The Autumn Statement

Chancellor Jeremy Hunt last week unveiled the government’s tax and spending plans in the Autumn Statement. He started his speech by saying that there were 110 measures to “Help grow the British economy”.

Growth is better than expected this year according to the Office for Budget Responsibility (OBR), although they state the impact of the Autumn Statement on output growth will be “modest”.   

They state that the economy recovered more fully from the pandemic and weathered the energy shock better than expected, but they expect inflation to remain higher for longer, taking until the second quarter of 2025 to return to the 2 per cent target, more than a year later than forecast in March. More persistent inflation means markets expect interest rates to be more than a full percentage point higher than assumed in March.

The full OBR Economic and fiscal outlook can be seen here: CP 944 – Office for Budget Responsibility – Economic and fiscal outlook – November 2023 (obr.uk)

The 2% cut in employee National Insurance Contributions (NIC) will be welcomed by most employees but it is worth pointing out that in October the Institute for Fiscal Studies (IFS) stated that this has been the biggest tax-raising parliament since records began, pushing UK tax revenues to historically high levels. They comment “At the time of the last general election, UK tax revenues amounted to around 33% of national income. By the time of the next election in 2024, on current forecasts, taxes will amount to around 37% of national income – a level not sustained in the post-war period. Compared with a world in which taxes had stayed at 33% of national income, the UK government will be raising upwards of £100 billion more in tax revenues next year. This is equivalent to around £3,500 more per household, though of course the tax rise will not be shared equally. The government argues the pandemic and the energy shock need to be repaid and hence the higher level of tax.

On the high level of public spending, the Chancellor said that the country needs “a more productive state, not a bigger state” and he set out a new target for the public sector to increase productivity by at least 5% per year. These measures should ensure growth in the public sector is always lower than growth in the economy. He also stated that the government would meet its fiscal rule on borrowing below 3% of growth domestic product within 5 years of the latest OBR forecast.

The key business and taxation points made by the chancellor include:

  • A cut in employees National Insurance contributions from 12% to 10% from 6 January 2024.
  • Measures to support corporate capital expenditure – the capital expenditure tax break for businesses that allows them to save on corporation tax by investing, has been made permanent.
  • A new simplified research and development (R&D) tax relief, combining the existing R&D expenditure credit (RDEC) and SME schemes.
  • Business rate relief extended – a freeze on the small business multiplier for a further year.
  • The 75% business rates relief for retail, hospitality, and leisure to be extended to 2025.
  • A 9.8% increase to the minimum wage to £11.44 per hour from April, which will be expanded to 21 and 22-year olds.
  • A consultation on giving pension savers a “legal right to require a new employer to pay pension contributions into their existing pension”.
  • Class 2 National Insurance contributions (NIC) for the self-employed will not be required from 6 April 2024.
  • A cut in the rate of Class 4 NIC from 9% to 8% on self-employment/partnership profits between £12,570 and £50,270.    
  • Targeted investments for advanced manufacturing and green energy.
  • Further funding of £50M to increase apprenticeships in engineering and other key sectors.
  • Additional levelling up and Artificial Intelligence funding.
  • Extending the financial incentives for Investment Zones and tax reliefs for Freeports from five to 10 years.

Some of the other key statements made include:

  • Welfare recipients will be made to undertake a mandatory work placement if they are still looking for a job after 18 months.
  • Universal Credit and disability benefits will increase next year by 6.7%.
  • State pensions will increase by 8.5% in April 2024, honouring the “Triple lock” in full.   
  • Tobacco duty will rise by 10% above the tobacco escalator and alcohol duty is frozen until 1 August 2024.
  • The UK will continue to meet its NATO defence spending target of 2% of GDP.
  • The local housing allowance will increase with an average increase of £800 for 1.6 million households.
  • Plans to speed up planning applications.

You can read the Autumn Statement in full here: Autumn Statement 2023 (publishing.service.gov.uk)

So, are there any tax planning opportunities ahead of the new tax year?

The new tax year starts 6 April 2024, so you have four months to consider your planning options. Once we pass this date, the majority of the tax planning options for Income Tax and Capital Gains Tax purposes will cease unless actioned.

Do you fall into any of these categories?

