22ndJan
News article

Nine million people borrowed more in 2020 as result of COVID-19 pandemic

Almost nine million people had to borrow more money in 2020 as a result of the coronavirus (COVID-19) pandemic, data published by the Office for National Statistics (ONS) has revealed.

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Almost nine million people had to borrow more money in 2020 as a result of the coronavirus (COVID-19) pandemic, data published by the Office for National Statistics (ONS) has revealed.

According to the ONS, the proportion of workers borrowing £1,000 or more increased from 35% to 45% since June 2020. It found that the self-employed were more likely to borrow money than employees.

The ONS suggested that young people and low earners have been affected the most by the COVID-19 pandemic. It added that individuals aged under 30 were 35% more likely to be furloughed than the population as a whole.

Commenting on the data, Gueorguie Vassilev, Senior Research Officer at the ONS, said: 'Many people took a financial hit in the first months of the pandemic, either being furloughed or working fewer hours.

'What we are seeing now though is a widening financial gap between households, where some people are relying on savings or borrowing to make ends meet. Those hardest hit are people on low pay, young people and parents of dependent children.'

21stJan
News article

One in three blocked from paying with cash during pandemic

Over a third of UK consumers have been blocked from paying for goods with cash during the coronavirus (COVID-19) pandemic, according to research from consumer group Which?.

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Over a third of UK consumers have been blocked from paying for goods with cash during the coronavirus (COVID-19) pandemic, according to research from consumer group Which?.

Which? surveyed more than 2,000 people across the country in November 2020 and found 34% had had cash as a means of payment refused.

The research showed that people were most likely to have been refused the option of paying with cash when shopping for groceries, accounting for more than a quarter (28%) of incidents.

Leisure activities such as going to a pub or restaurant followed closely behind, with 24% of people being refused for paying with cash.

Commenting on the research, Jenny Ross, Money Editor at Which?, said: 'We have repeatedly warned about the consequences that coronavirus will have on what was an already fragile cash system, but nowhere near enough action has been taken by the government or the regulator to understand the scale of this issue.

'The government, which is still yet to introduce legislation to protect cash it promised almost a year ago, must urgently make the Financial Conduct Authority (FCA) responsible for tracking cash acceptance levels. Failure to do so will see the cash network crumble and leave millions of people abandoned.'

20thJan
News article

Big businesses must pay small suppliers more quickly under changes to PPC

Large businesses must now pay their smaller suppliers more quickly under changes to the UK's Prompt Payment Code (PPC).

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Large businesses must now pay their smaller suppliers more quickly under changes to the UK's Prompt Payment Code (PPC).

Big businesses signed up to the PPC must pay small firms with fewer than 50 employees within 30 days instead of the previous 60 days. The Code currently has more than 2,800 signatories.

The Federation of Small Businesses (FSB) recently revealed that almost 50,000 small firms have to close each year because of late payments. According to the FSB, the issue has become more prevalent as a result of the coronavirus (COVID-19) pandemic.

Commenting on the matter, Philip King, Interim Small Business Commissioner, said: 'Late payment causes real hardship to small businesses, and the issue is more prevalent than ever due to the continued impact of the pandemic.

'Code signatories of all sizes demonstrate their commitment to ending the culture of late payment and helping to increase business confidence.'

19thJan
News article

CBI urges government to 'act on COVID business support' ahead of Budget

Ahead of the 2021 Budget in March, the Confederation of British Industry (CBI) has urged the government to provide more financial assistance to businesses affected by the coronavirus (COVID-19) pandemic.

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Ahead of the 2021 Budget in March, the Confederation of British Industry (CBI) has urged the government to provide more financial assistance to businesses affected by the coronavirus (COVID-19) pandemic.

The business group has outlined support measures required to help protect UK businesses through the spring. It has called for an extension of the Coronavirus Job Retention Scheme (CJRS) beyond April to the end of June; a lengthening of repayment periods for existing VAT deferrals until June 2021; and an extension of the business rates holiday for at least another three months.

The CBI has also called for an announcement of details of the successor of the Coronavirus Business Interruption Loan Scheme (CBILS).

'The Budget comes at a crucial time for the UK,' said Tony Danker, Director General of the CBI.

'Almost a year of disrupted demand and extensive restrictions to company operations is taking its toll. Staff morale has taken a hit. And business resilience has hit a sobering new low.

'The government must once again stand shoulder-to-shoulder with businesses to underwrite support for the duration, helping viable enterprises to last the course.'

The Budget will be delivered on Wednesday 3 March 2021.

18thJan
News article

Supreme Court backs small firms on business interruption claims

The UK's Supreme Court has found in favour of small firms receiving payments from coronavirus (COVID-19) business interruption insurance policies.

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The UK's Supreme Court has found in favour of small firms receiving payments from coronavirus (COVID-19) business interruption insurance policies.

The test case was brought against insurers by the Financial Conduct Authority (FCA). The ruling means that thousands of small businesses are now set to receive insurance payouts covering losses from the first national lockdown.

Eight insurers, including Hiscox, RSA, QBE and MS Amlin, agreed to be part of the test case and the ruling could now cost the insurance sector hundreds of millions of pounds.

Hiscox was challenged by 30,000 policyholders, who formed the Hiscox Action Group, as part of the case.

Commenting on the ruling, Flora Hamilton, Financial Services Director at the Confederation of British Industry (CBI), said: 'At such an uncertain time, this court case provides much-needed clarity to companies across the UK, and relief for smaller firms struggling with cashflow.

