News Archive - July 2013
HMRC campaigns update: your chance to disclose missed tax payments - 31.7.2013
HMRC is offering individuals who may have missed tax payments on property sales, and those who have failed to file self
assessment returns, the opportunity to come forward and settle any unpaid tax as part of time-limited campaigns.
There are currently two live HMRC campaigns in which individuals can voluntarily put their tax affairs in order:
Property sales campaign
Open to individuals who have sold residential properties, in the UK and abroad, that are not main homes. Although some
individuals may qualify for private residence relief, properties making a profit from sales may be liable for capital gains tax. Individuals must inform HMRC of their intentions to take part in the campaign by 9th August 2013.
Tax return catch up
Open to individuals who are yet to complete a self assessment tax return for all years up to the 2011-12 tax year and who have already received a notice from HMRC. Those wanting to take part will have to notify HMRC, complete and submit returns by 15th October 2013, and pay any tax payment that may be due.
Under the campaigns, individuals will be able to take advantage of paying the tax they owe and benefit from lower penalties than if HMRC were to find them at a later point.
HMRC's campaigns form part of an on going crackdown on tax evasion by the Government, with the Liberal Democrats this week pledging to raise £4 billion by tackling tax evasion in 2012 and £9 billion by 2015.
We can help get your tax affairs in order. Please get in touch.
assessment returns, the opportunity to come forward and settle any unpaid tax as part of time-limited campaigns.
There are currently two live HMRC campaigns in which individuals can voluntarily put their tax affairs in order:
Property sales campaign
Open to individuals who have sold residential properties, in the UK and abroad, that are not main homes. Although some
individuals may qualify for private residence relief, properties making a profit from sales may be liable for capital gains tax. Individuals must inform HMRC of their intentions to take part in the campaign by 9th August 2013.
Tax return catch up
Open to individuals who are yet to complete a self assessment tax return for all years up to the 2011-12 tax year and who have already received a notice from HMRC. Those wanting to take part will have to notify HMRC, complete and submit returns by 15th October 2013, and pay any tax payment that may be due.
Under the campaigns, individuals will be able to take advantage of paying the tax they owe and benefit from lower penalties than if HMRC were to find them at a later point.
HMRC's campaigns form part of an on going crackdown on tax evasion by the Government, with the Liberal Democrats this week pledging to raise £4 billion by tackling tax evasion in 2012 and £9 billion by 2015.
We can help get your tax affairs in order. Please get in touch.
Employment tribunal fees now in force - 30.7.2013
Workers who take employment disputes to court will have to pay fees under new legislation in place across the UK.
Workers will now pay between £160 to £250 to lodge a claim, while charges of £230 to £950 will apply if the case goes ahead to a tribunal hearing.
The fees are part of the Government's plan to encourage businesses and workers to settle disputes before requiring a full court hearing. It is hoped the fees will reduce the £84 million cost of running the current tribunal system.
The Forum of Private Business (FPB) welcomed the introduction of employment tribunal fees but said it did not foresee them working as a disincentive to bring about major changes in the system.
The FPB's chief executive, Phil Orford, said: "Escalating workplace disputes to the tribunal stage is too easy an option for many employees. The burden on the employee is limited whilst employers are not only defending the case in question, but also the reputation of their business. Hopefully the introduction of fees will make claimants think more carefully before resorting to litigation."
"Our members recognise that employment law is there to protect both the employee and the employer. But when weak and vexatious claims are being made against employers the system is being abused at considerable expense to small businesses employers; they do not have the time, resources or the money to defend vexatious claims and in many cases should not have to."
Trade unions meanwhile have criticised the new legislation, with the Trade Union Congress believing the reforms will deter unfair dismissal and discrimination victims from coming forward.
Workers will now pay between £160 to £250 to lodge a claim, while charges of £230 to £950 will apply if the case goes ahead to a tribunal hearing.
The fees are part of the Government's plan to encourage businesses and workers to settle disputes before requiring a full court hearing. It is hoped the fees will reduce the £84 million cost of running the current tribunal system.
