News
| 10-06-2024
As of 1st May 2024, Companies House has implemented revised fees, marking a significant change in the cost structure for various services.
| 10-06-2024
HM Revenue & Customs (HMRC) has recently announced new Advisory Fuel Rates (AFRs) that will take effect from 1 June 2024. These changes include a reduction in the Advisory Electric Rate (AER) for electric vehicles
| 05-06-2024
The Treasury Committee has warned about the negative impacts of unfair banking practices and inadequate financial regulation on small and medium-sized enterprises (SMEs). The report, stemming from an inquiry into SME access to finance,
| 29-05-2024
Updated guidance has been issued by the Equality and Human Rights Commission to help employers. The guidance provides advice on what employers can do to prevent pregnancy and maternity discrimination at work.
| 29-05-2024
A new service has been launched to help employers and managers with employee health and disability. The guidance contained in the service will help in supporting employees and to understand any legal requirements.
| 29-05-2024
New planning laws that have come into force simplify the conversion of unused farm buildings into new homes, farm shops, and gyms. These changes aim to help farmers diversify and expand their businesses
| 22-05-2024
Measures to support farmers and help the UK’s farming and food sector grow were announced last week by the government. The support package is designed to support domestic food production
| 22-05-2024
While commenting on the GDP growth and what it indicates about the economy, the Prime Minister again drew attention to National Insurance. The article released by the Prime Minister’s
| 22-05-2024
HM Revenue & Customs (HMRC) have released figures showing that 295,250 Self Assessment tax returns were filed in the first week of the new tax year. Almost 70,000 were filed on the first day – April 6th. Tax returns do not need to be filed until 31 January 2025,
| 14-05-2024
From October 2024, company size thresholds are to increase by 50%. For each company, these new thresholds will begin to apply from the start of the next accounting period commencing on or after 1 October 2024. But what are the implications of these changes to your company?
| 14-05-2024
A new digital service has been launched that makes it easier to check if you have any gaps in your National Insurance (NI) record that may affect your State Pension entitlement. The service is called Check Your State Pension forecast and can be accessed via GOV.UK or the HMRC app.
| 07-05-2024
Growing a business often requires capital. If you don’t have that capital personally or already in the business, then one option is to get finance from a bank. What types of finance are available? How can you present a request to a bank and have it accepted? We will endeavour
| 07-05-2024
HM Revenue and Customs (HMRC) have updated their guidance on what qualifies as ordinary commuting and private travel for tax purposes to include hybrid or flexible working. Generally, where an employee works at home as
| 07-05-2024
Recent surveys of UK business owners show us to be under pressure. This is no surprise. As a business owner, you’re constantly juggling multiple responsibilities and facing a myriad of challenges.
| 29-04-2024
New employment laws came into force on 6 April 2024 that apply to all businesses which include Flexible working: · An employee now has a right to request flexible working from their first day of employment.
| 29-04-2024
From 1 May 2024, the VAT road fuel scale charges will be updated. The new rates will need to be used from the start of the next VAT accounting period that begins on or after 1 May.
| 29-04-2024
HM Revenue and Customs (HMRC) are running a campaign to help people avoid being caught out by tax avoidance schemes. This is particularly relevant to those who are contractors, agency workers, or are working through an umbrella company.
| 29-04-2024
New guidance has been published by HM Revenue and Customs (HMRC) to help legal representatives find out what they need to tell HMRC to calculate the lump sum death benefit charge.
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Our company secretarial experts are ready to assist businesses in adapting to the revised fee structure and ensuring continued compliance with regulatory requirements, so speak to us.
HM Revenue & Customs (HMRC) has recently announced new Advisory Fuel Rates (AFRs) that will take effect from 1 June 2024.
These changes include a reduction in the Advisory Electric Rate (AER) for electric vehicles – which can be highly tax efficient.
Many businesses have invested in electric fleets, which presents a slight problem for business owners.
Should you reduce your rates in line with the AER or stick with your current rates? Here’s everything you need to know.