'This is significant news for insurers, and regulators will need to work closely with the industry as policies, products and processes are updated to reflect this ruling.'

15thJan
News article

COVID-19 is reasonable excuse for self assessment late filing, says HMRC

HMRC says it will accept coronavirus (COVID-19) as a reasonable excuse for the late filing of self assessment tax returns.

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HMRC says it will accept coronavirus (COVID-19) as a reasonable excuse for the late filing of self assessment tax returns.

However, taxpayers must submit the return as soon as possible and explain how they were affected by COVID-19 in the grounds for appeal. HMRC has also enhanced 'Time to Pay' arrangements so that taxpayers who have filed a self assessment return will be able to make payments over an extended period.

The automated self-serve Time to Pay online service has been changed to enable self assessment liabilities of up to £30,000 to be paid in up to 12 instalments.

A spokesperson for HMRC said: 'We want to encourage as many people as possible to file on time even if they can't pay their tax straight away, but where a customer is unable to do so because of the impact of COVID-19 we will accept they have a reasonable excuse and cancel penalties, provided they manage to file as soon as possible after that.

'Support is in place for those who may struggle to pay, with customers able to spread their payment liabilities of up to £30,000 over 12 months.'

14thJan
News article

Taxpayers using Time to Pay to spread cost of tax payments

Tax payments worth over £69 million are being spread through HMRC's Time to Pay facility, according to the tax authority.

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Tax payments worth over £69 million are being spread through HMRC's Time to Pay facility, according to the tax authority.

HMRC said that nearly 25,000 self assessment taxpayers have set up an online payment plan to manage their tax liabilities in up to 12 monthly instalments.

Last October HMRC increased the threshold for self-serve Time to Pay arrangements from £10,000 to £30,000. Once self assessors have completed their 2019/20 tax return and know how much tax they owe, customers can use the self-serve facility to set up monthly direct debits and spread the cost of their tax bill.

The Time to Pay threshold was increased to help businesses and individuals who have been adversely affected by the coronavirus (COVID-19) pandemic.

Karl Khan, HMRC's Interim Director General for Customer Services, said: 'We know the past year has been tough for many businesses and self-employed people, which is why we're helping them spread the cost of their tax bill into monthly payments.

'Self assessment customers can use the self-serve Time to Pay facility for amounts up to £30,000, with almost 25,000 customers already benefiting from the service.'

13thJan
News article

Monthly deadline approaching for furlough claims

HMRC has reminded employers that there are now monthly deadlines for claims for furloughed staff under the Coronavirus Job Retention Scheme (CJRS).

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HMRC has reminded employers that there are now monthly deadlines for claims for furloughed staff under the Coronavirus Job Retention Scheme (CJRS).

Chancellor Rishi Sunak extended the CJRS until the end of April 2021. The CJRS was supposed to have ended after being scaled back to cover 60% of salaries during October 2020.

However, following the second national lockdown for England, the Chancellor confirmed that the CJRS will continue to pay up to 80% of an individual's wage, up to £2,500 per month.

HMRC has stated that claims must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend, in which case the deadline is the next weekday. This means employers must submit December claims no later than 14 January.

Employers have until 28 January if they have already submitted claims for December but need to make changes or claim more assistance.

In his November 2020 statement to Parliament, the Chancellor said: '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.'

12thJan
News article

ICAEW calls for further guidance on CIS changes

The Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to publish draft regulations and guidance on the forthcoming changes to the Construction Industry Scheme (CIS).

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The Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to publish draft regulations and guidance on the forthcoming changes to the Construction Industry Scheme (CIS).

The ICAEW has called for HMRC to 'move quickly' to give businesses enough time to prepare. The CIS changes are set to take effect from April 2021. However, HMRC is yet to publish secondary legislation, guidance or IT specifications that will be required for businesses to make the relevant changes.

The ICAEW has also voiced concerns over plans to remove firms' ability to take account of the cost of materials when paying down the chain. It warned that this change could result in businesses having insufficient funds to pay subcontractors.

Commenting on the upcoming CIS changes, the ICAEW said: 'As there are now only three months until the implementation date, consideration should be given to deferring commencement until April 2022.'

11thJan
News article

HMRC issues self assessment scam warning

The approach of the 31 January self assessment tax return deadline will bring a surge in scams, HMRC has warned.

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The approach of the 31 January self assessment tax return deadline will bring a surge in scams, HMRC has warned.

HMRC issues thousands of SMS messages and emails as part of its annual self assessment tax return campaign. However, the tax authority has warned taxpayers completing their returns to avoid being caught out by fraudsters using calls, emails or texts to offer fake 'tax rebates' or 'tax refunds'. HMRC has reminded taxpayers that if it sounds too good to be true, it probably is.

In the last 12 months the tax authority has responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious webpages to internet service providers. 

Almost 500,000 of the referrals from the public offered bogus tax rebates, whereby fraudsters use phone, email or text messages to contact their victims, primarily offering them fake tax rebates in order to extract their personal details.

Impersonation scams use language intended to convince victims to hand over personal information, including bank details, in order to claim a 'refund'. There are also reports of scammers becoming aggressive and threatening towards victims.

Karl Khan, HMRC's Interim Director General for Customer Services, said: 'If someone calls, emails or texts claiming to be from HMRC offering financial help or asking for money, it might be a scam. Please take a moment to think before parting with any private information or money.'