26th March 2020:
As ever we will wait to see the detail but these are the key points to take away from the chancellor's latest announcements;
Self employed individuals will be able to claim 80% of their average monthly profits up to £2,500 - this is based on figures for the last three years (2016/17, 2017/18 and 2018/19).
Individuals can continue to work whilst making this claim.
It is available for at least three months and open to those with profits under £50k (presumably this is taxable profits as those are the figures HMRC would normally use.
It is only available to those who completed a 2018/19 tax return who had the majority of their income through self employment.
Payments will be available from the beginning of June - HMRC will contact you.
Thursday, 26 March 2020
Monday, 23 March 2020
Covid-19 Update
23rd March 2020
There are a number of reliefs, grants and loans available to
business and individuals following the latest round of announcements. This is a summary of where we are and what
can be done to utilise them.
- Coronavirus Job Retention
Scheme.
- Deferring VAT and Income
Tax payments.
- Statutory Sick Pay relief
package for small and medium sized businesses (SMEs).
- 12-month business rates
holiday for all retail, hospitality, leisure and nursery businesses in
England.
- Small business grant
funding of £10,000 for all business in receipt of small business rate
relief or rural rate relief.
- Grant funding of £25,000
for retail, hospitality and leisure businesses with property with a
rateable value between £15,000 and £51,000.
- Coronavirus Business
Interruption Loan Scheme offering loans of up to £5 million for SMEs
through the British Business Bank.
- HMRC Time to Pay Scheme.
1. The Coronavirus
Job Retention Scheme
All UK employers will be able to access support to
continue paying part of their employees’ salary for those employees that would
otherwise have been laid off during this crisis.
Designate affected employees as ‘furloughed workers,’ and
notify your employees of this change - changing the status of employees remains
subject to existing employment law and, depending on the employment contract,
may be subject to negotiation.
Submit information to HMRC about the employees that have
been furloughed and their earnings through a new online portal (HMRC will set
out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs,
up to a cap of £2,500 per month. They
expect this to be up and running by the end of April but claims can be
backdated to the date the employee was furloughed going back as far as 1st
March.
HMRC are working urgently to set up a system for
reimbursement. Existing systems are not set up to facilitate payments to
employers.
2. Deferring VAT
and Income Tax payments
VAT will be deferred for periods from 20 March 2020 until
30 June 2020, this deferral will happen automatically, no application is
required. Taxpayers will be given until the end of the 2020 to 2021 tax year to
pay any liabilities that have accumulated during the deferral period. VAT
refunds and reclaims will be paid by the government as normal.
VAT returns still need to be completed and submitted on
time.
Income Tax Self-Assessment payments due on the 31 July
2020 will be automatically deferred until the 31 January 2021.
3. Paying sick pay
to employees
Small-and medium-sized businesses and employers can
reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19
covering 2 weeks’ SSP per eligible employee.
The government will work with employers over the coming
months to set up the repayment mechanism for employers as soon as possible.
4. Business rates
holiday
A business rates holiday for retail, hospitality and
leisure businesses in England for the 2020 to 2021 tax year.
Businesses that received the retail discount in the 2019
to 2020 tax year will be rebilled by their local authority as soon as possible.
This will be applied automatically to your next council
tax bill in April 2020. However, local authorities may have to reissue your
bill automatically to exclude the business rate charge. They will do this as
soon as possible.
5. £10k grant fund
For businesses in the retail, hospitality and leisure
sectors with a rateable value of under £15k there is a £10k grant
available. Your local authority should
write to you if you qualify and they are the ones to contact if you need to
check your eligibility.
6. £25k grant fund
For businesses in the retail, hospitality and leisure
sectors with a rateable value of £15k to £51k there is a £25k grant
available. Your local authority should
write to you if you qualify and they are the ones to contact if you need to
check your eligibility.
7. Coronavirus
Business Interruption Loan Scheme
The new Coronavirus Business Interruption Loan Scheme
supports SMEs with access to working capital (including loans, overdrafts,
invoice finance and asset finance) of up to £5 million in value and for up to 6
years.
The government will pay to cover the first 12 months of
interest payments and any lender-levied fees, so smaller businesses will not
face any upfront costs and will benefit from lower initial repayments.
