22ndSep
News article

NAO calls on Treasury to safeguard access to cash

The National Audit Office (NAO) has called on the Treasury to safeguard access to cash after the coronavirus (COVID-19) pandemic accelerated the transition to cashless payments.

Click or touch to read the full article..

The National Audit Office (NAO) has called on the Treasury to safeguard access to cash after the coronavirus (COVID-19) pandemic accelerated the transition to cashless payments.

The NAO has warned that without co-ordinated effort there is a risk that vulnerable people who rely on cash will be excluded from the economy. A decade ago, cash was used in 60% of transactions, but that number fell to less than 30% by 2019, according to the NAO's data.

The data suggested that the COVID-19 outbreak may have accelerated this trend further, as market demand for notes and coins declined by 71% between early March and mid-April during the lockdown.

According to the NAO, the decline in the use of cash in transactions is putting pressure on the cash system. Commercial operators who distribute cash rely on high demand to maintain the attractiveness of their business models and cover large fixed costs, such as bank branches and ATMs.

In March 2020, the government announced that it would be bringing forward legislation to protect access to cash and address the sustainability of the cash infrastructure.

However, the NAO said it cannot currently see a clear link between the government's aim to safeguard the consumer's ability to use cash, and the responsibilities of the five public bodies in the cash system.

21stSep
News article

UK businesses voluntarily return £215 million in furlough funds

HMRC data has revealed that UK businesses have voluntarily returned more than £215 million in overclaimed Coronavirus Job Retention Scheme (CJRS) payments.

Click or touch to read the full article..

HMRC data has revealed that UK businesses have voluntarily returned more than £215 million in overclaimed Coronavirus Job Retention Scheme (CJRS) payments.

Around 80,433 firms have returned furlough funds they were given to help cover employees' salaries.

Commenting on the issue, HMRC stated: 'HMRC welcomes those employers who have voluntarily returned CJRS grants to HMRC because they no longer need the grant, or have realised they've made errors and followed our guidance on putting things right.'

The government believes as much as £3.5 billion in CJRS funds may have been paid out in error or to fraudsters.

Launched in April, the CJRS was designed to support businesses during the coronavirus (COVID-19) pandemic. Initially furloughed workers received 80% of their pay from the government, up to a maximum of £2,500 a month. Under the scheme, employers are now having to make contributions to employees' wages.

The CJRS will finish at the end of October, and will be followed by the Job Retention Bonus, which aims to encourage employers to keep employees on the payroll until the end of January 2021.

18thSep
News article

MPs urge Chancellor to extend job retention scheme

MPs have urged Chancellor Rishi Sunak to extend the Coronavirus Job Retention Scheme (CJRS) to help avoid mass redundancies.

Click or touch to read the full article..

MPs have urged Chancellor Rishi Sunak to extend the Coronavirus Job Retention Scheme (CJRS) to help avoid mass redundancies.

The CJRS is set to be wound down in October and changes were implemented to reduce the amount paid by the government from August. From the first week of August, employers had to start paying national insurance and pension contributions. For September and October, government contributions will be reduced to 70% and 60% respectively.

Experts have warned that there are a number of characteristics of the coronavirus (COVID-19) pandemic which indicate that unemployment is going to rise higher than it did at the time of the previous recession in 2008.

MPs recognised that the government faces 'a daunting challenge' in maintaining a balance between preventing a rise in unemployment but allowing labour market flexibility to enable workers to move from shrinking to growing sectors of the UK economy.

Commenting on the issue, former Chancellor Philip Hammond said: 'There is always a tension with the desire to protect employment, so there will be a tremendous political pressure in this recovery to not let people become unemployed and to not let companies fail.'

17thSep
News article

FCA confirms support for mortgage borrowers

The Financial Conduct Authority (FCA) has confirmed future support for mortgage borrowers if they continue to face payment difficulties due to the coronavirus (COVID-19).

Click or touch to read the full article..

