17thJul
News article

Coronavirus borrowing now over £46 billion

UK businesses have now borrowed over £46 billion through the government-backed schemes that are helping firms during the coronavirus (COVID-19) crisis, according to the latest figures from the Treasury.

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UK businesses have now borrowed over £46 billion through the government-backed schemes that are helping firms during the coronavirus (COVID-19) crisis, according to the latest figures from the Treasury.

In total, £46.3 billion has now been lent to over 1.1 million businesses through either the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) or the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

The BBLS remains the most widely used of the support schemes available, with over £31.7 billion lent to more than a million businesses. The BBLS allows small businesses adversely affected by the pandemic to apply for up to £50,000, with the government guaranteeing 100% of the advance.

Lenders have provided £11.9 billion to 54,500 businesses through the CBILS, while loans of £2.7 billion have been approved to over 400 mid-sized and larger UK businesses through the CLBILS.

Commenting on the figures, Stephen Pegge, Managing Director of Commercial Finance at UK Finance, said: 'This significant level of support demonstrates the clear commitment from the banking and finance industry to help businesses get through these tough times.

'This sits alongside the broad package of measures from the industry including commercial lending, capital repayment holidays, extended overdrafts and asset-based finance, ensuring that businesses can receive the right support that suits their needs.'

16thJul
News article

Three quarters of businesses not ready for end of Brexit transition period

Three quarters of UK businesses are not fully prepared for the end of the Brexit transition period, according to a survey conducted by the Institute of Directors (IoD).

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Three quarters of UK businesses are not fully prepared for the end of the Brexit transition period, according to a survey conducted by the Institute of Directors (IoD).

Nearly half of the 978 company directors polled in late June said they have not been able to prepare. One in seven said that the coronavirus (COVID-19) has negatively impacted preparations, while a third said that a lack of clarity on a deal between the UK and the EU was preventing changes.

Over two thirds of directors said that reaching a deal was important for their organisation.

Amongst those directors that favour being able to diverge from EU rules, 71% agreed that securing a deal is important for the economy.

Commenting on the survey, Jonathan Geldart, Director General of the IoD, said: 'A commitment to some form of reciprocal phasing-in of changes once clear is a long-standing ask from our members, and the benefits would be significant. At a time when government is rightly straining every sinew to help firms deal with widespread disruption, it would be counterproductive not to seek to minimise it at the end of the year.'

16thJul
News article

Homeworking creates new opportunities for cyber criminals, research finds

The rise in homeworking caused by the coronavirus (COVID-19) pandemic has created new vulnerabilities for criminals to exploit, according to research from cyber experts CyberCube and insurance broker Aon.

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The rise in homeworking caused by the coronavirus (COVID-19) pandemic has created new vulnerabilities for criminals to exploit, according to research from cyber experts CyberCube and insurance broker Aon.

According to the report, homeworking has exposed new access points for cyber criminals to gain entry to corporate systems, including domestic PCs, laptops and Wi-Fi routers.

It has also led to a diminution in employees' distinction between work and personal emails and an increase in the use of devices with insecure passwords. 

According to the research, workers based at home are more likely to use online applications that would be prohibited in the corporate environment due to security concerns.

Criminals have also exploited the public's need for information on COVID-19 to create a range of social media and text message attacks, particularly in those countries worst affected by the virus.

Jon Laux, Head of Cyber Analytics at Aon, said: 'The lesson this report draws is that cyber security at home is a different animal to cyber security in the workplace. Organisations are going to have to think more laterally. They'll need to be more user-centric with a particular focus on employees' own devices and the cloud-based applications they use.

'The traditional approach to cyber security must be replaced by something that recognises users will operate in a decentralised and remote fashion. For large organisations, that's going to create a lot of change management to handle.'

15thJul
News article

Self assessment deferral available to the self-employed

Self-employed workers who are struggling due to the coronavirus (COVID-19) pandemic can defer their second 2019/20 self assessment payment on account, HMRC has reminded taxpayers.

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Self-employed workers who are struggling due to the coronavirus (COVID-19) pandemic can defer their second 2019/20 self assessment payment on account, HMRC has reminded taxpayers.

The second self assessment payment on account for 2019/20 is ordinarily due at the end of July. However, the government has said that it will allow the self-employed to defer this payment as well as utilise the grants available through the Self-employment Income Support Scheme (SEISS).

Taxpayers do not need to contact HMRC to defer their payment on account; they can opt into the deferral by simply not paying their tax bill due by 31 July 2020.