The government will provide lenders with a guarantee of
80% on each loan (subject to a per-lender cap on claims) to give lenders
further confidence in continuing to provide finance to SMEs.
The scheme is now open for applications. To apply, you
should talk to your bank or finance provider.
All major banks are offering this scheme. If you have an
existing loan with monthly repayments you may want to ask for a repayment
holiday to help with cash flow.
8. Time to Pay
service
All businesses and self-employed people in financial
distress, and with outstanding tax liabilities, may be eligible to receive
support with their tax affairs through HMRC’s Time to Pay service.
These arrangements are agreed on a case-by-case basis and
are tailored to individual circumstances and liabilities.
If you have missed a tax payment or you might miss your
next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159
559.
Staying in touch
Please feel free to contact your usual Easterbrook Eaton
contact(s) via email or by calling the office on 01395 516658 (Sidmouth) or
01404 815646 (OSM).
Thursday, 19 March 2020
Coronavirus and Easterbrook Eaton
At Easterbrook Eaton our staff and our client’s welfare is of paramount importance and we therefore take our responsibilities as a business very seriously. We wish to play our part in delaying the spread of the virus in order to reduce its impact on the NHS and the community at large.
As the government continues to update the public on social distancing and other matters, we are moving towards a mix of staff working from home where possible, and keeping our physical offices in Sidmouth and Ottery St Mary open where practical until further notice. This will ensure that we are able to continue providing the quality service our customers continue to rely upon in these challenging times.
In regards to face to face meetings, we would strongly suggest these are cancelled unless absolutely necessary, but we will continue to meet with you so long as you are happy to do so in light of the Government guidance and associated risks. Our preference otherwise would be telephone conferencing where at all practical.
As the landscape changes we will continue to update you on our plans but if you have any questions do not hesitate to contact either office by telephone or email.
Wednesday, 4 July 2018
Wednesday, 4 October 2017
October 2017
Small
Business Tax & Finance
DIVIDEND ALLOWANCE
The current regime for taxing
dividends has been in place since 6 April 2016. Under the rules, all taxpayers,
regardless of the rate at which they pay tax, are eligible for a ‘dividend
allowance’. Although termed an ‘allowance’, in reality the dividend allowance
is a nil rate band and dividends sheltered by the allowance are taxable at a
zero rate. The allowance is set at £5,000 for 2016/17 and 2017/18, enabling all
taxpayers to receive dividend income of £5,000 tax-free (on top of any
dividends that are covered by the personal allowance). Once the dividend
allowance (and the personal allowance) have been used up, dividends are taxed
at 7.5% to the extent that they fall within the basic rate band, 32.5% to the
extent that they fall within the higher rate band and 38.1% to the extent that
they fall within the additional rate band.
The dividend allowance is to fall to
£2,000 from 6 April 2018. This will impact on anyone who receives dividends,
either from investments or as part of a profit extraction strategy from a
personal or family company.
Dividends are a popular and
tax-efficient method of extracting profits from a personal or family company.
Where profits are extracted in this way, it is sensible to plan ahead to ensure
that the higher dividend allowance available for 2017/18 is not wasted. Where
shareholders in personal or family companies have taken dividends of less than
£5,000 in 2017/18, and where retained profits are sufficient, consideration
should be given to paying a dividend before 6 April 2018 in order to mop up any
unused dividend allowance for 2017/18. For 2018/19 onwards, the allowance is
only £2,000.
Paying a
dividend after 6 April 2018 rather than before may mean (depending on the size
of the dividend) that it is taxable where previously it was tax-free. Assuming
that dividends of at least £5,000 continue to be paid in 2018/19 (and the
personal allowance is utilised elsewhere), the reduction in the dividend
allowance will increase the tax payable by a basic rate taxpayer by £225, a
higher rate taxpayer by £975 and an additional rate taxpayer by £1,143.
Talk to us about tax-efficient profit
extraction policies and the benefits of planning ahead.
TERMINATION PAYMENTS
The rules on the tax and National
Insurance treatment of termination payments is changing from 6 April 2018.
Payments made on the termination of
an employment are treated differently depending on whether the payment is a payment
of earnings, such as normal wages and salary, or a compensation payment, such
as damages for loss of office. Payments taxed as compensation payments benefit
from a £30,000 tax-free exemption and are only taxable to the extent that they
exceed £30,000. The £30,000 exemption does not apply to payments taxed as
earnings.
