6thJul
News article

HMRC finds lack of knowledge causing MTD non-compliance

A survey commissioned by HMRC has found that a lack of knowledge amongst UK businesses has contributed to Making Tax Digital for VAT (MTD for VAT) non-compliance.

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A survey commissioned by HMRC has found that a lack of knowledge amongst UK businesses has contributed to Making Tax Digital for VAT (MTD for VAT) non-compliance.

According to the survey, 16% of firms mandated to sign up to MTD for VAT have so far failed to do so.

Independent researchers working on behalf of HMRC found that whilst non-compliant businesses were keen to comply with MTD for VAT, many had come up against gaps in their knowledge or lacked key pieces of information essential to becoming compliant.

The survey also revealed that time and cost, a lack of urgency and factors outside businesses' control also contributed to MTD for VAT non-compliance.

Commenting on the issue, the Institute of Chartered Accountants in England and Wales (ICAEW) said that HMRC needs to balance the need for more direct MTD communications to those that need prompting with the need for more supportive communication for businesses that have tried to comply with MTD for VAT but have encountered barriers.

As your accountants, we can help you to stay compliant with the MTD for VAT rules. For more information, please contact us.

3rdJul
News article

Government unveils £200 million Sustainable Innovation Fund

The government has launched its latest coronavirus (COVID-19) support scheme, termed the Sustainable Innovation Fund (SIF), which is aimed at helping businesses to keep 'cutting edge' projects and ideas alive.

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The government has launched its latest coronavirus (COVID-19) support scheme, termed the Sustainable Innovation Fund (SIF), which is aimed at helping businesses to keep 'cutting edge' projects and ideas alive.

The SIF will make almost £200 million available to UK companies that are developing new technologies in certain areas. These include making homes and offices more energy efficient, creating ground-breaking medical technologies, and reducing the carbon footprint of public transport.

The government has urged research and development-intensive businesses to apply for the funding, which aims to aid the UK's economic recovery and develop new sustainable opportunities for firms following the COVID-19 pandemic. The government also wants these technologies to help the UK meet its targets to cut carbon emissions to net-zero by 2050.

Commenting on the SIF, Business Secretary Alok Sharma said: 'Our country is home to some of the world's most cutting-edge businesses that turn ingenious ideas into new technologies every day. That's why we're backing our innovators and risk-takers with new investment so they can recover and grow out of the coronavirus pandemic.

'I am urging businesses in all parts of the UK to come forward and pitch their state-of-the-art ideas to us, so we can work together to power the UK's economic recovery.'

Businesses can apply for support through the SIF by visiting the Innovate UK website.

3rdJul
News article

LITRG urges self-employed to check eligibility for SEISS

The Low Incomes Tax Reform Group (LITRG) has urged self-employed individuals to check their eligibility for the first round of the government's coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS) grant.

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The Low Incomes Tax Reform Group (LITRG) has urged self-employed individuals to check their eligibility for the first round of the government's coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS) grant.

The claim window for the first SEISS grant will close on 13 July. The LITRG stated that HMRC used IT systems to identify potential SEISS claimants in May. However, the group is concerned that some self-employed individuals did not receive HMRC's correspondence.

The LITRG also said that there is 'some confusion' in regard to the time periods for the SEISS grants. HMRC recently updated its guidance and outlined that a business that has been affected by COVID-19 at any point up to 13 July is eligible for the first SEISS grant, assuming all other conditions are met.

Only if a business is adversely affected by COVID-19 from 14 July can the self-employed claim the second grant.

Commenting on the issue, Victoria Todd, Head of the LITRG, said: 'The self-employed and individual partners trading in partnerships whose businesses have been affected adversely by COVID-19 but who are yet to claim the first SEISS grant should check urgently whether they are eligible.

'It is unfortunate if potential claimants miss out because they did not realise there was a deadline or because they were unsure if they could claim.'

Information on the SEISS can be found here.

2ndJul
News article

FSB finds late payment crisis has worsened during coronavirus lockdown

The Federation of Small Businesses (FSB) has found that the UK's late payment crisis has worsened during the coronavirus (COVID-19) lockdown.

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The Federation of Small Businesses (FSB) has found that the UK's late payment crisis has worsened during the coronavirus (COVID-19) lockdown.

