This UK Government is the biggest tax-raising parliament since records began
The Institute for Fiscal Studies (IFS) has stated that this has been the biggest tax-raising parliament since records began, pushing UK tax revenues to historically high levels. They comment “At the time of the last general election, UK tax revenues amounted to around 33% of national income. By the time of the next election in 2024, on current forecasts, taxes will amount to around 37% of national income – a level not sustained in the post-war period. Compared with a world in which taxes had stayed at 33% of national income, the UK government will be raising upwards of £100 billion more in tax revenues next year. This is equivalent to around £3,500 more per household, though of course the tax rise will not be shared equally.
The government may decide to announce tax cuts in the run-up to the next election. But there is no world in which this parliament – or indeed the period since Rishi Sunak became Prime Minister – turns out to be anything other than a tax-raising one. In fact, it is currently on track to be the biggest tax-increasing parliament since comparable records began.
The UK government is currently raising more in tax revenue, as a percentage of national income, than at any time since the 1940s. This is, in no small part, due to a raft of tax-raising measures announced over the past few years. Notable examples include the big increase in the main rate of corporation tax from 19% to 25%, the energy profits levy, and freezes to various income tax and National Insurance thresholds. Economic developments mean that some of these measures will now raise considerably more than originally planned or intended. That is particularly true of freezes to income tax allowances (which would otherwise have risen in line with inflation).
So are there any tax Planning opportunities ahead of the new tax year?
The new tax year starts 6 April 2024, so you have six months to consider your planning options. Once we pass this date the majority of the tax planning options for Income Tax and Capital Gains Tax purposes will cease unless actioned.
Do you fall into any of these categories?
- You have or are thinking about a change in your personal status (single, married, separating, joining or dissolving a civil partnership).
- You are thinking about selling a capital asset, such as shares or a property.
- You or your child’s other parent claims Child Benefit and the income of either parent is likely to exceed £50,000 for the first time during tax year 2023-24.
- Your annual income is approaching or above £100,000.
- You have not yet topped up your pension contributions for tax year 2023-24.
- You are self-employed with a 31 March 2024 year-end.
- You are thinking about the purchase of equipment or vehicles.
- You are the director and/or shareholder of a limited company and have not yet considered voting dividends or bonuses for 2023-24.
If you do, we can help you discuss your options ahead of the April 2024 deadline.
The above list is not comprehensive, and we specialise in helping clients with all taxes including PAYE, NIC, VAT, Corporation, Capital Gains, Income and Inheritance tax. Please contact us now!
Millions Heading for Retirement Without a Financial Plan
Millions of over-55s in the UK are at risk of encountering financial difficulties in their retirement, new research has revealed.
One of the UK’s leading at-retirement advisers commissioned an independent survey of 2,000 UK adults, finding that less than half (46%) of respondents currently have a financial plan in place for their retirement – with this figure only rising to 47% for those aged 55 and above.
When it comes to retirement savings, just 51% of UK adults know how much is in their pensions – again, there is only a slight increase (to 56%) among those aged 55 and above.
The research also showed that less than a third (32%) of over-55s are confident they will retire with enough money to achieve their desired lifestyle.
Research has also shown that only 16% of over-55s regularly use the services of a wealth manager or independent financial adviser (IFA), while just 19% have spoken with an IFA in the past 12 months to help them understand how to adapt their pension plans to the current economic climate.
Do you own a business?
The ultimate aim of every serious business person is to build a company that has value, so that it can be sold or transferred, allowing the entrepreneur to exit gracefully and profitably.
Recently, we have been helping a number of our entrepreneur clients develop exit strategies. There are many issues to consider:
- When do you want to retire?
- Can the business be sold to your employees?
- Is a trade sale more likely?
- Are there children involved?
- How much is the business worth?
- What needs to be done to enhance the value of the business?
- How long will it take?
- Do you want/need to stay on after sale or transfer?
- What are the tax consequences?
We have a tried and tested methodology to address these issues and to help you prepare your business for sale, find potential buyers and help you negotiate to get the maximum price a buyer feels your business is worth.
If you would like to discuss your personal exit plans we would be happy to do so with you — please call us!
Useful HMRC webinars on expenses and benefits
There is a wide range of expenses and benefits received by employees – including directors.
If you would like more information – or maybe just a refresher – on how to deal with such payments and the effects on tax and National Insurance, HMRC have some useful webinars to support you.
Expenses and benefits for your employees – if your employees have more than one workplace
Find out about:
- employee travel to different types of workplace,
- geographical locations,
- the 24-month rule, and
- the 40% test.
See: Registration (gotowebinar.com)
Expenses and benefits for your employees – travel
This webinar covers reimbursing employees undertaking travel on behalf of the employer, including the tax treatment of:
- travel and subsistence payments to employees;
- mileage payments for employees using their own vehicle;
- benchmark and bespoke scale rates; and
- records and reporting requirements.
See: Registration (gotowebinar.com)
Expenses and benefits for your employees – company cars, vans and fuel
If your employees have private use of a company vehicle, HMRC will cover:
- how to use the online calculator to work out the amount to report for payrolling or on the P11D;
- fuel made available for private use; and
- essential record keeping.
The first part of the webinar will cover company cars, followed by company vans.
See: Registration (gotowebinar.com)
UK government announces more legislation to tackle late payments
The UK government has announced tougher measures to tackle the issue of late payments to small businesses. These new measures will be included in the upcoming Prompt Payment & Cash Flow Review, due to be published shortly and will improve delivery and enforcement of policies, enabling more small businesses to get paid on time.
