14thOct
News article

Chancellor announces post-Brexit Budget date

Chancellor Sajid Javid has announced that he will deliver the 2019 Autumn Budget on Wednesday 6 November.

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Chancellor Sajid Javid has announced that he will deliver the 2019 Autumn Budget on Wednesday 6 November.

The 2019 Autumn Budget will be the first Budget to be delivered after the UK's scheduled departure from the EU on 31 October 2019.

The Chancellor will deliver this year's Budget later than usual, as he factors in the impact of Brexit. Commenting on the Budget, Mr Javid said: 'This will be the first Budget after leaving the EU. I will be setting out our plan to shape the economy for the future and triggering the start of our infrastructure revolution.

'This is the right and responsible thing to do – we must get on with governing.'

In the Budget announcement, the government said that it is committed to securing a Brexit deal and leaving the EU on 31 October. However, in the event of no-deal, it said it would 'act quickly to outline its approach and take early action to support the economy, businesses and households'.

We will be covering all of the key Budget announcements on our website.

11thOct
News article

'Lessons must be learned' from loan charge controversy, states ICAEW

The Institute of Chartered Accountants in England and Wales (ICAEW) has stated that 'lessons must be learned' from the controversy surrounding the loan charge.

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The Institute of Chartered Accountants in England and Wales (ICAEW) has stated that 'lessons must be learned' from the controversy surrounding the loan charge.

The loan charge, which came into effect on 6 April this year, added a 45% non-refundable charge on all loans advanced through the scheme, unless the individual had agreed with HMRC to settle their tax affairs by 5 April. The charge mainly affects freelancers and agency workers.

The ICAEW said that part of the problem is that many of the people affected are low paid, and were persuaded by their employers to join the loan charge scheme. As a result, many are now facing bankruptcy.

Sir Amyas Morse, the former Chief of the National Audit Office (NAO), is currently heading up an independent review into the controversial loan charge, which is due to be published by the middle of November.

In a letter to Sir Morse, the ICAEW stated: 'While there were some taxpayers using disguised remuneration schemes for the sole purpose of avoiding tax, some taxpayers were misled into such arrangements or had little choice but to accept them and thought the arrangements were in order.

'We suggested that HMRC should take a 'sympathetic and flexible approach' to resolving such cases, rather than looking to make the taxpayers concerned bankrupt.'

10thOct
News article

OECD considering plans to tax tech giants' profits by jurisdiction

Large multinational tech companies would have to pay taxes in the jurisdictions where profits are generated under new tax proposals from the Organisation for Economic Co-operation and Development (OECD).

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Large multinational tech companies would have to pay taxes in the jurisdictions where profits are generated under new tax proposals from the Organisation for Economic Co-operation and Development (OECD).

The OECD says the shake-up would 'bring the tax system into the 21st century' and make tech giants pay more corporation tax where sales are made.

It hopes that the proposal will advance negotiations for an international corporate tax framework, based on the Inclusive Framework on base erosion and profit shifting (BEPS).

The proposals follow months of negotiations and would see companies pay tax in jurisdictions where they do business, even if they don't have a physical presence there. The new rules outline both where taxes should be paid and what portion of profits should be taxed.

'We're making real progress to address the tax challenges arising from the digitalisation of the economy, and to continue advancing toward a consensus-based solution to overhaul the rules-based international tax system by 2020,' said Angel Gurría, Secretary General of the OECD.

'This plan brings together common elements of existing competing proposals, involving over 130 countries, with input from governments, business, civil society, academia and the general public. It brings us closer to our ultimate goal: ensuring all multinationals pay their fair share.'

Both France and the UK have already proposed levies on tech companies, but both have said that these would be scrapped in favour of an international tax.

9thOct
News article

UK productivity suffers worst drop in five years

Productivity in the UK fell at its fastest annual rate for five years during the second quarter of 2019, according to the Office for National Statistics (ONS).

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Productivity in the UK fell at its fastest annual rate for five years during the second quarter of 2019, according to the Office for National Statistics (ONS).

Productivity – measured by output per hour – fell by 0.5% after two previous quarters of zero growth. The ONS figures showed a 1.9% hit in manufacturing productivity, on an annual basis, in the second quarter.