If no payment is received, HMRC will automatically update their systems to show payment has been deferred and no interest or penalties will be incurred, providing it is paid in full by 31 January 2021.

Angela MacDonald, Director General of Customer Services at HMRC, said: 'We want to support taxpayers as much as possible as they face uncertainty and difficult circumstances. That's why we want to remind those who may struggle to pay a tax bill right now that they have the option to defer their self assessment payment. They don't need to do anything to take advantage of this deferral. By simply not paying, HMRC will know they have deferred and we will do the rest.'

We can help with all aspects of self assessment, including filing returns on your behalf. Please contact us.

15thJul
News article

Welsh government to reduce LTT rate

Following the reduction in the rate of residential Stamp Duty Land Tax (SDLT), the Welsh government has announced that it will reduce the rate of Land Transaction Tax (LTT).

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Following the reduction in the rate of residential Stamp Duty Land Tax (SDLT), the Welsh government has announced that it will reduce the rate of Land Transaction Tax (LTT).

LTT is payable by the purchaser of residential or non-residential property in a land transaction occurring in Wales. SDLT is payable on land transactions in England and Northern Ireland, and Land and Buildings Transaction Tax (LBTT) is payable on land transactions occurring in Scotland.

From 27 July 2020, the starting threshold for residential LTT will rise from £180,000 to £250,000. This will apply until 31 March 2021. The tax reduction will not apply to purchases of additional properties, including buy-to-let and second homes.

The Welsh government predicts that around 80% of homebuyers in Wales will pay no tax when purchasing their home, and that buyers of residential property who would have paid the main rates of LTT before 27 July will save up to £2,450 in tax.

Commenting on the matter, Rebecca Evans, Minister for Finance, said: 'These rates and thresholds have been set so they more closely reflect the property market in Wales and will ensure that we retain a progressive regime that expects those with the broadest shoulders to contribute a larger share in tax.'

More information can be found here.

14thJul
News article

Scottish government to reduce LBTT rate

The Scottish government will reduce the rate of Land and Buildings Transaction Tax (LBTT) following a similar reduction to the rate of residential Stamp Duty Land Tax (SDLT) announced by Chancellor Rishi Sunak in the recent Summer Economic Update.

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The Scottish government will reduce the rate of Land and Buildings Transaction Tax (LBTT) following a similar reduction to the rate of residential Stamp Duty Land Tax (SDLT) announced by Chancellor Rishi Sunak in the recent Summer Economic Update.

LBTT is payable by the purchaser in a land transaction occurring in Scotland. SDLT applies to land transactions in England and Northern Ireland, and Land Transaction Tax (LTT) applies in Wales.

The threshold at which residential LBTT is paid will be raised from £145,000 to £250,000 in order to help homebuyers following the coronavirus (COVID-19) lockdown. Announcing the change, Finance Secretary Kate Forbes said that 80% of homebuyers will be exempt from paying LBTT.

Commenting on the issue, Joanne Walker, Scottish Technical Officer at the Chartered Institute of Taxation (CIOT), said: 'Once implemented, the changes will mean that an additional 34% of transactions will be taken out of LBTT, taking the total to 79%. This will generate a maximum saving to taxpayers of £2,100.

'That said, it remains the case that across the UK there is still some uncertainty over who gains from a change of this kind. A 2011 study found that previous cuts to help first-time buyers were mostly absorbed in a higher house price, benefitting sellers rather than purchasers.'

Legislation is to be introduced to the Scottish Parliament to provide the revised residential LBTT rates and bands. These will apply to all relevant transactions where the effective date is between 15 July 2020 and 31 March 2021.

14thJul
News article

UK economy shrank by almost a fifth under lockdown

The UK economy shrank by 19.1% in the three months to the end of May as the country struggled under the coronavirus (COVID-19) lockdown, according to the latest data from the Office for National Statistics (ONS).

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The UK economy shrank by 19.1% in the three months to the end of May as the country struggled under the coronavirus (COVID-19) lockdown, according to the latest data from the Office for National Statistics (ONS).

The economy began to bounce back in May, growing by 1.8% as lockdown restrictions began to ease. However, a record drop of 20.4% in April, which was preceded by a 6.9% fall in March, meant the economy shrank during the quarter.

Although the economy rebounded in May, the growth rate expansion was less than the 5% or so that economists predicted. The data came as sectors such as manufacturing, construction, DIY retailers and garden centres were allowed to reopen.

