Chancellor Jeremy Hunt last week unveiled the government’s tax and spending plans in the Autumn Statement. He began his speech by saying that there were 110 measures to “Help grow the British economy”.

Growth is better than expected this year according to the Office for Budget Responsibility (OBR), although they said the impact of the Autumn Statement on output growth will be “modest”.

They added that the economy recovered more fully from the pandemic and weathered the energy shock better than expected, but they expect inflation to remain higher for longer, taking until the second quarter of 2025 to return to the two percent target, more than a year later than forecast in March. More persistent inflation means markets expect interest rates to be more than a full percentage point higher than assumed in March.

The 2% cut in employee National Insurance Contributions (NIC) will be welcomed by most employees but it is worth pointing out that in October the Institute for Fiscal Studies (IFS) stated that this has been the biggest tax-raising parliament since records began, pushing UK tax revenues to historically high levels.

The OBR added: “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 argues the pandemic and the energy shock need to be repaid and hence the higher level of tax.

On the high level of public spending, the Chancellor said that the country needs “a more productive state, not a bigger state” and he set out a new target for the public sector to increase productivity by at least 5% per year. These measures should ensure growth in the public sector is always lower than growth in the economy. He also stated that the government would meet its fiscal rule on borrowing below 3% of growth domestic product within 5 years of the latest OBR forecast.

The key business and taxation points made by the chancellor include:

• A cut in employees National Insurance contributions from 12% to 10% from 6 January 2024.
• Measures to support corporate capital expenditure – the capital expenditure tax break for businesses that allows them to save on corporation tax by investing, has been made permanent.
• A new simplified research and development (R&D) tax relief, combining the existing R&D expenditure credit (RDEC) and SME schemes.
• Business rate relief extended – a freeze on the small business multiplier for a further year.
• The 75% business rates relief for retail, hospitality, and leisure to be extended to 2025.
• A 9.8% increase to the minimum wage to £11.44 per hour from April, which will be expanded to 21 and 22-year olds.
• A consultation on giving pension savers a “legal right to require a new employer to pay pension contributions into their existing pension”.
• Class 2 National Insurance contributions (NIC) for the self-employed will not be required from 6 April 2024.
• A cut in the rate of Class 4 NIC from 9% to 8% on self-employment/partnership profits between £12,570 and £50,270.
• Targeted investments for advanced manufacturing and green energy.
• Further funding of £50M to increase apprenticeships in engineering and other key sectors.
• Additional levelling up and Artificial intelligence funding.
• Extending the financial incentives for Investment Zones and tax reliefs for Freeports from five to 10 years.
• Some of the other key statements made include:
• Welfare recipients will be made to undertake a mandatory work placement if they are still looking for a job after 18 months.
• Universal Credit and disability benefits will increase next year by 6.7%.
• State pensions will increase by 8.5% in April 2024, honouring the “Triple lock” in full.
• Tobacco duty will rise by 10% above the tobacco escalator and alcohol duty is frozen until 1 August 2024.
• The UK will continue to meet its NATO defence spending target of 2% of GDP.
• The local housing allowance will increase with an average increase of £800 for 1.6 million households.
• Plans to speed up planning applications.

You can read the Autumn Statement in full here: Autumn Statement 2023 (publishing.service.gov.uk)

So, are there any tax planning opportunities ahead of the new tax year?

The new tax year starts 6 April 2024, so you have four 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; or
• 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 so please contact us and find out how we at Barter Durgan can help 🙂

Self Assessment customers are urged to be on the lookout for scam texts, emails and phone calls from fraudsters.

This warning comes as HM Revenue and Customs (HMRC) received more than 130,000 reports about tax scams in the 12 months to September 2023, of which 58,000 were offering fake tax rebates.

With around 12 million people expected to submit a Self Assessment tax return for the 2022 to 2023 tax year before the 31 January 2024 deadline, fraudsters will prey on customers by impersonating HMRC.

The scams take different approaches. Some offer a rebate; others tell customers that they need to update their tax details or threaten immediate arrest for tax evasion.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:  “HMRC is reminding customers to be wary of approaches by fraudsters in the run up to the Self Assessment deadline. Criminals are great pretenders who try and dupe people by sending emails, phone calls and texts which mimic government messages to make them appear authentic. Unexpected contacts like these should set alarm bells ringing, so take your time and check HMRC scams advice on GOV.UK.”

Customers can report any suspicious communications to HMRC:

• forward suspicious texts claiming to be from HMRC to 60599
• forward emails to phishing@hmrc.gov.uk.
• report tax scam phone calls to HMRC on GOV.UK.

HMRC works to protect the public from scammers. In the 12 months to September 2023, HMRC has responded to 60,000 reports of phone scams alone and got 25,000 malicious web pages taken down.

