MERRY CHRISTMAS AND A HAPPY NEW YEAR
Merry Christmas and a Happy New Year from all at Gareth Hughes & Co.
Our office will close at 1pm on Friday 22 December 2023 and re open at 9am on Tuesday 2 January 2024.
NATIONAL INSURANCE CHANGES ‘EASE BURDEN ON STRIVERS
/in Financial /by Matthew WilliamsThe changes to National Insurance contributions (NICs) announced by Chancellor Jeremy Hunt in the Autumn Statement will help to ‘ease the burden on strivers up and down the country‘, according to the Federation of Small Businesses (FSB).
Mr Hunt used his Autumn Statement speech to cut the main rate of employee NICs from 12% to 10% for 27 million workers across the UK. This is set to take effect from 6 January 2024. The Chancellor said that, for the average employee earning £35,400 per year, the change amounts to a £450 annual tax cut.
For the self-employed, the Chancellor also abolished Class 2 NICs and cut Class 4 NICs from 9% to 8%, effective from 6 April 2024.
Tina McKenzie, Policy Chair at the FSB, said:
‘The Chancellor’s decision to reduce the rate of self-employed NICs and abolish the Class 2 element is extremely welcome, easing the burden on strivers up and down the country.
‘The FSB has long campaigned for the abolition of the Class 2 element of NICs and the reduction of Class 4, and we are therefore pleased that the Chancellor has acted.’
Internet link: GOV.UK FSB website
CHANCELLOR MAKES FULL EXPENSING PERMANENT IN AUTUMN STATEMENT
/in Financial /by Matthew WilliamsChancellor Jeremy Hunt used his Autumn Statement to make Full Expensing permanent for those businesses investing in IT equipment, plant and machinery.
The Chancellor said he was aiming to stimulate economic growth and highlighted 110 measures for businesses in the Statement.
Full Expensing was first announced in the March Budget and was scheduled to last for three years. The rules allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is unused and not second-hand.
Mr Hunt has now made it permanent and said it represents the ‘largest business tax cut in modern British history‘, worth £11 billion per annum.
The Chancellor also extended the tax reliefs and incentives for Freeports and the Investment Zones programme from five to ten years. In addition, he announced three advanced manufacturing Investment Zones, which will be established in Greater Manchester, the East Midlands and the West Midlands.
There is also a business rates support package worth £4.3 billion over the next five years to help high streets and protect small businesses. This includes a rollover of the 75% retail, hospitality and leisure relief.
Rain Newton-Smith, Chief Executive of the Confederation of British Industry (CBI), said:
‘Making full capital expensing a permanent feature of the tax system can be transformational for accelerating growth and improving living standards in the long-term. Helping firms to unleash pent-up investment is critical to getting momentum into the economy.’
Internet link: GOV.UK CBI website
HMRC IS ‘MAKING TAX DIFFICULT’ WITH MTD PROGRAMME
/in Financial /by Matthew WilliamsHMRC is ‘Making Tax Difficult’ for taxpayers as Making Tax Digital (MTD) adds to the burdens they face, according to a report by the Public Accounts Committee (PAC).
The report says that HMRC has lost sight of the need to put taxpayers at the heart of changes to the tax system.
The PAC says that HMRC is increasing the burdens imposed on some taxpayers through the MTD initiative. It said that in seeking further investment in MTD, HMRC has not been transparent enough about the ‘substantial costs’ MTD will impose on many taxpayers.
According to the Committee, the design of MTD fails to take into sufficient account the realities facing business taxpayers and agents.
It said that while MTD will ‘substantially benefit’ HMRC by improving its systems, taxpayers are asked to spend more and do more in order to be compliant.
The report revealed that HMRC excluded more than £2 billion in upfront transitional MTD costs for taxpayers from its 2022 and 2023 business cases for the scheme. It also found that ‘widespread and repeated‘ failures in HMRC’s planning, design and delivery of MTD have led to increased costs and delays to the initiative.
Meg Hillier, Chair of the PAC, said:
‘When reporting on proposals for digitalising the tax system, our committee should not have to be recommending that HMRC start with what taxpayers need – in an ideal world, one would hope this would simply go without saying. But seven years and £640 million into the MTD programme, we are concerned HMRC is also succeeding in making tax difficult.’
Internet link: Parliament website
MANY FIRMS STILL FACING RECRUITMENT PROBLEMS
/in Financial /by Matthew WilliamsMany UK firms are still facing hiring issues as a result of challenging economic conditions, according to a report from the British Chambers of Commerce (BCC).
73% of firms surveyed by the BCC reported having recruitment problems, with businesses in the hospitality sector the most likely to report challenges.
The construction and manufacturing industries are also experiencing issues, and 72% of retail businesses said they have had recruitment problems.
Adverse economic conditions are restricting investment in workplace training, the BCC found.
Jane Gratton, Deputy Director of Public Policy at the BCC, said:
‘The scale of the recruitment crisis remains huge, despite a welcome fall in the number of firms reporting hiring problems.
‘We have just under a million job vacancies in the economy, and skills shortages are damaging businesses’ ability to operate profitably – as well as impacting the wellbeing and morale of remaining staff.
‘Businesses and the government need to work together to resolve this problem. Bringing more people back into the workforce, with rapid retraining programmes and comprehensive support, will help. While many employers remain sharply focused on investment in training, most businesses need more help to get the workforce skills they need.’
Internet link: BCC website