The UK economy could enter recession if a second consecutive quarter of negative growth is confirmed. The uncertainty surrounding Brexit has been blamed as a factor behind negative growth.

Commenting on the figures, Richard Heys, Deputy Chief Economist at the ONS, said: 'Labour productivity has continued the weak trajectory it has followed over the last year. Both manufacturing and services saw a fall on this time last year, with only a couple of other relatively small sectors contributing positively. This confirms the broad base of the UK's productivity challenges.'

Meanwhile, Tej Parikh, Chief Economist at the Institute of Directors (IoD), said: 'These figures hammer home the impact uncertainty is having on the business environment.

'Unsure of what's around the corner, businesses' investment in the new equipment and technology that drives up their performance has been stifled.'

8thOct
News article

UK small businesses 'concerned about impact of Brexit on supply chains'

Research carried out by insolvency trade body R3 has suggested that a third of UK small businesses are concerned about the impact Brexit will have on their supply chains.

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Research carried out by insolvency trade body R3 has suggested that a third of UK small businesses are concerned about the impact Brexit will have on their supply chains.

R3's survey of 1,200 business leaders revealed that 11% of firms have reviewed the potential impact of Brexit on their operations, and harbour concerns in regard to their supply chains.

However, 16% of small businesses stated that they have not yet reviewed the potential impact of Brexit on their supply network.

'It's a serious worry that a third of UK businesses feel they are exposed to a supply chain risk as a result of Brexit,' said Duncan Swift, President of R3.

'A key part of preparing for Brexit is looking at how it affects your supply chain and customers. It's all very well making sure your own business has put adaptation plans in place, but these plans might not help if the businesses you depend on – customers and suppliers – are unprepared.

'Businesses which don't understand how Brexit will affect their supply chains are at risk of sleepwalking into trouble.'

7thOct
News article

Banking crime cost over £600 million in first half of 2019

Banking customers lost over £600 million to crime during the first half of 2019, according to data from industry group UK Finance.

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Banking customers lost over £600 million to crime during the first half of 2019, according to data from industry group UK Finance.

According to UK Finance's figures, £408 million was stolen by criminals through unauthorised card, remote banking and cheque fraud. In addition, £208 million was lost to authorised push payment (APP) fraud, where customers are tricked into authorising a payment to an account controlled by a criminal.

Commenting on the figures, Katy Worobec, Managing Director of Economic Crime at UK Finance, said: 'Not only does fraud have a devastating impact on victims, the money stolen goes on to line the pockets of organised criminal gangs involved in drugs, arms and human trafficking.

'The finance industry is constantly investing in advanced security systems to protect customers from this threat, while helping law enforcement to apprehend and disrupt the criminals responsible.

'A new voluntary code was introduced in May that has significantly improved consumer protections from authorised push payment fraud, with signatory firms committed to reimbursing victims providing they have met certain standards.'

The finance industry prevented £820 million of unauthorised fraud in the first half of 2019, up 14% on the previous year. This is equivalent to £2 in every £3 of attempted unauthorised fraud being stopped, or £4.5 million of fraud being prevented every day.

4thOct
News article

UK 'on cusp of recession' after services sector shrinks

The UK economy is 'on the cusp of recession' after the services sector suffered an unexpectedly sharp downturn last month, according to research from IHS Markit.

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The UK economy is 'on the cusp of recession' after the services sector suffered an unexpectedly sharp downturn last month, according to research from IHS Markit.

IHS Markit's Purchasing Managers' Index (PMI) for September fell to 48.8 from 49.7 in August. This represents its lowest level since July 2016.

A PMI reading below 50 indicates that the economy is generally contracting.

IHS Markit said the figures suggest that Britain's economy shrank by 0.1% in the three months to September.

Commenting on the survey, Chris Williamson, Economist at IHS Markit, said: 'Coming on the heels of a decline in the second quarter, (this) would mean the UK is facing a heightened risk of recession.'

If confirmed by official figures published next month, it would mean the UK has suffered two consecutive quarters of contraction – the definition of a recession.

