5thAug
News article

SME manufacturing activity plummets, says CBI

SME manufacturing output volumes fell at the fastest rate on record, according to the latest quarterly Confederation of British Industry (CBI) SME Trends Survey.

Click or touch to read the full article..

SME manufacturing output volumes fell at the fastest rate on record, according to the latest quarterly Confederation of British Industry (CBI) SME Trends Survey.

The survey of 331 small and medium-sized enterprise (SME) manufacturers reported that output volumes were down by 53% in the three months to July, the worst quarter since October 1988.

In addition, total new orders in the three months to July were down 56%, the quickest pace on record, reflected in the fastest falls on record in both domestic and export orders.

However, business sentiment in the quarter to July improved slightly, following its record pace of decline in April, while firms expect output to recover at a slow pace in the next three months.

Commenting on the figures, Alpesh Paleja, Lead Economist at the CBI, said: 'SME manufacturers faced an exceptionally challenging quarter due to the coronavirus (COVID-19) crisis. While firms believe that the worst of the downturn is behind them, ongoing cashflow issues and tough trading conditions mean that they aren't back on their feet yet. Expectations of another heavy fall in headcounts is a sign of what is to come.

'It's clear that firms need more immediate support, from grants to further business rates relief, to tide them over until demand conditions improve more substantially.'

5thAug
News article

HMRC publishes guidance on claiming Job Retention Bonus

HMRC recently published guidance on the eligibility requirements for the Job Retention Bonus.

Click or touch to read the full article..

HMRC recently published guidance on the eligibility requirements for the Job Retention Bonus.

From February 2021, employers will be able to claim the Job Retention Bonus through the gov.uk website. The Job Retention Bonus will be a one-off payment of £1,000 to the employer for every eligible employee that is claimed for. The bonus will be taxable, so the business must include the whole amount as income when calculating their taxable profits for corporation tax or self assessment.

The guidance states that an employer will be able to claim the Bonus for any employees that were eligible for the Coronavirus Job Retention Scheme (CJRS). Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.

All employers are eligible for the scheme, including recruitment agencies and umbrella companies.

The guidance can be read in full here. HMRC stated that additional guidance on the Job Retention Bonus will be published by the end of September.

4thAug
News article

Data reveals significant decrease in inheritance tax receipts

Data published recently by HMRC has revealed that there has been a significant drop in inheritance tax (IHT) receipts.

Click or touch to read the full article..

Data published recently by HMRC has revealed that there has been a significant drop in inheritance tax (IHT) receipts.

According to the data, HMRC collected £5.2 billion in IHT during 2019/20. This represents a decrease of 4% (£223 million) on 2018/19. The data covers the 2019/20 tax year and is based on payments received by HMRC.

The introduction of the main residence nil-rate band (RNRB) is cited as a cause for the decrease.

Commenting on the RNRB, Clare Moffat, Head of Intermediary Development and Technical at insurers Royal London, said: 'If you are a cohabiting couple this will not apply to you.

'In addition, the RNRB can only be used for direct descendants. This means that if you are single, have no children and your property is passing to a nephew that might be your full-time carer, then your estate would only be able to claim the nil-rate band of £325,000. Careful estate planning is vital to avoid nasty shocks and potential huge tax bills.'

4thAug
News article

FSB calls for further help for employers as furlough wind-down begins

The Federation of Small Businesses (FSB) has called for the government to provide further help to employers as the Coronavirus Job Retention Scheme (CJRS) begins to be wound down.

Click or touch to read the full article..

The Federation of Small Businesses (FSB) has called for the government to provide further help to employers as the Coronavirus Job Retention Scheme (CJRS) begins to be wound down.

From 1 August, employers have to pay national insurance contributions (NICs) and pension contributions for furloughed employees. Starting from this date the level of the grant will be reduced each month. Employers will take on an increasing proportion of pay for employees who are furloughed.

The CJRS will close at the end of October, and will be followed by the Job Retention Bonus, which will see UK employers receive a one-off payment of £1,000 for each furloughed employee who is still employed as of 31 January 2021.

