proposes crackdown on “subscription traps” 
The UK Government has launched a consultation to tackle so-called “subscription traps,” aiming to make it easier for consumers to cancel unwanted subscriptions and secure refunds. These proposals are designed to simplify cancellation processes and improve transparency, potentially saving UK families up to £1.6 billion annually. 

The problem: Trapped in subscriptions 
“Subscription traps” occur when consumers are misled into signing up for subscriptions, often via free trials or introductory offers, only to find themselves locked into costly plans due to unclear terms or complex cancellation procedures. 

New figures reveal that nearly 10 million of the UK’s 155 million active subscriptions are unwanted, costing an average of £14 per subscription per month. From magazines to beauty boxes, many businesses employ cumbersome cancellation methods, including lengthy phone calls or restrictive opening hours, leaving consumers feeling trapped. 

Proposed solutions 
The consultation seeks input on measures to protect consumers while ensuring businesses can still offer subscription-based services. Key proposals include: 

• Simpler cancellation processes: Looking at the arrangements businesses need to put into place to help customers conveniently cancel a contract. 
• Clearer communication: Consumers would receive reminders about trial periods ending or auto-renewals for long-term contracts. 
• Improved refund rights: Proposals explore how refunds should work when consumers exercise their right to cancel within the statutory 14-day cooling-off period or if businesses fail to meet their obligations. 

Next steps 
The consultation is open to businesses offering subscription services, consumer groups, and enforcement agencies, so that all perspectives can be considered.

To see further information about the consultation and participate, see: https://www.gov.uk/government/consultations/consultation-on-the-implementation-of-the-new-subscription-contracts-regime
 
Stay safe during Black Friday season
The National Cyber Security Centre (NCSC) has reported that shoppers lost over £11.5 million to online criminals between November 2023 and January 2024. Each victim lost an average of £695. A total of £10.6 million was lost the previous year.

The Black Friday season can be a good time to find bargains for businesses as well as individual shoppers. However, it’s evident that online criminals are doing their best to take advantage of the increased shopping activity.

It’s important then that you and your business exercise vigilance during this time. NCSC advise that criminals will often create false urgency by using limited-time offers or promoting items that seem scarce or not widely available.

Anyone involved in purchasing should be made aware that if they see or hear anything that doesn’t seem quite right, they should immediately:

1. Break the contact and don’t click on any links.
2. Research the company or seller by looking at reviews on trusted review sites.

Another important step that the NCSC recommends taking is to enable two-step verification on any online accounts you have. You should also make sure that all online accounts are protected with a memorable but secure password.

By taking these essential measures you will help protect yourself and your business from fraud while you track down any bargains!

To review the report and guidance in full, see: https://www.ncsc.gov.uk/news/black-friday-warning-figures-reveal-rising-losses-scams
 
Are you ready for new B2B parcel arrangements between Great Britain and Northern Ireland? 
New arrangements will apply to business to business (B2B) parcels sent from Great Britain to Northern Ireland under the Windsor Framework, effective from 31 March 2025. The changes were originally due to come into effect from 30 September 2024, but this was delayed to March next year.

Businesses will need to make sure they are prepared for these changes, which include distinct processes for business-to-business (B2B) and business-to-consumer (B2C) shipments. 

What are the key changes? 
For B2B Parcels, information must be submitted via the Customs Declaration Service (CDS). Your parcel carrier will handle this but may ask you to provide the additional information they need to do this. You may also need to pay duty. If you haven’t done so already, speak to your parcel carrier so that you are clear on how they will be handling this new procedure.

A UK Internal Market Scheme (UKIMS) authorisation enables eligible goods to move without full customs declarations or duty. UKIMS can be used if your goods are for sale to, or final use by, end consumers located in the UK and aren’t subject to an EU trade remedy.

If you don’t hold one already you will need to apply for UKIMS authorisation. In view of the March 2025 deadline, we recommend starting this as soon as you can.

B2C parcels
When goods are sent to consumers (B2C) in Northern Ireland for their personal use, there are no individual customs declarations, duty or presentation of goods to customs authorities. However, your parcel carrier will need to collect some additional data from you, such as the recipient’s details and a description of the goods.

Next steps for businesses
In view of the different processes between B2B and B2C, you will need to know whether your customer is a business or a consumer.

You may already know whether your customer is a business, but if you don’t then the onus is on you to find out. The customer holding a business account with you, requiring a VAT invoice, or the volume or type of goods ordered from you could all be indications that they are a business.

You may also want to apply for UKIMS authorisation to simplify your B2B parcel movements and avoid unnecessary costs.
Talking with your parcel carrier is also important to ensure that you understand their systems and how you can provide the information they will need in a practical way.

To review the guidance, see: https://www.gov.uk/government/publications/moving-parcels-from-great-britain-to-northern-ireland-under-the-windsor-framework
 
Business rates reforms continue: What it means for you 
The government has now published the legislation to deliver the business rates changes announced in the recent Budget. These reforms, set to take effect from the 2026/27 tax year, are designed to create a more balanced system, with notable benefits for smaller retail, hospitality, and leisure (RHL) businesses. 
Here’s what you need to know and how it might affect your business. 