The Forum of Private Business (FPB) welcomed the introduction of employment tribunal fees but said it did not foresee them working as a disincentive to bring about major changes in the system.
The FPB's chief executive, Phil Orford, said: "Escalating workplace disputes to the tribunal stage is too easy an option for many employees. The burden on the employee is limited whilst employers are not only defending the case in question, but also the reputation of their business. Hopefully the introduction of fees will make claimants think more carefully before resorting to litigation."
"Our members recognise that employment law is there to protect both the employee and the employer. But when weak and vexatious claims are being made against employers the system is being abused at considerable expense to small businesses employers; they do not have the time, resources or the money to defend vexatious claims and in many cases should not have to."
Trade unions meanwhile have criticised the new legislation, with the Trade Union Congress believing the reforms will deter unfair dismissal and discrimination victims from coming forward.
Hot weather helps business boom - 17.7.2013
Continuing hot weather throughout the UK is boosting business trade, according to the Federation of Small Businesses (FSBs).
Members of the business group are continuing to report improvements in trade, with the FSB calling it welcome news after the negative effect on businesses during the extended period of cold in the first half of 2013.
Research from the FSB earlier in the year found that more than half (55 per cent) of businesses were hit financially by the prolonged cold weather, costing each business an average £1,580 in lost earnings.
The sunshine is expected to provide a good outlook for tourism industry and businesses in the services sector including retailers, hotels, pubs and fast food outlets.
The FSB's national policy chairman, Mike Cherry, said: "It's great that the warm weather is continuing to provide a boost to small businesses up and down the country, especially considering how long businesses had to suffer from the cold this year."
Members of the business group are continuing to report improvements in trade, with the FSB calling it welcome news after the negative effect on businesses during the extended period of cold in the first half of 2013.
Research from the FSB earlier in the year found that more than half (55 per cent) of businesses were hit financially by the prolonged cold weather, costing each business an average £1,580 in lost earnings.
The sunshine is expected to provide a good outlook for tourism industry and businesses in the services sector including retailers, hotels, pubs and fast food outlets.
The FSB's national policy chairman, Mike Cherry, said: "It's great that the warm weather is continuing to provide a boost to small businesses up and down the country, especially considering how long businesses had to suffer from the cold this year."
Inflation rises to 2.9 per cent in June - 17.7.2013
UK inflation, as measured on the consumer prices index (CPI), rose to 2.9 per cent in June, up from 2.7 per cent in May,
data from the Office for National Statistics (ONS) has shown.
Despite the figure reaching a 14-month high, the ONS said inflation was 'fairly calm' when compared to with the longer term.
According to ONS data, this month's inflation figures came from three key contributors;
1. The largest contribution came from an increase in transport costs, rising 0.1 per cent between May and June 2013 compared with a fall of 0.5 per cent during the same period a year ago
2. The cost of clothing and footwear fell by 1.9 per cent between the two months, however this was a smaller fall when compared
with the 4.2 per cent fall between the same months last year
3. Airfares helped to hold inflation back from a larger increase, with last month's large rise in airfares dropping away slightly
in June.
Economists had predicted inflation to rise by three per cent.
Speaking last month, former Bank of England Governor Mervyn King said inflation is likely to remain 'stubbornly high' until 2015 with the Bank predicting a further rise in the coming months.
data from the Office for National Statistics (ONS) has shown.
Despite the figure reaching a 14-month high, the ONS said inflation was 'fairly calm' when compared to with the longer term.
According to ONS data, this month's inflation figures came from three key contributors;
1. The largest contribution came from an increase in transport costs, rising 0.1 per cent between May and June 2013 compared with a fall of 0.5 per cent during the same period a year ago
2. The cost of clothing and footwear fell by 1.9 per cent between the two months, however this was a smaller fall when compared
with the 4.2 per cent fall between the same months last year
3. Airfares helped to hold inflation back from a larger increase, with last month's large rise in airfares dropping away slightly
in June.
Economists had predicted inflation to rise by three per cent.