Commenting on the matter, Mike Cherry, National Chairman of the FSB, said: 'One in five small firms have been forced to let staff go over the last three months. Even with critical emergency measures in place, jobs are sadly being lost in the here and now.

'As we look to the autumn, it's clear that we cannot afford to pull up the business support drawbridge any time soon. Giving firms £1,000 for every employee they bring back from furlough is welcome, but Job Retention Bonus funds won't manifest until next year – jobs are being lost today.'

The FSB is urging the government to help employers in regard to NICs, either through an uprating of the Employment Allowance or an NICs holiday for firms who employ those furthest from the workplace.

3rdAug
News article

HMRC sets up scheme for loan charge refunds

HMRC has published details on its refund scheme for taxpayers who made voluntary payments of income tax or national insurance prior to a change in the rules regarding the loan charge.

Click or touch to read the full article..

HMRC has published details on its refund scheme for taxpayers who made voluntary payments of income tax or national insurance prior to a change in the rules regarding the loan charge.

The loan charge, which came into effect on 6 April this year, applies to anyone who used 'disguised remuneration' schemes. The legislation added a 45% non-refundable charge on all loans advanced through the schemes, unless the individual had agreed with HMRC to settle their tax affairs by 5 April.

The charge mainly affects freelancers and agency workers: however, many of the 50,000 people caught up in the issue are low paid and were persuaded by their employers to join the schemes. The typical sum owing, according to the Loan Charge Action Group, is almost £120,000.

The refund scheme applies to those who settled the tax due with HMRC on or after 16 March 2016 and before 11 March 2020.

Individuals who paid some or all the tax or national insurance contributions (NICs) voluntarily to avoid the loan charge may be eligible for a refund or waiver, and will be contacted by HMRC with details of how to apply.

For certain payments of income tax and NICs, HMRC may refund amounts that were paid in disguised remuneration scheme settlements and waive amounts that may be due if an individual is paying their settlement in instalments.

More information, including how to apply for a refund, can be found here.

3rdAug
News article

More firms to benefit from CBILS following changes to loan rules

Changes to state aid rules mean that more small businesses can benefit from the government's Coronavirus Business Interruption Loan Scheme (CBILS).

Click or touch to read the full article..

Changes to state aid rules mean that more small businesses can benefit from the government's Coronavirus Business Interruption Loan Scheme (CBILS).

As a result of EU rules, previously small firms in the 'undertakings in difficulty' category were unable to make use of the CBILS. From 30 July businesses in undertakings in difficulty with a turnover of less than £9 million and fewer than 50 employees can apply for a loan under the CBILS.

Commenting on the issue, John Glen, Economic Secretary to the Treasury, said: 'Our loan schemes have been a key part in supporting businesses, enabling them to bounce back as we kick start the economy.'

Meanwhile, Chris Wilford, Head of Financial Services Policy at the Confederation of British Industry (CBI), said: 'These eligibility hurdles have been a real stumbling block for many firms across the UK throughout the crisis.

'These were put in place to avoid governments bailing out failing companies, but those rules were established in normal times. They have had a real impact on the ability of some high-growth firms and those with more complex structures being able to access the loan schemes.'

31stJul
News article

Treasury publishes call for evidence on administration of pensions tax relief

The Treasury has published a call for evidence on the administration of pensions tax relief.

Click or touch to read the full article..

The Treasury has published a call for evidence on the administration of pensions tax relief.

The call for evidence seeks to gather evidence on the operation of both of the main methods of administering pensions tax relief. According to the Treasury, the government recognises that the two systems produce different outcomes in certain circumstances for different groups of taxpayers, as some may receive tax relief at a different rate to their highest marginal rate.

The Treasury stated that it is important to note that many of these taxpayers will be lower earners who may not otherwise regularly have to engage with the tax system. The government is seeking to gather views on the appropriate balance between consistency of outcomes for individuals with similar circumstances and simplicity for individuals, employers and pension schemes.

Commenting on the call for evidence, John Glen, Economic Secretary to the Treasury, said: 'I am mindful that pensions administration can only be effectively delivered through successful partnership between government, the pensions industry, employers and professional administrators of payroll and other systems.

'The government therefore wants to listen to all those who work with these systems on a regular basis to understand the options available to improve the administration of pensions tax relief.'

