In a new report, the Institute for Fiscal Studies (IFS) has warned that future increases in the National Living Wage (NLW) could lead to more UK jobs becoming automated.
Under current plans, by 2020, the NLW will have risen significantly, as part of the government’s commitment to ‘support working families with the cost of living’. The IFS predicts that, by this time, the NLW will rise to over £8.50 an hour.
The NLW is currently £7.50 per hour. It is set to rise from 1 April 2018, reaching £7.83 an hour.
The Institute’s report warned that a higher NLW will eventually begin to ‘affect jobs that appear to be more automatable’, such as retail cashiers and receptionists, which could be replaced by computerised systems.
Individuals who work in the wholesale and retail sector are most likely to be affected by automation, the IFS said. Those working in the manufacturing industry are also highly likely to lose their jobs to automation, according to the report.
The IFS also found that, currently, the NLW is rising faster than workers’ average earnings, meaning that more individuals are being paid at the minimum level.
Commenting on the findings, Agnes Norris Keiller, Research Economist at the IFS, said: ‘The fact that the higher minimum will increasingly affect jobs that appear to be more automatable is an additional reason why extremely careful monitoring is required.
‘Even higher rates… would bring even more employees in more automatable jobs into the minimum wage net.’
HMRC has published draft Making Tax Digital for VAT (MTD for VAT) regulations, outlining how businesses must use MTD-compatible software to keep digital records and file their VAT returns.
Under the government’s MTD plans, from 1 April 2019 businesses with a turnover above the VAT threshold (currently £85,000) will be required to keep digital records for VAT purposes, and provide their VAT return information to HMRC using MTD-compatible software. The MTD requirement will remain even if a business’s turnover subsequently falls below the VAT threshold.
Keeping digital records and making quarterly updates will not be made compulsory for taxes other than VAT before April 2020.
Within the draft regulations, HMRC stated that businesses will be able to use multiple pieces of software, provided that there is a ’digital link‘ between them. This will enable records to be ‘kept in a range of compatible digital formats’.
The government also outlined that any digital software used must be able to record and preserve records in an electronic format; supply HMRC with information and returns from these records; and receive information from HMRC.
In addition, taxpayers will be permitted to calculate any adjustments outside of their digital records, and then transfer these into the software, the draft regulations revealed.
The government is seeking feedback on its draft MTD for VAT regulations. The consultation will close on 9 February 2018: the draft regulations can be viewed here.
Figures published by HMRC have revealed that a significant number of taxpayers filed their self-assessment tax returns over the festive period.
18,825 self-assessment tax returns were submitted on New Year’s Eve, whilst a further 17,068 were filed on New Year’s Day.
Meanwhile, 6,033 taxpayers filed their tax return on Christmas Eve, and 2,590 individuals submitted their return on Christmas Day.
7,655 self-assessment tax returns were filed on Boxing Day.
Commenting on the figures, Angela MacDonald, Director General for Customer Services at HMRC, said: ‘It’s easy to put off doing your self-assessment, but that ‘niggle’ means it’s always on our customers’ minds.
‘We want to help remind our customers to get it done so they can alleviate that feeling, ensuring they can relax.’
The deadline for submitting 2016/17 self-assessment tax returns is midnight on 31 January 2018. Those that miss this deadline will receive a penalty of £100, even if there is no tax to pay. Further penalties will be issued for continued payment failures.
As your accountants, we can assist you in preparing and filing your self-assessment tax returns. We can also advise you on any payments due. Please contact us for help with your tax and accounting requirements.
The government has published a draft Bill to repeal the so-called ‘staircase tax’ that has adversely affected businesses in England and Wales.
The staircase tax affected businesses with offices on multiple floors of a commercial property. Such businesses had been receiving separate, backdated business rates bills for each floor occupied, provided the areas separating the offices were communal. Some firms in England and Wales saw their business rates rise as a result.
Business rates are calculated separately in Scotland, using the rateable value, which is set by a local assessor, and the ‘poundage rate’, which is set by the Scottish government.
Under the Bill, affected firms in England and Wales will be able to choose to have their business rates recalculated under the old, single bill system. The government stated that any savings due as a result will be backdated.
Meanwhile, in the 2017 Autumn Budget, Chancellor Philip Hammond also confirmed that future business rates revaluations will take place every three years rather than every five years, beginning after the next revaluation, which is currently due in 2022.
Commenting on the draft Bill, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘The staircase tax has arbitrarily penalised small firms simply because they shared a communal staircase, corridor or even car park with another business.
‘It is very good news that the government has stepped in to repeal this ludicrous tax and I hope politicians of all parties will now back its abolition when it is put to Parliament.’
With 2018 just around the corner, you may wish to consider creating some financial New Year’s resolutions, to ensure that you remain on course for a successful and profitable year ahead.
Inadequate financial planning could mean that you miss out on tax-saving opportunities, thereby failing to make the most of your business and personal wealth.
Carrying out a detailed review of your financial planning strategies will help to keep you on track to achieving your financial goals for you and your business.
We can assist you with implementing strategies to help improve your business’s bottom line. Our team can also suggest a number of ways to minimise the tax bill.
We understand that organising your finances often poses an unwelcome burden. That is why we are on hand, helping you to manage your business and personal finances and stay on track in 2018.
For more information on how we can assist you during 2018 and beyond, please contact us.
The deadline for submitting the 2016/17 self-assessment tax return is fast approaching.
The final date by which you must complete your self-assessment tax return is midnight on 31 January 2018. Those that miss this deadline will receive a penalty of £100, even if there is no tax to pay. Further penalties will be issued for continued payment failures.
Last year, a significant number of individuals chose to use the festive break as an opportunity to catch up on paperwork.
6,214 individuals submitted their self-assessment tax return online on Christmas Eve, while 1,944 submitted their return on Christmas Day.
A further 6,200 taxpayers filed their tax return on Boxing Day. This number proved to be significantly higher when compared to the same period the year before.
As your accountants, we can assist you in preparing and filing your self-assessment tax returns. We can also advise you on any payments due. Please contact us for help with your tax and accounting needs.
Insurance provider Zurich has advised businesses to safeguard themselves against adverse weather conditions over the festive period.
Zurich warned that over the winter months, businesses face a number of hazards posed by wintry conditions. Risks range from burst water pipes as a result of freezing temperatures, to failing heating systems.
To minimise the risks that adverse wintry conditions pose to businesses, Zurich has recommended a host of strategies for firms to consider implementing.
Carrying out regular building inspections is vital in order to identify potential issues and undertake essential maintenance, says Zurich. It also recommends leaving boilers and water heating systems running throughout the winter period, and inspecting pipes for defects or vulnerabilities.
Businesses are also advised to leave the heating system turned on if a property is temporarily unoccupied, in order to maintain a steady temperature and reduce the risk of freezing.
Zurich recommends that business owners should assess how cold weather may affect their employees, and implement reasonable measures to safeguard their wellbeing.
Indoor workplace temperatures should ideally stay above 16°c, according to the guidance, while those working outdoors should be provided with appropriate personal protective equipment.