Committee raises concerns over impact of business rates on UK firms

Committee raises concerns over impact of business rates on UK firms

The Treasury Committee has expressed concerns in regard to the impact of the UK’s current business rates system on firms.

In a letter to Chancellor Philip Hammond, Nicky Morgan, the Chair of the Committee, stated that business rates place a ‘financial burden’ on UK businesses, and questioned whether the system is ‘fit for purpose’.

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‘It’s clear that many bricks and mortar stores are struggling to remain competitive against online retailers, with the Chancellor admitting that business rates can represent a high fixed cost for some businesses,’ said Mrs Morgan.

‘We are likely to scrutinise business rates further as part of our Autumn Budget inquiry later this year.’

In response to the Treasury Committee’s letter, the Chancellor ruled out reforming the business rates system, but did admit that the tax has ‘hit the high street too hard’.

Mr Hammond also stated that the government ‘needs to find a better way of taxing the digital economy’, and that it has been ‘making progress’ in regard to this.

HMRC tax investigations into SMEs are ‘too intensive’

HMRC tax investigations into SMEs are ‘too intensive’

New research commissioned by HMRC has revealed that more than half of small and medium-sized enterprises (SMEs) believe that HMRC’s tax investigations are ‘too intensive’.

Insurer Professional Fee Protection (PfP), who undertook the research, found that 52% of SMEs believe that tax probes are ‘too rigorous’, while an additional 56% think HMRC investigations are ‘too costly and time consuming’.

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PfP warned that tax investigations often prove to be disruptive for SMEs, with many resulting in significant professional fees.

Commenting on the issue, Kevin Igoe, Managing Director of PfP, said: ‘Small businesses think they are getting rough treatment from HMRC and are making this clear. [They] are often at the receiving end of lengthy tax investigations, which can be very disruptive. Many of these businesses also do not have the resources at their disposal to manage an inquiry or negotiate with inspectors.’

According to the research, 48% of SMEs ‘do not believe that HMRC’s penalties are fairly distributed’, and many think that small firms are ‘unfairly targeted’.

PfP also revealed that, in 2016/17, HMRC’s investigation teams collected an additional £16 in taxes for every £1 spent on investigatory staff.

Government publishes Finance Bill 2018-19 draft legislation

The government has published draft legislation for Finance Bill 2018-19.

The draft legislation is open for consultation, and ‘continues the government’s commitment to a competitive and fair tax system’.

It includes plans that could potentially affect a range of taxes, from Stamp Duty Land Tax (SDLT) to income tax.

The draft legislation also outlines the government’s approach to the Making Tax Digital (MTD) penalty system, with HMRC outlining its intention to utilise a two-tier penalty model for businesses and individuals who fail to pay their tax on time.

The July publication of the Finance Bill 2018-19 draft legislation forms part of the government’s new fiscal timetable. It hopes that the earlier publication of the legislation will ‘allow more time for scrutiny of tax measures, giving greater certainty and stability to taxpayers’.

Commenting on the draft legislation, Mel Stride, Financial Secretary to the Treasury, said: ‘Britain is one of the best places in the world to do business, and we’re determined to see that continue.

‘This legislation illustrates our commitment to creating an environment in which innovation and enterprise can thrive, while ensuring that everyone plays by the same rules.’

The consultation on the draft legislation will run until 31 August 2018.

New fund launched to ‘increase productivity’ amongst SMEs

New fund launched to ‘increase productivity’ amongst SMEs

The government has launched a new £8 million ‘Business Basics Fund’, with the stated aim of helping small and medium-sized enterprises (SMEs) in England to improve their productivity. The Fund forms part of the government’s Industrial Strategy, which seeks to ‘boost productivity and earning power across the UK’.

The Business Basics Fund is being run by the Department for Business, Energy and Industrial Strategy (BEIS) and Innovate UK, with the aim of encouraging SMEs to adopt ‘tried and tested’ technologies and management techniques that could help to enhance their productivity and performance.

In the first phase, funding is being made available for undertaking proof of concept projects. Private sector organisations that are collaborating with at least one public sector or not-for-profit partner can apply to receive a grant. Proof of concept projects could be eligible for grant funding of up to £60,000.

Once the projects are launched, the government will then work to assess the effectiveness of each project in boosting productivity, thereby helping to inform future policies.