62% of small businesses have been subject to late or frozen payments during the COVID-19 pandemic, according to research carried out by the FSB. Just 10% of small firms have agreed changes to payment terms with their clients.

65% of small businesses that supply goods or services to other businesses have experienced being paid late or having payments frozen.

The FSB has called on policymakers to give the Small Business Commissioner additional powers to investigate and fine repeat late payment offenders.

'Before the COVID-19 outbreak struck, many small firms were already under immense financial pressure because of late payments,' said Mike Cherry, National Chairman of the FSB.

'Cash is still very much king for small firms, and withholding it has pushed many to the brink at a time when they're at their most vulnerable. Our endemic culture of treating small businesses as free credit lines against their will must be brought to an end.'

2ndJul
News article

FCA confirms further support for consumer credit customers

The Financial Conduct Authority (FCA) has confirmed further support for users of certain consumer credit products if they are experiencing temporary payment difficulties due to the coronavirus (COVID-19).

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The Financial Conduct Authority (FCA) has confirmed further support for users of certain consumer credit products if they are experiencing temporary payment difficulties due to the coronavirus (COVID-19).

The measures outline the options firms will provide for credit card, revolving credit and personal loan customers who are coming to the end of a payment freeze. They also outline options for customers who have agreed an arranged interest-free overdraft of up to £500.

In addition, customers yet to request a payment freeze or an arranged interest-free overdraft of up to £500 will have until 31 October 2020 to apply for one.

According to UK Finance, its members have offered over 27 million interest-free overdrafts, provided 992,400 payment deferrals on credit cards and 686,500 payment deferrals on personal loans during the pandemic.

Commenting on the support, Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'Lenders are committed to supporting customers through these tough times and the updated guidance from the FCA gives clarity on the next steps for those who continue to face financial difficulty during the ongoing pandemic.'

1stJul
News article

Furlough scheme now covering 9.3 million workers

The number of workers now furloughed under the Coronavirus Job Retention Scheme (CJRS) has risen to 9.3 million, according to the latest figures from the Treasury.

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The number of workers now furloughed under the Coronavirus Job Retention Scheme (CJRS) has risen to 9.3 million, according to the latest figures from the Treasury.

A further 100,000 employees were furloughed in the week up to 28 June, with 1.1 million employers now using the CJRS.

The government has now paid out more than £25 billion to furloughed UK workers. It has also guaranteed £42.9 billion in loans through its business support schemes.

The majority has been borrowed via Bounce Back loans, with 967,000 businesses accessing £29.5 billion.

A further £11.1 billion has been borrowed through the Coronavirus Businesses Interruption Loan Scheme (CBILS), while £2.3 billion has been lent under the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Commenting on the figures, Stephen Pegge, Managing Director of Commercial Finance at UK Finance, said: 'The fact that over one million businesses are receiving support through the coronavirus loan schemes is a credit to bank staff up and down the country who have worked tirelessly to get finance to those who need it.

'Almost £43 billion has now been approved through these schemes, in addition to the industry's broad package of support for businesses, including overdraft extensions and capital repayment deferrals.'

1stJul
News article

Government expands Future Fund for start-ups

The government has expanded its Future Fund scheme, which aims to support start-up businesses not eligible for other coronavirus (COVID-19) rescue measures.

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The government has expanded its Future Fund scheme, which aims to support start-up businesses not eligible for other coronavirus (COVID-19) rescue measures.

The change will ensure that firms which have moved their headquarters abroad can still access the scheme.

This means that UK companies who have participated in accelerator programmes and were required, as part of the programme, to have parent companies outside of the UK will now be able to apply for investment.

Companies in accelerator programmes are often required to set up a non-UK parent company in order to participate, which means some did not have a UK parent company when Future Fund applications opened in May.

The Future Fund offers government loans of between £125,000 and £5 million to UK-incorporated companies, provided private investors at least match the funding supplied by the state. The package is aimed at innovative start-up businesses not eligible for existing COVID-19 support.

Commenting on the matter, Business Secretary Alok Sharma said: 'As we restart our economy, it is crucial that our innovators and risk-takers get all the support they need to flourish.

'Our decision to relax this rule recognises the importance of many of the UK's most cutting-edge start-ups as we bounce back from coronavirus.'