The manufacturing and construction sectors both grew by more than 8% during the month.

Commenting on the data, Jonathan Athow, Deputy National Statistician for Economic Statistics at the ONS, said: 'The economy was still a quarter smaller in May than in February, before the full effects of the pandemic struck.

'In the important services sector, we saw some pick-up in retail, which saw record online sales. However, with lockdown restrictions remaining in place, many other services remained in the doldrums, with a number of areas seeing further declines.'

13thJul
News article

Recovery advice scheme launched for small businesses

A government-backed scheme to offer free online advice to help small businesses bounce back from the coronavirus (COVID-19) has been launched.

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A government-backed scheme to offer free online advice to help small businesses bounce back from the coronavirus (COVID-19) has been launched.

The Recovery Advice for Business Scheme gives small firms access to free, one-to-one advice with an expert adviser to help them through the COVID-19 pandemic and prepare for long-term recovery.

Advice offered includes bespoke, specialist assistance from accountancy, legal and advertising experts, as well as marketing, recruitment and tech advice to help businesses adapt to difficult circumstances and bounce back as the UK economy recovers.

The Institute of Chartered Accountants in England and Wales (ICAEW), the Chartered Institute of Personnel Development (CIPD), the Advertising Association, the Law Society and the Management Consultancies Association (MCA) are among the professional bodies that have signed up for the scheme.

Commenting on the scheme, Small Business Minister Paul Scully said: 'We have stood by small businesses throughout this crisis, offering a wide-ranging package of financial support. However, it is also important that business owners get easy access to expert advice and support.

'It is incredible to see so many professional advisers stepping up to do their bit for small businesses across the country. This advice platform will help to boost our recovery from the impact of coronavirus, giving small businesses extra support to adapt their business models and come back fighting.'

The Recovery Advice for Business Scheme runs until 31 December 2020. Further information on accessing the support can be found here.

13thJul
News article

Tax gap falls to lowest recorded rate

The tax gap fell to an estimated 4.7% for the 2018/19 fiscal year, its lowest recorded rate, according to the latest data from HMRC.

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The tax gap fell to an estimated 4.7% for the 2018/19 fiscal year, its lowest recorded rate, according to the latest data from HMRC.

The tax gap is the difference between tax that should be paid and what is actually paid. HMRC said there is a long-term downwards trend from the figure of 7.5% estimated in 2005/06.

HMRC collected £628 billion in tax revenue in 2018/19, which it said represents over 95% of all taxes due.

According to the tax authority, the falling gap is a result of efforts to improve the tax administration system and make it easier for taxpayers to pay, as well as initiatives such as Making Tax Digital (MTD) for businesses.

More than 1.4 million businesses have signed up to MTD, which helps them reduce errors and see, in close to real time, the health of their finances. This includes around 280,000 businesses below the VAT threshold who have joined voluntarily.

Commenting on the data, Jim Harra, Chief Executive of HMRC, said: 'More than 95% of the tax due was paid in 2018/19. HMRC's aim is for everyone to pay the tax that is due, no matter who they are.

'Our role is increasingly about making it straightforward for taxpayers to get it right first time, while also tackling the minority who deliberately set out to cheat the system. I'm pleased that we're now able to share more information about who pays what.'

10thJul
News article

IFS warns taxes will rise as result of coronavirus lockdown

The Institute for Fiscal Studies (IFS) has warned that the government will need to raise taxes in order to pay for the economic support measures announced by Chancellor Rishi Sunak in the Summer Economic Update.

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The Institute for Fiscal Studies (IFS) has warned that the government will need to raise taxes in order to pay for the economic support measures announced by Chancellor Rishi Sunak in the Summer Economic Update.

The cost of the Chancellor's economic support measures has risen to £190 billion, according to recent data. The Summer Economic Update included another £30 billion in measures to boost the UK economy following the coronavirus (COVID-19) lockdown.

The IFS has predicted that government borrowing will rise to £350 billion in 2020.

The business group recently published an analysis of the Summer Economic Update, in which it stated that further spending support will most likely be needed in the Autumn Budget. This could take the form of targeted tax cuts.

However, the IFS also warned of tax rises in the near future.

Commenting on the issue, Paul Johnson, Director of the IFS, said: 'Let's hold in the back of our minds that a reckoning, in the form of higher taxes, will come eventually.

'This is no normal recession. It's the deepest in history.'