The government must clarify plans around new customs processes as firms remain in the dark about crucial aspects of their operation, says the British Chambers of Commerce (BCC).

The first phase of the UK's Border Target Operating Model begins on 31 January, with imports of plant and animal products now requiring export health certificates. 

It will be the first time for decades that EU firms will have to provide this documentation for goods they are sending to Great Britain. The BCC says it is unclear how prepared they are for the change. 

The business group says there is more concern is a lack of clarity around physical checks of consignments, due to start in April.

Government figures show the UK imports just under 30% of all the food it consumes from the EU. 

William Bain, Head of Trade Policy at the BCC, said: 'The government is finally implementing major changes to Great Britain's inbound border controls and customs checks stemming from Brexit, but there are still unanswered questions around its plans.

'Especially, as businesses are already facing a tough start to the year, with container shipping prices quadrupling as the Red Sea disruption continues. 

“The initial changes … should not cause many noticeable hold ups for inbound goods, although EU firms will be facing new charges to get export health certificates and will need to find vets to sign them. 

'The bigger issue is physical checks on a proportion of these imports, which are due to start in April.'

Just 35% of UK adults are confident they could complete the self assessment tax return form correctly, according to research Standard Life. 

Three in ten UK adults admit they do not feel confident they could complete the form correctly. A further 18% said they felt neither confident nor unconfident while 17% were not sure. 

The research highlighted a widespread lack of awareness around self assessment timings, with more than half not knowing when the deadline for filing is. 

In addition, among those who are currently, or soon will be, in the higher income tax bracket, 41% are unaware that they might need to fill in a self assessment tax return to claim all their pension tax relief.

Dean Butler, Managing Director for Retail Direct at Standard Life, said: 'The deadline for filing self-assessment tax returns is fast approaching, with returns needing to be submitted online by midnight on 31 January. So, if you're one of the categories of people who needs to send a tax return then now is the time to act.

'Tax returns can be tempting to put off, but it's important to understand what's required and file it on time to avoid any penalties which can be costly. Tackling the forms in advance, rather than leaving it to the last minute, will give you the time to gather the information needed and make the submission as stress free as possible.' 

If you require advice or assistance with self assessment please get in touch.

The Institute for Fiscal Studies (IFS) has warned that tax cut promises may need to be scrapped as a result of the UK being in an 'unfortunate economic and fiscal bind'.

In a new report, the IFS said that whilst tax rises and cuts for public services are built into current government plans, public services are 'showing signs of strain' and are 'performing less well than they were in 2010'.

The think tank also said that 'everything is harder' when the economy is growing slowly and public finances are more constrained.

In the report, the IFS stated: 'It might be easy to announce immediate tax cuts without any hint of what it is the state currently does that it will stop doing, or what taxes will rise in future, but this trade-off cannot be wished away.'

A spokesperson for the Treasury commented: 'The best way to deliver sustainable funding for public services in the future is to grow the economy - the UK has grown faster than France, Germany and Japan since 2010 and the Office for Budget Responsibility (OBR) says our action in spring and autumn will deliver the largest boost on record.'

Data published by the Office for National Statistics (ONS) has revealed that government borrowing fell to £7.8 billion in December 2023, increasing the possibility of tax cuts in the upcoming Spring Budget.

Experts have suggested that the latest figures may give Chancellor Jeremy Hunt additional 'wiggle room' for tax cuts in the Spring Budget on 6 March. During the World Economic Forum's annual meeting in Davos, Switzerland, Mr Hunt hinted that he wants to cut taxes, and stated that low-tax economies are 'more dynamic, more competitive and generate more money for public services'.

The ONS data also showed that interest payments on government debt fell to £4 billion, down by £14.1 billion when compared to December 2022.

Commenting on the data, a spokesperson for the Treasury said: 'We are focused on creating a more productive public sector, not a larger one, by reducing admin workloads, introducing early interventions and safely bringing in new tech like AI. This will stop the state growing ever larger and ensure taxpayers' money is spent on the public's priorities.' 

Nearly four million self assessment taxpayers have yet to file their returns with only a week to go until the 31 January deadline, according to HMRC.

HMRC is expecting more than 12.1 million tax returns to be filed for the 2022/2023 tax year, along with any payment that is owed.

To date, more than 8.3 million online returns have already been received, with 3.8 million returns still outstanding.

HMRC is urging those taxpayers yet to file their tax return to act now or risk facing a £100 penalty.

Myrtle Lloyd, HMRC's Director General for Customer Services, said: 'If you are a self assessment taxpayer, now is the time to take action and get your return done. People can familiarise themselves with the process by checking out HMRC's online resources on GOV.UK.

'Once a tax return is submitted, it's easy to find out what's owed and to pay online or using the HMRC app.'

We have many years of experience in dealing with tax returns - please contact us if you require any assistance with self assessment.