  • You have or are thinking about a change in your personal status (single, married, separating, joining, or dissolving a civil partnership);
  • You are thinking about selling a capital asset, such as shares or a property;
  • You or your child’s other parent claims Child Benefit and the income of either parent is likely to exceed £50,000 for the first time during tax year 2023-24;
  • Your annual income is approaching or above £100,000;
  • You have not yet topped up your pension contributions for tax year 2023-24;
  • You are self-employed with a 31 March 2024 year-end;
  • You are thinking about the purchase of equipment or vehicles; or
  • You are the director and/or shareholder of a limited company and have not yet considered voting dividends or bonuses for 2023-24.

If you do, we can help you discuss your options ahead of the April 2024 deadline.

The above list is not comprehensive and we specialise in helping clients with all taxes, including PAYE. Please contact us!

Self-Assessment payments via the HMRC app treble to £121 million

Almost 100,000 tax-payers have paid £121 million using the HM Revenue and Customs’ (HMRC) app since April 2023, taking advantage of the new way to pay their Self-Assessment tax bill.

Latest figures from HMRC reveal that between April and September 2023, 97,365 taxpayers used the app to settle their tax bill for the 2022 to 2023 tax year – more than 3 times the £34.6 million paid by 36,467 taxpayers during the same period last year.

Tax-payers have been able to pay their Self-Assessment tax bill via the free and secure HMRC app since February 2022 and there is a YouTube video demonstrating how to make a payment.

See: Self Assessment payments via the HMRC app treble to £121 million – GOV.UK (www.gov.uk)

Companies urged to file accounts early and online to avoid penalties

Running your own company can be exciting but also challenging. Directors have lots of responsibilities including keeping company records up-to-date and making sure they’re filed on time.

All limited companies, whether they trade or not, must deliver annual accounts to Companies House (CH) each year. This includes dormant companies.

If we do not file your accounts then you can use CH online services which are available 24 hours a day, 7 days a week – and there are inbuilt checks to help you avoid mistakes.

It can take as little as 15 minutes from start to finish and you’ll know your accounts have been delivered on time. To file online, you’ll need your company authentication code. If you need to request a new code, you should allow up to 5 days for this to arrive at the company’s registered office.

You should only send paper accounts if your company cannot file online.

See: Filing your Companies House accounts – GOV.UK (www.gov.uk)

HSE guidance on keeping workplace temperature reasonable

As winter takes hold, you can find helpful advice from the Health and Safety Executive (HSE) on keeping people as comfortable as possible when working in the cold.

The guidance has been refreshed to make it easier to find and understand advice on how to protect workers in both low and high temperatures.

The Workplace (Health, Safety and Welfare) Regulations require employers to provide a reasonable indoor temperature in the workplace.

The guidance explains how you can assess the risks to workers and put controls in place to protect them.

There is a workplace temperature checklist to help you carry out a basic risk assessment. HSE have also updated sources of advice, including practical steps you can take in the summer months to protect workers during a heatwave.

See: Temperature (hse.gov.uk)

Stay safe in the snow

The Met Office have some practical advice and information on what to do to stay safe in the snow.

When there is a snow warning in place the guidance covers:

1. What to do if you need to drive somewhere;
2. Driving safely in snow;
3. Thinking ahead and acting now so you can cope if cut off;
4. Staying safe if you are cut off; and
5. What you can do in a power cut

See: 5 tips for staying safe in snow – Met Office

ICO guidance on international data transfers

The Information Commissioner’s Office (ICO) has guidance on international transfers guidance:

This information aims to help organisations know how to protect people’s personal information when making international transfers. The guidance clarifies an alternative transfer risk assessment approach to the one put forward by the European Data Protection Board.

With the guidance, and the six-question TRA tool, the ICO offers a framework to help people identify an initial risk level for categories of data and focus on whether the transfer significantly increases the risk of either privacy or other human rights breach. The ICO believes this approach captures the key risk to the people the data is about and is also achievable.

See: International transfers | ICO

Where does the money go?

With ever increasing supplier prices, managing your businesses cash and understanding the flow are now vital tools in maintaining resilience and being able to adopt flexible strategies for success.

Fund flows are a reflection of all the cash that is flowing in and out of a business. Owners can look at the direction of the cash flows for insights about the health of specific products or services and overall market patterns.

Some types of business are more likely to run into cash flow problems, while other types appear to be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is, you can still have problems with cash flow. Here are our thoughts on managing the flow of cash in your business:

The first stage of understanding and predicting how funds flow is to perform a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down, you might need to take action. Prepare a funds flow statement so you know where the money goes.

Next, create a yearly budget and look where cash could become tight and months where you can save to cover off the quieter times. Look at those quieter months and think about flexible work scheduling, new products or services, or other activities to tide you over.