It is not always easy to determine
whether a payment is one of earnings or a compensation payment benefitting from
the £30,000 exemption. In particular, payments referred to as ‘payments in lieu
of notice’ cause difficulty in practice, not least because the term is used to
describe payments that differ in nature. Under the current rules, payments in
lieu which the employee is contractually entitled to receive, or which the
employee has an expectation of receiving (for example, where there is a long
standing company practice of making payments in lieu of notice), are taxed as
earnings and do not benefit from the £30,000 exemption. By contrast, payments
for which there is no contractual entitlement or expectation and which take the
form of damages for the failure to give proper notice, benefit from the £30,000
exemption.
The treatment of payments in lieu of
notice is to change from 6 April 2018 onwards. From that date, the payment is
compared to the pay that the employee would have received had the employment
continued throughout the notice period. Where the termination payment is not
more than the pay that the employee would have received in the notice period
had the employment not been terminated, it is taxable in full. Any excess over
what would have been payable had the employment continued is treated as a
compensation payment and will benefit from the £30,000 exemption. Essentially,
any earnings payable until the end of the notice period are taxed in full as
earnings from the employment.
The way in which compensation
payments are treated for National Insurance purposes is also changing from 6
April 2018. Prior to that date, no National Insurance is payable on termination
payments treated as compensation payments rather than as earnings. However,
from 6 April 2018, employer National Insurance contributions will be payable on
compensation payments made on the termination of employment to the extent that
they exceed the £30,000 tax-free threshold – although the payments will remain
free of employee’s National Insurance. The employee will pay tax on
compensation payments in excess of £30,000 (as now) and the employer will pay
employer’s National Insurance.
Please contact us to discuss the structuring
of tax-efficient termination packages.
PAYE SETTLEMENT AGREEMENTS
A PAYE Settlement Agreement (PSA) is
an agreement that an employer makes with HMRC under which the employer agrees
to pay the tax and National Insurance on certain benefits and expenses provided
to employees. The tax and National Insurance due under the PSA is paid in a
single payment by 22 October after the end of the tax year to which it relates
where payment is made electronically. An earlier date of
19 October applies to payments that are made by cheque.
19 October applies to payments that are made by cheque.
A PSA can be useful to save work and
also to preserve employee goodwill. Benefits and expenses included in the PSA
do not need to be notified to HMRC on form P11D.
However, not all benefits are
suitable for inclusion within a PSA – a PSA can only be used for payments that
are made irregularly, payments which are minor (although this category is
largely irrelevant following the introduction of the exemption for trivial
benefits costing £50 or less) or where it would be impracticable to operate
PAYE. For 2017/18 and earlier years it is necessary to agree a PSA with an
officer of HMRC before 6 July following the end of the tax year to which it
relates. However, HMRC are simplifying the PSA process and as part of this, it
will no longer be necessary to agree the terms of the PSA in this way. Further
reforms are planned. The current PSA process largely relies on paper forms but
HMRC are to develop an automated PSA process as part of their digital strategy.
Please contact us to discuss whether
a PSA would be suitable for your employees and whether it would save work for
you at the year end.
CASH BASIS FOR LANDLORDS
Under the cash basis, accounts are
prepared simply by reference to money received and money paid out. By contrast,
under Generally Accepted Accounting Practice (GAAP) profits must be worked out
using the accruals basis (sometimes referred to as the ‘earnings basis’) which
recognises income earned in a period and expenditure incurred in a period,
regardless of when the income is received or the payment made.
From 6 April 2017 onwards, the cash
basis will be the default basis for most unincorporated landlords where rental
income is less than £150,000 a year. However, if the landlord wishes to
continue to prepare accounts on the accruals basis, he or she will need to
elect to do so. By contrast, property letting companies will need to continue
to use the accruals basis to prepare accounts.
The rules for the treatment of
capital expenditure under the cash basis have also been reformed from 6 April
2017 onwards. The new rules allow landlords using cash basis accounting to
deduct most capital items from rental income when computing profits. However, a
deduction is not available in this way for all capital expenditure – notable
exceptions include land and cars.
Contact us to discuss what cash basis
accounting means for your property rental business.
