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Thousands face huge tax avoidance bills

Contractors whose employers paid them through loans from offshore trusts are being urged to speak to HMRC as soon as possible or risk receiving massive tax bills.

Up to 50,000 contractors in the UK are believed to have benefitted from the lower income tax rates applied under loan advances, instead of being paid salaries.

Those yet to have settled outstanding loans dating back to when the schemes first arose in 1999 could be facing a hefty tax bill.

Anyone who is affected by these loan arrangements will need to pay a loan charge to the Revenue on the outstanding balance by 5 April 2019. More…

Auto-enrolment fines rise 146%

Fines issued to employers that fail to comply with their auto-enrolment responsibilities have more than doubled over the last two years, a report from the Pensions Regulator shows.

In 2017/18, there were 36,137 fines issued to employers for not complying with the requirements of auto-enrolment – up from 14,707 such penalties in 2016/17.

The Pensions Regulator said this rise has been in line with an increased number of employers with auto-enrolment responsibilities, and does not indicate a widespread issue of non-compliance.

Employers are legally obliged to automatically enrol workers into a workplace pension scheme if they are aged between 22 and state pension age, and earning more than £10,000 a year. More…

R&D investment grows

Businesses in the UK spent £23.7 billion on research and development (R&D) in 2017, according to the latest data from the Office for National Statistics (ONS).

The ONS found that year-on-year expenditure on R&D increased by £1.1bn – or 4.9% – compared to statistics for 2016.

Firms in the pharmaceutical sector continued to have the highest level of R&D spending of all product groups at £4.3bn.

Software development businesses increased expenditure on R&D by 34.7% – to £1.4bn and a 6% share of all R&D spending by UK businesses in 2017. More…

Small retailers business rates lowered

Small retail businesses in England will see a reduction to their business rates, as announced in Budget 2018.

Business rates will be reduced by a third for many retail properties with a rateable value below £51,000 for two years from April 2019, subject to state aid limits.

The Chancellor said this will mean “an annual saving of £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes”.

This was part of a series of measures announced to support high streets in the UK under the pressures of high costs and growing competition from online retailers.

While industry bodies have welcomed the boost, some have argued that the system needs wider reform. More…

Government announces apprenticeship levy reforms

Chancellor Philip Hammond has announced a package of new measures to reform the under-fire apprenticeship levy.

Under the revised rules, employers who pay the apprenticeship levy will be able to transfer a quarter of their funds to organisations in their supply chain, including smaller employers.

Levy-paying businesses have been able to transfer up to 10% of their training funds to other employers in their supply chain since April 2018, but the new measures will increase this to 25%.

The reforms also include £5 million of extra funding for the Institute for Apprenticeships, to improve training standards and update existing ones. More…

Small firms not ready for Brexit

Small businesses are woefully unprepared should the Government deliver a no-deal Brexit, according to a report.

The Federation of Small Businesses (FSB) surveyed 1,234 business owners, and found only 14% had contingency plans in place for the UK exiting the EU without arrangements having been agreed.

The research revealed that 41% of UK SME owners fear the impacts of a no-deal Brexit, compared to one in 10 owners who believe no deal will have a positive impact on their business.

Almost half (48%) believed a no-deal Brexit will negatively affect their ability to do business after the UK is scheduled to leave the EU on 29 March 2019. More…

Most small businesses receive funding boost

The overwhelming majority of small businesses that applied for finance in the first six months of 2018 were successful, statistics show.

UK Finance commissioned market research firm BDRC to carry out its SME Finance Monitor Q2 2018 and found 85% of small businesses in the UK secured finance in the first half of the year.

Additionally, around six in 10 SMEs reported that they had a high level of trust in their main bank. More…

Apprenticeships drop by 31% year on year

The number of people starting apprenticeships has dropped by 31% in the last 12 months, the Department for Education has claimed.

In the academic year between August 2017 and May 2018 there were 315,900 apprenticeship starts, compared to 457,200 the same time the year before.

Business groups including the British Chambers of Commerce (BCC) and the Institute of Directors (IoD) argue the apprenticeship levy creates barriers for employers who hire apprentices.

Employers with an annual pay bill of over £3 million are required to pay the apprenticeship levy, and receive an allowance of £15,000 to offset against it. More…

BCC calls for further delay to digital accounts rollout

The government’s flagship Making Tax Digital (MTD) scheme should be delayed until 2020/21 for all taxpayers, according to the British Chambers of Commerce (BCC).

VAT-registered businesses with annual turnover of more than £85,000 are due to be the first to go through the transition to digital accounts for reporting VAT only from April 2019.

But the BCC is calling on the government to push that date back after discovering that only one in ten UK businesses are fully aware of MTD.

The BCC polled 1,073 small firms and found 24% of business owners had never heard of MTD, while 66% had only heard of it by name and know little else. More…

Landlords welcome tax incentives for long-term tenancies

The government is considering introducing tax incentives for landlords who offer longer tenancies, as part of a new consultation.

The Ministry of Housing, Communities and Local Government has launched a consultation on implementing a three-year tenancy model.

This is intended to support the increasing number of private tenants seeking long-term security, as more families and older people plan to stay in privately rented property.

The report put forward a number of options, including introducing a financial incentive for landlords in the form of tax relief or cash payments. More…

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