Customers do not need to wait until 31 January before filing their tax return, they can submit it before then but do not have to pay until the deadline, unless they choose to. Filing earlier allows them to find out what they owe sooner or if they are owed money, get their refund.

Help and support is available on GOV.UK to help customers complete their return, there is no need to call us. HMRC has a wide range of online resources to help customers file a tax return including a series of video tutorials on YouTube and help and support guidance on GOV.UK alongside HMRC digital assistant, HMRC app, community forums and the help and support email service.

Taxpayers who need to submit a tax return for the tax year to April 5th 2023 have less than a month to register for self-assessment.

The deadline is October 5th 2023 and people who no longer need to file a tax return should also contact HMRC to have their notice to file withdrawn.

The deadline for submitting a tax return in respect of the year April 6th 2022 to April 5th 2023 is January 31st 2024 if they are submitting online, and October 31st 2023 if submitting by post.

People who need to submit a tax return for the first time will need to notify HMRC that they need to submit a tax return.

This includes people who have started self-employment or as a partner during the 2022/23 tax year. People who started to receive other taxable income during the year, such as rental or investment income, may also need to register.

Increased income levels can be another trigger for individuals to register for self-assessment. People with income exceeding £100,000 for the tax year also need to submit a tax return, although this threshold is increasing to £150,000 from the 2023/24 tax year.

People with adjusted net income over £50,000, where they or their partner continue to receive child benefit payments, also need to register.

Taxpayers should register by 5 October 2023, otherwise failure to notify penalties may be applied.

By contrast, some individuals may no longer fit within HMRC’s criteria for when a self-assessment return is required, owing to changes in their circumstances or changes to HMRC’s criteria.

For example, HMRC no longer requires “no income other than PAYE” directors to register for self-assessment. However, if HMRC has issued a notice to file a self-assessment return for 2022/23, the return must be filed unless HMRC can be persuaded to withdraw the notice.

Thanks to their enviable reputation for efficiency and expertise Barter Durgan work with hundreds of businesses, organisations and individuals in Portsmouth, Southsea and across Hampshire. Contact Barter Durgan today 02392 738311 or go to barterdurgan.co.uk

Barter Durgan has two new partners – Chelzea Kerr and Emma Zeqo.

Chelzea has worked at the firm for 13 years, having initially been at the firm on a summer placement She went on to graduate from university and joined Barter Durgan as a trainee accountant, later qualifying as a Chartered Accountant.

Emma has been at the firm for seven years, joining Barter Durgan after moving from another local company. Emma has more than 20 years of experience working in accounts. She initially obtained her AAT qualification and then later went on to qualify as a Chartered Accountant.

Senior Partner Keith Green said: “We are delighted to announce the appointment of Chelzea Kerr and Emma Zeqo as new partners at Barter Durgan. Their commitment and hard work over many years have been important to our continued success.

“Both have experience dealing with small and medium-sized firms from all business sectors and clients appreciate their friendly and professional approach.

“I know how thrilled Chelzea and Emma are to have been given this opportunity and look forward to helping move the business forward. We have a great team, with dedicated and talented colleagues, who all strive to give our clients the best possible service. The future is very exciting.”

 

 

Taxpayers earning between £100,000 and £150,000 whose only income is taxed under PAYE will be removed from self-assessment from the 2023/24 tax year onwards, which could result in those affected paying more tax.

That’s because from tax year 2023 to 2024 onwards, the Self Assessment threshold for customers taxed through PAYE only, will change from £100,000 to £150,000.

Affected customers do not need to do anything now as the Self Assessment threshold for 2022 to 2023 tax returns remains at £100,000.? They will receive a Self-Assessment exit letter if they submit a 2022 to 2023 return showing income between £100,000 and £150,000 taxed through PAYE and they do not meet any of the other criteria for submitting a Self Assessment return.

For the 2023 to 2024 tax year onward customers will still need to submit a tax return if their income taxed through PAYE is below £150,000 but they meet one of the other criteria for submitting a Self Assessment return, such as:

• receipt of any untaxed income
• partner in a business partnership
• liability to the High Income Child Benefit Charge
• self-employed individual and with gross income of over £1,000

It is thought that the change may lead to some people overpaying tax. Accountingweb.co.uk said: “Reader kevinringer said he attended a Teams meeting with HMRC and reported that these taxpayers will still be required to notify HMRC of any tax payable but not through the self assessment system. He said this means phoning or writing to HMRC instead.

“I would have thought HMRC would prefer these clients to be in self assessment (SA) because surely it requires less HMRC resources to process an SA return (especially if submitted online) than having to process a letter or phone call,” said kevinringer.”