The services sector – which covers a range of businesses, from law firms and accountants to travel agents and restaurants – represents 80% of UK economic output.

3rdOct
News article

Inheritance tax 'could be scrapped', Chancellor hints

Chancellor Sajid Javid has suggested that the government 'may be prepared' to scrap inheritance tax (IHT).

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Chancellor Sajid Javid has suggested that the government 'may be prepared' to scrap inheritance tax (IHT).

IHT is levied on a person's estate when they die, and certain gifts made during an individual's lifetime. The rate of tax on death is 40% and 20% on lifetime transfers, where chargeable. For 2019/20, the first £325,000 chargeable to IHT is at 0%, and this is known as the nil-rate band.

A reduced rate of IHT applies where 10% or more of a deceased individual's net estate (after deducting IHT exemptions, reliefs and the nil-rate band) is left to charity. In those cases, the 40% rate is reduced to 36%.

Speaking at the Conservative Party Conference, the Chancellor revealed that scrapping IHT is 'on his mind'.

He said: 'I understand the arguments against that tax. You pay taxes already through work or through investments, and your capital gains in other taxes. There is a real issue with then asking them to, on that income, pay taxes all over again.

'Sensible changes have already been made but it's something that's on my mind.'

However, experts have warned that abolishing IHT could be 'hugely expensive': the tax raised £5.3 billion for the Treasury in 2018.

2ndOct
News article

Chancellor pledges to increase National Living Wage to £10.50

Chancellor Sajid Javid has pledged to raise the National Living Wage (NLW) to £10.50 within the next five years.

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Chancellor Sajid Javid has pledged to raise the National Living Wage (NLW) to £10.50 within the next five years.

Speaking at the Conservative Party Conference, the Chancellor also said he would lower the qualifying age for the NLW from 25 to 21.

The current rate for over 25s is £8.21. The Living Wage Foundation says the NLW should already be £9 across the UK and £10.55 for workers in London.

The announcement came as Mr Javid confirmed a number of spending plans, including £25 billion for road projects and £220 million for bus improvements. In addition, he said there will be £5 billion for digital infrastructure, along with £500 million extra funding for youth services.

Speaking at the conference, Mr Javid said: 'In 2016, we introduced the NLW, giving Britain's workers the biggest pay rise in two decades. In April, we increased the rate again, making 1.8 million workers better off, putting the number of low paid workers at its lowest level in four decades.

'Over the next five years, we will make the UK one of the first major economies in the world to end low pay altogether.To do that, I am setting a new target for the NLW: raising it to match two-thirds of median earnings.'

The minimum wage is paid at an hourly rate, with payment bands depending on age, and special provisions applying to apprentices. The NLW is the minimum wage for those aged 25 and over, whilst the National Minimum Wage (NMW) applies to those above school leaving age and individuals aged under 25.

1stOct
News article

ATT calls for 'urgent clarity' on off-payroll working changes

The Association of Taxation Technicians (ATT) has called for 'urgent clarity' on next April's changes to the off-payroll working rules.

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The Association of Taxation Technicians (ATT) has called for 'urgent clarity' on next April's changes to the off-payroll working rules.

From April 2020, HMRC intends to extend off-payroll working rules, known as IR35, to private sector contractors who work for medium and large businesses.

IR35 applies to individuals who provide their personal services via an 'intermediary'. An intermediary may be another individual, a partnership, an unincorporated association or a company; however, the most common structure is a worker providing their services via their own company – known as 'personal service companies' (PSCs). 

The rules are specifically designed to prevent the avoidance of tax and national insurance contributions (NICs) by those using PSCs and partnerships, and were introduced to the public sector in 2017.

In a submission to HMRC, the ATT outlined its concerns in regard to the 'lack of detail' on the changes in the Finance Bill 2019-20 draft legislation.

'Uncertainty in how the off-payroll rules will operate in practice is making it difficult for businesses to make adequate preparations,' said Michael Steed, Co-chair of the Technical Steering Group at the ATT.

'These changes come in from next April, which means that businesses now have only about six months to get ready – and this at a time when many may also be preparing for or responding to the implications of Brexit.'

The ATT has urged HMRC to release more information and detailed guidance 'as soon as possible'.