Optimism amongst UK business leaders in regard to the UK economy rose in April 2024, data published by the Institute of Directors (IoD) has revealed.

The IoD's Directors' Economic Confidence Index showed that optimism in prospects for the UK economy rose to -10 in April 2024 from -12 in March.

The business group said that the latest figure 'sustains the leap upwards that the Index experienced in March', and 'continues its steady recovery from its recent low point of -31 in June 2023'.

Optimism regarding businesses' net investment plans for the upcoming year also increased from +18 in March to +21 in April.

Dr Roger Barker, Director of Policy at the IoD, said: 'It remains the case that business leaders are, on balance, pessimistic about UK economic prospects. However, since March, the pessimists have been in retreat. Confidence has been edging upwards and is now within striking distance of a more neutral perspective.

'According to IoD members, the fundamentals are in place for some kind of UK economic recovery.' 

The British Chambers of Commerce (BCC) is concerned over the impact of new customs checks and charges on small firms in the UK.

The new checks came into force on 30 April, and introduced charges of up to £145 for imports of plant and animal products. The BCC said the introduction of the new fee marks the first time in decades that firms will be required to pay for EU imports of goods arriving in Great Britain.

Costs are highly likely to be passed on to consumers, the business group warned, and there is also mounting uncertainty around which consignments will be subject to the new checks and fees due to issues with border computer systems.

Commenting on the matter, William Bain, Head of Trade Policy at the BCC, said: 'Firms face mounting confusion and uncertainty about exactly how and when the borders checks and costs will be fully implemented. It is crucial for business and trade that the government gives clarity on what is happening. 

'While the government did consult on the new charges being introduced it chose not to listen. The size of these costs shows scant regard to the interests of either businesses or consumers.'

The government stated that the new service, which is available from 29 April, will make it 'easier for customers to check for and fill any gaps in their national insurance record to help increase their State Pension'.

It also said that the new Check your State Pension service has been enhanced to include an end-to-end digital solution. The service shows customers by how much their State Pension could increase and outlines the voluntary national insurance contributions (NICs) they would need to pay to achieve this.

The service also allows people under the State Pension age to view gaps in their national insurance record and pay voluntary contributions to fill the gaps.

Nigel Huddleston, Financial Secretary to the Treasury, said: 'Having peace of mind when planning for retirement is crucial to ensure people can enjoy later life. That's why HMRC has launched this new online service today, making a real difference for thousands of pensioners in their retirement while providing certainty to those in their middle years and those still planning ahead.'

The Check your State Pension forecast tool can be found here. 

The Federation of Small Businesses (FSB) has called on the energy regulator Ofgem to 'take action' on the standing charges paid by UK small firms.

According to the FSB, many small businesses have seen the daily fixed price they pay soar over recent months, regardless of usage levels.

The FSB stated that it has written to Ofgem's Chief Executive to alert him to the issue and to 'recognise the specific negative impact standing charges are having on small firms'.

It also said that small firms located in rural areas have been 'disproportionately' affected by standing charge increases, exacerbating the existing rural-urban divide.

Commenting on the issue, Tina McKenzie, Policy Chair at the FSB, said: 'We want Ofgem to do a thorough review of standing charges for businesses as well as consumers, for better transparency and to discern whether energy companies are behaving fairly towards their small firm clients.

'Small business energy customers behave in a way more akin to consumers than big businesses, lacking the resources, the expertise and the buying power necessary to get the best possible deal out of their energy suppliers.'

HMRC has updated guidance on when tax relief is available on travel expenses for staff who work from home.

The tax authority is responding to the growth of flexible and hybrid basis working contracts, particularly since the Covid-19 pandemic.

HMRC confirmed that 'under such arrangements, the employee will have a base office and journeys from home to that location will be ordinary commuting'.

These trips are not eligible for tax relief.

Whether or not an employee's home is a workplace does not affect the availability of tax relief for travel expenses.

Travel expenses from home to a permanent workplace will only qualify for tax relief if the journey qualifies as travel in the performance of the duties of the employment.

HMRC states: 'Even though it may have been accepted that the employee's home is a workplace, it does not necessarily follow that they'll be entitled to tax relief for the cost of travel between their home and a permanent workplace.'

This is because the place where an employee lives will ordinarily be down to their personal choice, not an objective requirement of the job.

Figures have shown that UK borrowing over the last financial year was £7.6 billion lower when compared to the year before.