Relief for retail, hospitality, and leisure 
Businesses in the RHL sectors with properties valued below £500,000 will benefit from “two permanently lower business rates multipliers”. This means a reduced tax bill for smaller high-street businesses, which could free up funds for growth, staffing, or other operational priorities.

Of course, RHL properties have already been receiving temporary relief to their business rates charges. However, the legislation will make permanent adjustments so this should provide greater stability of RHL businesses to plan.

Any relief here is likely to be welcome since high-street businesses are facing tough competition. The BBC recently reported that footfall in Ipswich town centre fell by a third in the past year. So, the high street is under significant pressure to find and maintain sales.

Larger properties to shoulder more 
From 2026/27, properties with rateable values of £500,000 or above will see their rates increase, as a higher multiplier will apply. If you operate in higher-value premises, it’s worth factoring this into your financial planning. 

This move is because the government intends to fund the reduced rates for smaller businesses sustainably by shifting some of the tax burden to higher-value properties. This may particularly be aimed at large warehouses used by the online giants, but isn’t limited to these firms.

How to prepare 
Although these changes are still a couple of years away, there are steps you can take now to ensure you’re ready: 

• Assess your properties: Review the rateable values of your properties to understand where you will fall under the new system. 
• Review your current rates bill: Make sure that your property is currently being valued and assessed correctly. Agreeing necessary changes with the local authority can take time and effort, but will be worthwhile to make sure that you are getting any relief your business is due. 
• Plan for rate increases: Larger businesses, particularly those in premium or urban locations, should start budgeting for the higher multiplier to avoid surprises when the changes take effect. 

Looking ahead 
Precise definitions of which businesses qualify for the lower rates, as well as the exact multipliers, will be confirmed by Autumn 2025. This clarity will be crucial for understanding the full impact of the reforms on your business. 

For now, the key takeaway is that relief is on the horizon for many smaller RHL businesses, while larger property holders should begin preparing for increased costs.

If you’d like to discuss what these changes might mean for your business, please get in touch. We would be happy to help!

See: https://bills.parliament.uk/bills/3887

22nd November 2024 – Hillmans Weekly Update

Welcome to our latest round-up of business and tax news for our clients. Please contact us if you want to discuss 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

Reduction in HMRC late payment interest rates
Following the Bank of England’s decision to reduce the base rate from 5% to 4.75%, HM Revenue and Customs (HMRC) have announced a reduction in their late payment interest rates.

HMRC interest rates track the base rate. Late payment interest (payable if you pay tax late) is set at base rate plus 2.5%. Repayment interest (which HMRC pay you on refunds or overpayments) is set at base rate minus 1%, with a minimum rate of 0.5%.

Therefore, the late payment interest rate will reduce to 7.25%. Repayment interest will reduce to 3.75%.

The reductions come into effect from the following dates:

• 18 November 2024 for quarterly instalment payments; and
• 26 November 2024 for non-quarterly instalments payments.

See: https://www.gov.uk/government/news/hmrc-late-payment-interest-rates-to-be-revised-after-bank-of-england-lowers-base-rate

Make Work Pay: What are the next steps
Since coming into power, the Labour government has made its Make Work Pay plan a centrepiece of their policies. As a result, we have already seen a number of changes being proposed and implemented. This includes the new Employment Rights Bill which is currently making its way through Parliamentary processes.

The government’s Make Work Pay policy paper makes interesting reading on what it intends to do.

The paper outlines how the UK has seen a productivity slowdown in recent years that is more pronounced than other advanced economies. They attribute much of this to issues with the labour market, both in workers feeling insecure and businesses struggling to find the right staff when they need them.

The Plan to Make Work Pay is therefore designed to modernise the UK labour market and address the challenges the economy is facing.
Principally the plan aims to make work more flexible, more secure and more family-friendly. This will help to support more people to stay in work.

Employment Rights Bill
This key legislation is the first phase of delivering the government’s Plan. The changes it will bring about, including ‘day 1 rights’ of employment, banning exploitative zero-hours contracts and increasing worker protections have been widely discussed in the press.

Consultations are planned to take place in 2025, with the majority of reforms taking effect no earlier than 2026.

Employment rights and industrial relations are reserved in relation to Scotland and Wales and transferred to Northern Ireland. The UK government intends to work closely with the devolved governments on delivering and implementing their plan so that rights for people across the entire country are strengthened.

Family friendly rights
The government is looking at how to support workers in working while balancing the essential responsibilities of their wider life, including raising children, improving their own wellbeing or looking after a loved one with a long-term health condition.

Some immediate changes are being made to support this. Flexible working will essentially become the default, a new right to bereavement leave is being introduced, paternity and parental leave will become a day 1 right, and protections for pregnant women as well as new mothers returning to work are being strengthened.

The government also intends to review the current parental leave system and the implementation of carer’s leave.

Fair pay
We have already seen an adjustment in how minimum wage rates are set, with the cost of living now factored in.

The government’s intention is to remove the separate wage rates for different age bands. Instead, there will be one single rate regardless of the worker’s age.

