Deadline to spend old £10 notes rapidly approaching, Bank of England warns

The Bank of England (BoE) has warned that the deadline for spending old £10 notes is rapidly approaching.

Paper £10 notes, which feature a portrait of naturalist Charles Darwin, will be demonetised on 1 March 2018. After this time, the new polymer £10 note will be the only note with legal tender status.

Data from the BoE has revealed that, despite 73% of £10 notes currently in circulation being the new polymer type, there are still around 211 million old paper £10 notes left in circulation in the UK.

The BoE is urging consumers to spend their old £10 notes before the 1 March deadline. Individuals will also be able to exchange them for new polymer ones after this time.

The new polymer £10 note came into circulation on 14 September 2017, and depicts author Jane Austen on the back. ‘Tactile’ features for the blind and partially-sighted are also included on the new note.

Plans are in place to introduce a new polymer £20 note in 2020. There are no plans currently in place to replace the paper £50 note.

More information on the new £10 note can be found here.

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Data shows many firms ‘paying male employees more than female employees’

Data published by the government’s Equalities Office has revealed that a vast majority of UK firms are paying male employees more than their female employees.

The statistics showed that around 1,000 businesses have published their gender pay gap so far, but a further 8,000 are yet to do so.

Taking hourly earnings into account, the data revealed that, of the businesses that have published their gender pay gap data, 908 are paying their male employees more than their female employees. 143 are paying female workers more, the Equalities Office found.

30 firms stated that there is no difference in the levels of pay between their male and female employees.

New rules introduced from 6 April 2017 mean that large businesses are required by law to publish their gender pay gap figures on their website. The government hopes that, by publishing this data, employers will be able to address any gaps within their firm, and take action to close them.

Voluntary and private sector employers with 250 employees or more must publish their figures by 4 April 2018. Public sector employers must publish their figures by 30 March 2018.

Commenting on the issue of gender pay gap reporting, Charles Cotton, Senior Performance and Reward Adviser at the Chartered Institute of Personnel and Development (CIPD), said: ‘Some businesses may be concerned about reputational issues, which may be holding them back from reporting early.

‘They may be hoping that by waiting until the deadline and submitting at the same time as others that their results will get lost in the crowd.’

Businesses ‘turning to alternative sources of finance’, research suggests

Research published by the British Business Bank (BBB) has suggested that UK small businesses are increasingly turning to alternative sources of finance to fund their plans for growth and expansion.

The BBB’s Small Business Finance Markets report found that many small firms are turning to specialist asset finance providers and peer-to-peer lending for funding, as opposed to big banks.

The value of small business asset finance deals increased by 12% in 2017, whilst peer-to-peer lending also proved popular, with its value rising by 51% last year. The value of equity investment also increased by 79%, the research showed.

Meanwhile, the report also revealed that over the last two years, only 1.7% of small businesses sought new loans – a ‘record low’ amount, according to the BBB.

Commenting on the issue, Keith Morgan, CEO of the BBB, said: ‘A core objective of the BBB is to encourage greater diversity of finance, so we welcome the growth in the uptake of equity finance and other alternatives to traditional lending.’

However, the Federation of Small Businesses (FSB) expressed concern over the low percentage of UK small firms who sought new loans over the last two years. Mike Cherry, its National Chairman, said: ‘We’re lagging behind the US when it comes to venture capital investment in businesses to the tune of millions. That has to change.

‘Lots of small firms simply aren’t up to speed on all of their options.

‘Small firms will often start their finance journey by speaking to the bank they’ve always dealt with, leading them down a more traditional debt route that won’t suit everyone.’

SMEs expect cryptocurrency payments to reach high street ‘within two years’

Research carried out by card payments provider Paymentsense has suggested that owners of small and medium-sized enterprises (SMEs) expect cryptocurrency payments to be a reality on the UK high street ‘within two years’.

35% of UK SME owners expect cryptocurrency payments to be made on the high street from 2020, whilst a further 21% believe that such payments will appear even earlier.

59% of business owners revealed that they would consider investing in cryptocurrency, with an additional 18% divulging that they already invest in it.

