Inflation holds steady at 6.7%
UK inflation unexpectedly held stable in September at 6.7% as rising fuel costs offset the first monthly fall in food prices for two years to maintain pressure on households during the cost-of-living crisis.
The largest downward contributions to the monthly change came from food and non-alcoholic beverages, where prices fell on the month for the first time since September 2021, and furniture and household goods, where prices rose by less than they did a year ago.
The Consumer Prices Index including owner-occupiers’ housing costs (CPIH) rose by 6.3% in the 12 months to September 2023, the same rate as in August.
The Office for National Statistics (ONS) said the annual inflation rate as measured by the consumer prices index (CPI) remained unchanged from August’s reading, already raising questions by experts over the Bank of England’s next decision on interest rates due in November. City economists had forecast a modest fall to 6.6%.
Occupiers’ Housing Costs (OOH) increased by 5% in the twelve months to September 2023.
Source: Office for National Statistics.
So what actions can a business take now to remain resilient to any changes in the economy?
Here are a few suggestions to help you think about your business:
- Review your Budgets and set realistic and achievable targets for 2024.
- Review your debtors list and chase up overdue invoices (if appropriate).
- Assign responsibility to one individual for invoicing and collections.
- Put extra effort into making sure your relationships with your better customers are solid.
- Review and flow chart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc) and challenge the need for each step.
- Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
- Review your staffing needs over the next few months.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
Do you have a side income?
If you do then you are probably aware of the requirement to disclose this on your Self-Assessment tax return. It is important to record any side income accurately and HMRC is going to be able to see exactly how much income you receive when using a digital platform from 1 January 2024.
HMRC have new powers which means that anyone in the UK who makes money selling goods or services online will have their incomes recorded on the digital platform that they use and HMRC will have direct access to this.
Digital platforms include apps and websites which facilitate the provision of goods and services such as the provision of taxi and private hire services, food delivery services, freelance work, and the letting of short-term accommodation.
HMRC will have access to the digital records of businesses such as Airbnb, Fiverr, Upwork, Uber, Deliveroo, Etsy and other online businesses. The change is part of a wider plan for HMRC to keep a more accurate eye on people adding to their existing income through side profits or freelancing and they will be checking tax returns to ensure the figures tally with the records from the platforms themselves.
The power to enable these regulations to be made was introduced under section 349 of the Finance (No.2) Act 2023.
From 1 January 2025, certain UK digital platforms will be required to report information to HMRC about the income of sellers of goods and services on their platform. HMRC will then exchange the information with the other participating tax authorities for the jurisdictions where the sellers are tax resident.
Under the Organisation for Economic Co-operation and Development (OECD) rules, digital platforms in participating jurisdictions will be required to provide a copy of the information to the taxpayer to help them comply with their tax obligations.
The legislation, ‘The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023’, as issued in July 2023, can be seen here: The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 (legislation.gov.uk) and the reporting rules for digital platforms can be seen here: Reporting rules for digital platforms – GOV.UK (www.gov.uk)
If you are not currently filing a tax return then you can check how to register for Self-Assessment here: Check how to register for Self Assessment – GOV.UK (www.gov.uk)
Please talk to us if you have any questions about a side income and how to declare this on your tax return, we have considerable experience in helping our clients comply with the complex HMRC disclosure requirements.
Latest HMRC tax webinars
Listed below are a number of live HMRC webinars that will help employers with payroll. The webinars are free and last around an hour.
Expenses and benefits for your employees – social functions and parties
Wed 1 Nov at 11:45am
Expenses and benefits for your employees – trivial benefits
Tue 31 Oct at 1:45pm
Statutory Maternity and Paternity Pay
Fri 27 Oct at 9:45am
Tue 14 Nov at 11:45am
Expenses and benefits for your employees – company cars, vans, and fuel
Thu 2 Nov at 1:45pm
Expenses and benefits for your employees – phones, internet, and homeworking
Tue 7 Nov at 1:45pm
Wed 8 Nov at 1:45pm
Statutory Sick Pay
Thu 9 Nov at 11:45am
Getting payroll information right
Mon 27 Nov at 9:45am
Please talk to us if you have any payroll queries; we have extensive experience in helping our clients comply with HMRC regulations.
The new UK supply chain directory
The High Value Manufacturing (HVM) Catapult could make it easier for domestic manufacturers to connect with a new, free to use, UK Supply Chain Directory.
The platform harnesses the power of machine learning to provide up-to-date information on UK manufacturers. It combines publicly accessible data with web scraping to create the single most data-rich source of UK’s manufacturers and suppliers. It also allows companies to put up their company profile to update and enrich their content.
HVM keep Companies House as a reference and it joins information coming from companies’ websites, CreditSafe, and Dealroom.
This new tool is bringing together hundreds of thousands of businesses across UK industry in one online resource.
The tool is free to sign up for and access, and businesses can use it to:
- find new suppliers and customers; and
- map the UK’s capability in their sector or area.
Users can search the directory according to company size, location, and specialist areas, with a wide range of other filters. Using data-driven classification, users can also find suppliers or supply chains based on manufacturing capability.
Innovate UK Smart Grants: September 2023
Innovate UK, part of UK Research and Innovation, is investing up to £25 million in the best game-changing and world-leading ideas.
Ideas need to be designed for swift, successful commercialisation and be genuinely new and novel, not just disruptive within their sector.
All proposals must be business-focused, with deliverable, realistic, adequately resourced plans to achieve return on investment, growth and market share following project completion.
Applications can come from any area of technology and be applied to any part of the economy, such as, but not exclusively:
- the arts, and
- design and media.
To be in scope, your proposal must demonstrate (among other things):
- a game-changing, innovative, and disruptive idea that will lead to new products, processes or services;
- an idea that is significantly ahead of others in the field, set for rapid commercialisation; and
- clear potential to positively impact the UK’s position, productivity and competitiveness within the global economy.
Innovate UK will fund feasibility projects, industrial research projects and experimental development projects, as defined in the guidance on categories of research.
Your application must include at least one micro, small or medium-sized enterprise (SME) as the lead or a collaborative grant claiming partner.
The competition closes at 11am on Wednesday 17 January 2024.
Mindset: Extended reality for digital mental health
Funding is available for immersive digital mental health therapeutic solutions.
Innovate UK, part of UK Research and Innovation, will invest up to £4.5 million in innovation projects across the two strands of the Mindset XR competition.
The aim of this competition is to develop digital therapeutic extended reality (XR) solutions to provide improved delivery of mental health and wellbeing services.
This competition is split into two strands:
Your project must undertake feasibility studies or industrial research in the application of XR to provide mental health care solutions. Your proposal must specifically explore how digital therapeutic content can provide positive mental health applications and outcomes for young adults (aged 13 and above) or older adults. Your project must also demonstrate that the solution could be applied, trialled and ultimately adopted at scale, to provide a broad benefit to the UK mental health sector.
The deadline for applications to both strands of this competition is 11am on Wednesday 6 December 2023. To find out more about the competition, potential applicants are invited to register for an online briefing and applicant workshop, taking place on Thursday 12 October 2023.