17thNov
News article

HMRC confirms MTD for corporation tax to be mandated from 2026

In a new consultation HMRC has confirmed that Making Tax Digital (MTD) for corporation tax (CT) (MTD for CT) will not be implemented until 2026 'at the earliest'.

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In a new consultation HMRC has confirmed that Making Tax Digital (MTD) for corporation tax (CT) (MTD for CT) will not be implemented until 2026 'at the earliest'.

The consultation considers how the principles created for MTD could be established for companies within the charge to CT. It outlines the potential design of the MTD for CT system and provides companies with information in regard to what may be required of them following the introduction of MTD for CT.

HMRC is seeking feedback on the plans from companies and agents.

Commenting on the consultation, Tina Riches, Chair of the joint Association of Taxation Technicians (ATT) and Chartered Institute of Taxation (CIOT) Digitalisation and Agent Services Committee, said: 'We are disappointed that the consultation presupposes that most entities within the charge to CT should be within the scope of MTD before the costs and benefits arising to different parts of the population have been established.

'If a key purpose of MTD is to encourage taxpayers to become digital then it is not necessary to extend it to CT, as a large proportion of companies are VAT registered and so already in MTD for VAT, or using digital records anyway.'

The consultation runs from 12 November 2020 to 5 March 2021. The details can be found here.

16thNov
News article

Wealth gap widening as result of coronavirus pandemic, research suggests

Research carried out by think tank the Centre for Enterprise, Markets and Ethics (CEME) has suggested that the UK's wealth gap is widening as a result of the ongoing coronavirus (COVID-19) pandemic.

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Research carried out by think tank the Centre for Enterprise, Markets and Ethics (CEME) has suggested that the UK's wealth gap is widening as a result of the ongoing coronavirus (COVID-19) pandemic.

Around a third of individuals now have less than £1,500 in savings, the CEME found. In the three months to September, 314,000 workers lost their jobs as a result of the pandemic. Redundancies have caused many households to make use of savings they have stored up, according to the think tank.

However, a proportion of workers have strengthened their financial situation by saving more of what they earn. The CEME revealed that savings ratios have risen from 5% in 2019 to almost 30% in 2020.

Commenting on the research, Andrei Rogobete, Associate Director of the CEME, said: 'Financial inequality is rising fast against a historic background of big differences between the wealth of the rich and the poor. The so-called wealth gap is becoming a chasm as lockdowns inflict the greatest pain on people with low paid, insecure jobs.'

13thNov
News article

Current CGT regime 'fit for purpose', says ICAEW

The Institute of Chartered Accountants in England and Wales (ICAEW) has stated that there is 'no need' to overhaul the current capital gains tax (CGT) regime.

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The Institute of Chartered Accountants in England and Wales (ICAEW) has stated that there is 'no need' to overhaul the current capital gains tax (CGT) regime.

In its response to a review of CGT carried out by the Office of Tax Simplification (OTS), the ICAEW concluded that 'the scope and boundary of CGT is generally clear', and that the tax 'largely achieves' its policy aim of discouraging schemes that attempt to convert income into a capital gain for tax purposes.

The Institute stated that some administrative and legislative improvements are possible. However, it also believes that alterations to the tax are unlikely to raise significant revenue without a major structural change to reliefs.

In regard to the different rates of CGT in use, the ICAEW found that the structure of rates is important for the tax as individuals will often be able to choose when to make disposals.

The ICAEW said: 'The current rates are intended to reflect the fact that following the removal of indexation and taper relief for individuals, the calculation of gains does not take into account the length of time an asset has been held or inflation; this is the policy basis for CGT rates being lower than the income tax rate.

'The extent to which CGT should be payable on gains arising from inflation and how it should be mitigated is a policy matter for government and parliament to determine.'

12thNov
News article

UK economy rebounds from recession

The UK's economy bounced back from recession with record growth of 15.5% from July to September, according to the latest data from the Office for National Statistics (ONS).

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The UK's economy bounced back from recession with record growth of 15.5% from July to September, according to the latest data from the Office for National Statistics (ONS).