Details on the call for evidence can be found here.

31stJul
News article

Mixed picture for retail sector, CBI finds

Retail sales were broadly flat in the year to July despite three months of sharp declines, according to the monthly Distributive Trades Survey published by the Confederation of British Industry (CBI).

Click or touch to read the full article..

Retail sales were broadly flat in the year to July despite three months of sharp declines, according to the monthly Distributive Trades Survey published by the Confederation of British Industry (CBI).

However, the improvement was primarily driven by stronger grocery sales, with non-essential retailers continuing to struggle despite the easing of lockdown restrictions.

Alongside higher grocery volumes, sales of hardware and DIY products, other normal goods (including cards, flowers, stationary) returned to growth in the year to July.

Other retailers, including clothing, footwear and department stores, continued to report significant declines as a result of the coronavirus (COVID-19) pandemic. In some cases, falls were less severe than in recent months.

Overall, the CBI expects sales to dip slightly in the year to August.

Commenting on the figures, Rain Newton-Smith, Chief Economist at the CBI, said: 'It's great to see retail sales stabilise this month, but this doesn't tell the whole story. This crisis has created winners and losers within the retail sector and for some businesses the picture remains bleak.

'The re-opening of non-essential retail was a vital step towards recovery but isn't a cure-all. The government has provided critical support for firms and jobs throughout the crisis. But ongoing financial pressures are a major challenge for some retailers, and additional direct support to shore up cashflow, such as extension of business rates relief, should be considered.'

30thJul
News article

LITRG urges HMRC to thoroughly test MTD for Income Tax before its introduction

The Low Incomes Tax Reform Group (LITRG) has urged HMRC to thoroughly test Making Tax Digital for Income Tax (MTD for Income Tax) before rolling it out to taxpayers and landlords.

Click or touch to read the full article..

The Low Incomes Tax Reform Group (LITRG) has urged HMRC to thoroughly test Making Tax Digital for Income Tax (MTD for Income Tax) before rolling it out to taxpayers and landlords.

HMRC recently announced that, from April 2022, Making Tax Digital for VAT (MTD for VAT) will be extended to all VAT-registered businesses with turnover below the VAT threshold of £85,000.

Additionally, from April 2023, the self-employed and landlords with turnover above £10,000 per year will be required to keep digital records and submit income tax updates every three months. The updates will replace the filing of the annual self-assessment tax return.

The LITRG is urging HMRC to 'make effective use of the next three years' and run full pilots in order to help support taxpayers with the transition to the new digital system.

HMRC is currently running a small MTD for Income Tax pilot with self-employed individuals and landlords. It is seeking to scale up the pilot from April 2021.

Commenting on the matter, Victoria Todd, Head of the LITRG, said: 'We recognise the many benefits that a primarily digital system will bring for individuals and business as well as for HMRC.

'However, it is important that those who require assistance to transact digitally and individuals who are digitally excluded continue to have their needs met.'

30thJul
News article

Public warned to watch out for top coronavirus scams

Fraudsters are exploiting people's financial concerns during the coronavirus (COVID-19) pandemic, UK Finance has warned.

Click or touch to read the full article..

Fraudsters are exploiting people's financial concerns during the coronavirus (COVID-19) pandemic, UK Finance has warned.

The trade body highlighted some of the most common scams as it launched a campaign called Take Five to Stop Fraud. According to UK Finance, some scams manipulate innocent victims, urging people to invest and 'take advantage of the financial downturn'.

Others impersonate well-known subscription services to get people to part with their savings and personal information. Criminals are even posing as representatives from the NHS Test and Trace service to trick people into giving away their personal details.

Commenting on the scams, Katy Worobec, Managing Director of Economic Crime at UK Finance, said: 'During this pandemic we have seen criminals using sophisticated methods to callously exploit people's financial concerns, impersonating trusted organisations like the NHS or HMRC, to trick them into giving away their money or information.

'The banking and finance industry is tackling fraud on every front, investing millions in advanced technology to protect customers and working closely with the government and law enforcement to stop the criminal gangs responsible and neutralise the threat.'

More information on Take Five to Stop Fraud can be found here.