VAT FLAT RATE SCHEME
The VAT Flat
Rate Scheme for small businesses is a simplified scheme which allows eligible
traders to calculate the VAT that they pay over to HMRC by reference to a fixed
percentage applied to gross
(i.e. VAT-inclusive) turnover. Businesses with VAT taxable turnover of £150,000 a year or less can join the scheme.
(i.e. VAT-inclusive) turnover. Businesses with VAT taxable turnover of £150,000 a year or less can join the scheme.
Prior to 1 April 2017 the flat-rate
percentage was determined solely by reference to the trade sector in which the
business operated. From 1 April onwards, it is also necessary to consider
whether the business meets the definition of a ‘limited cost trader’. Where a
company is a ‘limited cost trader’ the VAT that must be paid over to HMRC is at
worked out using a higher rate percentage of 16.5% of gross (VAT-inclusive)
turnover for the period, rather than the percentage for the relevant business
sector.
A limited cost trader is one that
spends less than 2% of its VAT-inclusive turnover on ‘relevant goods’ or one
which spends more than 2% of its turnover but less than £1,000 a year on
relevant goods. The 2% test must be applied for each VAT quarter. The test is a
harsh one as it only takes account of expenditure on goods, not on services.
Consequently, if a business spends a lot on VATable services but not much on
goods, it may be classed as a limited cost business and may lose out in terms
of recovering the VAT incurred on services.
If you use the flat rate scheme,
contact us to arrange a review as to whether this is still beneficial.
COMPANY CARS
Despite rising tax bills, company
cars remain a popular benefit. The rules for taxing company cars reward
employees driving cheaper low emission models with a lower tax bill.
Until 5 April 2015, it was possible
to drive an electric company car tax-free. However, after that date, electric
cars have been taxed according to the appropriate percentage for the 0 to
50g/km emissions band (9% for 2017/18, rising to 13% for 2018/19).
Technological advances mean that
electric cars are becoming a more viable alternative to petrol and diesel
options. In recognition of this, new appropriate percentage bands are to be
introduced from 2020/21 onwards for electric and other ultra-low emission
vehicles. Under the new structure, the percentage applying to cars with
emissions of 1 to 50g/km will depend on both the level of the car’s CO2
emissions and also its electric range, which is the distance that the vehicle
can travel in pure electric mode. For vehicles with CO2 emissions of 51g/km and
above, the appropriate percentage depends solely on the level of CO2 emissions.
The bands for ultra-low emission cars
for 2020/21 onwards are as follows:
CO2 emissions
|
Electric range
|
Appropriate percentage
|
0g/km
|
2%
|
|
1–50g/km
|
130 miles or more
|
2%
|
70 to 129 miles
|
5%
|
|
40 to 69 miles
|
8%
|
|
30 to 39 miles
|
12%
|
|
Less than 30 miles
|
14%
|
|
51–54g/km
|
15%
|
|
55–59g/km
|
16%
|
|
60–64g/km
|
17%
|
|
65–69g/km
|
18%
|
|
70–74g/km
|
19%
|
|
Thus, a lower tax charge will apply
to electric cars with a greater electric range.
When planning ahead for company car
changes, it is important to consider the tax implications of any policy and of
the models chosen for the car fleet. Please contact us for more information.
This
newsletter deals with a number of topics which, it is hoped, will be of general
interest to clients. However, in the space available it is impossible to
mention all the points which may be relevant in individual cases, so please
contact us for personal advice on your own affairs.
Thursday, 15 December 2016
Money, money, money
Securing funding for your business
The government have recently launched a new scheme to allow those small businesses who are unable to access finance to be matched with alternative finance options. Here we outline the key points of the new service, and we also suggest other types of funding to consider when searching for finance for your business.
The new matchmaking service for small businesses
The government's new programme will require nine of the UK's largest banks to automatically pass on the details of small businesses they have rejected for finance to three finance platforms: Funding Xchange, Business Finance Compared and Funding Options.
These platforms will then share the details with alternative finance providers and help to 'facilitate a conversation' between the business and any provider who expresses an interest in them. RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust Bank are all required to offer access to these finance platforms - although small businesses must give permission before their details are shared.
Alternative sources of finance
Raising funds for a business remains a significant challenge for many. Whether you are looking to start a new business or require capital to expand, there are many factors to consider, in addition to whether you'd like to utilise the government's new funding initiative. You may want to consider some alternative ways of securing finance.