The Office for National Statistics (ONS) data also showed that borrowing was £120.7 billion in the year to March - £6.6 billion more than the Office for Budget Responsibility (OBR) previously predicted.

The figures revealed that the UK has a moderate current deficit of 3.0%. Debt levels are at their highest, however, at 89.4%.

Cara Pacitti, Senior Economist at the Resolution Foundation, commented: 'Last year was one of high but falling inflation and rising interest rates, causing both spending and tax receipts to rise in nominal terms compared to the year before.

'While lower than last year, borrowing is already £6.6 billion higher than forecast at the Spring Budget last month. So far there are no signs of any new fiscal wriggle room emerging that might allow the Chancellor to announce another pre-election Budget in the Autumn.' 

Data published by HMRC has revealed that inheritance tax (IHT) receipts rose to a record high of £7.5 billion in the 2023/24 tax year.

The latest figure is £400 million higher than in the same period last year. Experts have predicted that IHT receipts could hit £9.5 billion before the end of the decade.

Chancellor Jeremy Hunt was previously under pressure to abolish IHT altogether, but opted for national insurance cuts in fiscal events instead.

IHT receipts have risen partly due to the threshold at which the tax is payable having been frozen at £325,000, preventing it from rising with inflation and bringing more families into its scope. 

Ruth Gregory, Deputy Chief UK Economist at Capital Economics, commented: 'If the Chancellor was hoping March's figures would provide more scope for tax cuts at a fiscal event later this year, he will have been disappointed.

'Just based on the larger-than-expected budget deficit and the recent shift up in market interest rates, he may have even less fiscal 'headroom' (perhaps about £5 billion) for tax cuts than the £8.9 billion left over in March.'

The government has been accused of confusing small firms before new import rules on plant and food products are introduced, according to the Federation of Small Businesses (FSB). 

The FSB says the government has bypassed formal channels and left small firms out of the conversation, leaving them unsure as to who they can trust.

Officials from the Department for the Environment, Food and Rural Affairs (DEFRA) say new checks – due to come in on April 30 – may not be turned on as expected.

However, small firms have not been formally told of the changes, and instead found out after a document was leaked to the press.

Martin McTague, National Chair of the FSB, said: 'It's left them unsure as to who they can trust. Many have invested considerable time and money making sure they're getting it right, but now they're left scratching their heads at the conflicting messages coming out of Whitehall – will they or won't they face these checks and have to start paying on April 30?

'Government has had years to get this right. Small firms deserve clarity, and they really do not have time to decode messy and unclear Whitehall messages that contradict each other. 

'The government really ought to put small firms, the most affected by these changes, at the heart of the conversation.'

HMRC's pilot scheme for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) launches today (22 April).

Accountants and agents are now able to sign up to the pilot and test the programme out. The pilot aims to assess the MTD for ITSA reporting environment, with an initial focus on clients who are self-employed and landlords with annual income exceeding £50,000.

These clients will be mandated to keep digital records and submit quarterly updates on their income and expenditure to HMRC via MTD-compatible software from April 2026.

HMRC has urged accountants and agents seeking to participate in the pilot to ensure that their record keeping software is up to date and compatible with MTD prior to signing up. Accountants' clients must also have MTD-compatible software.

A spokesperson for HMRC said: 'Taking part in testing is a good opportunity to familiarise yourself and a small number of your clients with MTD for ITSA well ahead of 2026. This will help you to prepare your business and be ready to support the rest of your clients.'

Government proposals to enact a due diligence regime for the umbrella company market are in a 'precarious position, unless government shows some urgency, the Association of Independent Professionals and the Self-Employed (IPSE) has warned.

The government has said that it is 'minded to introduce a due diligence requirement to drive out bad actors from labour supply chains'.

HMRC will also publish new guidance later this year, including an online pay checking tool to help umbrella company workers to check whether the correct deductions are being made from their pay.

IPSE said it supports this proposal but warned that a lack of parliamentary time before the next General Election puts the plans in a 'precarious position'.

Andy Chamberlain, IPSE's policy director, said: 'It's great that government is minded to do something about non-compliance in the umbrella company sector. Contractors want to see a regulated umbrella sector, and we're ready to work with government to chalk up how a due diligence requirement could work.

'But we need some urgency from government. It's been almost a year since it began consulting on the proposals – ones that should have been in place before the off-payroll working rules. With an election on the horizon, the plans are in a precarious position and risk being delayed even further.'