Finally, make sure you collect your money from those who owe you quickly. Reward customer loyalty by offering early bird discounts; set credit limits and payment terms to ensure customers follow the rules. If you take on new customers, make credit checks. Penalise late payers and request up front deposits or payment.

Talk to us about preparing a funds flow statement and annual budget so that you can work on your business for maximum success!   

What is Working Capital Finance?

Working capital finance solutions offer businesses the opportunity to improve cash flow. The world of commercial finance and asset based lending (ABL) is complex and expansive with products, terminology and contractual interpretation varying from lender-to-lender.

The Benefits of arranging Working Capital are:

  • Up to 90% of outstanding invoice value can be advanced within 24 hours;
  • Flexible lending – funding increases in line with your growth (UK and Export);
  • Confidentiality – lenders can offer a completely confidential service – your customers need not know you have a facility in place;
  • Lenders allow you to manage your funding at all times;
  • Sector-specific finance is often available;
  • Structured ABL – funding for management buy-outs/management buy-ins; and
  • Trade Finance & Supply Chain Finance Solutions.

Specialists in this area can advise on:

  • Invoice Finance – an effective way of quickly accessing a proportion of the value (up to 90%) of your invoices. Effectively, a business ‘sells’ its invoices to the lender in return for accessing cash at the point products and services are sold. Specific sector-based offerings are available, as is the ability to arrange finance for selected invoices only.
  • Structured ABL – generate a higher level of funding by unlocking the maximum value tied up in the combined assets within your business, including Debtors, Inventory, Plant & Machinery and Property. Additional forms of funding can be structured in addition to this, such as top up loans in order to drive growth.
  • Trade Finance – supply chain finance with various options, enabling the purchasing of goods from overseas where you are otherwise unable to obtain credit from suppliers.

Typically, you will need to ensure your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need up to date projections before an expert will consider your application. Please talk to us about finance; our working capital finance experts have many years of experience and success in advising businesses across a wide range of sectors in obtaining working capital finance solutions.

Changes to Digital Markets Bill introduced to ensure fairer competition in tech industry

The Digital Markets, Competition and Consumers Bill is set to introduce a new targeted and proportionate regulatory regime to address concerns around competition in the digital industry while ensuring that the UK remains one of the best places to invest in and innovate new technology.

At the heart of the Bill is a new approach to digital market regulation, allowing the Competition and Markets Authority (CMA) to intervene quickly and flexibly to promote competition.

Amendments to the Bill recently proposed by the Government will maintain the appeals process for all regulatory decisions (except fines) on the basis of judicial review principles. This will mean that eligible tech firms can challenge regulatory decisions on proportionality grounds through this process.

This approach will enable the CMA to encourage the most powerful firms in dynamic digital markets to work with regulators to ensure competition is maintained on an ongoing basis, rather than allowing legal challenges to cause the regime to get bogged down in the courts. This will also act as a further incentive on the CMA to ensure that it is always acting proportionately and exploring the intervention that is most likely to achieve the best outcome for consumers.

Under the Bill, certain firms may also be subject to fines that could reach tens of billions of pounds. To make sure these huge fines are balanced by rigorous checks and balances, these firms will now be able to challenge these decisions “on their merits”. These changes allow firms to challenge fines on the substance of the decision, as well as the process to reach that decision.

The legislation will also make clear that the regulator cannot impose a conduct requirement or pro-competition intervention on a firm unless it is proportionate to do so and there is a strong evidence base behind the intervention.

These amendments bring the digital markets regime in line with the approach taken for decisions under the CMA’s Mergers and Markets regimes, where the decisions about the level of a fine can be appealed on the merits.

See: Changes to Digital Markets Bill introduced to ensure fairer competition in tech industry – GOV.UK (www.gov.uk)

UK opens electronic travel authorisation scheme

The UK’s electronic travel authorisation (ETA) scheme has officially opened for Qatari nationals who, from 27 November, need one to travel to the UK.

This demonstrates the UK government’s delivery in transforming and digitising the UK border, enabling an increasingly seamless customer experience in the future for the millions of legitimate visitors who come to the UK.

Qataris have been able to apply for their ETA since 25 October 2023, with most doing so using the mobile app, which allows for a simple and fast application.

Nationals of Bahrain, Kuwait, Oman, United Arab Emirates, Saudi Arabia and Jordan will need an ETA if they’re visiting the UK from 22 February 2024, and can apply for their ETA from 1 February 2024.