Statutory Sick Pay is also to be strengthened. The lower earnings limit and the waiting period will be removed.

A consultation on how a Fair Pay Agreement process for the adult social care sector should work is also planned.

Ending ‘one-sided flexibility’
Where workers have a zero-hours contract or a ‘low’ number of guaranteed hours but regularly work more than these hours, they will gain the ability to move to guaranteed hours contracts.

Protections from unfair dismissal, which currently have a 2-year qualifying period, will be changed to apply from day 1.

Employers will still be able to assess whether someone is right for the job via probationary periods. Currently the government is suggesting a 9 month statutory probationary period where the worker will have certain day 1 rights, but there will be a lighter-touch process that employers can follow to dismiss an employee who is not right for the job.

There is concern amongst businesses that the proposed changes will expose them to increased legal liability and a greater number of unfair dismissal claims.

The government is proposing to identify ways to signpost and support employees that will make clear where bringing claims might be unsuccessful.

They have also said that they will consult on limiting compensation awards for successful claims of unfair dismissal during a probationary period.

In addition, there is a commitment that changes to the unfair dismissal rules will not come into effect any sooner than autumn 2026.

Equality at work
The plan includes measures that will help to ensure greater equality in the workplace, including:

• ensuring that outsourcing of services can no longer be used to avoid paying equal pay.
• a regulatory and enforcement unit for equal pay will be implemented.
• larger companies will be required to publish information on their ethnicity and disability pay gaps.
• specialist initiatives to join up employment and health systems to help support disabled people and people with health conditions thrive at work.
• making it unlawful to dismiss a pregnant worker within 6 months of their return to work other than in specific circumstances.
• establishing the Fair Work Agency to bring together existing enforcement functions and introduce the enforcement of holiday pay policy.

The government also intends to consult on the legal framework around trade unions and modernise it to reduce conflicts but provide workers with a voice.
Many of these changes will be enacted when the government publishes its Equality (Race and Disability) Bill later in this parliamentary session.

Anything else?
Further reforms are also briefly discussed in the plan that will take place over the longer term.

These include consulting on having a single ‘worker’ status that differentiates between workers and the genuinely self-employed. This would include strengthening protections for the self-employed through a right to a written contract. Health and safety guidance and regulations will also be modernised.

Conclusion
The government’s plan could largely be summed up as ‘a happy worker is a productive worker’. Therefore, the aim of the changes seems to be to make workers feel more secure and give them more flexibility over their working hours. If more workers remain more productive, this should make businesses more productive and the economy will grow as a result.

Of course, this will have to be reconciled with businesses dealing with additional costs and compliance. And you may have a question mark about whether the government’s plan will help you to grow your own business, particularly after a Budget that increased employment costs for many businesses.

While many of the proposals still need to be consulted on before they become law and there is time before the Employment Rights Bill will come into force, it is clear that we all need to be ready for changes over the next few years.

To read the policy in full, see: https://www.gov.uk/government/publications/next-steps-to-make-work-pay/next-steps-to-make-work-pay-web-accessible-version
 
Help for the high street: New powers for councils
Next month, councils across England will be given new powers to transform high streets by tackling long-term empty shops. Starting from 2 December, High Street Rental Auctions (HSRAs) powers will allow local authorities to auction leases for persistently vacant commercial properties, a move that is hoped will bring new businesses and community groups back to once-busy centres.

Through HSRAs, councils can take action if a property remains empty for more than 365 days within a two-year period. By auctioning leases for up to five years, this policy aims to prevent disengaged landlords from sitting on empty properties, which contribute to the decline of high streets. Local authorities will need to first try to engage with the landlord to resolve the vacancy before putting a property to rental auction.

According to data quoted by the government, one in seven high street shops are currently closed. So, this initiative could provide a helpful boost, creating jobs and driving foot traffic back to town centres.

Local Growth Minister Alex Norris emphasised the importance of reviving high streets, saying: “High streets are the beating heart of our communities. But for too long, too many have been neglected, with more and more empty lots and boarded-up shopfronts.” He added that HSRAs put “local communities first, re-energising town centres and driving local opportunities and growth.”

Additional support for high street businesses
There is currently plenty of talk at government level about how to revitalise high streets.

During the Autumn Budget it was announced that the small business rates multiplier has been frozen for next year. Plans were also revealed to permanently lower business rates for retail, hospitality and leisure properties.

£250 million was also committed for 2025-26 to the British Business Bank’s small business loans programme.

The government has also announced its intention to publish a new Small Business Strategy next year. This will set out further measures to support SMEs and, according to the government announcement, supporting small businesses on the high street will be at the centre of this.

See: https://www.gov.uk/government/news/high-streets-to-be-revitalised-with-new-legal-powers
 
VOA to improve transparency on business rates valuations with reforms coming
The Valuation Office Agency (VOA) has announced plans to share more detailed information on business rates valuations, making the system more transparent for ratepayers across England. Starting in 2026, businesses will have access to tailored information about their properties, and by 2029, they will be able to see specific valuation details and evidence.