The return to growth comes after a six-month slump caused by the first coronavirus (COVID-19) lockdown. However, the expansion was not enough to reverse the damage caused by the pandemic.

According to the ONS, the country's economy is still 8.2% smaller than before COVID-19 struck. In September, growth was 1.1%, marking the fifth consecutive month of expansion. However, that was weaker than the levels seen in previous months.

Commenting on the data, Anna Leach, Deputy Chief Economist at the Confederation of British Industry (CBI), said: 'Economic growth bounced back strongly over the summer as lockdown was eased. But with lockdowns re-intensifying across the UK's regions and nations in October and November, we're likely to see activity fall again over the winter months.

'Many businesses have adapted their operations already . . . but the second hit to sectors that have already suffered hard may be too much to bear. Additional government support – notably the extension of the Job Retention Scheme – is welcome. And the recent good news on a vaccine gives hope for the future and may give some stimulus to spending.'

11thNov
News article

Self-employed sector facing 'avoidable decline', according to IPSE

The self-employed sector is facing a 'long-term but avoidable decline', the Association of Independent Professionals and the Self-Employed (IPSE) has cautioned.

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The self-employed sector is facing a 'long-term but avoidable decline', the Association of Independent Professionals and the Self-Employed (IPSE) has cautioned.

The warning comes after the Office for National Statistics (ONS) reported that the number of self-employed individuals in the UK dropped by 174,000 between April and June and July and September 2020.

This leaves the sector at 4.53 million self-employed individuals, down from 5.1 million at the end of 2019.

In addition, a report from the London School of Economics found that a fifth of the UK's self-employed workers are planning to change occupation after seeing their work hit by the coronavirus (COVID-19) pandemic.

Derek Cribb, CEO of IPSE, said: 'The continuing drop in the number of self-employed in the UK shows that the glaring gaps in support are leading to a long-term, avoidable decline in the sector. This is deeply concerning not only for the self-employed themselves, but also for the UK's prospects in the coming recession.

'After the 2008 financial crisis, it was rising self-employed numbers that kept unemployment comparatively low, as uncertain employers looked for more flexible expertise instead of permanent employees. Now, this does not appear to be happening and the self-employed sector is in precipitous decline. Some self-employed are finding their way into full-time roles, but many others are joining the record flow into unemployment.'

10thNov
News article

Real Living Wage increases across the UK

The Real Living Wage has increased to £9.50 per hour across the UK.

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The Real Living Wage has increased to £9.50 per hour across the UK.

The Living Wage Foundation, the charity which sets the voluntary wage, has raised the national Real Living Wage rate by 20p to £9.50 an hour. The London Real Living Wage has risen by 10p to £10.85 per hour.

The increase will benefit over 250,000 people working for almost 7,000 Real Living Wage employers throughout the UK, according to the Foundation.

The UK rate is 78p per hour more than the government minimum wage (for over 25s), and the London Real Living Wage is £2.13 per hour higher.

Laura Gardiner, Director of the Living Wage Foundation, said that the 'new Living Wage rates will give a boost to hundreds of thousands of UK workers, including thousands of key and essential workers like cleaners, care workers and delivery drivers who have kept our economy going'.

She continued: 'Since the start of the pandemic employers have continued to sign up to a real Living Wage. During Living Wage Week it's right that we celebrate those employers that have done right by workers and families, providing them with much needed security and stability even when times are hard. These are the employers that will allow us to recover and rebuild from this crisis.' 

9thNov
News article

PAC finds over £1 billion worth of fraudulent Bounce Back loan applications

The Public Accounts Committee (PAC) identified more than £1 billion worth of fraud in the government's coronavirus (COVID-19) Bounce Back Loan Scheme (BBLS) during the first six months of the scheme being in operation.

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The Public Accounts Committee (PAC) identified more than £1 billion worth of fraud in the government's coronavirus (COVID-19) Bounce Back Loan Scheme (BBLS) during the first six months of the scheme being in operation.

In a letter to the PAC, which has been looking at the operation of the BBLS, Catherine Lewis La Torre, CEO of the British Business Bank, provided fraud statistics across all BBLS lenders, as of 20 October.

