6thSep
News article

Tax-Free Childcare can ease the cost of the return to school, says HMRC

Families may be eligible for Tax-Free Childcare (TFC) to help pay for breakfast clubs and after school clubs as their children go back to school, HMRC has said.

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Families may be eligible for Tax-Free Childcare (TFC) to help pay for breakfast clubs and after school clubs as their children go back to school, HMRC has said.

Eligible families can save money on their childcare and benefit from a government top-up worth up to £2,000 every year, or up to £4,000 a year if a child is disabled.

In June 2021, almost 308,000 families across the UK benefited from making use of TFC, but HMRC says thousands are still missing out on the opportunity.

TFC is available to parents or carers who have children aged up to 11, or 17 if their child is disabled. For every £8 a parent or carer deposits into their account, they will receive a £2 top-up, up to the value of £500 every three months, or £1,000 if their child is disabled.

The 20% top-up is paid into the TFC account and is ready to use almost instantly, meaning parents and carers can use the money towards the cost of childminders, breakfast clubs and after school clubs and approved play schemes.

Myrtle Lloyd, HMRC's Director General for Customer Services, said: 'As your children head back to school this autumn, don't miss out on the opportunity to receive your 20% top-up to help pay for their childcare.

'It is quick and easy to sign up, just search 'Tax-Free Childcare' on GOV.UK.'

3rdSep
News article

Drop proposed basis period reform, urges ICAEW

Pushing through proposals to change basis periods ahead of the expansion of Making Tax Digital (MTD) will cause as many problems as it solves, the Institute of Chartered Accountants in England and Wales (ICAEW) has warned.

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Pushing through proposals to change basis periods ahead of the expansion of Making Tax Digital (MTD) will cause as many problems as it solves, the Institute of Chartered Accountants in England and Wales (ICAEW) has warned.

HMRC recently began a consultation outlining proposals to align basis periods with the tax year.

However, the ICAEW's Tax Faculty argues that implementing such changes ahead of the introduction of Making Tax Digital for income tax self assessment (MTD for ITSA) 'would not provide any genuine simplification to the UK's tax system'.

Instead, it says such reforms would be likely to increase costs, complexity and uncertainty for those businesses affected. It could also damage the UK's attractiveness as a place for the location of international service firms, the ICAEW added.

The ICAEW said that those businesses not following the tax year are likely to have very good reasons for doing so, including aligning with 31 December which is the international standard for the tax year end.

The response also highlights the considerable difficulties that the proposed change would pose for seasonal businesses, agricultural firms and GP practices.

The ICAEW concludes: 'As the UK recovers from the pandemic, the one thing businesses need most of all is a period of certainty and stability. This is not the time to make this change and we urge the government to drop the proposal.'

2ndSep
News article

FSB suggests business rates system 'disincentivises investment'

The Federation of Small Businesses (FSB) has stated that the current business rates system in England serves to 'disincentivise businesses to invest in net zero and employee wellbeing measures'.

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The Federation of Small Businesses (FSB) has stated that the current business rates system in England serves to 'disincentivise businesses to invest in net zero and employee wellbeing measures'.

In a letter to the government, the business group said that small firms should not be penalised with higher business rates bills for greening their premises or improving staff wellbeing. It also stated that childcare providers should be granted business rates relief.

Ahead of a government business rates review this autumn, the FSB described the business rates system as 'regressive and outdated', and suggested that some small firms should be removed from the system altogether.

Mike Cherry, National Chairman of the FSB, said: 'This is a levy that hurts small firms trying to do the right thing: if you put solar panels on the roof to aid your transition to net zero, or install ventilation to support the wellbeing of your staff, the Valuation Office Agency will advise your local authority that you should be paying more in business rates.

'As we look to aid the small business community's transition to net zero and employee safety and wellbeing as we come out from the pandemic, this simply cannot be the right approach to taxation.'

1stSep
News article

UK business confidence at four-year high

British business confidence is at its highest level since April 2017, according to the latest Lloyds Bank Business Barometer.