Carolyn Bartlett, Chief Strategy and Transformation Officer at the VOA, noted that while ratepayers generally desire more transparency, some have concerns about data confidentiality. “We’ve balanced the desire for greater transparency from some with the concerns of others about the confidentiality of their data,” Bartlett explained.

Having more detailed information available may make it easier to detect whether an error has been made on your business property valuation.

Business rates reforms coming
The VOA’s disclosure improvements are part of a larger set of business rates reforms that will roll out from 2026 to 2029.

A key part of this reform is a new duty on ratepayers to provide property information to the VOA. This new requirement will start to be tested in phases from
April 2026 and will become mandatory by April 2029.

Under the new duty, ratepayers must inform the VOA within 60 days of any property changes, including new occupiers, rent adjustments, and physical changes to the property.

For some businesses, there will also be an annual requirement to submit trade information if it is used in property valuations.

Ratepayers will additionally need to confirm annually that all property changes have been reported.

The VOA have confirmed that businesses do not need to take any action yet. They will contact businesses directly about the changes and tell them when they will be affected.

See: https://www.gov.uk/government/news/sharing-more-information-on-business-rates-valuations
 
Employer banned for hiring six illegal workers: A reminder to check right-to-work status
A recent case involving a former company director in Hartlepool and Guisborough underlines the importance of checking employees’ right to work in the UK. Edris Ali, 39, who previously ran a pizza restaurant and a car wash, was banned as a director for ten years after hiring six illegal workers from Iran, Sudan, and Cote d’Ivoire. The workers were discovered during Immigration Enforcement visits, leading to substantial fines and legal action against Ali.

Ali employed two individuals without work authorisation at Tasty Pizza restaurant in Hartlepool and a further four at Bubbles Car Valeting in Guisborough. His actions resulted in penalties of £20,000 and £60,000, respectively, for the businesses, alongside the ten-year ban from company directorship.

Takeaway point
The High Court ruling against Ali serves as an important reminder for employers to check each employee’s right to work in the UK before they begin employment.

Under UK law, employers must carry out simple right-to-work checks before employing someone. Failure to comply with these requirements can result in severe penalties.

The Home Office provides guidance on how and when to conduct a right to work check. The guidance is periodically updated with the last update being published in September 2024.

Following the guidance provides your business with protection. If it was later found that someone employed by you did not in fact have a right to do the work in question, you would not be charged a penalty if you had correctly conducted right to work checks.

For a copy of the guidance, see: https://www.gov.uk/government/publications/right-to-work-checks-employers-guide

For more on the High Court ruling, see: https://www.gov.uk/government/news/ten-year-ban-for-teesside-director-who-hired-illegal-workers-at-pizzeria-and-car-wash

15th November 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

Base rate drops to 4.75%
As had been widely expected, the Bank of England reduced the interest base rate to 4.75% last week. This was due to inflationary pressures easing in recent weeks.

The Bank expects inflation to increase slightly again over the next year to around 2.75% and then fall back to the 2% target after that.
In their quarterly report, the Bank outlined that they will be taking a cautious approach and so will not be cutting rates too quickly or too much. It seems unlikely there will be a further cut when the Bank next meet on December 19^th.

However, the Bank have said that “if things evolve as expected, it’s likely that interest rates will continue to fall gradually.”
Obviously, a rate cut can be a mixed blessing depending on whether your business is investing or borrowing. However, if inflation is stabilising this may mean a more stable economy and more certainty for businesses in the year ahead.

See: https://www.bankofengland.co.uk/monetary-policy-report/2024/november-2024
 
Agricultural and business property relief: What happened in the Budget?
Changes to inheritance tax were announced in the Budget that have caused consternation to farmers and business owners across the UK. What exactly is changing and what could this mean for you?

What are agricultural and business property relief?
Agricultural property relief (APR) is a type of inheritance tax relief that helps reduce the amount of tax that is paid when farmland is being passed down to the next generation. Currently, the relief has no financial limit, meaning regardless of the value of the farmland, it could be passed on with no inheritance tax payable.

Business property relief (BPR) is similar but relates to business assets included in a person’s estate. Again, this relief currently applies without any financial limit to the relief.

Clearly, both reliefs have played an important role in families being able to pass on agricultural and business assets without having to worry about inheritance tax.

What changed in the budget?
Based on the Autumn Budget announcement, there will be a new £1 million limit where 100% relief will be given. The relief will then reduce to 50% on the value that exceeds £1 million.

It is important to note that the £1 million allowance is a combined one for APR and BPR purposes. An estate that has both qualifying business and agricultural assets will only have a single £1 million allowance to use.

In addition, (quoted) shares that are designated as “not listed” on the markets of recognised stock exchanges, such as AIM, will only ever get 50% relief regardless of whether they would otherwise qualify as agricultural or business assets.

When will the change take effect?
The intention is that this change will take effect from 6 April 2026. So, these changes do not take immediate effect and mean that there could be some scope for planning or transferring of assets that will minimise your exposure to inheritance tax when the new limits come into force.

If I have agricultural assets valued at more than £1 million, will I have to pay inheritance tax?
Not necessarily. Inheritance tax is calculated by first deducting any reliefs (such as APR and BPR) and then deducting any allowances that apply. Each individual has a nil rate allowance, currently £325,000, and there is a residence nil-rate band limit of £175,000.