Speaking last month, former Bank of England Governor Mervyn King said inflation is likely to remain 'stubbornly high' until 2015 with the Bank predicting a further rise in the coming months.
Government plans for greater liability of company directors - 15.7.2013
Company directors should be personally liable for misconduct or company failure, business secretary Vince Cable has
said as part of an overhaul of company rules.
Launching the 'Transparency and Trust' paper at the Responsible Capitalism conference, Cable outlined measures to improve corporate transparency and strengthen director accountability and disqualification laws.
The proposed reforms seek to promote growth by improving confidence in the UK as an open and trusted place to invest and do business, the Department for Business, Innovation and Skills (BIS) said.
The paper highlights two key points:
Corporate transparency
- how the UK will implement its G8 commitment to a central register of company owners
- the abolition of bearer shares and their misuse
- steps to tackle tax evasion, money laundering, and to boost the UK's investment environment.
Director accountability
- giving regulators more power to disqualify directors in specific sectors
- questions on whether disqualified directors should compensate creditors.
"Greater transparency and improved trust will mean honest entrepreneurs and investors can do business more securely in the UK and not be disadvantaged by those who don't play by the rules," said a Government press release.
Business Secretary Vince Cable said: "A stronger economy depends on investors, employees and the wider public having trust and confidence in companies and those that are running them."
said as part of an overhaul of company rules.
Launching the 'Transparency and Trust' paper at the Responsible Capitalism conference, Cable outlined measures to improve corporate transparency and strengthen director accountability and disqualification laws.
The proposed reforms seek to promote growth by improving confidence in the UK as an open and trusted place to invest and do business, the Department for Business, Innovation and Skills (BIS) said.
The paper highlights two key points:
Corporate transparency
- how the UK will implement its G8 commitment to a central register of company owners
- the abolition of bearer shares and their misuse
- steps to tackle tax evasion, money laundering, and to boost the UK's investment environment.
Director accountability
- giving regulators more power to disqualify directors in specific sectors
- questions on whether disqualified directors should compensate creditors.
"Greater transparency and improved trust will mean honest entrepreneurs and investors can do business more securely in the UK and not be disadvantaged by those who don't play by the rules," said a Government press release.
Business Secretary Vince Cable said: "A stronger economy depends on investors, employees and the wider public having trust and confidence in companies and those that are running them."
RTI is largest cost of compliance for businesses
The new real time information (RTI) process for calculating PAYE has been identified as one of the biggest drivers of costs
to businesses, research by the Forum of Private Business (FPB) has found.
Small and medium sized enterprise (SMEs) are paying 11 per cent more to external providers of payroll and tax support compared with two years ago; most likely down to the introduction of RTI, the FPB said.
The average SME now spends substantially more on compliance costs compared with two years ago, with the total cost standing at £18.2 billion - an 8.5 per cent increase compared to 2011.
This comes despite falling health and safety costs, the FPB said, and the Government's ongoing drive to cut red-tape regulations for businesses.
The FPB's policy adviser, Robert Downes, said: "Our research shows little has changed in terms of what's costing small business the most for compliance costs. The stand-out surprise though has to be the huge increase in spend on external contractors."
"We believe this is largely down to RTI, and firms having to pay a payroll specialist to manage their employees' PAYE bills, but by contrast businesses are paying out slightly less on internal compliance managed in-house. The logic here seems to be to pay an expert to do a job they can no longer do themselves, for whatever reason that may be," he said.
to businesses, research by the Forum of Private Business (FPB) has found.
Small and medium sized enterprise (SMEs) are paying 11 per cent more to external providers of payroll and tax support compared with two years ago; most likely down to the introduction of RTI, the FPB said.
The average SME now spends substantially more on compliance costs compared with two years ago, with the total cost standing at £18.2 billion - an 8.5 per cent increase compared to 2011.
This comes despite falling health and safety costs, the FPB said, and the Government's ongoing drive to cut red-tape regulations for businesses.
The FPB's policy adviser, Robert Downes, said: "Our research shows little has changed in terms of what's costing small business the most for compliance costs. The stand-out surprise though has to be the huge increase in spend on external contractors."