Key changes in the AFRs
Below is a breakdown of the key changes made to the rates – these are advisory, however, so you have no obligation to follow them to the letter.
- Electric vehicles: The AER has been reduced from 9 pence per mile (ppm) to 8ppm. This rate is intended to cover the cost of electricity used for business travel by electric company car drivers.
- Petrol: Rates have increased by 1ppm for engine sizes up to 2,000cc, and by 2ppm for engines over 2,000cc.
- Diesel: Rates have increased by 1ppm across all engine sizes.
- LPG vehicles: Rates remain unchanged across all engine sizes.
How does the AER calculation work
In essence, the AER is derived from data on electricity costs and vehicle consumption rates.
The Department for Energy Security and Net Zero (DESNZ) provides the annual “pence per kilowatt hour” cost, which is then adjusted quarterly by the Office for National Statistics (ONS) Consumer Prices Index for electricity.
This data is combined with vehicle-specific electricity consumption rates and business car sales data to calculate a weighted average cost per mile for fully electric cars.
The Association of Fleet Professionals (AFP) suggests having different rates based on access to home charging and vehicle type (cars versus vans) which could provide a more accurate reflection of actual costs and improve fairness among employees (this is yet to be implemented).
Responding to the changes
You’ll want to review how the new AER compares to the actual costs incurred by your employees for charging their electric vehicles.
If the new rate falls short, consider whether this might lead to dissatisfaction or financial strain for your employees.
It’s important to remember that although HMRC sets the advisory rates, businesses can set their own reimbursement rates.
So, if the new AER does not cover the true costs, you might want to consider offering a higher reimbursement rate to ensure employees are not out of pocket.
We can provide tailored advice to ensure your reimbursement policies meet both regulatory requirements and the needs of your employees.
For more information, or guidance based on your unique circumstances, please get in touch.
The Treasury Committee says confidence among SMEs has fallen.
The Treasury Committee has warned about the negative impacts of unfair banking practices and inadequate financial regulation on small and medium-sized enterprises (SMEs). The report, stemming from an inquiry into SME access to finance, highlights the struggles these businesses have faced over the past five years, exacerbated by the global pandemic and energy crisis.
The committee criticised the widespread use of personal guarantees, which often require borrowers to secure loans against personal assets, such as their homes. It also raised concerns about “debanking”, noting that in 2023 alone, banks closed around 140,000 SME accounts, frequently without sufficient explanation.
The report condemned the current mechanisms for resolving disputes between SMEs and banks as inadequate. The Financial Ombudsman Service lacks the resources and expertise for complex SME cases, while the Business Banking Resolution Service (BBRS) has been ineffective and is recommended for closure. Despite costing over £40m, the BBRS has resolved only 58 cases.
The committee has made several recommendations to enhance transparency and fairness in banking for SMEs. These include urging the Financial Conduct Authority (FCA) to enforce greater transparency in account closures and to amend regulations regarding the use of personal guarantees. Furthermore, it suggests expanding the scope of the Financial Ombudsman Service and calls on the Treasury to develop a new, independent system to support SMEs outside the Ombudsman’s current remit.
Talk to us about your small business.
Updated guidance has been issued by the Equality and Human Rights Commission to help employers. The guidance provides advice on what employers can do to prevent pregnancy and maternity discrimination at work.
The updates are due to the new flexible working laws that came into effect in April 2024, and they outline the changes that employers will have to make because of these laws.
These changes include:
- Extending protection from redundancy.
- In a redundancy situation, offering suitable alternative employment.
- Dealing with the new right to request flexible working from the first day of employment.
- Increasing the flexibility in how paternity leave is used.
Employers should ensure that they are up-to-date and compliant with the new laws, and the guidance can help with doing that.
To review the guidance in full, see: https://www.equalityhumanrights.com/guidance/pregnancy-and-maternity-pregnancy
A new service has been launched to help employers and managers with employee health and disability.
The guidance contained in the service will help in supporting employees and to understand any legal requirements. There are also links provided to government and other organisations that are able to help.
The guidance contains information on:
- Managing absences and staying in touch with employees.