What should I do now?
If your estate is likely to be subject to inheritance tax, then it can pay to consider using some estate planning strategies to reduce your exposure to inheritance tax. As a starting place, it is a good idea to assess the current value and makeup of your estate.

Please get in touch with us if you would like any help with doing this, or if you would like to discuss whether there are any estate planning strategies that are open to you. We would be happy to help you!
 
Self-assessment tax returns: Counting down to 31 January
HM Revenue and Customs (HMRC) have begun reminding taxpayers that time is ticking for getting self-assessment tax returns filed in time for the 31 January 2025 deadline.

More than 3.5 million tax returns have already been submitted, however HMRC are anticipating more than 12 million in total needing to be filed by the end of January. So, HMRC are encouraging people to submit their return as early as possible.

Filing earlier does have some advantages, such as avoiding a last-minute panic, and knowing how much any tax payment will be in time to be able to budget for it.

If you need to complete a self-assessment tax return this year but haven’t completed one before, then you will need to register first before you can sent your tax return. The registration process can take a few days so it is best to start this in good time before the end of January.

If you would like any help with completing your tax return, please feel free to contact us at any time and we would be happy to help you.

See: https://www.gov.uk/government/news/on-your-marks-100-days-to-file-self-assessment
 
UK export opportunities in the Caribbean
Marking the second event of its kind, the UK-Caribbean Trade and Investment Summit was held in London last week. Organised by UK Export Finance (UKEF), the UK’s export credit agency, the summit brought together UK and Caribbean government officials, as well as senior investors, to discuss business partnerships and financing for projects across the Caribbean.

In the year leading up to April 2024, UK exports to the Caribbean countries involved in CARIFORUM reached £2.7 billion, a substantial 36% increase compared to the previous year.

The forum highlighted the huge potential represented by trade and investment between the UK and rapidly growing Caribbean economies. UKEF is helping UK businesses access billions of pounds in financial support to win and deliver projects in the region. With expanded financing now available in countries like Jamaica, Guyana, Trinidad & Tobago, and more recently Grenada, St Lucia, and St Kitts & Nevis, UK firms have significant opportunities to enter or grow in these markets.

Several UK companies are already benefiting from UKEF’s support. For instance, Severfield Steel won a £4.5 million contract to supply materials for a hospital project in Georgetown, Guyana. In Jamaica, Lagan Construction completed a $7 million resurfacing project at Norman Manley International Airport and is now set to undertake further work in Bermuda.

See: https://www.gov.uk/government/news/uk-caribbean-trade-and-investment-summit-brings-uk-export-opportunities
 
New “failure to prevent fraud” offence for large organisations
A new corporate criminal offence of "failure to prevent fraud" is set to take effect from 1 September 2025, following its introduction in the Economic Crime and Corporate Transparency Act.

This law holds large organisations criminally liable if they benefit from fraudulent acts carried out by an employee, agent, subsidiary, or other associated person on their behalf.

A “large organisation” is defined in the legislation as meeting two out of three of the following criteria:

• More than 250 employees
• More than £36 million turnover
• More than £18 million in total assets

These criteria, and the obligations to prevent fraud, apply to the whole organisation, including subsidiaries. This is regardless of where the organisation is headquartered or where its subsidiaries are located.

The aim is to make it harder for businesses and other large organisations to turn a blind eye to fraud within their ranks, encouraging proactive fraud prevention in a similar way to the UK’s “failure to prevent bribery” law introduced in 2010.

The offence means that, if an organisation is prosecuted for fraud committed by someone associated with it, the organisation must show it had reasonable fraud prevention measures in place when the fraud occurred. Examples of fraud could include dishonest sales practices, the hiding of important information from consumers or investors, or dishonest practices in financial markets.

Newly issued guidance, developed with input from agencies including the Serious Fraud Office, Financial Conduct Authority, HMRC, and the Crown Prosecution Service, offers advice for organisations preparing for the change.

Nick Ephgrave of the Serious Fraud Office stressed the urgency for companies to implement robust fraud prevention strategies before the offence becomes enforceable, warning that failure to do so could lead to criminal investigations.

With fraud now accounting for roughly 40% of crime in England and Wales, it is hoped these measures will help protect businesses and the public from the damaging effects of fraud.

To review the guidance, see: https://www.gov.uk/government/publications/offence-of-failure-to-prevent-fraud-introduced-by-eccta
 
Financial markets approve of Trump winning the presidency
Immediately following the US election results and Donald Trump’s win, the dollar made gains against other currencies. The FTSE 100 index also went up on Wednesday afternoon by 1%.

The positive moves appear to be based on Trump’s plan to cut taxes and raise tariffs, as these will cause inflation to increase and reduce the speed at which interest rates are cut.

US interest rates staying higher for longer will mean that investors get a better rate of return on savings and investments they hold in dollars.
However, there are concerns that the UK economy could be detrimentally affected by Trump’s proposals around trade, and lead to a slow-down in growth.

Financial markets are of course fickle, so by the time you read this article things could have changed again. However, it is useful to maintain a broad awareness of what is happening in the financial markets.