"We believe this is largely down to RTI, and firms having to pay a payroll specialist to manage their employees' PAYE bills, but by contrast businesses are paying out slightly less on internal compliance managed in-house. The logic here seems to be to pay an expert to do a job they can no longer do themselves, for whatever reason that may be," he said.
Red tape regulation cuts continue - 11.7.2013
Simplification of health and safety laws and employment tribunals are to be included in ongoing measures to cut business red
tape, business minister Michael Fallon has announced.
The Government's latest Statement of New Regulation details all regulations, including EU measures, which are to come into force in the next six months, as well as regulations removed under its 'one-in one-out' rule.
Key regulations - estimated to save businesses over £5 million annually - include:
- Employment tribunals: simplification of procedures to make tribunals more efficient, flexible and proportionate for small businesses. Includes making settlements easier and the introduction of a salary based compensation cap
- Health and safety: simplified reporting processes for injuries and removal of employers' strict liability for employee injuries
- Environmental regulations: rationalisation of information requests for regulators and simplification of requirements making them easier to understand. Estimated to save businesses more than £1 billion over 10 years
- Vehicle regulations: simplification of requirements regarding vehicle ownership, insurance checks and removal of annual statutory off road notifications
Business minister Michael Fallon said: "We remain on course to achieve our radical ambition of reducing the cost of regulation over the course of this Parliament. This Statement details important measures that will ease unnecessary demands on small firms, alongside essential reforms that will make our economy fairer."
The full Sixth Statement of New Regulation can be found online on the Governments' website.
Please get in touch if you think your business may be affected by any of the new regulations.
tape, business minister Michael Fallon has announced.
The Government's latest Statement of New Regulation details all regulations, including EU measures, which are to come into force in the next six months, as well as regulations removed under its 'one-in one-out' rule.
Key regulations - estimated to save businesses over £5 million annually - include:
- Employment tribunals: simplification of procedures to make tribunals more efficient, flexible and proportionate for small businesses. Includes making settlements easier and the introduction of a salary based compensation cap
- Health and safety: simplified reporting processes for injuries and removal of employers' strict liability for employee injuries
- Environmental regulations: rationalisation of information requests for regulators and simplification of requirements making them easier to understand. Estimated to save businesses more than £1 billion over 10 years
- Vehicle regulations: simplification of requirements regarding vehicle ownership, insurance checks and removal of annual statutory off road notifications
Business minister Michael Fallon said: "We remain on course to achieve our radical ambition of reducing the cost of regulation over the course of this Parliament. This Statement details important measures that will ease unnecessary demands on small firms, alongside essential reforms that will make our economy fairer."
The full Sixth Statement of New Regulation can be found online on the Governments' website.
Please get in touch if you think your business may be affected by any of the new regulations.
Government consults on new tax reliefs - 9.7.2013
The Government has launched a consultation on providing two new tax reliefs worth £50 million to boost and support the creation of employee-owned companies.
The promotion of employee-owned companies, co-operatives and mutuals follows evidence that such business structures lead to greater job creation and are more productive and resilient against economic downturns.
The consultations cover;
1. A capital gains tax relief: this would apply when the controlling share of a business is sold into an indirect employee ownership structure - enabling entrepreneurs to sell their business to employees as opposed to external buyers
2. An income tax and national insurance contributions (NICs) exemption: this would allow indirectly employee owned companies to pay their employees a certain amount per annum free of income tax and NICs. There would also be an employer NIC exemption for the company.
The Government announced in Budget 2013 that it will provide £50 million annually from 2014-15 to support employee-ownership models.
Chief secretary to the treasury Danny Alexander said: "The employee ownership sector has huge potential and the government wants to support it as much as possible. Employee ownership is of significant benefit to the wider economy, through increased growth and business success and this business model will also add greater diversity to our economy."
Launched on the first Employee Ownership Day, the first stage of the consultation will run until 26 September with individuals, businesses and business groups encouraged to put forward their views.
The promotion of employee-owned companies, co-operatives and mutuals follows evidence that such business structures lead to greater job creation and are more productive and resilient against economic downturns.