Make use of an overdraft
Overdrafts are credit facilities that have a set amount of money, agreed between you and your bank. Using an overdraft may provide a flexible means for covering short-term outgoings and any potential unforeseen or unexpected business expenses. Overdrafts, however, should not be used as a long-term source of finance, and continued use may prompt your bank to question whether you are in financial difficulty.
Apply for a grant or government support
A grant is typically supplied by the government, charities or local councils. For those that qualify, grants can be a useful source of inexpensive financing. Grants are typically non-repayable: however, strong competition for such a source of finance persists. Additionally, grants are usually only offered to specific sectors for specific projects that are in their proposal stages.
In some instances, you may be asked to cover part of the cost of your project or to match the funds awarded to you.
The British Business Bank is a government owned company which aims to make finance markets work better for small businesses and works with over 80 partners such as banks, leasing companies and venture capital funds. Further information can be found here: http://british-business-bank.co.uk/
Sell business shares to an investor
Making use of this option involves selling part of your stake in the business to an investor. If you choose to sell to an investor, any profit (or loss) the business makes will be shared with them. However, by using this type of finance you will not need to make monthly repayments and you will not be charged interest.
This source of finance only applies to limited companies, so sole traders and partnerships would have to make use of other funding options available to them.
Asset finance
Leasing equipment means you can avoid spending a large amount of money in one lump sum. This is often beneficial from a cash flow perspective, although it should be noted that in some cases the monthly leasing instalments can be more expensive than buying the asset outright. Leasing will also give you access to a high standard of equipment, and assets can be upgraded easily when contracts end.
Hire purchase agreements are another option for those who want to acquire business assets without having to pay for the whole item up-front, and contracts usually include an option to purchase at the end of an initial period.
And don't forget, the cost of qualifying business equipment is usually tax deductible - talk to us for further details.
It is worth considering a range of options when sourcing finance for your business. We can advise on the most suitable type of finance to suit your needs - please contact us for further information.
Friday, 1 July 2016
July 2016 Newsletter
Welcome to the July 2016 Newsletter from Easterbrook Eaton Limited
Business groups have called on the Government to help stabilise the UK economy in the wake of Britain's historic decision to leave the European Union. Following the referendum result, the business community has said it now wants to see decisive action to calm the markets and provide clarity and reassurance to the millions of businesses throughout the UK.
Also this month, Citizens Advice has warned of possible high exit fees for individuals making use of pension freedoms. A survey conducted by the organisation revealed that those withdrawing money from their pension pot may be subject to a 10% loss of their retirement funds.
Business community calls for decisive action following referendum result
Business groups have responded to the UK's historic decision to leave the European Union.
The business community had been divided in the run up to the referendum, with many prominent figures expressing starkly contrasting views on Britain's future membership of the EU. But with the outcome now clear, business leaders are seeking reassurance as Britain enters a period of potential economic and political uncertainty.
Carolyn Fairbairn, Director General of the Confederation of British Industry (CBI), commented on the consequences of the vote to leave, saying: 'Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt.
'The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England (BoE), to shore up confidence and stability in the economy.'
This view was echoed by the British Chambers of Commerce (BCC), which called for 'swift, decisive and coordinated action from the Government and the BoE to stabilise markets if trading conditions or the availability of capital change dramatically'.
The pound dropped to a 30-year low in the immediate aftermath of the result, while the London stock market fell by 8% before later regaining some momentum.
Meanwhile, the Federation of Small Businesses (FSB) has also stressed the need for clarity on issues such as exporting and the single market.
'The FSB calls on the Government for clarity on what these decisions now mean for business, including how businesses will have access to the single market and the free movement of people and trade,' commented the FSB's National Chairman, Mike Cherry, adding that these are 'crucial questions that need to be answered swiftly’ in order to protect the falling confidence of the UK's 5.4 million small businesses.
Following the referendum outcome, Prime Minister David Cameron announced that he will resign from his post, while the Chancellor has suggested that there will be no immediate emergency Budget before a new leader is in place.
The decision to leave the EU is likely to have significant implications for businesses and individuals alike. We will be on hand to guide you through any changes, and to advise you on any key tax and financial measures that could affect you and your business. Please contact us for assistance.