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British business confidence is at its highest level since April 2017, according to the latest Lloyds Bank Business Barometer.

Confidence is being fuelled by hope that the economy will recover strongly to pre-pandemic levels. Firms in the manufacturing, services and construction sectors were the most optimistic that recovery would continue.

However, there was caution amongst many companies about inflation and staff shortages.

The barometer found that overall business confidence among UK firms rose by six points to +36% in August, driven by improvements in companies' trading prospects and expectations of stronger growth in the year ahead.

Said Hann-Ju Ho, Senior Economist at Lloyds Bank Commercial Banking, commented: 'Business confidence reaching its highest level in over four years tells a positive story about the country's economic recovery.

'This confidence is driven by the continued success of the vaccine rollout, the removal of lockdown restrictions and adjustments to self-isolation rules.

'Staff shortages remain a challenge, but as the economy moves back towards pre-pandemic levels we can be optimistic that the momentum for business confidence and economic optimism can be sustained in the months ahead.'

31stAug
News article

Contactless limit to increase to £100 from 15 October

The national roll-out of the new £100 spending limit for contactless card payments will begin from 15 October 2021, trade body UK Finance has confirmed.

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The national roll-out of the new £100 spending limit for contactless card payments will begin from 15 October 2021, trade body UK Finance has confirmed.

The decision to raise the contactless limit from £45 to £100 was made by HM Treasury and the Financial Conduct Authority (FCA) following a public consultation and discussions with both the retail and banking sectors. It follows on from the successful increase in the limit from £30 to £45 in April 2020.

From 15 October 2021, consumers will start to see retailers accepting contactless payments up to the new £100 limit, which will give customers more flexibility when shopping in store.

David Postings, Chief Executive of UK Finance, said: 'Contactless payment has proved very popular with consumers and an increasing number of transactions are being made using contactless technology.

'The increase in the limit to £100 will allow people to pay for higher value transactions like their weekly shop or filling up their car with fuel. The payments industry has worked hard to put in place the infrastructure to enable retailers to update their payments systems so they can start to offer their customers this new higher limit.'

27thAug
News article

HMRC urges taxpayers to stay alert to digital scams

HMRC has urged taxpayers to stay alert to the threat of digital scams and scammers claiming to represent HMRC.

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HMRC has urged taxpayers to stay alert to the threat of digital scams and scammers claiming to represent HMRC.

Research published by HMRC revealed that the number of tax-related scams has doubled in the past 12 months.

In the past year HMRC has received more than one million referrals from the UK public in regard to suspicious contact, with many fraudsters offering 'tax refunds' or 'rebates'. The research showed that HMRC received 441,954 reports of phone scams and more than 13,315 reports of malicious websites.

HMRC also stated that, over the last year, it has asked internet providers to take down 441 coronavirus (COVID-19) support scheme scam webpages.

Mike Fell, Head of Cyber Security Operation at HMRC, said: 'The pandemic has given criminals a fresh hook for their activity and we've detected more than 460 COVID financial support scams alone since early 2020.

'HMRC takes a proactive approach to protecting the public from tax-related scams and we have a dedicated Customer Protection Team that works continuously to identify and close them down.'

26thAug
News article

UK recovery slows as staff shortages take their toll

Staff and supply shortages have taken their toll on the UK's economic recovery this month, according to the latest IHS Markit/CIPS Purchasing Managers' Index (PMI).

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Staff and supply shortages have taken their toll on the UK's economic recovery this month, according to the latest IHS Markit/CIPS Purchasing Managers' Index (PMI).

August's PMI hit a six-month low of 55.3, down from 59.2 in July.

A score above 50 indicates growth, however the post-pandemic recovery appears to be losing momentum due to shortfalls. Companies previously found staffing levels difficult to maintain due to self-isolation requirements for contacts of people with coronavirus (COVID-19). However, self-isolation rules were dropped from 13 August for people who have been fully vaccinated.

