Client News

The latest news, launches and awards some of our clients have released and won.

The risks of a tax investigation

Will HMRC come knocking on your door?

It’s a fact – humans are bad at assessing risk. We’re terrified of things that rarely happen (plane crashes, power station meltdowns) but relatively blasé about things that are statistically more likely to harm us, such as unwashed lettuce.

The likelihood of HMRC swooping to investigate your business’s tax affairs seems to be a particularly difficult risk to quantify.

Why take the chance?

In 2017, the Government published a report called ‘Understanding evasion by small and mid-sized businesses’. The authors interviewed 45 people known to have engaged in deliberate tax evasion in an attempt to get to the bottom of what made them risk it.

It found that tax evaders cited a range of reasons for withholding tax.

Some judged the risk of detection to be low, and assumed evasion would be hard to prove even when suspected, or thought that any fine they did incur would be outweighed by the financial benefits of bending the rules.

Others were emboldened by a belief that, to paraphrase, “everybody does it, and nobody cares”.

Meanwhile, those who fancied themselves as having the gift of the gab simply assumed they would be able to talk their way out of prosecution.

The report concludes that it is a problem for HMRC if people think the chances of being investigated, prosecuted and fined are low, and recommends raising the perceived threat level to deter would-be evaders. More…

Dual-registration service passes 200,000 milestone

More than 200,000 startup owners have benefitted from a collaborative service that enables businesses to register for tax at the same time as registering their company.

The streamlined company registration service, which was announced by HMRC and Companies House in 2015, was launched to reduce the burden on business owners and their agents.

When a company is registered, Companies House notifies the Revenue so it can dispatch a unique taxpayer reference to the company’s registered office.

Most accountants take care of this task as part of a comprehensive business service, which involves setting up a company, liaising with HMRC on its behalf, and dealing with trading periods. More…

The apprenticeship levy – your understanding so far

Businesses are finally beginning to understand the apprenticeship levy, after previously voicing serious concerns over its complexity and lack of flexibility.

The apprenticeship levy took effect on 6 April 2017 and means businesses with an annual pay bill of more than £3 million must pay the levy towards apprenticeship funding.

It is charged at 0.5% of an employer’s annual pay bill, and each employer receives an allowance of £15,000 to offset against their levy payment.

Business groups, including the Institute of Directors (IoD), urged the Government to address ongoing problems with the levy – and it attempted to do so by announcing a package of reforms in Budget 2018.

Levy-paying businesses can transfer up to 10% of their training funds to other employers in their supply chain in 2018/19, and this will increase to 25% from April 2019. More…

Have you made a will?

Most people don’t like to think about their own mortality, but planning for the future is important to ensure your property, money and possessions are distributed the way you intend.

Writing a legally valid will is an essential part of this, and can provide peace of mind for you and your loved ones.

Despite this, a study from YouGov found that 62% of the UK’s adult population did not possess a will in 2017. In fact, most people tend to put it off, with only 36% of 45 to 54-year-olds saying they have a will, compared to 67% of over-55s.

When asked why they hadn’t made a will, the main reason was simply that they “hadn’t got round to it yet”. More…

Funding and cashflow – we can help

Difficulty accessing funding is causing around one in four small and medium-sized firms to miss out on business opportunities, research shows.

A survey by Aldermore of 1,004 senior decision-makers in SMEs revealed that 23% had missed out on at least one new business opportunity due to lack of funding in the past 12 months.

The issue shows no signs of improvement, with 4% more businesses reporting this problem since the same survey was conducted in 2017. More…

Late payments and differing processes

Almost half of small and medium-sized businesses have struggled with late payments in the last year, according to research by the Institute of Directors (IoD).

Of the 787 business leaders surveyed, 48% have faced issues with late payments since April 2017.

Almost a third (31%) said this was the result of an “excessively bureaucratic payments system” in the company being invoiced. More…

Sole trader to Limited company the pros and cons

What to expect from incorporating your business.

With a new tax year upon us, many sole traders will be reviewing their business structure and considering whether it’s worth switching to a limited company.

There’s no denying that incorporating a business proved popular in 2017, with Companies House reporting a 7% rise in the number of actively trading companies – bringing the UK total to 1.9 million.

Last year’s statistics also showed this trend is no flash in the pan as the number of actively trading companies increased by around 610,000 since 2010.

If you’re a sole trader who has weighed up the pros and cons and decided to form a limited company, here’s what you need to know to complete the transition. More…

Best Advanced Taxation exam mark in the world

We are delighted to announce that one of our up and coming accountants James Cox has achieved the best ACCA exam mark in the world, yes that’s right worldwide.

With a mark of 93 in his September 2017 Advanced Taxation exam he continues his progress with outstanding success.

As your accountants we are constantly working to give you the best advice we can and James is certainly an asset to your team here at Wormald and Partners.

We will update further when James receives his award.

I hope you will join us in saying “well done James an exceptional achievement”

IR35 changes for the public sector

Important changes to public sector contractors working under IR35 legislation have taken effect for 2017/18.

Individuals who work through intermediaries, such as personal service companies, are no longer subject to IR35 rules if they work in the public sector.

Public sector organisations or agencies paying off-payroll workers are now responsible for deciding whether the work falls within IR35. They must deduct income tax and national insurance (NI) if they deem the worker an employee within IR35.

Under previous rules, intermediaries were responsible for calculating and paying the contractor’s income tax and NI owed to HMRC. More…

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