The team at Barter Durgan can advise on all tax and accountancy matters.

HM Revenue and Customs has closed its Self-Assesment helpline for three months.

The helpline closed last week with just five days’ notice.

The HMRC says it is piloting a new seasonal model for the Self Assessment helpline, to prioritise helping those with urgent queries.

The trial will last for three months and will see self-assessment from the helpline to the department’s digital services, including its online guidance, digital assistant and webchat.

It says the move will free up 350 advisers to take urgent calls on other lines and answer customer correspondence. If focused on urgent calls, it says these advisers will answer around 6,600 each day, ensuring more customers who really need to speak to an adviser can do so.

The vast majority of SA customers use HMRC’s online services, with 97% filing online. The helpline will re-open on September 4th 2023 so customers can receive support in the five months running up to the self-assessment deadline on 31 January 2024.

Angela MacDonald, Deputy CEO and Second Permanent Secretary at HMRC, said: “We continually review our services to see how they can best serve the public and we are taking steps to improve them.

“A seasonal SA helpline will make more of our expert advisers available where they are most needed during the summer months,” she said.

“Our online services, including the HMRC app, are quick and easy to use and have been significantly improved. I urge customers to explore these fully before deciding to wait to speak to us on the phone.”

The HMRC says the helpline receives far fewer calls over the summer, with calls around 50% higher between January and April compared with June to August.

it says around two-thirds of all SA calls can be resolved by customers themselves online while HMRC will increase the advisers available on webchat, the Online Service Helpline and the Extra Support Team Helpline.

The decision to close the helpline has been criticised with This Is Money columnist Heather Roger saying: “When taxpayers have a concern regarding their affairs, or in relation to correspondence they have received, especially if they think it’s wrong, they want to speak to a person, not be fobbed off with a digital chatbot.

“I note HMRC want to transfer advisers to deal with correspondence, which they need to do, as we are waiting for responses to letters that are over 12 months old.

“However, all this will do is frustrate taxpayers and further add to the mountain of correspondence HMRC need to deal with, as customers turn to paper to try and resolve their issue.”

Taxpayers now have until April 5th 2025 to fill gaps in their National Insurance record, the government has announced.

Extending the voluntary National Insurance contributions deadline until 2025 means that people have more time to properly consider whether paying voluntary contributions is right for them and ensures no-one need miss out on the possibility of boosting their State Pension entitlements.

The original deadline was extended to July 31st 2023 earlier this year, and tens of thousands of people have taken advantage to pay voluntary contributions to HM Revenue and Customs (HMRC) since then. The revised deadline is expected to enable tens of thousands more to do the same.

Victoria Atkins, Financial Secretary to the Treasury, said: “People who have worked hard all their lives deserve to receive their State Pension entitlement, and filling gaps in National Insurance records can make a real difference. With the deadline extended, there is no immediate rush for people to complete gaps in their record and they will have more time to spread the cost.”

Laura Trott, Minister for Pensions, Department for Work and Pensions, said: “I am pleased to see so many people taking steps to review their State Pension, which is why we have extended the deadline for customers to add extra years to their National Insurance record. This extension means thousands more people will have time to check their entitlement, and in many cases increase the amount they receive when they retire.”

The extension means that taxpayers have a longer period to enable them to afford to fill any gaps if they choose to do so. All relevant voluntary National Insurance contributions payments will be accepted at the rates applicable in 2022 to 2023 until April 5th 2025.

Individuals who are planning for their retirement could benefit from the opportunity to complete gaps in their National Insurance record. Other people who may benefit include those who may have been:

• employed but with low earnings
• unemployed and not claiming benefits
• self-employed who did not pay contributions because of small profits
• living or working outside of the UK

Paying voluntary contributions does not always increase your State Pension. Before starting the process, eligible individuals with gaps in their National Insurance record from April 2006 onwards should check whether they would benefit from filling those gaps.

They can find out how to check their National Insurance record, obtain a State Pension forecast, decide if making a voluntary National Insurance contribution is worthwhile for them and their pension, and how to make a payment on GOV.UK. Taxpayers can check their National Insurance record through their Personal Tax Account.

HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19).

The helpline allows any business or self-employed individual who is concerned about paying their tax due to coronavirus to get practical help and advice. Up to 2,000 experienced call handlers are available to support businesses and individuals when needed.

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

• agreeing an instalment arrangement
• suspending debt collection proceedings
• cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

The helpline number is 0800 0159 559 – and is an addition to other HMRC phone contact numbers.

Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm. The helpline will not be available on Bank Holidays.

Businesses that fail to pay their workers the National Minimum Wage or National Living Wage will continue to be publicly named by the government, following a review of the scheme.

