Accountancy Blog

The scourge of late payments

Outstanding invoices compromise your business’s cashflow.

When you supply goods and services, you expect to be paid, and promptly, but Britain has a deeply embedded culture of late payments. Indeed, for some businesses, delaying payment is an essential part of the business model.

Outstanding payments are problematic for various reasons. First, there’s the basic problem of cashflow within the supplying business – electricity bills, rent and other regular outgoings need to be paid regardless.

Then there’s the time spent chasing late payments and the stress it can cause if the conversation becomes bad-tempered, or when you start to worry that the job might be a write-off.

You might even find yourself incurring lawyers or bailiffs fees, or being forced to sell the debt on to a collection agency at a discount. More…

Tax implications of working from home

Working from home offers all kinds of benefits, from the opportunity to create the perfect environment in which you can be most productive, to the improvements to work-life balance that come with ditching the commute.

There are advantages for businesses, too, assuming they trust their employees to work without direct supervision. For example, if only a portion of your workforce is on site on any given day, you might be able to run a smaller office, saving on rent and operating costs.

According to research undertaken by the TUC, 1 in 20 people worked from home in 2005; by 2018, that figure had leapt to 1 in 16.

For many freelancers and contractors in particular, working from home is both normal and desirable.

For one thing, it’s a way of underlining their separation from those who hire them, and thus helping achieve compliance with IR35. More…

CBI: ‘Unsustainable’ business rates system in need of reform

The business rates system has become “uneconomical” and “unsustainable”, and should be reviewed, the Confederation of British Industry (CBI) has said.

Business rates are a tax on most properties used for business purposes, and are calculated based on an estimate of the property’s open market rental value.

The CBI argues that long gaps between rate revaluations mean business rates are lagging behind economic cycles and rises in property costs.

In some cases, businesses’ tax bills have surged by up to 50% due to property prices increasing in the time between business rates revaluations. More…

Govt. urged to introduce stamp duty tax break for downsizing

The Government is facing calls to announce a stamp duty holiday for homeowners who seek to downsize.

Saga polled 2,000 people over the age of 50 and found that 73% would support a tax break to help them move into a smaller property.

Almost three-quarters (70%) said their motivation for downsizing was because their current home was too big, while 25% want to downsize to reduce the costs of running a home.

A quarter said the current stamp duty land tax rates that apply to all homeowners in England and Northern Ireland, apart from first-time buyers, are preventing over-50s from selling up. More…

Retirees taxed £4bn more than previously thought

Pensioners are paying around £4 billion more in income tax than previously estimated, the Centre for Policy Studies (CPS) has claimed.

The latest figures published by HMRC show that pensioners paid £17.9bn in income tax on their pensions in 2016/17, which increased to £18.4bn in 2017/18.

A footnote in the paper said the method for estimating pension tax figures had changed, using real-time information supplied by pension schemes instead of a sample survey.

Michael Johnson, research fellow at the CPS, said this added an extra £4bn to the estimate for 2016/17, compared to the last time the figures were published in February 2018. More…

Small business owners hit out at ‘unfair’ UK tax system

Most small business owners in the UK do not think the tax system treats their business fairly, according to the British Chambers of Commerce (BCC).

In a survey of 1,000 firms, 58% of SME owners said they think the UK tax system is unfair, with different tax rules applying to different types of business.

More than two-thirds (67%) of small business owners did not believe the Revenue applies tax rules fairly across all sizes of business.

This view was a pressing concern for 70% of microbusiness owners, while it subsided to 59% of the UK’s medium or large businesses. More…