- In and out of work conversations with your employees.
- Helping you to decide on changes that may help employees stay or come back to work.
- How to protect your business and your employees with policies and procedures.
- How to manage complex situations.
The service asks you questions, such as “Is your employee currently at work?” or “Has your employee told you they have a health condition or disability?”. Depending on your answers it then provides advice and information about what you need to do.
To try the new service out, see: https://www.support-with-employee-health-and-disability.dwp.gov.uk/support-with-employee-health-and-disability
New planning laws that have come into force simplify the conversion of unused farm buildings into new homes, farm shops, and gyms. These changes aim to help farmers diversify and expand their businesses without the burden of submitting planning applications.
Farmers can now repurpose agricultural buildings and land for various new uses, including outdoor sports facilities, larger farm shops, and training centres.
Permitted development rights already allow farmers to make some changes without needing planning permissions, but these have now been extended to provide greater freedoms. For instance, the number of homes that can be provided through converting agricultural buildings has doubled from five to ten, provided certain conditions like space and natural light are met. This initiative supports development of rural housing, enhancing the availability of homes in rural areas.
Key changes include:
- Doubling the allowable floorspace for converting agricultural buildings to commercial use from 500 to 1,000 square meters.
- Increasing the size of new buildings or extensions that can be built on larger farms (over 5 hectares) from 1,000 to 1,500 square meters, and for smaller farms from 1,000 to 1,250 square meters.
- Doubling the number of homes that can be created from agricultural buildings from five to ten.
- Protecting important archaeological sites by restricting new developments near them.
See: https://www.gov.uk/government/news/planning-red-tape-slashed-for-farmers
Measures to support farmers and help the UK’s farming and food sector grow were announced last week by the government. The support package is designed to support domestic food production and boost innovation so that the sector can reach its full potential.
A new blueprint
A blueprint to grow the UK fruit and vegetable sector is included as part of the measures. This is a plan to increase the amount of fruit and vegetables produced in the UK.
The blueprint includes plans for ensuring access to affordable and sustainable energy and water, cutting red tape so that glasshouses can be built more quickly and easily, and new investment aimed at boosting innovation.
To look at the blueprint in full, see: https://www.gov.uk/government/publications/a-blueprint-to-grow-the-uk-fruit-and-vegetable-sector
Food Security Index
A new annual Food Security Index has also been published. This index is UK-wide and gives an assessment of the state of UK food security in 2023 to 2024.
Rather than being a single figure, the index looks at 9 indicators across a range of areas. This allows for a more qualitative, well-rounded assessment to be made.
The new index shows an overall assessment of UK food security as being broadly stable. It does mention though that there are longer term risks from climate change, and an exceptionally wet winter and spring in 2024 pose significant challenges to some domestic production.
To read about the Food Security Index and its 9 indicators in full, see: https://www.gov.uk/government/publications/uk-food-security-index-2024/uk-food-security-index-2024
While commenting on the GDP growth and what it indicates about the economy, the Prime Minister again drew attention to National Insurance.
The article released by the Prime Minister’s Office noted that the progress in the economy has allowed them to bring down taxes, particularly the recent cuts in National Insurance.
The article went on to say: “We think it’s unfair that workers pay two taxes on their income – income tax and National Insurance – when those who earn their income from other sources only pay income tax. That’s why we want to keep cutting National Insurance until it’s gone.”
Likely part of an election strategy, but this again confirms that we can expect further cuts to National Insurance.
The lack of National Insurance to pay on dividend payments is a key reason why many company shareholders choose a blended salary/dividend approach to extract money from their company. However, cuts to National Insurance will lessen the tax advantages that dividends bring.
The cuts that have already been made mean that taxpayers in certain situations will want to review their profit extraction strategy. Future cuts will likely mean more need to do this.
If you are unsure about your profit extraction strategy please feel free to get in touch with us and we will be happy to carry out a personalised review for you.