Confidence amongst small businesses fell in the last quarter of 2023, the Federation of Small Businesses (FSB) has found.

The FSB said small business confidence 'lost ground' in the final three months of 2023, which assisted in reversing gains made earlier in the year.

Its Small Business Index (SBI) fell to -15.0 points in quarter four of 2023, down from -8.0 points in the third quarter.

'Losing the ground made up in the third quarter in terms of the overall confidence level among small firms should be a wake-up call to the government and to decision-makers,' said Tina McKenzie, Policy Chair at the FSB.

'It's especially disheartening that this slip in confidence happened in the so-called 'golden quarter', which so many hospitality and retail firms in particular rely on to shore up their finances ahead of the new year's belt-tightening.

'With small hospitality firms reporting a big fall in their confidence, there are fears of yet more distress and closures among this sector, so vital to community spirit and our social fabric. The help extended to small firms in the retail, leisure and hospitality sectors at the Autumn Statement via an extension of business rates relief is a welcome start, and will mitigate their tax burden later this year, but right now things are tough.'

Chancellor Jeremy Hunt has hinted that he may cut taxes in the upcoming Spring Budget.

Speaking at the World Economic Forum's annual meeting in Davos, Switzerland, the Chancellor stated: 'In terms of the direction of travel we look around the world and we note that the economies growing faster than us in North America and Asia tend to have lower taxes, and I believe fundamentally that low-tax economies are more dynamic, more competitive and generate more money for public services like the NHS.

'That's the direction of travel we would like to go in but it is too early to say what we are going to do.'

The Chancellor used the 2023 Autumn Statement in November to slash national insurance thresholds by 2%.

Although the Chancellor did not comment on which taxes he might cut, experts predict Mr Hunt will focus on income tax in the Spring Budget. Tax cuts are more likely if inflation falls and interest rates are reduced.

The Chancellor will present the Spring Budget on Wednesday 6 March. 

Nearly 45,000 people have sorted self assessment tax bills totalling almost £148 million by setting up a payment plan, according to HMRC.

The tax authority confirmed that over 7.7 million self assessment customers have already filed their tax return for the 2022/23 tax year.

However, HMRC also warned taxpayers to pay their tax bill before the deadline on 31 January or risk facing a penalty.

Those who are unable to pay in full can check online to see if they can set up a monthly payment plan called Time to Pay.

If they owe less than £30,000, they can use the affordability checker on GOV.UK to help decide the best arrangements for them. Interest will be applied to any outstanding balances from 1 February.

Myrtle Lloyd, HMRC's Director General for Customer Services, said: 'We want to help self assessment customers meet their obligations and there is no time like the present to choose the right payment option for you.'

The government should raise the turnover threshold for VAT from £85,000 to £100,000, according to the Federation of Small Businesses (FSB).

The business group said that this would give firms stepping into the VAT-paying ring crucial breathing space. It would also be an incentive to grow their turnover without fear of having to charge customers an extra 20% overnight, the FSB added.

The FSB also suggested bringing in a smoothing mechanism to ease the transition for small firms, owner-managed companies and some of the self-employed who go just over the threshold.

At the moment, thousands of small firms keep their turnover just below the £85,000 threshold, according to the Office for Budget Responsibility (OBR).

The OBR said that hundreds of millions of pounds of potential economic activity could be lost due to this 'bunching' just below the threshold.

Tina McKenzie, FSB's Policy Chair, said: 'VAT compliance flattens small firms by stifling their growth and emptying their coffers. It's crying out for a modern makeover to match today's economic landscape.

'The flaws in our current system are glaringly obvious. We are at a breaking point – a drastic overhaul of VAT is needed.

'Raising the threshold to reflect inflation, introducing a buffer to soften the blow for those just over the limit and demystifying the rules to save small business owners from a VAT-induced headache could unlock hundreds of millions in extra economic activity.'

UK inflation rose to 4% in the year to December, according to the latest figures released by the Office for National Statistics (ONS).

That is a rise from 3.9% recorded in November and higher than economists expected.

It is the first time the rate has increased since February 2023.

The ONS says that tobacco and alcohol had the biggest impact on prices rises. Tobacco prices saw an annual increase of 16.0% last month, while alcohol had a smaller rise at 9.6%.

At the other end of the scale, the annual inflation rate on food and non-alcoholic beverages saw the biggest fall in the latest period, dropping to 8% in December from 9.2% in November.

It marked the ninth consecutive fall, after hitting a high of 19.2% in March 2023.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: 'For consumers, prices continue to rise from a very high base. The current global picture means the path ahead is now more uncertain.

'One of the core reasons for the last two years of inflation was supply chain collapse due to Covid-19 lockdowns, and current disruption in the Red Sea has already seen a spike in leading indicators such as shipping container and insurance costs.

'Businesses are increasingly desperate for a clear, long-term strategy which delivers on infrastructure, trade, skills and green innovation to grow the economy.'