The Financial Conduct Authority (FCA) has confirmed future support for mortgage borrowers if they continue to face payment difficulties due to the coronavirus (COVID-19).

The regulator has published finalised guidance to ensure support for consumers who have taken payment deferrals and still face financial difficulties, as well as those whose financial situation may be newly affected by the pandemic after 31 October.

Under the FCA's current guidance, borrowers can take a first or second payment deferral, which does not have a negative impact on the borrower's credit file.

However, under additional guidance published, any further support from lenders can be reflected on credit files. Firms are required to be 'clear' about the credit file implications of any support offered.

According to UK Finance, lenders have granted more than two million mortgage payment deferrals since the scheme came into effect in late March.

Commenting on the changes, Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'Lenders understand that many households will continue to see their finances squeezed as the pandemic continues and will be offering a range of support for those who need it. It is essential that customers speak with their lender to discuss the best solution for them.

'Firms will be communicating with customers whose mortgage payment deferral is coming to an end to discuss the options available. Those who can afford to resume payments should do so, as it will always be in their best interests in the long run.'

16thSep
News article

HMRC urges VAT-registered businesses to prepare for Brexit trading changes

HMRC has written to VAT-registered businesses that trade with the EU outlining how they should prepare for Brexit trading changes set to take effect from 2021.

Click or touch to read the full article..

HMRC has written to VAT-registered businesses that trade with the EU outlining how they should prepare for Brexit trading changes set to take effect from 2021.

The letters have been sent to VAT-registered businesses in Great Britain trading with the EU, or with the EU and the rest of the world.

From 1 January 2021, the UK will operate a full, external border with the EU. From this date, businesses will be required to submit declarations when importing and exporting goods that are categorised as 'controlled'.

The letters outline what businesses need to do to prepare for new processes for moving goods between the UK and the EU from 1 January 2021. Businesses are urged to ensure they have a UK Economic Operator Registration and Identification (EORI) number, and have been advised to decide how they will make customs declarations.

HMRC has also urged businesses to check if their imported goods are eligible for staged import controls.

Further advice on how to prepare can be found here.

15thSep
News article

Private pension withdrawal age to be raised

The Treasury has confirmed that the minimum age for private pension withdrawals will increase from 55 to 57 in 2028.

Click or touch to read the full article..

The Treasury has confirmed that the minimum age for private pension withdrawals will increase from 55 to 57 in 2028.

Pension reforms made under Chancellor George Osborne meant private savers could access their savings pots before State Pension retirement age.

At the time it was intended that the age restriction should be linked to be ten years behind the State Pension age, which is currently 65 but is rising to 66 this October and to 67 between 2026 and 2028.

In a statement to Parliament, John Glen, Economic Secretary to the Treasury, said: 'In 2014 the government announced it would increase the minimum pension age to 57 from 2028, reflecting trends in longevity and encouraging individuals to remain in work, while also helping to ensure pension savings provide for later life.

'That announcement set out the timetable for this change well in advance to enable people to make financial plans, and will be legislated for in due course.'

Currently, savers can take some or all of the cash held in private pension pots at age 55, including taking 25% of their savings tax-free.

14thSep
News article

CBI warns of rocky road despite July economic growth

The Confederation of British Industry (CBI) has warned that the UK economy still faces a 'rocky road back to normality' despite GDP growth in July.

Click or touch to read the full article..

The Confederation of British Industry (CBI) has warned that the UK economy still faces a 'rocky road back to normality' despite GDP growth in July.

The UK economy grew by 6.6% in July but remains far below pre-pandemic levels, according to the latest figures from the Office for National Statistics (ONS).

Hairdressers, pubs and restaurants contributed to the economic growth after businesses were allowed to reopen in July. It is the third month in a row that the economy has expanded.

However, the ONS warned that the UK has still only recovered just over half of the lost output caused by the coronavirus (COVID-19).