The consultations cover;
1. A capital gains tax relief: this would apply when the controlling share of a business is sold into an indirect employee ownership structure - enabling entrepreneurs to sell their business to employees as opposed to external buyers
2. An income tax and national insurance contributions (NICs) exemption: this would allow indirectly employee owned companies to pay their employees a certain amount per annum free of income tax and NICs. There would also be an employer NIC exemption for the company.
The Government announced in Budget 2013 that it will provide £50 million annually from 2014-15 to support employee-ownership models.
Chief secretary to the treasury Danny Alexander said: "The employee ownership sector has huge potential and the government wants to support it as much as possible. Employee ownership is of significant benefit to the wider economy, through increased growth and business success and this business model will also add greater diversity to our economy."
Launched on the first Employee Ownership Day, the first stage of the consultation will run until 26 September with individuals, businesses and business groups encouraged to put forward their views.
Interest rate and QE programme left unchanged - 5.7.2013
In its first meeting under the leadership of new governor Mark Carney, the Bank of England's Monetary Policy Committee (MPC) has voted to keep the base rate of interest at 0.5 per cent and the quantitative easing programme at £375 billion.
David Kern, the chief economist at the British Chambers of Commerce, agreed with the MPC's decision but argued that the Bank could be doing more to boost business lending. He said:
"However, the existing QE programme can and should be used in more innovative ways. We urge Dr Carney and the Committee to focus on measures that will boost lending to businesses. Rather than just gilts, the MPC should consider purchasing private sector assets, such as securitised SME loans. This would make banks less risk-averse in lending to growing businesses who are finding it difficult to access finance."
Steven Gifford, director of economics at the Confederation of British Industry, was unsurprised by the decision. He said:
"Looking ahead, some form of forward guidance on interest rates remains a strong possibility. Although the MPC's scepticism will be hard to dispel, recent financial market volatility and today's statement by the Bank have strengthened the case for providing greater clarity around monetary policy, which businesses would welcome."
David Kern, the chief economist at the British Chambers of Commerce, agreed with the MPC's decision but argued that the Bank could be doing more to boost business lending. He said:
"However, the existing QE programme can and should be used in more innovative ways. We urge Dr Carney and the Committee to focus on measures that will boost lending to businesses. Rather than just gilts, the MPC should consider purchasing private sector assets, such as securitised SME loans. This would make banks less risk-averse in lending to growing businesses who are finding it difficult to access finance."
Steven Gifford, director of economics at the Confederation of British Industry, was unsurprised by the decision. He said:
"Looking ahead, some form of forward guidance on interest rates remains a strong possibility. Although the MPC's scepticism will be hard to dispel, recent financial market volatility and today's statement by the Bank have strengthened the case for providing greater clarity around monetary policy, which businesses would welcome."
Prioritise VAT fraud and online trading risks, report tells HMRC - 3.7.2013
HM Revenue and Customs (HMRC) needs to do more to tackle VAT fraud and the emerging threat of losses from online trading, a report by the National Audit Office (NAO) has advised.
The report found that £32 billion of tax went uncollected in 2010/11, with £9.6 billion of this consisting of uncollected
VAT.
Although the NAO said the tax authority had prevented £579 million of fraudulent VAT payments in 2012/13, it highlighted that it failed to carry out any real-time checks across VAT returns. A comprehensive plan to tackle the threat of losses due to online trading, through sites such as eBay, is also yet to be produced.
Amyas Morse, head of the NAO said: "HMRC has three strategic priorities: to improve customer experience; to reduce its operating costs; and to reinvest money from efficiency savings to generate increased tax revenue."
But it also requires the help of legislators and changes in international tax rules, if it is to respond effectively to the ‘borderless'
internet world.
Other key findings from the NAO report include:
- HMRC collected £475.6 billion in tax revenue in 2012/13 - £1.4 billion (0.3 per cent) more than in 2011/12
- Corporation tax revenue decreased by £900 million
- Income tax and national insurance revenue decreased by £800 million
- VAT revenue increased by £1.4 billion.