See: https://www.gov.uk/government/news/what-does-gdp-growth-mean-for-me
HM Revenue & Customs (HMRC) have released figures showing that 295,250 Self Assessment tax returns were filed in the first week of the new tax year. Almost 70,000 were filed on the first day – April 6th.
This seems to suggest an increasing trend for filing tax returns early. Last year, 246,210 returns were filed in the opening week.
Tax returns do not need to be filed until 31 January 2025, however filing early does bring advantages. You get more time to budget and plan for paying your tax bill as well as peace of mind from knowing an essential task has been ticked off your to-do list.
However, it is especially good if you have overpaid tax since tax refunds will be paid as soon as the return has been processed, Therefore, the earlier the tax return is filed, the earlier a refund can be received.
You may need to complete a tax return for the 2023 to 2024 tax year if:
- You are self-employed with an income over £1,000.
- You received any untaxed income in the year over £2,500.
- You rent out one or more properties.
- You claim Child Benefit but you or your partner’s income is above £50,000.
- You are a partner in a partnership business.
- Your taxable income from savings and investments is more than £10,000.
- Your taxable income earned from dividends is more than £10,000.
- You have paid Capital Gains Tax on assets sold for a profit above the Capital Gains threshold.
If you are new to Self Assessment and think you might need to complete a return, you can use HMRC’s online tool to check your situation.
If you would like help in completing your tax return, please do not hesitate to contact us at any time. We will be happy to help you!
See: https://www.gov.uk/government/news/300000-file-tax-returns-in-the-first-week-of-the-tax-year
From October 2024, company size thresholds are to increase by 50%. For each company, these new thresholds will begin to apply from the start of the next accounting period commencing on or after 1 October 2024. But what are the implications of these changes to your company?
The Companies Act 2006 makes requirements for what is included in the accounts that are filed at Companies House. These requirements are split into four categories or regimes based on the size of the company. These four sizes are described as micro-entity, small, medium-sized, and large.
A company generally falls into one of those four categories based on its turnover and Balance Sheet total. The larger the company, usually the more requirements there are as to what is included in the accounts.
The increase in the thresholds potentially means that many businesses will move down a category.
At first glance this is good news as it means reduced requirements for the accounts. However, there may be reasons why a company might decide not to take advantage of the change.
For instance, if a company is growing rapidly, stepping down a category may only be temporary. Because some reporting requirements rely on ongoing processes, it may be inconvenient to stop those processes only to have to start them a year or so down the line.
If you have any concerns about how the changes might affect your company, please feel free to contact us. We would be very happy to help advise you on the most suitable regime for your company.
A new digital service has been launched that makes it easier to check if you have any gaps in your National Insurance (NI) record that may affect your State Pension entitlement.
The service is called Check Your State Pension forecast and can be accessed via GOV.UK or the HMRC app. You will need to register for or login to your Personal Tax Account to find the service.
The forecast details your NI record by tax year and identifies if there are any years that are not counting towards your State Pension entitlement. The service also shows the details of any voluntary NI contributions that you could make to increase your forecast.
The service allows you to choose which years you would like to pay voluntary contributions for and then takes you through to a secure payment facility to make payment.
If you think you may have gap years in your contributions, it is important to check sooner rather than later. Because of new State Pension transitional arrangements, the deadline for paying voluntary NI contributions was extended to 5 April 2025.
Currently, it is possible to make voluntary contributions for tax years going back to 6 April 2006. However, from 6 April 2025, it will only be possible to make voluntary contributions for the preceding six years.
If you need help using the service, or you would like to review your retirement and pension plans, please give us a call. We have access to expert financial advisers who will be happy to discuss your plans with you in a no pressure environment.
See: https://www.gov.uk/check-state-pension
Growing a business often requires capital. If you don’t have that capital personally or already in the business, then one option is to get finance from a bank. What types of finance are available? How can you present a request to a bank and have it accepted? We will endeavour to answer those questions in this article.
Common types of finance
Financing can usually be broken down into 3 main areas: loans, leases, and hire purchase.
- Loans are usually provided by a bank and could be as simple as an agreed overdraft or a fixed term loan. There are often requirements imposed by a bank, such as securing the borrowing against business or even personal assets.