Chris Williamson, Economist at IHS Markit, said: 'Despite COVID-19 containment measures easing to the lowest since the pandemic began, rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages.

'Supplier delays have risen to a degree exceeded only once before – in the initial months of the pandemic – and the number of companies reporting that output had fallen due to staff or materials shortages has risen far above anything ever seen previously in more than 20 years of survey history.'

25thAug
News article

CIOT warns over stamp duty refund claims

The Chartered Institute of Taxation (CIOT) has warned that some claims being made by firms offering help with Stamp Duty Land Tax (SDLT) refunds are too good to be true.

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The Chartered Institute of Taxation (CIOT) has warned that some claims being made by firms offering help with Stamp Duty Land Tax (SDLT) refunds are too good to be true.

The CIOT says an increasing number of firms are contacting buyers of properties after completion of a purchase, suggesting that SDLT has been overpaid. 

The most common issues raised are that multiple-dwellings relief (MDR) has not been claimed or that the buyer could have paid non-residential rates of SDLT (which are generally lower than residential rates) because the property was a mixture of residential and non-residential land. 

The CIOT said: 'SDLT is complicated and sometimes reliefs are overlooked, so it can be worth revisiting transactions if a letter is received.

'However, many unsolicited approaches are indeed too good to be true and responsible taxpayers should act with caution and check independently whether a refund is due. 

'The suggested fee arrangements can also seem attractive as it appears that the claims are made on a 'no win no fee' basis. But it is important to remember that receiving a refund is not necessarily a win as HMRC may revisit the claim and deny that it was valid. In these circumstances, the fee may already have been paid.'

24thAug
News article

HMRC outlines changes to late payment penalty regime

HMRC has published a paper outlining the changes to the late payment penalty regime for taxpayers.

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HMRC has published a paper outlining the changes to the late payment penalty regime for taxpayers.

The government intends to reform sanctions for late submission and late payments to make them 'fairer and more consistent across taxes'. Initially the changes will apply to VAT and income tax self assessment (ITSA).   

The changes will see interest charges and repayment interest harmonised to bring VAT in line with other tax regimes, including ITSA.

Under the new regime, there are two late payment penalties that may apply: a first penalty and then an additional or second penalty, with an annualised penalty rate. All taxpayers, regardless of the tax regime, have a legal obligation to pay their tax by the due date for that tax. The taxpayer will not incur a penalty if the outstanding tax is paid within the first 15 days after the due date. If tax remains unpaid after day 15, the taxpayer incurs the first penalty.

For VAT taxpayers, the reforms take effect from periods starting on or after 1 April 2022. The changes will take effect for taxpayers in ITSA from accounting periods beginning on or after 6 April 2023 for those with business or property income over £10,000 per year (that is, taxpayers who are required to submit digital quarterly updates through Making Tax Digital for ITSA).

For all other ITSA taxpayers, the reforms will take effect from accounting periods beginning on or after 6 April 2024.

Further guidance can be found here.

23rdAug
News article

Deadline looms for parents to update Child Benefit for 16-year-olds

HMRC has reminded parents and carers that they have until 31 August 2021 to confirm whether their teenagers are staying in full-time education or training beyond 16.

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HMRC has reminded parents and carers that they have until 31 August 2021 to confirm whether their teenagers are staying in full-time education or training beyond 16.

If they do decide to continue their full-time education or training, parents and carers will be eligible to continue receiving Child Benefit payments for their child.

Child Benefit is paid to eligible parents and carers who are responsible for a child under 16, or under 20 if they are in full-time non-advanced education or approved training.

However, parents and carers receiving Child Benefit and who also have an income over £50,000 (or their partner does) may have to pay the High Income Child Benefit Charge via an annual self assessment tax return.

In addition, HMRC will stop making payments of Child Benefit, Guardian's Allowance and tax credits into Post Office card accounts from 31 November. HMRC is reminding any Child Benefit and tax credit customers who use this account to receive their payments that they will need to update HMRC with their new bank, building society or credit union account details.

Child Benefit records can be updated on GOV.UK.