Financial markets influence the price of commodities, currency exchange rates and interest rates. So being aware of trends may help you to manage cash flow for increasing costs, or it may help you to time when you borrow so as to get a lower interest rate.

Consumer spending power and confidence are also affected by the same factors that influence the financial markets. So, trends in the financial markets, particularly when you can identify the reasons for them, can give you an idea of how your customers are thinking. These insights can help you to prepare and adjust as needed.

See: https://www.bbc.co.uk/news/articles/c6246e3w935o
 
Funding granted to small businesses on rural transport projects
The UK government has awarded £1.2 million in funding to small businesses for projects to boost transport links in rural areas.

Through the Rural Transport Accelerator Fund, eight small businesses have received £150,000 each to develop digital tools and other innovations that will improve connectivity for rural communities. By partnering with local authorities, these projects will support rural jobs, community wellbeing, and local economies, with trials beginning in areas from Norfolk to Scotland.

Among the winning projects are digital solutions to address the specific needs of rural residents. For instance, You.Smart.Thing will trial a demand-responsive tool in Warwickshire to help residents without access to a car find shared or community transport options. Another project by UrbanTide will map patient journeys to NHS hospitals in Fife, helping healthcare providers address gaps in transport for those needing hospital services. Additional projects will focus on predictive tools for rural transport needs and creating safer cycling routes using recycled car tyres.

Future of Roads Minister Lilian Greenwood highlighted the unique transport challenges faced by rural residents, emphasising that these projects will allow easier access to essential services, from grocery shopping to hospital appointments.

See: https://www.gov.uk/government/news/12-million-to-boost-rural-transport-in-the-uk
 
CMA provisionally approves Vodafone and Three merger
The Competition and Markets Authority (CMA) have provisionally concluded that with certain commitments the proposed merger of Vodafone and Three would not be a competition concern.

Vodafone and Three first proposed merging in June last year, however the CMA have been investigating the proposed deal because of concerns that the merger would lead to higher prices for customers as well as harming mobile virtual network operators.

The CMA have identified remedies including a commitment to upgrading the merged company’s network across the UK, including 5G rollout, and short-term customer protections that would solve competition concerns and allow the merger to go ahead.

Currently, O2 and EE are the largest operators in the mobile market. While merging Vodafone and Three would reduce the main operators from four to three, by applying the remedies, it is thought that the merger would result in three more equal networks that could aid competition in the long run.

Responses are due to the CMA this week and then it will make its final decision by December 7^th.

See: https://www.bbc.co.uk/news/articles/ckgznpx44q3o
ICO guidance on using AI for recruitment
As use of artificial intelligence (AI) tools to help with employee recruitment increases, the Information Commissioner’s Office (ICO) has published guidance on key data protection considerations.

While AI tools can help you improve efficiency in the hiring, there is need for caution. AI tools can unfairly exclude jobseekers from roles or compromise their privacy. ICO recently audited a number of providers and uncovered several areas where improvement is required leading to almost 300 recommendations being made. ICO plans to continue working with these businesses over coming months.

The ICO is also encouraging any organisation that is planning to use an AI tool for recruitment to make sure that their provider is complying with data protection law.

The key questions provided by the ICO are as follows:

1. Have you completed a Data Protection Impact Assessment (DPIA)?
2. What is your lawful basis for processing personal information?
3. Have you documented responsibilities and set clear processing instructions?
4. Have you checked the provider has unmitigated bias?
5. Is the AI tool being used transparently?
6. How will you limit unnecessary processing?

To review the questions in more detail, please see the ICO’s guidance at: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2024/11/thinking-of-using-ai-to-assist-recruitment-our-key-data-protection-considerations/
 
Stress awareness week reminders from HSE
Last week was Stress Awareness Week 2024. The Health and Safety Executive (HSE) used the occasion to remind employers of their need to carry out their legal duty to prevent work-related stress and support good mental health at work.

According to HSE figures, 17.1 million working days were lost to work-related stress in 2022/23. An average employee suffering from work-related stress, depression or anxiety takes an average of 19.6 days off work a year, almost the equivalent of a working month.

Clearly, it is in an employer’s interest to do what it can to reduce and minimise stress in the workplace.

Employers have a legal duty to:

• Carry out risk assessments for stress and then act on them.
• Take steps to prevent work-related stress.
• Write down the risk assessment if there are five or more employees. (It is still recommended to write it down if you have less employees.)

The HSE provides free online learning, a risk assessment template and a ‘talking toolkit’ that can help structure your conversations with staff.

See: https://press.hse.gov.uk/2024/11/03/stress-awareness-week-employers-have-to-fulfil-legal-duty

8th November 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

Autumn 2024 Budget speech: History in the making?
On 30 October 2024, Rachel Reeves delivered her first Budget speech. As the first Budget speech ever delivered by a female Chancellor of the Exchequer, the occasion was bound to be one for the history books regardless of what was said.

The Chancellor’s speech lasted 76 minutes and right from the start she claimed that difficult decisions were having to be made because of the £22bn ‘black hole’ left in the public finances by the previous government.

