We have pleasure in attaching details and some very significant points of the Chancellor’s speech last Friday.
We are not going to present much of an editorial but the markets have reacted negatively so far.
We will be pleased to address any particular questions you may have as a result of the information provided.
Our simple comment is that it looks like taxes will be reduced for quite a few people in the 2023/24 tax year.
The political landscape means that this may well only be of short duration so it may well be an opportunity to “fill your boots” for one year. We await further developments and in assisting with optimising your tax situation.
The Martlet Partnership is pleased to announce that the Association of Chartered Certified Accountants has re-awarded us with approved employer status, which enables us to offer contracts to students who wish to train for this qualification and also those qualified members of the Association, who wish to obtain practicing certificates and audit qualifications.
HMRC decided to pause payments for Research & Development Tax Credits in April due to an increase of fraud, mostly linked to organised criminal gangs.
In April alone, HMRC had received over 8,000 claims and although started paying some claims from 10th May, HMRC are still recovering from the recent pause in payments, and expect to be processing 80% of claims within 40 days by the end of this month.
Over a thousand letters have been issued to claimants identified as high risk challenging irregular claims. HMRC request that claimants do not contact them to chase their claims, as they work through the backlog.
Therefore, if you are waiting for an R&D Tax Credit payment, it may take a little longer than it used to.
HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 September 2022, increasing rates between one and two pence per mile. Please note that these rates only apply for employees who have a company car but where fuel is not paid in full by the employer.
Unfortunately, no change has been made in rates to the mileage payment due to employees who use their own vehicles for work. This is a pity as the rate of 45p a mile has been unchanged for many years and of course the price of petrol has increased dramatically.
The advisory fuel rates that apply from 1 September 2022 have been increased for some classes of vehicles from the June 2022 rates with a one pence increase on petrol vehicles under 2000cc and two pence for vehicles over 2000cc.
The equivalent diesel vehicle rate goes up one penny for vehicles under 2000cc and 2p for over 2000cc, while LPG rates remain unchanged except for a one pence rise for vehicles over 2000cc.
The previous rates, effective June 2022, can be used for up to one month from the date the new rates apply.
The rates only apply in the following circumstances:
reimburse employees for business travel in their company cars; or
require employees to repay the cost of fuel used for private travel.
These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.
The advisory electricity rate for fully electric cars remains at 5p per mile. Electricity is not a fuel for car fuel benefit purposes.
When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.
Advisory fuel rates from 1 September 2022
Petrol – amount per mile (previous)
LPG – amount per mile (previous)
1400cc or less
1401cc to 2000cc
Diesel – amount per mile
Up to 1600cc
1601cc to 2000cc
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Following the latest increase in the Bank of England base rate to 1.75%, HMRC will raise interest rates on late tax bills by 0.5%.
This means that the late payment interest rate will increase to 4.25% from 23 August 2022. The rate last increased to 3.75% on 5 July. This is the highest rate since the height of the financial crisis in January 2009.
Late payment interest is payable on late tax bills covering income tax, National Insurance contributions, capital gain tax, stamp duty land tax, stamp duty and stamp duty reserve tax. The corporation tax pay and file rate also increases to 4.25%.
HMRC are also increasing interest paid to taxpayers on overpayments. This is the first rise since 29th September 2009 but they are only raising the rate by 0.25% to point 0.75% which contrasts with their increase in monies due to them of 0.5%.
However, interest paid on corporation tax paid before the due date rises to 1.5% which is significantly better than the rate which can be obtained from most banks!
One of the basic requirements on all employers is to ensure that the people they employ have permission to work in the UK.
From April 2022 the process that employers need to follow when conducting right to work checks changed – you can no longer accept physical cards or permits, you must undertake digital checks.
Civil penalties are imposed on organisations that have employed an individual who does not have permission to work. If found to be employing workers who do not have the right to work, employers can face a penalty of up to £20,000 per worker.
The Home Office has produced guidance – but at 72 pages long, many employers may not be familiar with the specifics.
It’s very important that employers understand how to conduct right to work checks. If a right to work check is undertaken correctly, employers are likely to have a statutory excuse against liability for a civil penalty. If not undertaken properly, a civil penalty may be imposed.
We have produced a helpful guide to help employers understand their obligations and what checks they need to undertake to ensure that someone they recruit has a right to work.
During the pandemic, we’ve received an increased number of enquiries from people wanting to buy or sell businesses and this shows no sign of letting up in the near future.
Therefore, we have produced a useful guide which covers some of the key considerations for those buying or selling a business.
A recent article by PWC states “The conditions for Merger & Acquisition (M&A) activity appear well aligned: many businesses have a strategic need to consolidate, divest non-core businesses, or quickly acquire new capabilities and skills. And there is plenty of money available to fund deals.”
This is supported by the latest Merger and Acquisition (M&A) figures from the Office of National Statistics (ONS), showing an overall increase in 2021.
If you are considering buying or selling a business, or planning on doing so in the coming years and want to ensure you are properly prepared, there are some key things you can do to ensure that: • If selling – that you maximise the value, ensure that the people aspects are handled sensitively and ensure the smooth sale of your business. • If buying – that you get the best possible price (value) and conduct suitable due diligence so there are no ‘nasty’ surprises.
Many points overlap when selling a business or buying; you both want the transaction to complete smoothly, so having a robust and thorough approach, with conscientious and thorough paperwork, financial data, due diligence and open and clear communication, benefits all parties.
You can grab your copy of our helpful guide – Considering Buying or Selling a Business? 11 Key Considerations – below.
The Martlet Partnership is delighted to announce that our Jarrad Gilbertson has passed his final paper and has now completed all his examinations to become a member of the Chartered Association of Certified Accountants.
I am sure you will wish to pass on your good wishes to Jarrad, who works mainly in our tax department, and with whom many of you therefore are likely to come into contact during the coming year.
Having just emerged from the pandemic, the UK and global economy is facing a challenging future with rising inflation and interest rates globally. Global stock markets continue to perform well, but many would argue too well.
Closer to home households are facing significant price rises in pretty much everything from fuel to tomatoes. This will inevitably start to impact businesses, many of which have little, if any reserves left to face challenging times.
Alongside this backdrop, many businesses are facing challenges with their staff, with high sickness rates and ongoing implications from Covid.
What should businesses be doing to protect themselves, their people and their customers?
From prioritising debt and cashflow, to being highly communicative with your people, your customers and your suppliers; this handy guide provides you with a helpful action plan that will enable you to focus on and act in the right areas.
Most importantly, don’t wait, at a time of economic uncertainty, it is vital that you act quickly and decisively.
You can download your copy of the Managing Economic Uncertainty 2022: 20 Practical Actions Businesses can take guide here.