BCC urges HMRC to ‘cut the complexity’ associated with tax administration

The British Chambers of Commerce (BCC) has urged HMRC to ‘reverse the burden and complexity’ associated with tax administration and compliance.

A survey carried out by the BCC and software company Avalara revealed that 75% of businesses believe the overall burden of tax administration and compliance has increased, when compared to five years ago.

64% of firms surveyed stated that VAT generates ‘the biggest administration and compliance burden’, whilst many businesses reported that the ‘vast array of rules and rates’ can be confusing.

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According to the survey, firms also feel under pressure to be ready for the April 2019 introduction of the government’s landmark Making Tax Digital (MTD) initiative.

The BCC stated that there is a ‘real need’ to reduce compliance costs, transaction costs and the complexity of business tax. It is calling for HMRC to make compliance easier, and improve its process for collecting tax.

‘Companies now routinely cite tax administration and compliance, rather than regulation, as their biggest single source of administrative headaches,’ said Dr Adam Marshall, Director General of the BCC.

‘If the government wants its ‘global Britain’ vision to become a reality, it is time to tackle the huge costs and complexities of the UK tax system, which sap away time and resources that could be better spent raising business productivity and growth.’

As your accountants, we can relieve you of the burden that tax administration often presents. Please contact us for more information.


Keep workplaces cool during heatwave, TUC urges employers

The Trades Union Congress (TUC) has urged employers to keep their workplaces cool during the heatwave, and to be lenient with their employees in regard to dress codes and flexible working in order to help them work as comfortably as possible.

The advice comes as the hot weather continues to affect much of the UK, with temperatures set to hit 34°C in some parts of the country.

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The TUC is advising employers to keep workplaces cool by opening windows, providing employees with fans and installing air cooling and ventilation systems. Employers have also been encouraged to relax staff dress codes, and permit staff members to leave jackets and ties at home and wear lightweight and cooler clothes to work instead.

Allowing employees some flexibility at the start or end of their working day can also help them to avoid sitting in the heat during the rush-hour commute.

Unlike when temperatures plummet, there is currently no law in place restricting employees from working when their workplace becomes too hot. The TUC would like to see this changed, and has called for the introduction of a maximum indoor temperature of 30°C (or 27°C for those in strenuous jobs).

The TUC warns that high temperatures mean workers are at risk of fainting, suffering from dizziness or from heat cramps.

Frances O’Grady, TUC General Secretary, stated that employers ‘should do all they can’ to keep temperatures down during hot weather.

HMRC launches new consultation on pensions cold calling ban

Following a previous consultation on the matter, HMRC has launched a new technical consultation on draft proposals to ban pensions cold calling.

During the 2016 Autumn Statement, the government outlined its intention to tackle so-called ‘pension scams’, including banning cold calling in relation to pensions.

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The government has stated that it is ‘committed to protecting people from pension scams, and pursuing those who perpetuate pension scams’. Its technical consultation focuses on policy intentions behind the proposed ban on pensions cold calling, and invites comments on the issue.

Under the proposals, unsolicited marketing calls relating to pensions will be banned, alongside cold calls that offer a ‘free pension review’, or other free financial guidance.

The government also outlined its intention to ban cold calls that promote retirement income products, such as drawdown and annuity products, or offer an assessment of the performance of an individual’s current pension funds.

A spokesperson for the Treasury recently commented: ‘We’re committed to introducing a ban on pensions cold calling as quickly as possible.

‘We intend to lay the required regulations before Parliament this autumn.’

The government proposals can be found here. The consultation closes on 17 August 2018.

Investment in innovation needed to ‘help boost SME productivity’, states FSB

The Federation of Small Businesses (FSB) has urged the government to invest in innovation in order to help ‘boost productivity’ amongst small and medium-sized enterprises (SMEs).

A report published by the FSB has suggested that 24% of UK SMEs and sole traders have not made any significant changes to products or processes in the last three years, with many citing pressure on time and finances as being a barrier to innovation.

The report also revealed that 76% of SMEs have made significant improvements to their business over the past three years. 95% of those who did innovate introduced a change to their business, such as new software, whilst 25% invented a new-to-market product.