Once the speech had concluded there was a feeling that the Budget may not have been as bad as we might have expected. This is likely the effect the Chancellor was hoping for and may have had something to do with the fact that the main way of increasing taxes – from a rise in Employers National Insurance (NI) – had already been strongly indicated before the Budget took place.

For working people, the Budget maintained the status quo with no increases to income tax, national insurance or VAT. The personal allowances and tax rate bands were frozen by the previous government as a way of raising taxes known as ‘fiscal drag’. This is because as pay increases, more earnings are likely to be taxed at higher rates. The Chancellor did promise that from 2028/29, personal tax thresholds would be uprated in line with inflation once again.

However, businesses were one of the big losers in the Budget, largely through the aforementioned Employers NI increases as well as increases to the minimum wage rates, which are both explored in the two articles below.

Retail, hospitality and leisure (RHL) businesses received some support through continued business rates relief. For the 2025/26 tax year, RHL businesses will be given a 40% relief on their business rates, subject to a cap of £110,000 per business. The small business multiplier will also be frozen in 2025/26.

These are interim measures as the government intends to introduce permanently lower tax rates for RHL properties with rateable values under £500,000 from 2026/27.

The Chancellor also announced investments in public services and home building. These may mean contracts and work for businesses across various sectors.

If you are concerned about how any of the Budget measures will affect you and your business, please get in touch at any time and we will be happy to provide you with personalised advice.
 
Businesses count the cost of increases to Employers National Insurance
As has been widely expected in the last few weeks, the Chancellor, Rachel Reeves, made some significant changes to the Employers National Insurance (NI) rate and threshold in the Autumn Budget.

From 1 April 2025, the rate for Employers National Insurance (NI) will increase from 13.8% to 15%. At the same time, the level at which employers start paying national insurance on each employee’s salary will be reduced from £9,100 per year to £5,000. The combination of these two changes means a potentially significant increase in payroll costs for businesses.

To counteract this, the employment allowance will be increased from its current £5,000 to £10,500. The Chancellor claimed that this would mean that “865,000 employers won’t pay any National Insurance at all next year and over 1 million will pay the same or less than they did previously.”

An employer who employs 4 full time (35 hours per week) employees at the National Living Wage rate will not have to pay NI on their wages.
However, there is some encouraging news for larger businesses. Previously the Employment Allowance could only be claimed by an employer if their Employers NI liability was less than £100,000 in the tax year. This restriction will be removed and mean that all employers that otherwise qualify will be able to reduce their national insurance liability by £10,500.

Businesses planning their headcount and budgeting payroll costs for next year will want to factor in the increased national insurance costs. If you need any help with doing this, please do not hesitate to give us a call.

See: https://www.bbc.co.uk/news/articles/c4g7x6p865zo

Bus fare cap to increase to £3
Two days before the Budget, the Prime Minister announced that the cap for single bus fares would be increased to £3 from its current £2.

The current fare cap is due to expire at the end of 2024. Without intervention, prices for some routes looked set to rise significantly. The new £3 cap will run until the end of 2025.

The cap means that no single bus fare on routes that are included in the scheme can exceed £3. Routes where the fare is less than £3 can only increase in line with inflation.

For workers that are reliant on bus fares, the new cap means an increase in their costs but at least continues to provide some relief.
See: https://www.gov.uk/government/news/over-1-billion-to-boost-bus-services-across-the-country-as-bus-fares-capped-at-3
 
Employers now required to take “reasonable steps” to prevent sexual harassment
From 26 October 2024, employers were given a new legal duty to take “reasonable steps” to prevent sexual harassment of employees.

This duty requires employers to anticipate when sexual harassment may occur and take reasonable steps to prevent it. If sexual harassment has already taken place, then an employer would need to take action to stop it from happening again.

It is not possible for an individual to make a claim against their employer for failing to take preventative action. However, if they successfully bring a sexual harassment claim, the employment tribunal will automatically consider whether the employer failed in its duty to prevent the harassment from happening. If they find that the employer was negligent then they can order an uplift in the compensation paid to the employee.

ACAS have provided guidance to employers on what to do, including advising on things that should be included in a sexual harassment policy.
To review the guidance, see: https://www.acas.org.uk/sexual-harassment
 
Why staying up-to-date with your accounts is essential: Lessons from a recent insolvency case
In a recent court case, a company director from Bury was sentenced to prison for failing to comply with basic accounting and legal responsibilities. Vezubuhle Ndlovu, the former director of VN Electrics Limited, was jailed for 10 months after he failed to provide the required records when his company went into liquidation, leaving over £200,000 in unpaid taxes.

This case serves as a stark reminder of the consequences for businesses that do not prioritise accurate accounting, particularly when dealing with financial and tax obligations. Let’s examine why keeping up-to-date records is so important for businesses of all sizes and sectors.

What happened?
Ndlovu's company, VN Electrics, which operated as a wholesale trade business, was petitioned for liquidation by HM Revenue and Customs (HMRC) in 2019 due to an outstanding tax bill of £221,600.

After the company entered liquidation, Ndlovu was required by law to provide the company’s financial records to the Insolvency Service. His failure to do so prevented the Official Receiver from assessing the company’s assets, income, and financial position.