Commenting on the news, Small Business Minister, Andrew Griffiths, said: ‘The Business Basics Fund will test new and innovative ways of supporting small businesses to take advantage of technologies and management practices – giving small business leaders the tools and support they need to continue to thrive.’

UK businesses must prepare for ‘no deal’ Brexit, warns ICAEW

UK businesses must prepare for ‘no deal’ Brexit, warns ICAEW

The Institute of Chartered Accountants in England and Wales (ICAEW) has warned that businesses in the UK must prepare for a ‘no deal’ Brexit.

Research carried out by the Institute has revealed that a fifth of UK firms ‘haven’t considered the impact of Brexit’ on their business.

Many business owners believe that the UK’s exit from the EU will have ‘minimal to no impact’ on their firm, according to the ICAEW.

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It has urged businesses to put contingency plans in place in order to prepare for a ‘no deal’ Brexit, and to consider what this scenario could mean for their firm.

‘With less than a year until Britain leaves the EU, the prospect of an agreement in time is looking increasingly unlikely,’ said Michael Izza, Chief Executive of the ICAEW.

‘Even with the transition period until the end of 2020, too much still needs to be determined on how UK businesses and professional services will work both with and in Europe.’

Meanwhile, the research also suggested that 77% of businesses do not consider EU regulations to be a burden to growth, with a further 80% of firms committing to complying with EU rules once the UK has left the bloc.

Couples urged to claim free tax break

Couples urged to claim free tax break

HMRC is urging eligible married couples and civil partners to claim a free tax break worth up to £238 per year, as official data suggests that more than a million couples are ‘missing out’.

According to the data, nearly three million couples have claimed the Marriage Allowance to date. The allowance enables spouses to transfer a fixed amount of their personal allowance (PA) to their partner.

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The Marriage Allowance is available to married couples and civil partners where one partner pays tax at the basic rate and the lower earner has an income of £11,850 or less. Where a couple is eligible, one partner is permitted to transfer 10% of their PA to the other (£1,190 for the 2018/19 tax year). Where one partner does not use all of their PA, the benefit will be up to £238 – equating to 20% of £1,190.

HMRC stated that a new online application process has made applying for the Marriage Allowance easier, and that eligible couples could receive backdated claims of up to £662, given as a lump sum.

Since March 2018, more than 300,000 couples have reportedly signed up for the allowance.

Mel Stride, Financial Secretary to the Treasury, commented: ‘This is a really important tax relief and reflects the social importance of marriages and civil partnerships.

‘I’d urge those that haven’t yet managed to claim to do so right away – it’s quick and easy to apply.’

As your accountants, we can help to ensure that you are making the most of any tax allowances or reliefs that are available to you. For advice and assistance, please contact us.

HMRC ‘saves consumers more than £2.4 million’ in its fight against cybercrime

HMRC ‘saves consumers more than £2.4 million’ in its fight against cybercrime

Newly-published figures have revealed that HMRC has ‘saved the public over £2.4 million’ by tackling fraudsters who trick consumers into using premium rate phone numbers for services that are supplied for free by HMRC.

According to HMRC, criminals create websites that emulate its official site. These fake sites direct individuals to call phone numbers with ‘extortionate costs’.

The data also revealed that, since 2016, HMRC has blocked half a billion phishing emails from reaching consumers, and has reduced the number of phishing texts by 90%. It has also taken down 20,750 malicious websites over the past year – representing a 29% increase when compared to the previous year.

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HMRC is keen to reinforce the message that ‘genuine organisations like banks will never contact people out of the blue to ask for their PIN, password or bank details’. The Revenue also stated that individuals should ‘never give out private information, download attachments or click on links in emails and messages they weren’t expecting’.

‘The criminals behind these scams prey on the public and abuse their trust in government,’ said Mel Stride, Financial Secretary to the Treasury.

‘HMRC is cracking down harder than ever, as these latest figures show. But we need the public’s help as well. By doing the right thing and reporting suspicious messages you will not only protect yourself, you will protect other potential victims.’

Any suspicious emails claiming to be from HMRC should be forwarded to, and texts should be sent to 60599. Consumers are urged to contact Action Fraud on 0300 123 2040 to report any suspicious calls. Alternatively, individuals can make use of its online fraud reporting tool.