In its report, the FSB stated that the government must ‘put more emphasis on supporting businesses to make improvements within their firm’.

The business group has called for the introduction of a new tax credit to help ‘alleviate the opportunity costs attached to small business owners’ who take time out of their firm to undertake leadership and management training.

‘Think of innovation, and introducing new, market-changing inventions might spring to mind. While these are undoubtedly important, our research shows that changes made within small businesses can have huge impact on their productivity,’ said Martin McTague, Policy Chairman at the FSB.

‘We are calling for the government to explore putting in place a tax credit for those time-poor small businesses that can’t afford to take time out of their everyday businesses to take part in training.’

‘Record amount’ of tax collected by HMRC

A ‘record amount’ of tax has been collected by HMRC, official data has revealed.

The data showed that, in the year to April 2018, HMRC collected a total of £605.8 billion in taxes – an increase of 5.4% when compared to the figure recorded in the previous year.

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Of this total amount, £186 billion was collected in income tax; £130.5 billion in national insurance contributions (NICs); £128.6 billion in VAT; and £53.3 billion in corporation tax.

The amount collected in capital gains tax (CGT), however, fell by 7.1% as a result of the reduction in CGT rates from 18% to 10%, where an individual is not a higher rate taxpayer.

The data also revealed that HMRC secured £30.3 billion by tackling tax avoidance and evasion, and that 15 million taxpayers are actively using their Personal Tax Accounts (PTAs) to manage their taxes online.

Commenting on the data, Jon Thompson, First Permanent Secretary and Chief Executive at HMRC, said: ‘HMRC has a vital purpose, and that is to collect the revenues that pay for public services, and to provide targeted financial support for those in our society.

‘Last year, HMRC had a great year. Record revenues, record compliance yield, record numbers of people prosecuted for tax evasion, and performing strongly for customers up and down the country.’

As your accountants, we can help you plan for a prosperous future, while keeping the tax bill to a minimum. Please contact us for more information.

OBR warns tax rises will be required to fund health service spending

In its latest Fiscal Sustainability Report (FSR), the Office for Budget Responsibility (OBR) has warned that tax rises or spending cuts will be required in order to fund planned increases in the NHS budget.

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The government recently outlined plans to boost its health budget partly by way of a so-called ‘Brexit dividend’ – by 2023/24, it hopes to contribute £20 billion a year to the NHS in England. However, according to the OBR, Brexit is ‘more likely to weaken than strengthen’ public finances.

Responding to the OBR’s warning, the Treasury said: ‘The government will fund this five-year commitment while continuing to meet its fiscal rules and reduce debt. Taxpayers will need to contribute a bit more in a fair and balanced way.’

Within its report, the OBR also stated that public finances are ‘likely to come under significant pressure’ in the long-term, as a result of the UK’s ‘ageing population’ and ‘upward pressure on health spending’.

The fiscal watchdog revealed that the current long-term outlook for UK public finances is now ‘less favourable’ than at the time when its last FSR was published in January 2017.

Business confidence ‘reaches two-year high’, research suggests

Research carried out by Lloyds Bank has revealed that confidence amongst UK firms has ‘reached a two-year high’.

The Bank’s confidence index rose from 23% in January 2018 to 25% in the second quarter of this year, and is now ‘above the long-term average’. UK businesses are now ‘more confident than at any point since the EU referendum vote’, according to Lloyds Bank.

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It did, however, warn that Brexit uncertainty poses ‘the greatest threat to business confidence’ in the short-term, alongside ‘weaker UK demand’. 36% of firms ‘expect a negative impact on their business’ if the government fails to reach a trade agreement with the EU.

The research also suggested that many firms are choosing not to put additional recruitment and investment plans into place.

‘Despite concerns on the wider economy, businesses are still relatively upbeat, as our latest report shows business confidence hitting a two-year high since the Brexit vote,’ said Sharon Geoghegan, Managing Director of SME Banking at Lloyds Banking Group.

‘As we look ahead, the external environment remains mixed, as Brexit uncertainty and weaker UK demand are businesses’ biggest concerns for the next six months.’