Find more guidance on the Future Fund here.

30thJun
News article

UK mortgage approvals slump during pandemic

UK mortgage approvals slumped to a record low during May as the COVID-19 pandemic took its toll on the housing market, according to data from the Bank of England.

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UK mortgage approvals slumped to a record low during May as the COVID-19 pandemic took its toll on the housing market, according to data from the Bank of England.

The number of mortgage approvals fell to 9,273, the lowest number since comparable records began in October 1997, down from 15,851 in April.

New mortgage approvals collapsed by 90% compared to pre-pandemic levels and represent just a third of the lowest level seen during the 2008 financial crisis.

The data also showed a net repayment of consumer credit of £4.6 billion pounds in May as people remained largely stuck at home and spent less.

The Bank of England also reported a further big rise in the amount of money households and companies hold in their bank accounts, which increased by £52 billion.

Commenting on the data, Hina Bhudia, a Partner at mortgage broker Knight Frank Finance, said: 'The Bank of England data reveals the unprecedented impact of the property market shut down when many surveyors were unable to visit properties to conduct valuations in-person.

'Leading indicators suggest lending has been picking up since May, but it's clear there is still a long way to go before many borrowers experience anything resembling pre-pandemic conditions.'

30thJun
News article

Business warned about rise in impersonation fraud

Businesses have been told to stay vigilant against the rise in impersonation fraud during the coronavirus pandemic, by trade credit insurer Atradius.

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Businesses have been told to stay vigilant against the rise in impersonation fraud during the coronavirus pandemic, by trade credit insurer Atradius.

The insurer says the increase in impersonation fraud is result of opportunistic fraudsters seeking to take advantage of disruptions to normal business patterns during lockdown.

Impersonation fraud occurs when a fraudulent party presents themselves as if representing a reputable business. The impersonator approaches other businesses under the guise of looking for new suppliers.

Believing the enquiry is from a legitimate and recognisable customer, the supplier progresses with the order and unwittingly makes the delivery to a rogue trading address. Once the impersonator obtains the goods, they quickly disappear, leaving invoices unpaid and the supplier out of pocket.

Simon Rockett, Head of Risk Underwriting at Atradius UK, said: 'Impersonation fraud is a common occurrence in the business world but what's different just now is the significant increase we are seeing.

'Lockdown measures have changed normal operations for many businesses – including shutdowns, a sudden drop in demand and supply chain interruptions. As a result, businesses are actively seeking new customers for their goods and services and will increasingly do so as the country emerges from lockdown.

'The concern is that the eagerness to resume trading will mean businesses could become less cautious in their approach to due diligence and so more likely to get caught out – which is exactly what fraudsters are hoping for.'

29thJun
News article

Coronavirus lockdown puts focus on UK skills gap

The COVID-19 lockdown has served to highlight the widening UK skills gap and the government must now act, warns the Chartered Institute of Management Accountants (CIMA).

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The COVID-19 lockdown has served to highlight the widening UK skills gap and the government must now act, warns the Chartered Institute of Management Accountants (CIMA).

CIMA has called on the government to look beyond the short-term and focus on future investments in skills.

It also warned that workers in the service industries hit hardest by the lockdown restrictions will be vulnerable despite the government's support packages.

CIMA said that while the government must tackle immediate issues such as restoring jobs and increasing consumer spending, it must also put great emphasis on creating long-term recovery including boosting social mobility.

CIMA believes investing in education and skills development in sectors such as digital technology,

education technology, healthcare, financial services, engineering and construction.

Prior to the pandemic, a 2019 report by the Industrial Strategy Council already estimated that 20% of the workforce will be significantly under-skilled for their jobs by 2030.

Andrew Harding, Chief Executive at Management Accounting, said: 'By creating rapid and profound shifts in our economy and the labour market, the pandemic has exacerbated some of the UK's prevailing issues such as faltering productivity, widening skills gap and failing social mobility.

'A new, post-lockdown reality is now sinking in, we must not fall into the trap of believing in a return to business as usual.

'If we are to get the economy back on its feet, remain competitive on the global scene and sustain growth, we must now foster both capital investment in business and invest wisely into developing a skilled, motivated workforce. That provides the opportunity to advance social mobility through creating quality jobs and real wage growth.'