New measures to be announced in the review will include:
- Extending the Reporting on Payment Practices and Performance Regulations 2017. Following consultation, Government will take forward legislation to extend payment performance reporting obligations. Also included will be new metrics for reporting, including a value metric, so businesses and commentators can see the value of invoices, including invoices paid late, and a disputed invoices metric. Government will also introduce reporting on retention payments for businesses in the construction sector.
- Providing greater advice to small businesses on negotiating payment terms that better suit them, and on how going digital can help them get paid quicker and manage their cash flow.
- Broadening the powers of the Small Business Commissioner: Introducing broader responsibilities, enabling the Commissioner to undertake investigations and publish reports where necessary on the basis of anonymous information and intelligence. This will require primary legislation, so will be subject to the legislative timetable.
See: Government takes action to back small businesses and tackle late payments – GOV.UK (www.gov.uk)
Digital Innovation Fund opens for applications
The Made Smarter Innovation – Smart Manufacturing Data Hub (SMDH) is now accepting applications for funded projects that will support manufacturing small and medium-sized businesses (SMEs) on their smart manufacturing journey.
The fund aims to support the development of concepts into a market-ready solution for deployment and dissemination to SMEs.
There are three different funding opportunities based on the needs of the company:
- Lighthouses – aims to develop already proven digital products and processes into readily accessible solutions which meet the needs of manufacturing SMEs. Grant funding of up to £315,000 is available per project.
- Virtual Testbeds – aims to provide financial support and opportunities to bring pre-existing testbeds to the SMDH community and enable SMEs to utilise them. Grant funding of up to £100,000 is available per project.
- Rapid Demonstrators – aims to support SMEs with sensor installation, data analysis or similar to enable levelling-up the opportunities for SMEs to exceed and expand. Grant funding of up to £50,000 per project is available.
The fund is open to any UK-based industrial or professional sector organisation which can provide skills, support or solutions for manufacturing SMEs.
The deadline for applications is 31 October 2023.
See: Apply for Digital Innovation Funding (smdh.uk)
Health and safety funding for fishers and aquaculture workers
Fishers and aquaculture workers in Wales are being encouraged to apply for funding to improve the health and safety aspects of their work.
The Welsh Marine and Fisheries Scheme is a funding scheme to support environmentally and economically sustainable growth in the Welsh seafood industry and encourage Welsh coastal communities to thrive.
The aim of this Health and Safety funding round is to improve hygiene, health, safety, wellbeing, and working conditions for fishers and aquaculture workers in Wales.
Items which are eligible for funding under this Health and Safety round include, for example, life jackets with a personal locator beacon and life rafts.
All items must meet the specifications as set out in the Welsh Marine and Fisheries Scheme Health and Safety guidance document. The maximum grant award is £10,000 and the minimum grant award is £200.
The application window will be open until 11 October 2023.
See: £600,000 to improve health and safety for fishers and aquaculture workers | GOV.WALES
Wales Tech Week 2023
Brought to you by Technology Connected, Wales Tech Week showcases Welsh technology and champions the industry on the global stage.
It connects, promotes, and develops Wales as a centre of expertise for enabling and emerging technologies and their applications for today’s business and society.
After two years of virtual, it’s now time to get physical. Wales Tech Week 2023 will be an international tech summit at the International Convention Centre Newport, from 16 to 18 October 2023, bringing together some of the world’s best tech minds to learn, connect and do business, along with sponsorship and exhibiting opportunities.
See: Wales Tech Week 2023 – 16-18 October 2023
More than 5,000 New Welsh Businesses Registered this Summer
More than 5,000 new businesses were set up in Wales this summer, according to new research from R3, the UK’s insolvency and restructuring trade body.
R3’s analysis of data provided by Creditsafe shows there were 5,014 start-ups in Wales over the summer months – an increase of 7.1% on last year’s figure of 4,683.
Welsh start-up numbers peaked in August of this year, when 1,693 firms were launched, after falling between June (1,672) and July (1,649). This was a change on the trend in 2022, when numbers decreased during the summer months.
Wales’s yearly increase in start-ups has been mirrored across almost every UK region and nation, with only Yorkshire and Humberside seeing a decrease in start-up numbers, falling by 2.6%. The largest increases were seen in Northern Ireland (55.8%), Greater London (12.4%) and Scotland (8.6%).
Single-use plastics ban from 30 October 2023
From 30 October 2023 there will be a ban on anyone selling or supplying some single-use plastic products in Wales.
What is being banned?
- Single-use plastic plates – this includes paper plates with a laminated plastic surface;
- Single-use plastic cutlery – for example forks, spoons, knives;
- Single-use plastic drinks stirrers;
- Cups made of expanded or foamed extruded polystyrene;
- Takeaway food containers made of expanded or foamed extruded polystyrene;
- Single-use plastic balloon sticks;
- Single-use plastic-stemmed cotton buds; and
- Single-use plastic drinking straws – with exemptions so people who need them to eat and drink safely and independently can continue to have them.
See: Single-use plastics ban from 30 October 2023 | Business Wales (gov.wales)
Succession planning– Employee ownership
Business owners plan for most things, but often succession is not one of them. With the growth of Employee Ownership (EO) in Wales, this session, on 24 October 2023 at 11am, will give you the information you need to start thinking about EO as your succession option.
Aimed at business owners in Wales considering an exit from their company, this online session will give attendees the opportunity to hear from our team on succession planning and EO, including how the use of an Employee Ownership Trust (EOT) could work for you, your business, and employees.
See: Event: “Selling your business, the EO Way” | Employee Ownership Wales