Citizens Advice warns of high exit fees for pension freedoms users
Those withdrawing money from pension savings may lose up to 10% of their funds, according to a new Citizens Advice survey.
The data revealed that individuals using pension freedoms may have had their savings significantly reduced as a result of providers' charges.
Savers with smaller funds have been paying proportionately larger fees, the survey suggested: those with pension pots of £20,000 or less have paid, on average, £1,966 in charges.
The Financial Conduct Authority (FCA) recently proposed a 1% cap on exit fees for current pension schemes. However, Citizens Advice believes that this cap is too high, and is instead proposing the introduction of a standard £50 charge to cover providers' administration costs.
Gillian Guy, chief executive of Citizens Advice, commented: 'The Government and industry needs to work together to make it easier for consumers to compare drawdown products and choose the one which best meets their needs.
'The threat of excessive charges can also put people off making the right pension choices for them. A standard £50 exit fee across all types of pensions will mean consumers can make the most of the pension freedoms.'
In a separate study, financial technology firm eValue found that demand for products that provide a guaranteed income in retirement has risen from 33% in April 2015 to 41% in April 2016.
During this period, the demand for flexible income options, such as drawdown, fell from 54% to 46%.
We can help you plan for a prosperous retirement - please contact us for more information.
ESSENTIAL TAX DATES FOR JULY
6 July
Deadline for submission of employment-related securities and annual returns.
File Taxed Award Scheme Returns, file P11Ds and P11D(b)s. Issue copies of P11Ds to employees.
Deadline for entering into a PAYE Settlement Agreement for 2015/16.
14 July
Due date for income tax for the CT61 period to 30 June 2016.
19/22 July
Quarter 1 2016/17 PAYE remittance due.
Final date for payment of 2015/16 Class 1A NICs.
31 July
Second self assessment payment on account for 2015/16.
Annual adjustment for VAT partial exemption calculations (April VAT year end).
Liability to 5% penalty on any tax unpaid for 2014/15.
Deadline for tax credit Annual Declaration (if estimated, final figures required by 31/01/17).
QUOTE OF THE MONTH
'We have taken all the necessary steps to prepare for today's events. In the future we will not hesitate to take any additional measures required to meet our responsibilities as the United Kingdom moves forward.'
The Governor of the Bank of England, Mark Carney, attempts to calm the financial markets in the wake of the referendum result.
WEBSITE OF THE MONTH
http://is4profit.com
Provides informative blogs and guides on a range of topical business issues.
ON OUR WEBSITE
Up-to-date resources for businesses
With topics ranging from company car tax to the VAT annual accounting scheme, the Your Business section of our site is a hub of useful information for businesses.
A wealth of information for individuals
For a comprehensive bank of guides covering personal taxation and much more, please visit the Your Money area of our website.
MPs warn of consequences of 'digital skills crisis'
MPs have warned that the UK may potentially be left behind if the Government fails to take action to combat a 'digital skills crisis'.
Click here for the full story
UK house prices up 8.2% in the last year, according to new official measure
House prices across the UK rose by 8.2% in the year to April, taking the average property value to £209,054, according to the new official measure, the UK House Price Index.
Click here for the full story
RTI penalty concession to continue, HMRC reveals
The recent concession for returns submitted late under the new Real Time Information (RTI) regime is to be extended until April 2017, HM Revenue & Customs has revealed.
Click here for the full story
HMRC claws back £540m in unpaid tax
HMRC has reportedly recouped more than £540 million through its so-called tax taskforces, new figures have revealed.
Click here for the full story
Sugar tax may bring 'arbitrary burden', says TPA
The Government’s new 'sugar tax' could impose an 'arbitrary burden' on many families, the Taxpayers’ Alliance (TPA) has warned.
Click here for the full story
Business groups have called on the Government to help stabilise the UK economy in the wake of Britain's historic decision to leave the European Union. Following the referendum result, the business community has said it now wants to see decisive action to calm the markets and provide clarity and reassurance to the millions of businesses throughout the UK.
Also this month, Citizens Advice has warned of possible high exit fees for individuals making use of pension freedoms. A survey conducted by the organisation revealed that those withdrawing money from their pension pot may be subject to a 10% loss of their retirement funds.
Business community calls for decisive action following referendum result
Business groups have responded to the UK's historic decision to leave the European Union.