- Leases involve renting an asset for a set period rather than owning it. The initial outlay is often lower than with other forms of finance. However, if you look at the total cost, leases can work out more expensive in the long run.
- Hire purchase normally involves a finance company buying an asset and then ‘hiring’ it to you. Once you pay the final instalment you get legal ownership. Interest rates can be more expensive than for a loan, but it pays to check.
It pays to compare interest rates and look at the total cost of ownership. Loans are usually the cheapest source of finance to a business, but there can be good reasons for considering leases or hire purchase.
Matters considered by a bank
When looking at an overdraft or loan application, a bank will consider what they know about you and your business, and the experience they have of the trade you are in. They will also look at your experience with the business and how you handle your accounts with the bank.
The bank will also consider the amount of finance being requested and whether it is enough to complete the aim of the finance. They will want to see cashflow forecasts and whether other factors relating to the finance request have been properly considered. For instance, if the finance is to expand property, are planning applications needed?
A bank will also look at whether the repayment period of the finance fits with the use of the asset. For example, a 10-year loan for a laptop is unlikely to be accepted.
Banks will often flex their interest rates and fees to cover them for the risk they may feel there is in lending to you. And, particularly with an overdraft, they may want to see regular financial reports from you.
When you can show that you have requested an adequate amount of finance for what you are proposing, you have demonstrated the need for the finance, and you have up to date accounts and forecasts including cashflow projections, you are giving the bank plenty of reasons for confidence in lending you the money.
We have connections with local banks and have many years of experience working with clients to get the finance that takes their business forward. Please just get in touch and we will be happy to guide you through the finance maze!
HM Revenue and Customs (HMRC) have updated their guidance on what qualifies as ordinary commuting and private travel for tax purposes to include hybrid or flexible working.
Generally, where an employee works at home as an objective requirement of the job, then HMRC will usually accept that the employee is entitled to tax relief for the expenses of travelling from their home to another workplace, such as the office, when this is in performance of the duties of their job.
Usually, HMRC will only accept that working at home is an objective requirement of the job if facilities that an employee needs to do their job are only practically available at their home.
On the other hand, if an employer provides appropriate facilities in other locations that could be practically used by the employee, or the employee chooses to work from home, then HMRC will not accept that working from home is an objective requirement of the job.
HMRC provide an example to illustrate this. The work of an area sales manager living in Glasgow requires her to manage the company’s regional sales team across Scotland, but the companies nearest office is in Newcastle. Since the manager cannot practically attend that office and is required by her employer to keep all client information securely at home, she is entitled to tax relief for her costs on the occasions she travels to the company’s office in Newcastle.
Since COVID and with the developments in communication technology, many employers now allow their employees the choice of working from home on a flexible or hybrid basis. The employee will usually have a base office that they attend on the days they are working in the office.
Since this flexible way of working is voluntary for the employee, they are not required to work from home. This means that any journeys they make from home to the office are ordinary commuting and do not qualify for tax relief.
This is important to be aware of as an employer if you reimburse staff using the approved mileage rates. You must make sure that you do not reimburse expense claims for home to office travel for employees who are hybrid workers by their own choice. If you do, the payment then becomes a benefit and will need to have tax and national insurance deducted via payroll.
If you are not sure about whether you or an employee qualifies for tax relief on home to office journeys, please feel free to call us at any time. We will be happy to help you!
See: https://www.gov.uk/guidance/ordinary-commuting-and-private-travel-490-chapter-3#employees-who-work-at-home
Recent surveys of UK business owners show us to be under pressure. This is no surprise. As a business owner, you’re constantly juggling multiple responsibilities and facing a myriad of challenges. While there are countless strategies for success, it’s equally important to be aware of potential pitfalls that could derail your efforts.
In this article, we’ll explore seven common mistakes that business owners should avoid at all costs.
- Ignore financial management
One of the biggest mistakes a business owner can make is neglecting proper financial management. Failing to keep accurate records, monitor cash flow, and budget effectively can lead to financial instability and ultimately, business failure.