However, the research also revealed that only 13% of businesses already accept cryptocurrency payments, while an additional 25% believe that this type of payment will never become a reality on the high street.

Guy Moreve, Head of Marketing at Paymentsense, commented: ‘It’s clear that cryptocurrencies are moving swiftly towards the mainstream. However, small business owners considering cryptocurrency as a payment option should be clear about how they can integrate it with their existing financial arrangements.

‘Also, the value of unregulated cryptocurrency changes fast. Using a trusted payment processor or merchant service provider can help guard against this by allowing a swift currency exchange, and improve security processes.’

Average UK small business ‘spends £5,000 on tax compliance every year’, study finds

A new report published by the Federation of Small Businesses (FSB) has found that the average UK small business spends £5,000 per year on tax compliance.

The FSB also revealed that small businesses spend three working weeks each year on complying with their tax obligations.

Pay as You Earn (PAYE), VAT and national insurance contributions (NICs) were highlighted in the report as being the most time-consuming taxes that firms have to deal with, with many spending an average of 95 hours per year complying with them.

An additional 46% of firms find calculating tax rates challenging, whilst a further 40% find exemptions confusing.

The FSB has urged the government to reform the UK tax system. It has proposed a series of changes intended to help simplify the tax collection process, including giving businesses an estimation of what their tax bills will look like before they are due and allowing firms to pay taxes in instalments.

Commenting on the issue, Mike Cherry, National Chairman of the FSB, said: ‘Time and money spent by small businesses on navigating the tax system is time and money not spent on innovating, expanding and creating jobs.

‘We hear a lot about the need to simplify the UK tax code. In fact, our priority should be simplification of the tax compliance process.’

As your accountants, we can help you to minimise the tax burden. Please contact us for assistance.

Significant number of UK workers ‘planning to become self-employed’, research finds

Research carried out by banking group Aldermore has suggested that a significant number of UK workers are planning to become self-employed in the future.

Aldermore found that 29% of individuals aim to become self-employed – a notable rise when compared to 2017’s figure of 15%.

15% of workers plan to launch a business in the retail sector, whilst an additional 11% plan to move into the catering and accommodation industry.

18% intend to make the move in the coming year, the research suggested.

Aldermore found that economic uncertainties ‘don’t seem to be a concern’ to entrepreneurs, with 53% stating that Brexit negotiations will have ‘little impact’ on their business.

However, the research also revealed that 70% of workers believe it is harder for the self-employed to secure a mortgage.

Commenting on the findings, Charles McDowell, Commercial Director for Mortgages at Aldermore, said: ‘The research demonstrates that the UK is a truly entrepreneurial nation, with nine million people considering making the ambitious move to become self-employed.

‘It takes a lot of courage to make the major life decision to become self-employed, and it is encouraging to see almost three in ten expect their revenues to increase in the next 12 months, which is a positive outcome in light of the myriad of uncertainties.’

As your accountants, we can advise on the optimum business structure to suit your requirements – simply contact us to find out more.

Bank of England survey suggests UK workers in line for pay rise

The Bank of England (BoE) has indicated that a significant pay rise could soon be in store for UK workers.

Its agents’ survey, which polled 368 UK businesses, suggested that real wages are on course to begin to rise above inflation, and grow by 3.1% during 2018 – a significant rise when compared to 2017’s figure of 2.6%.

Most industries in the UK are set to benefit from the wage rise: however, individuals working in the construction sector are not in line for the pay rise, the BoE revealed.

The forecasted pay rise can be attributed to the upcoming increase in the National Minimum Wage (NMW), which is set to take effect from 1 April.

At this time, the NMW for those aged between 21 and 24 will rise to £7.38 an hour, whilst the National Living Wage (NLW) for workers aged 25 and over will increase to £7.83 per hour.

Commenting on the issue, Howard Archer, Chief Economic Adviser at EY Item Club, said: ‘Expectations that the BoE will raise interest rates in May will likely be fuelled by their regional agents reporting a pick-up in companies’ expected average pay settlements.’