The naming scheme will resume calling out businesses failing to pay their workers the National Minimum Wage, while increasing support for employers to comply with NMW legislation. The changes, which will see naming rounds occur more often, will enhance the effectiveness of the measure as a deterrent.

The government has also increased the threshold for naming employers, meaning that firms which owe arrears of more than £500 in National Minimum Wage payments to their workforces will now be named. The threshold was previously £100. This new proportionate approach will mean that some businesses falling foul of the rules by minimal sums will not be named, provided they correct any errors. These businesses that underpay by less than £100 will have the chance to correct their mistakes without being named, still have to pay back workers and can face fines of up to 200% of the arrears.

Business Minister Kelly Tolhurst said: “Anyone who is entitled to the minimum wage should receive it – no ifs, no buts – and we’re cracking down on companies that underpay their workers.

“We also want to make it as easy as possible for employers, especially small businesses and those trying to do right by their staff, to comply with the NMW rules, which is why we’re reforming regulations.”

The government is today changing regulations to widen the range of pay arrangements available to business employing ‘salaried hours workers’, which are workers who receive an annual salary in equal instalments for a set number of contracted hours.

Under these changes, workers who are often paid hourly or per day and consequently have different pay checks every month, such as those in the retail industry, can be classified as salaried workers.

The changes will provide more flexibility in how salaried workers are paid, without reducing protections for workers. At the same time, businesses employing these workers are less likely to caught out by the NMW legislation due to the differences in their hours from one month to the next.

These changes include:

• permitting additional payment cycles for salaried workers, including fortnightly and 4-weekly cycles, providing choice and flexibility to employers and workers
• allowing employers to choose the ‘calculation year’ fit for their workers, helping them to better monitor the hours worked by salaried workers and identify potential underpayment of wages
• ensuring salaried workers can receive premium pay, for example for working on Bank Holidays, without losing their entitlement to equal and regular instalments in pay

These changes are expected to come into force on 6 April 2020, subject to normal Parliamentary approvals.

Matthew Taylor, Director of Labour Market Enforcement, said: “I welcome today’s announcement by the government and believe employers will benefit from the greater clarity these revisions bring to the minimum wage rules for salaried workers.

“Particularly welcome is the news of the reintroduction of the NMW Naming Scheme, that both recognises the sharper focus advocated by my predecessor and follows a stronger compliance and education approach to help employers get it right.”

Additionally, the government has decided that employers offering salary sacrifice and deductions schemes will no longer be subject to financial penalties if the scheme brings payment below the National Minimum Wage rate (which can be up to 200% of arrears).

For example, benefit schemes where staff buy products from their employer and pay for these via salary deductions. The waiver will be subject to strict criteria – including that the worker has opted into the scheme.

Deductions of NMW for uniform and other items connected with the worker’s employment will continue to be penalised. Full details will be published later today in the National Minimum Wage enforcement policy document.

As well as making changes to the rules, the government is doing more to support businesses to comply with National Minimum Wage, so that they pay their staff correctly first time. The government will:

• improve NMW guidance available through the GOV.UK website, making it more accessible and easier to navigate. This includes new thematic guides on specific compliance issues, such as pay deductions and uniform policy. This revamped guidance will be published shortly.
• proactively support new, small businesses. HMRC will visit selected new, small businesses to educate them on the National Minimum Wage and support those businesses in getting their practices right from the start
• provide more support via a helpline for employers who operate deduction or salary sacrifice schemes. Employers will be able to access support and information directly from HMRC

This update to National Minimum Wages regulations comes ahead of a major overhaul of labour market enforcement, with the creation of a Single Enforcement Body to crack down on employment law breaches, set to be announced as part of the forthcoming Employment Bill.

Additional information

• a worker is classified as doing ‘salaried hours’ work if they are paid a set number of hours each year under their contract and an annual salary in equal weekly or monthly amounts
• workers cannot currently be classified as salaried hours if they are paid every 2 or 4 weeks. These workers are ‘time-paid’ workers, paid hourly or per day. This will change, giving greater stability to workers and clarity about earnings. It is likely to affect a relatively small number of workers, particularly in the retail industry
• premium payments: under the current NMW rules, premium payments (such as for working on a bank holiday) can prohibit workers from being treated as salaried workers under the NMW regulations and this could affect enforcement by HMRC

The government is committed to NMW enforcement:

• budget for enforcing £27.4 million for 2019 to 2020, up from £13.2 million in 2015 to 2016
• in 2018 to 2019, HMRC identified £24.4 million in arrears, for over 220,000 workers
• in 2018 to 2019, a record amount of penalties (over 1,000) issued, totalling over £17 million