Make it a priority to invest in robust accounting software, seek professional advice when needed, and regularly review your financial performance to make informed decisions.
- Neglect customer feedback
Your customers are the lifeblood of your business, and their feedback is invaluable.
Ignoring customer complaints, suggestions, or reviews can damage your reputation and lead to losing valuable business.
Look for opportunities to openly communicate with your customers and seek their feedback. The best feedback often comes from informal, relaxed conversations so train your staff to be alert to feedback given to them and ready to pass it on to you.
Demonstrate a willingness to address customer concerns and improve their experience and you will add to their loyalty to you.
- Overlook employee development
Your employees are your most valuable asset and investing in their development is essential for long-term success.
Neglecting training, mentorship, and opportunities for growth can result in disengagement, high turnover rates, and decreased productivity.
Instead, look for opportunities that could develop your employees. Be willing to consider training. Provide regular feedback and recognition to your staff so that they know what needs improving, but also what they do well. Foster a work culture that encourages teamwork and for staff to work together to overcome problems.
- Failing to adapt to market changes
Business is constantly changing, and failure to adapt can quickly lead your business into a dead end. Whether it’s changes in consumer preferences, advances in technology, or updates to regulations, staying ahead of the curve is essential for survival.
You need to be monitoring market trends on an ongoing basis. Stay open to the possibility that things will change. Sometimes indications that something is changing can come from reading the news, sometimes it’s from conversations with a customer or supplier, or sometimes you will only pick it up from changes in your sales or accounts figures. When it comes, be ready to pivot your business strategy as needed to stay relevant and competitive.
- Micromanaging everything
When starting up in business it’s exciting to be involved in everything and feel needed. While it’s natural to want to maintain control over every aspect of your business, micromanaging can be counter-productive and even stifling.
Trust your team to carry out their responsibilities and give them the power and authority to make decisions within their areas of expertise.
If you can delegate tasks, and encourage a culture where staff feel that they can take their initiative, you will free up your own time to be able to focus on strategic priorities and scale your business more effectively.
- Ignoring legal and regulatory compliance
Complying with laws and regulations is non-negotiable for any business. Ignoring legal obligations can lead to hefty fines, court proceedings, and irreparable damage to your reputation.
Find a way to stay informed about the laws that affect your industry. Be willing to seek legal advice when necessary and implement robust compliance procedures in your business to mitigate risks and keep your business on the right side of the law.
- Neglecting work-life balance
As a business owner, it’s easy to fall into the trap of working excessively long hours and neglecting your personal well-being. However, burnout can have serious consequences for both you and your business.
Make self-care a priority and set boundaries between your work and your personal life. Make time for your family and for hobbies and relaxation. Remember that maintaining a healthy work-life balance is essential for productivity in the long term and your overall happiness.
In conclusion, avoiding these seven common mistakes can help you navigate the challenges of business ownership more effectively and build a resilient and thriving business that stands the test of time.
Having looked at seven things to avoid why not ask us for our guide on 57 ways to grow your business?
New employment laws came into force on 6 April 2024 that apply to all businesses. Here is a brief summary of the changes.
Flexible working:
· An employee now has a right to request flexible working from their first day of employment.
· Previously, an employee could only make one request in a 12-month period, however this is now increased to two.
· Employers must respond to a request within 2 months and provide an explanation and consultation if the request is refused.
Carer’s leave:
· Previously, there were no leave rights for employees who are carers. Now, an unpaid leave entitlement exists from day one of employment.
Pregnancy and family leave:
· Enhanced protection in a redundancy process is available to employees on maternity leave, shared parental leave or adoption leave. Under these laws, an employer must offer suitable alternative vacancy where one is available. This is sometimes called MAPLE protection.
· From 6 April, this protection has been extended to cover an employee from the point they tell their employer they are pregnant.
· MAPLE protection generally extends to 18 months after the birth of the child, but conditions apply to those who have taken shared parental leave without taking maternity or adoption leave.
