News


Employers to pick up the bill for 6.2% national living wage increase

The hourly national living wage rate for over-25s will increase from £8.21 to £8.72 for 2020/21.

The Low Pay Commission published recommendations for the new rates, which kick in from 1 April 2020.

The national living wage is the Government’s minimum wage for over-25s. The minimum wage for under-25s will also rise.

Workers aged between 21 and 24 will get £8.20 an hour, while staff aged 18 to 20 will see their hourly rate rise to £6.45.

Under-18s will be paid at least £4.55 an hour – up from £4.35, with apprentices being paid at least £4.15 an hour.

Company car tax

Does it pay off to provide zero-emission cars?

Offering a company car as a benefit can be a valuable and attractive perk to any valued employee.

Unfortunately, it is not necessarily a tax-free perk and it may be liable for PAYE because HMRC considers the private use of a company car to be a benefit-in-kind.

In some cases it can even be quite costly to the employee, especially if the company also pays for the fuel.

Factors including fuel type, carbon dioxide (CO2) emissions, the car manufacturer and model, and how long the car is available in the tax year will all affect the amount of tax the employee has to pay. In addition, the employer may have to pay employer national insurance contributions (NICs).

Tracing lost pensions

Billions of pounds lost in unclaimed funds.

Helping you plan for your retirement is one of our core services, ensuring you are prepared when the time comes to call it a day.

With medical advances enabling more people to live for longer, the average person who retires at 65 lives for another 20 years.

According to the Office for National Statistics, males who retire at 65 can expect to live another 19 years while the average female will be around for 21 years after turning 65.

Considering most people start working in their late teens or early 20s, retirement can be half the amount of time spent working.

Year end tax guide 2019/20

Year-End Tax Guide 2019/20

The last few months of the tax year are the ideal time to pause and reflect, and to make sure you’ve organised your finances as efficiently as possible before the new tax year begins on 6 April 2020.

It’s important to consider this from every angle: have you maximised all of your tax-free allowances? Have you claimed any reliefs available? And have you made plans for future changes?

This guide will help you to answer those questions and more, with detailed summaries of the tax rates, allowances and reliefs that apply to businesses and individuals for the remainder of 2019/20.

Each section comes with a set of planning points, too, which you can use as a checklist to ensure you’ve covered all the key areas to consider.

New tax rates for 2020/21

The new government intends to announce the 2020/21 tax rates, bands and allowances in a full Budget next month.

Prime Minister Boris Johnson secured a handsome majority on 12 December 2019, and swiftly returned Sajid Javid to the position of Chancellor.

Javid was poised to deliver his first Budget speech in November 2019, only for it to be cancelled following the decision to call the first December general election since 1923.

While resolving Brexit remains the biggest priority for the new government, time is running out to legislate for any tax changes before the start of 2020/21.

Johnson aims to finalise the UK’s departure from the EU before the end of this month, before holding an early Budget.

High earners need to read this

High earners could face large tax bills if they fail to declare pension contributions on their 2018/19 tax returns, according to a report.

When completing self-assessment, taxpayers are asked if they have put any money into a pension scheme above the annual pensions allowance.

For most people, this allowance is £40,000 – but for every £2 of income above £150,000, a high earner’s allowance is reduced by £1 to give an alternative figure known as the tapered allowance.

The maximum reduction is £30,000, so additional-rate taxpayers who earned more than £210,000 in 2018/19 will see their tapered annual allowance reduced to £10,000.

Pension contributions that exceed an individual’s tapered annual allowance will be charged at the taxpayer’s marginal rate, usually 40% or 45%.

IR35 and some changes

The planned extension of the new off-payroll rules to the private sector will be included in a review into how the new government can provide better support to the self-employed.

The pre-election admission by Chancellor Sajid Javid increases the prospect of the controversial tax measure, which was contained in Finance Bill 2019, being delayed.

“In our manifesto, we promise a review of how we can further help the self-employed,” Javid told Money Box on BBC Radio 4 in the run-up to last month’s general election.

“But one thing in particular I want to look at again are the proposed changes to IR35.”

When pressed by host Paul Lewis as to whether the extension of the rules to the private sector may be put off, Javid stopped short of committing to a delay.

“I don’t want to pre-empt the review,” added Javid. “But it makes sense to include the IR35 changes in that review.”

Cash flow is king to survival

A quarter of small business owners in the UK believe their company will fold in the next four years, research has claimed.

Late payments (54%), tax rates (44%) and cyber-attacks (27%) were the biggest concerns among the 500 owner-managers polled by cloud accounting software provider Xero.

Other challenges included Brexit (44%), maintaining or boosting levels of productivity (31%) and recruitment costs (19%).

Around a third (37%) of small business owners said they are experiencing their most turbulent period.

The missing budget 2019

It’s been an eventful few years in British politics, but 2019 has been something else again with one jolt after another.

The 29 March deadline for the UK to leave the EU was extended to 31 October and then again until 31 January 2020. Boris Johnson replaced Theresa May as Prime Minister and Sajid Javid succeeded Philip Hammond as Chancellor of the Exchequer.

Javid was poised to deliver his first Budget on 6 November against a backdrop of constitutional crisis but, in late October, it was cancelled as Parliament voted in favour of holding the first December general election since 1923.

With all eyes on Brexit, those with an interest in fiscal policy were left bewildered: could this be the first year without any Budget at all? After all, the Spring Statement became a non-event on Hammond’s watch.

That’s not the only question. For example, we know there will be a Budget at some point, but when?

Protecting your business from fraud

Steps to shield your firm from threats.

Fraud costs the UK around £190 billion a year, with businesses bearing almost three quarters – £140bn – of those losses.

This worrying picture is backed up by the 2019 Fraudscape report compiled by anti-fraud body Cifas, which provides statistics for fraud committed by employees. The report read:

“Dishonest action by staff to obtain a benefit by theft or deception was the most common type of internal fraud in 2018, accounting for 46%. The most prevalent form of dishonest action during the year was theft of cash from the employer.

“The second most common fraud type was theft of cash from a customer, which rose to 22% in 2018 compared to 17% in 2017.”

Fraud can be characterised as rule-bending, but for businesses struggling to manage cashflow it can have catastrophic effects.