These statistics show 26,933 fraudulent loan applications have been detected, with a value of £1.1 billion.

The scheme was announced on 27 April to quickly provide loans of up to £50,000, or a maximum of 25% of annual turnover, to registered and unregistered small businesses in order to support them financially during the pandemic.

Preliminary estimates from the Department for Business, Energy and Industrial Strategy (BEIS) and the British Business Bank suggested that because of credit and fraud risks, 35% to 60% of borrowers may default on the loans.

Analysis by the National Audit Office (NAO) revealed that, assuming the scheme lends £43 billion, this would imply a potential cost to government of £15 billion to £26 billion.

6thNov
News article

Chancellor extends furlough scheme to end of March

Chancellor Rishi Sunak has extended the Coronavirus Job Retention Scheme (CJRS) until the end of March 2021.

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Chancellor Rishi Sunak has extended the Coronavirus Job Retention Scheme (CJRS) until the end of March 2021.

The CJRS was supposed to have ended after being scaled back to cover 60% of salaries during October. However, on 31 October Prime Minister Boris Johnson announced a new national lockdown for England that runs from 5 November until 1 December.

In a statement to the House of Commons, the Chancellor confirmed that the CJRS will pay up to 80% of an individual's wage, up to £2,500 per month. Mr Sunak stated that the government will review the scheme in January. The Job Retention Bonus, which had been set to take effect from 15 February 2021, will be redeployed 'at the appropriate time'.

The Chancellor also announced more generous support for the self-employed. He confirmed that the next income support grant, which covers the period November to January, will be increased to 80% of average trading profits, up to £7,500.

Commenting on the matter, the Chancellor said: 'We can announce . . . that the furlough scheme will not be extended for one month – it will be extended until the end of March. The government will continue to help pay people's wages, up to 80% of the normal amount.

'All employers will have to pay for hours not worked is the cost of employer national insurance contributions (NICs) and pension contributions.

'We'll review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.'

5thNov
News article

FCA proposes further support for consumer credit borrowers impacted by COVID-19

The Financial Conduct Authority (FCA) is proposing further support for borrowers affected by the coronavirus (COVID-19).

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The Financial Conduct Authority (FCA) is proposing further support for borrowers affected by the coronavirus (COVID-19).

The UK's financial regulator announced tailored measures for borrowers in September and said it would keep them under review as the situation evolved. With a second national lockdown starting today, it has made further proposals.

The FCA has proposed to extend payment deferrals and other support to personal loans, credit cards, motor finance, rent-to-own, buy-now-pay-later and pawnbroking customers who are experiencing payment difficulties because of COVID-19.

These proposals will mean that those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total. In addition, those who currently have an initial payment deferral will be eligible for a further payment deferral of up to three months.

Commenting on the proposals, Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'Lenders continue to provide unprecedented support to borrowers impacted by the COVID-19 crisis and are working closely with the FCA to ensure customers continue to receive the help they need.

'It will always be in the long-term interest of customers who are able to do so to resume making payments, but for anyone who is still struggling ongoing support will be available.'

4thNov
News article

Government delays implementation of new pensions dashboards

The government has delayed the introduction of new online pensions dashboards that will enable individuals saving for retirement to view their pension pots in one place.

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The government has delayed the introduction of new online pensions dashboards that will enable individuals saving for retirement to view their pension pots in one place.

The pensions dashboards system was initially supposed to take effect in 2019. However, the Money and Pensions Service (MaPS) recently outlined that a fully operational pensions dashboard system will not be in place until 2023.

According to the MaPS, development and testing of the pensions dashboard system will start in 2021.

Commenting on the issue, Chris Curry, Principal of the Pensions Dashboard Programme at the MaPS, said: 'While dashboards are a simple concept, the delivery of dashboards will be complex and is reliant on collaboration between the Pensions Dashboard Programme and many other organisations across government, regulators, dashboard providers, pension schemes and providers to complete actions at a specific time.

'The first version of the data standards, which will be published in December, will enable industry to take action and take the next steps in making pensions dashboards a reality.'