Paternity leave:
· There is now greater flexibility in how and when paternity leave is taken.
· It can be taken at any time in the first year of the child’s life, and the weeks can now be split and taken at different times. See: https://helptogrow.campaign.gov.uk/new-changes-to-employment-law/
From 1 May 2024, the VAT road fuel scale charges will be updated. The new rates will need to be used from the start of the next VAT accounting period that begins on or after 1 May. So, if your next VAT quarter starts on 1 June, you will begin using the new rates for the quarter that begins on 1 June.
VAT road fuel scale charges provide a simplified method for calculating and accounting for VAT for VAT registered businesses that pay for road fuel that is used both for business and private purposes.
Instead of tracking each fuel purchase individually, businesses apply fixed charges based on the type of vehicle and its CO2 emissions. The fixed charges are effectively an estimate of the VAT on private use.
If your business only pays for fuel that is used for business purposes, or simply reimburses business mileage to employees, there is no need to use the VAT road fuel scale charges.
The vehicle logbook or UK approval certificate should show the vehicle’s CO2 emissions figure. However, the online tool here – https://www.gov.uk/get-vehicle-information-from-dvla – can also be used to check this figure.
If the car is too old to have a CO2 emissions figure, then the CO2 band needs to be identified based on the engine size.
The new scale charges together with details on how to calculate the charge for a vehicle can be found on HMRC’s website at the link below. If you need any help with calculating the rate or you are not sure whether you need to use these charges on your VAT return, please feel free to call us and we will be happy to help you. See: https://www.gov.uk/guidance/vat-road-fuel-scale-charges-from-1-may-2024-to-30-april-2025
HM Revenue and Customs (HMRC) are running a campaign to help people avoid being caught out by tax avoidance schemes. This is particularly relevant to those who are contractors, agency workers, or are working through an umbrella company.
Tax avoidance schemes are schemes designed to bend the rules of the tax system in a way that was not intended. They usually involve contrived transactions whose only real purpose is to artificially reduce the amount of tax someone pays. It is different from effective tax planning.
Being caught out by a tax avoidance scheme can be expensive. People who use them often end up paying interest and penalties in addition to the tax they should have paid. This is on top of the fees that may already have been paid to the person who sold the scheme.
Therefore, it makes sense to check your working arrangements and contract to make sure that you do not get caught up in a scheme that might land you a big tax bill somewhere down the line. This applies whether you are being considered as self-employed or employed.
Red flags include receiving more money in your bank account that what is shown on your payslip, or receiving untaxed payments that are described as loans or capital advances.
You should be especially careful if a scheme is described as ‘HMRC approved’, since HMRC does not approve schemes.
HMRC provide a risk checker tool that you can use to find out if your employment arrangements might involve tax avoidance. This can be accessed here: https://www.gov.uk/guidance/check-if-you-are-at-risk-of-tax-avoidance
We are expert tax advisers and can help you with effective tax planning, however please be assured that we do not offer tax avoidance schemes. If you think that you may have been caught out by a tax avoidance scheme and would like some advice, please call us and we will be happy to help you.
See: https://dontgetcaughtout.campaign.gov.uk/tax-avoidance/
New guidance has been published by HM Revenue and Customs (HMRC) to help legal representatives find out what they need to tell HMRC to calculate the lump sum death benefit charge.
When someone passes away and their estate includes certain financial products like pensions or life insurance products, any lump sum death benefit received by the beneficiaries might be subject to inheritance tax.
If a lump sum death benefit charge applies to the payout, it could affect the overall value of the estate and potentially impact the inheritance tax liability. Therefore, it’s important to accurately report this information to HMRC to make sure that the overall tax paid is correct.
The new guidance sets out what the legal representative must do and the information they will need to provide to HMRC.
If you need any help with Inheritance Tax or would like to see if there are any planning measures that could mitigate Inheritance Tax on your estate, please contact us. We will be happy to help you. For the guidance, please see: https://www.gov.uk/guidance/how-to-tell-hmrc-about-a-lump-sum-death-benefit-charge