Commenting on the data, Rain Newton-Smith, Chief Economist at the CBI, said: 'As more businesses were able to open their doors, the economy grew further in July. But economic growth lost some steam on the previous month, illustrating the continued uncertainty over the shape of an economic recovery ahead.

'The prospect of a second wave is restraining consumer and business confidence, and firms continue to face cashflow difficulties. With government support schemes coming to an end and renewed uncertainty over Brexit, clearly the road back to 'normal' is going to be a rocky one.'

11thSep
News article

Lockdown grants welcome but more support needed, say business groups

The government's announcement of new cash grants for businesses affected by local lockdowns has been welcomed by business groups, including the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB).

Click or touch to read the full article..

The government's announcement of new cash grants for businesses affected by local lockdowns has been welcomed by business groups, including the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB).

Businesses in England that are required to shut because of a local lockdown will now be able to claim up to £1,500 per property every three weeks. However, both the CBI and the Association of Independent Professionals and the Self-Employed (IPSE) have warned that more targeted help is still required.

Annie Gascoyne, Director of Economic Policy at the CBI, said: 'New direct cash grants will certainly help small businesses if their area falls under new restrictions to protect public health. But the impact of COVID-19 is still hurting businesses, so the government will need to look at more targeted support in the autumn. That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September.'

Andy Chamberlain, Director of Policy at IPSE, commented: 'We welcome the fact the government is supporting businesses affected by local lockdowns. However, although this will help some self-employed people with business premises, it will leave the great majority out in the cold.'

Meanwhile, the FSB said the grants are 'much-needed additional financial lifelines' for businesses most affected by COVID-19. Mike Cherry, National Chairman of the FSB, said: 'Though a lot of firms have now been able to reopen, thousands are still impacted by local lockdowns.

'We look forward to working together with local government to make sure there is a straightforward claims process for all firms affected.' 

10thSep
News article

IoD urges government to extend coronavirus insolvency measures

The Institute of Directors (IoD) has called for the government to extend emergency coronavirus (COVID-19) insolvency measures to prevent company collapses and job losses.

Click or touch to read the full article..

The Institute of Directors (IoD) has called for the government to extend emergency coronavirus (COVID-19) insolvency measures to prevent company collapses and job losses.

Directors have a duty to cease trading if their company is facing insolvency, and could face financial or legal liabilities if they seek finance instead. In June, the government introduced emergency COVID-19 legislation to suspend the threat of liability for such 'wrongful trading'.

This protection expires on 30 September. However, the IoD is warning that failure to extend the measure could lead to 'entirely preventable company collapses'. The business group is calling for the government to extend the measure until the end of 2020 to aid the economic recovery and to help safeguard jobs.

'The recovery has begun, but businesses are not out of the woods yet,' said Roger Barker, Director of Policy and Corporate Governance at the IoD.

'The government has rightly supported business survival, and emergency legislation in June was an important step. The need for this support has only intensified as we enter the next stage of the recovery. Firms trying to adjust will face steep costs and limited revenues.'

9thSep
News article

Up to £3.5 billion in furlough payments fraudulent, HMRC finds

HMRC has revealed that almost £3.5 billion in Coronavirus Job Retention Scheme (CJRS) payments have been claimed fraudulently or paid out in error.

Click or touch to read the full article..

HMRC has revealed that almost £3.5 billion in Coronavirus Job Retention Scheme (CJRS) payments have been claimed fraudulently or paid out in error.

HMRC told the Public Accounts Committee (PAC) that it estimates that between 5% and 10% of CJRS funds have been provided in error. According to the PAC, in 2019 £30 billion in tax was lost as a result of taxpayer error and fraud.

HMRC said it intends to target individuals who made fraudulent CJRS claims, rather than penalise employers who made legitimate mistakes in compiling their claims.

Commenting on the issue, Jim Harra, Chief Executive of HMRC, said: 'We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5% and 10%. That will range from deliberate fraud through to error.

'Although we will expect employers to check their claims and repay any excess amount, what we will be focusing on is tackling abuse and fraud.'