The business community had been divided in the run up to the referendum, with many prominent figures expressing starkly contrasting views on Britain's future membership of the EU. But with the outcome now clear, business leaders are seeking reassurance as Britain enters a period of potential economic and political uncertainty.
Carolyn Fairbairn, Director General of the Confederation of British Industry (CBI), commented on the consequences of the vote to leave, saying: 'Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt.
'The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England (BoE), to shore up confidence and stability in the economy.'
This view was echoed by the British Chambers of Commerce (BCC), which called for 'swift, decisive and coordinated action from the Government and the BoE to stabilise markets if trading conditions or the availability of capital change dramatically'.
The pound dropped to a 30-year low in the immediate aftermath of the result, while the London stock market fell by 8% before later regaining some momentum.
Meanwhile, the Federation of Small Businesses (FSB) has also stressed the need for clarity on issues such as exporting and the single market.
'The FSB calls on the Government for clarity on what these decisions now mean for business, including how businesses will have access to the single market and the free movement of people and trade,' commented the FSB's National Chairman, Mike Cherry, adding that these are 'crucial questions that need to be answered swiftly’ in order to protect the falling confidence of the UK's 5.4 million small businesses.
Following the referendum outcome, Prime Minister David Cameron announced that he will resign from his post, while the Chancellor has suggested that there will be no immediate emergency Budget before a new leader is in place.
The decision to leave the EU is likely to have significant implications for businesses and individuals alike. We will be on hand to guide you through any changes, and to advise you on any key tax and financial measures that could affect you and your business. Please contact us for assistance.
Citizens Advice warns of high exit fees for pension freedoms users
Those withdrawing money from pension savings may lose up to 10% of their funds, according to a new Citizens Advice survey.
The data revealed that individuals using pension freedoms may have had their savings significantly reduced as a result of providers' charges.
Savers with smaller funds have been paying proportionately larger fees, the survey suggested: those with pension pots of £20,000 or less have paid, on average, £1,966 in charges.
The Financial Conduct Authority (FCA) recently proposed a 1% cap on exit fees for current pension schemes. However, Citizens Advice believes that this cap is too high, and is instead proposing the introduction of a standard £50 charge to cover providers' administration costs.
Gillian Guy, chief executive of Citizens Advice, commented: 'The Government and industry needs to work together to make it easier for consumers to compare drawdown products and choose the one which best meets their needs.
'The threat of excessive charges can also put people off making the right pension choices for them. A standard £50 exit fee across all types of pensions will mean consumers can make the most of the pension freedoms.'
In a separate study, financial technology firm eValue found that demand for products that provide a guaranteed income in retirement has risen from 33% in April 2015 to 41% in April 2016.
During this period, the demand for flexible income options, such as drawdown, fell from 54% to 46%.
We can help you plan for a prosperous retirement - please contact us for more information.
ESSENTIAL TAX DATES FOR JULY
6 July
Deadline for submission of employment-related securities and annual returns.
File Taxed Award Scheme Returns, file P11Ds and P11D(b)s. Issue copies of P11Ds to employees.
Deadline for entering into a PAYE Settlement Agreement for 2015/16.
14 July
Due date for income tax for the CT61 period to 30 June 2016.
19/22 July
Quarter 1 2016/17 PAYE remittance due.
Final date for payment of 2015/16 Class 1A NICs.
31 July
Second self assessment payment on account for 2015/16.
Annual adjustment for VAT partial exemption calculations (April VAT year end).
Liability to 5% penalty on any tax unpaid for 2014/15.
Deadline for tax credit Annual Declaration (if estimated, final figures required by 31/01/17).
QUOTE OF THE MONTH
'We have taken all the necessary steps to prepare for today's events. In the future we will not hesitate to take any additional measures required to meet our responsibilities as the United Kingdom moves forward.'
The Governor of the Bank of England, Mark Carney, attempts to calm the financial markets in the wake of the referendum result.
WEBSITE OF THE MONTH
http://is4profit.com
Provides informative blogs and guides on a range of topical business issues.
ON OUR WEBSITE
Up-to-date resources for businesses
With topics ranging from company car tax to the VAT annual accounting scheme, the Your Business section of our site is a hub of useful information for businesses.
A wealth of information for individuals
For a comprehensive bank of guides covering personal taxation and much more, please visit the Your Money area of our website.
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