Business Newsletter 3rd October 2022

U-turn on the top rate of tax

Facing huge criticism and market turbulence following his announcement of a series of “growth” measures, Chancellor Kwasi Kwarteng has backtracked on his decision to abolish the 45p rate of income tax paid by people earning more than £150,000 a year. The proposal to scrap the rate had been criticised as unfair at this time of rising living costs.

Following the mini budget markets reacted poorly and we saw a falling pound, higher interest rates, a collapse in mortgage products and the Bank of England stepping in to calm markets. Prime Minister Liz Truss has admitted yesterday she should have “laid the ground better” for her mini budget, after it sparked days of market turmoil.

We will keep you updated on the effects of this and other decisions in good time for the new tax year which commences on 6 April 2023.


Consider delaying end of October payroll to 6 November?

Employers may wish to consider negotiating with employees to delay the end of October payroll to 6 November to benefit from the 1.25% NIC reduction.

For a senior employee on £10,000 a month this would save £125 for both the employer and employee, or a lot more for some Premier League footballers. Cristiano Ronaldo is allegedly on £20 million a year so a delay to 6 November would save him and Manchester United £20,833!

This would of course impact on the employees’ ability to make bank payments such as mortgages and other direct debits scheduled to be made at the end of October or early November.

Please contact us if you wish to talk through your payroll options


Dealing with the rising costs of living

Retail sales fell steeply in August as the rising cost of living put pressure on households, figures show. According to the Office for National Statistics (ONS), sales fell by 1.6% which is much larger than economists predicted, continuing a fall since the summer of 2021.

Retail sales in all the main sectors – food, non-food, online and fuel – fell over the month and supermarkets’ sales volumes fell by 0.9% in August. However, alcohol and tobacco sales rose by 6.3%. August’s sales figures signalled the largest month-on-month drop since December 2021.

If you are struggling with your finances, there are some steps you can take to start managing your situation. Make a list of the organisations that you need to make a payment to.

Note down how much you pay and whether you are behind on any payments. This includes essential household bills such as electricity and gas, as well as loans and any other debts or repayments you have.

If you find this too difficult, a debt adviser can help you for free.

The MoneyHelper Debt Advice Locator tool can help you find out where to access free debt advice near you.

It’s important that you prioritise your debts. Some debts will be more urgent than others because the consequences of not paying them can be more serious. These may include:

  • Mortgage or rent
  • Council tax/rates
  • Gas or electricity bills

MoneyHelper has useful information on how to prioritise your debts.

Once you know which debts are a priority, you can work out a budget.

This will help you understand how much money you have to pay your commitments as you go forward.

You might want to use a budget tool, such as the MoneyHelper online budget planner, or a tool provided by a debt adviser to help you.

If you are worried about not being able to make future payments, it is important to contact the organisations you make payments to and let them know. They may be able to talk to you about options for changing how or when you pay.

If you are finding it difficult to pay your mortgage, credit card or personal loan, your lender should provide you with support tailored to your individual circumstances. This support will be available if you’re struggling for the first time or if you’ve already had help.

Your options could include:

  • Making reduced payments for a temporary period.
  • Changing your mortgage or loan term to make your payments more affordable.
  • Making no payments for a temporary period.
  • Being directed to sources of free debt advice.

Contact your lender as soon as possible if you’re finding it difficult to make payments.

Just talking to your lender will not affect your credit file, and they can help you. If you agree on an arrangement with them, that will be reflected on your file, but this would also be the case with any missed payments.

If your lender is not treating you fairly, you have the right to complain directly to them. If you aren’t satisfied with their response, you can contact the Financial Ombudsman Service.

See: Dealing with the financial impact of rising costs of living | FCA



Business asset finance explained

Business asset finance is an agreement that enables businesses to obtain the assets needed to manage and/or expand effectively and spread the cost/outlay.

Regardless of the size of the business, the decision to invest in assets is always difficult. However, there are some key benefits, including:

  • It’s a great alternative to a traditional bank loan.
  • Increased tax benefits.
  • Payments can be budgeted according to cash flow.
  • Lenders secure against the asset.

Specialists can advise on:

  • Hire purchase – allows you to buy an asset and pay for it over a period of time, spreading the cost via an agreement with a finance company. An initial deposit is payable; and
  • Finance lease – a rental agreement through which an asset can be obtained for a fixed term. At the end of the initial term, the agreement can be extended or sold with a rebate of the sale proceeds to the client.

You will need to ensure that your management accounts are up to date, that you have current detailed lists of debtors, creditors and all assets, and you might need up-to-date projections before a lender will consider your application. Please talk to us about finance. We can introduce you to finance specialists who have many years of experience and success in advising businesses across a wide range of sectors.



Submitting your Self Assessment return early

HMRC has seen a growing trend in customers submitting their Self Assessment returns early. In the last five years, the number of customers choosing to file their return on the first day of the tax year has almost doubled.

You have until 31 January 2023 to send HMRC your Self Assessment tax return and to pay any tax you may owe.

Learn more about getting started with Self Assessment, including registration, tax returns, tax bills and payments on the webpage below.

See: HMRC email updates, videos and webinars for Self Assessment – GOV.UK (