Elsewhere, the report stated that HMRC had successfully piloted its new Real Time Information (RTI) system - which allows PAYE payments to be reported when they are made rather than at the end of the tax-year - but had yet to test full functionality of end-of-tax-year reconciliations.
The RTI system is being rolled out to employers from April 2013 but the programme's budget 'does not include contingency for any significant extra development costs', it said.
The report found that £32 billion of tax went uncollected in 2010/11, with £9.6 billion of this consisting of uncollected
VAT.
Although the NAO said the tax authority had prevented £579 million of fraudulent VAT payments in 2012/13, it highlighted that it failed to carry out any real-time checks across VAT returns. A comprehensive plan to tackle the threat of losses due to online trading, through sites such as eBay, is also yet to be produced.
Amyas Morse, head of the NAO said: "HMRC has three strategic priorities: to improve customer experience; to reduce its operating costs; and to reinvest money from efficiency savings to generate increased tax revenue."
But it also requires the help of legislators and changes in international tax rules, if it is to respond effectively to the ‘borderless'
internet world.
Other key findings from the NAO report include:
- HMRC collected £475.6 billion in tax revenue in 2012/13 - £1.4 billion (0.3 per cent) more than in 2011/12
- Corporation tax revenue decreased by £900 million
- Income tax and national insurance revenue decreased by £800 million
- VAT revenue increased by £1.4 billion.
Elsewhere, the report stated that HMRC had successfully piloted its new Real Time Information (RTI) system - which allows PAYE payments to be reported when they are made rather than at the end of the tax-year - but had yet to test full functionality of end-of-tax-year reconciliations.
The RTI system is being rolled out to employers from April 2013 but the programme's budget 'does not include contingency for any significant extra development costs', it said.
Recurring payments now easier to cancel - 1.7.2013
Consumers will be able to cancel regular payments from their bank account by contacting their card provider as part of a move to simplify the banking system and better protect consumers, the Financial Conduct Authority (FCA) has said.
Looking into Continuous Payment Authorities (CPA) - also known as recurring transactions or recurring payments - the FCA found that some banks had not been stopping payments when asked to do so.
It follows an FCA review into how the largest high street banks process requests to cancel such payments, which are commonly used for subscriptions or gym memberships.
CPAs are 'relatively easy to set up but can be hard to cancel, causing problems for consumers trying to manage their finances,' it
said.
Banks have now agreed that a consumer request to end a recurring payment will be sufficient to cancel the arrangement, rather than the customer having to contact the merchant. Incorrect payments taken following cancellation will also be immediately refunded.
Banks are to review all individual complaints since November 2009 and award compensation to consumers whose payments continued despite them asking the bank to cancel them.
Clive Adamson, the FCA's director of supervision, said the regulatory body had been working hard to improve everyday banking for the consumer.
It's important that consumers are confident that banks are meeting their everyday banking need. Today customers can be confident that when they ask for a Continuous Payment Authority to be cancelled - it will be cancelled - and that it can be done easily.
Looking into Continuous Payment Authorities (CPA) - also known as recurring transactions or recurring payments - the FCA found that some banks had not been stopping payments when asked to do so.
It follows an FCA review into how the largest high street banks process requests to cancel such payments, which are commonly used for subscriptions or gym memberships.
CPAs are 'relatively easy to set up but can be hard to cancel, causing problems for consumers trying to manage their finances,' it
said.
Banks have now agreed that a consumer request to end a recurring payment will be sufficient to cancel the arrangement, rather than the customer having to contact the merchant. Incorrect payments taken following cancellation will also be immediately refunded.
Banks are to review all individual complaints since November 2009 and award compensation to consumers whose payments continued despite them asking the bank to cancel them.
Clive Adamson, the FCA's director of supervision, said the regulatory body had been working hard to improve everyday banking for the consumer.
It's important that consumers are confident that banks are meeting their everyday banking need. Today customers can be confident that when they ask for a Continuous Payment Authority to be cancelled - it will be cancelled - and that it can be done easily.