Ndlovu repeatedly refused to cooperate. Even after being disqualified as a director for seven years, he still failed to respond or attend interviews requested by the Insolvency Service. Manchester Crown Court have subsequently sentenced him to 10 months in prison.

The legal responsibilities of directors
Company directors have a legal duty to keep accurate financial records and to be transparent with stakeholders, especially in times of financial distress.

This case highlights the severe consequences for not complying. Under the Companies Act and Insolvency Act, it is a criminal offence to fail to keep proper accounting records, and persistent failure to cooperate with authorities can result in prison sentences.

The impact on the stability of your business
Maintaining up-to-date accounts is more than just an administrative task; it is a core responsibility that can safeguard the future of a business.
Businesses that regularly review their accounts are better positioned to make informed decisions, identify potential financial issues early on, and avoid the kinds of tax and debt problems that led to VN Electrics’ liquidation. Without clear records, even the day-to-day management of cash flow, payroll, and expenses can become difficult to handle, potentially leading to further financial instability.

Protecting relationships with stakeholders
For any business, building trust with creditors, suppliers, and partners is essential. Reliable accounting practices demonstrate that a company is well-managed, financially sound, and transparent in its dealings.

In the case of VN Electrics, the lack of financial transparency not only damaged the company’s reputation but also strained relationships with stakeholders who were left uncertain about the company’s financial position.

Key takeaways
The case of VN Electrics serves as an important reminder for all business owners and directors:

• Legal accountability: Directors are legally accountable for maintaining accurate records, which must be available to stakeholders and regulators as needed. 
• Financial health and oversight: Up-to-date accounts provide a clear picture of a company’s financial health, helping to avoid situations where debt builds up unaddressed. 
• Stakeholder confidence: Reliable records enhance trust with creditors, suppliers, and partners, making it easier to do business and manage financial obligations. 
• Early problem detection: Regular reviews of financial records help identify issues early, allowing businesses to take corrective action before problems become unmanageable.

In a time when economic challenges and tax obligations continue to impact businesses, staying on top of financial records is one of the best ways to protect a company’s future, meet legal responsibilities, and ensure transparency with all stakeholders.

If you need advice about or help with your accounts please feel free to get in touch and we would be happy to help you!

See: https://www.gov.uk/government/news/bury-director-jailed-after-failing-to-produce-accounts-for-company-which-owed-more-than-200000-in-tax

Protecting young people online: The ICO taking action on data privacy for children
In today’s digitally connected world, social inclusion has extended into virtual spaces, and young people are increasingly exchanging personal information to stay connected with friends and access social media platforms. This trend has raised significant privacy concerns, especially as recent research by the Information Commissioner’s Office (ICO) reveals how critical data handling is for safeguarding children online.

The ICO’s Children’s Data Lives research has highlighted the importance of enforcing stronger privacy practices to protect young users who may not fully understand the implications of sharing their data.

Data as a form of currency
For many children, personal data has become a form of currency. According to the ICO’s findings, young people often feel they must exchange personal details to access apps and social media platforms, which are central to their social lives.

The research emphasises that, while children seek acceptance in digital spaces, they are largely unaware of how their data is being collected or used by companies. Many young users place their trust in well-known platforms, assuming they are safe, but these platforms’ designs can obscure data-sharing practices, making it difficult for children to make informed decisions about their privacy.

The ICO’s strategy for child privacy protections
In response, the ICO has taken several steps to promote safer digital environments for children. Through its Children’s Code strategy, the ICO aims to ensure that online services prioritise the needs and privacy of young users. This initiative holds businesses accountable for implementing privacy practices that protect children’s rights and enable them to interact safely online.

The ICO has reviewed the privacy practices of 34 social media and video-sharing platforms as part of the Children’s Code strategy. This review assessed issues related to:

1. Default privacy settings: Since many children rely on default settings, the ICO is pushing for these defaults to be set to privacy-friendly options, minimising exposure to unnecessary data sharing from the outset. 
2. Geolocation: The ICO is addressing the risks associated with geolocation data, which can reveal a user’s location. They advocate for stricter control over location settings to reduce the risk of exposing children’s whereabouts unknowingly. 
3. Age assurance: Verifying the age of users helps ensure that privacy features are appropriately tailored for children, preventing them from inadvertently sharing personal data in adult-oriented environments.

Holding businesses accountable
As part of their commitment to enforcing the Children’s Code, the ICO requested further information from 11 companies to understand how their privacy practices align with child-friendly standards.

While most companies have engaged voluntarily, the ICO had to issue formal information notices to three companies—Fruitlab, Frog, and Imgur—to compel them to provide detailed responses on critical matters such as geolocation, default privacy settings, and age verification. Frog and Imgur have now responded, and the ICO is carefully reviewing their submissions.

A safer online future for children
As digital spaces play an ever-growing role in children’s social lives, the ICO remains committed to its Children’s Code strategy, and will continue to encourage businesses to adopt stronger, more transparent privacy practices.

See: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2024/10/statement-on-ico-s-work-to-protect-children-online/