ETAs are replacing Electronic Visa Waivers (EVW) which the majority of Gulf nationals currently apply for. An ETA is an improvement from the EVW, being a third of the price at £10 and allowing unlimited visits to the UK over two years, or until the holder’s passport expires – whichever is sooner. The move to the ETA scheme means that the visa requirement will be removed for short stays to the UK for nationals from the Gulf and Jordan.

When applying for an ETA, applicants need to provide biographic and biometric information, and answer questions on suitability and criminality. The application process ensures that those who pose a danger to the UK’s security, such as criminals, are not allowed to travel here. Once individuals have successfully applied, their ETA is digitally linked to their passport.

While the standard processing time for an application is 3 working days, the majority of applications so far have been decided within hours.

See: UK opens electronic travel authorisation scheme – GOV.UK (www.gov.uk)

The StartUp Awards 2024

With over 35 categories ranging from Creative StartUp of the Year, Technology Services StartUp of the Year, Global StartUp of the Year, and Innovative StartUp of the Year; businesses providing any services across any industry are in with the chance of winning regional StartUp of the Year!

The StartUp Awards offer a chance for businesses to gain recognition and exposure, build brand visibility, make industry contacts, and network with potential investors, all while celebrating the incredible achievements of StartUps in the early years of their business journey.

Applications open in December 2023.

The StartUp Awards is completely free to enter and offers applicants access to a supportive community of peers, experts, and supporters.

See: What are the StartUp Awards? – Start Up Awards

The Smart Data Discovery Challenge

There are few aspects of our lives today that are not influenced, informed, or driven by data.

We generate data constantly in our daily lives: when we spend and save; when we use energy or watch TV; when we shop, travel, or use the internet. But most of this data remains locked away in individual companies and organisations, rather than being put in the hands of consumers.

The Department for Business & Trade (DBT), Challenge Works, the Open Data Institute (ODI) and Smart Data Foundry are inviting individuals, innovators, entrepreneurs, academia, and civil society to identifying innovative ways in which Smart Data could make a difference for consumers, small businesses, and wider society.

This open call isn’t seeking fully-formed solutions, but cross-sector Smart Data use case ideas that use data from at least one of the following five sectors:

  • Financial services,
  • Home buying,
  • Energy,
  • Transport, and
  • Retail.

Following the Discovery Challenge, the aim is to launch a Smart Data challenge prize later in 2024. Participants in this prize will benefit from a share of up to £750,000 to prototype and test solutions that demonstrate a range of promising cross-sector Smart Data use cases in action.

You must submit your entries by 4pm on 8 December 2023.

See: Home – Smart Data Challenge (challenges.org)

Free course on ethical AI for creative industries

As part of the Innovate UK BridgeAI programme, the Alan Turing Institute is hosting a series of free virtual courses that will look at relating the concepts of ethical artificial intelligence (AI) principles into the systems design process.

The first course is open to applications from small and medium businesses in the creative industries only.

The ‘Operationalising ethics in AI in creative industries’ live training course will consist of two sessions taking place online on:

  • Thursday 7 December 2023 (10am – 1pm), and
  • Thursday 14 December 2023 (10am – 1pm).

Participants will engage with real-world case studies and provocative thought experiments to challenge and stimulate understanding of ethical considerations in AI. The learning experience will provide ample opportunities for discussion with experts and peers about how these concepts apply in the creative industries sector.

The course is open to creative industries SMEs. Participants should be currently developing or using AI solutions or looking to employ them in their organisation.

No prerequisite skills are required; however, it would be useful to have an interest in or a basic understanding of AI and the existing regulatory landscape.

Registration is open until 11:30pm on 3 December 2023.

See: BridgeAI live training course: Operationalising Ethics in AI (eventsforce.net)

Dispute resolution – Modernising the framework

The new Arbitration Bill could benefit businesses and individuals around the world who look to the UK as the best place to resolve disputes from family law and rent reviews to international commercial contracts and claims by foreign investors made against entire countries.

Modernising the framework for arbitration in this country for the first time in 26 years – making it quicker, cheaper, and more efficient –could cement the position of this high-value sector in the face of growing competition from other centres such as Singapore and Paris.

With arbitrations in England and Wales worth £2.5 billion to the British economy each year in fees alone, the Bill should help the UK’s world-leading legal services sector to continue to flourish.

See: Modernised laws to secure UK as world leader in dispute resolution – GOV.UK (www.gov.uk)