The week of 13 February 2023 has seen positive reports from HMRC about its Start-up Loan Scheme and a record high of on-time self-assessment tax filings.
Importantly, new legislation is on the table that would give more power to those with zero-hour contacts. This new bill is aimed at mitigating the effects of forcing workers to be available at any time, with little warning.
Start-up Loan Scheme success
The Start-up Loans scheme was established in 2012, to provide support for new businesses that have been trading for less than 36 months.
The loans range from £500 to £25,000, and charge a fixed interest rate of 6% per year. Businesses also get free support writing up their business plan, and up to 12 months of free tutoring.
Young people (aged between 18-24 years old) have received 14 percent of loans since the scheme was established. Of the total of more than 100,000 loans, 40 percent have gone to women and one-in-five to people from Black, Asian, and other ethnic minority backgrounds.
With 12,382 loans in the North-West, 7,117 in the East of England, 5,616 in the East Midlands and 15,39 in Northern Ireland, as well as many more across all parts of the United Kingdom, the Start Up Loans scheme has seen the entire UK benefit, with total economic activity estimated to be around £5.3 billion.
Predictable working hours bill on the table
The Workers (Predictable Terms and Conditions) Bill, proposed by Blackpool South MP Scott Benton, could bring forward huge changes for tens of millions of workers across the UK to request predictable working hours.
The move, which would apply to all workers and employees including agency workers, comes after a review found many workers on zero hours contracts (i.e. contracts with no minimum working hours) experience ‘one-sided flexibility’.
This means people across the country are currently left waiting, unable to get on with their lives in case of being called up at the last minute for a shift. With a more predictable working pattern, workers will have a guarantee of when they are required to work, with hours that work for them.
What does this change for zero-hours contracts?
If a worker’s existing working pattern lacks certainty in terms of the hours they work, the times when they work, OR if it is a fixed term contract for less than 12-months, they will be able to make a formal application to change their working pattern to make it more predictable.
All workers and employees will have this new right if the bill gets parliamentary approval. However, they must first have worked for their employer for a set period before they make their application. This period will be set out in regulations and is expected to be 26-weeks.
Employers do have the option to refuse a request for a more predictable working pattern on specific grounds, such as the burden of additional costs to make changes, or there being insufficient work at times when the employee proposes to work. Workers will be able to make up to two requests a year.
Record number of taxpayers file on time
HMRC reports that more than 11.7 million people submitted their 2021-22 Self-Assessment tax returns by the 31 January deadline. This included over 861,000 taxpayers who left their filing until the final day and over 36,000 that filed in the last hour before the deadline.
Whilst this was the highest ever number of filings, there are still an estimated 600,000 taxpayers that have missed the deadline and are yet to file. Are you among those that missed the 31 January 2023 filing deadline for your 2021-22 Self-Assessment returns?
If you have missed the filing deadline, have a look at this post explaining the penalties and this post on how to reduce your penalties.
If you are unable to pay your tax bill, there is an option to set up an online time to pay payment plan to spread the cost of tax due on 31 January 2023 for up to 12 months. This option is available for debts up to £30,000 and the payment plan needs to be set up no later than 60 days after the due date of a debt.
Late tax payment interest rate increase
For those who have not filed and paid their taxes on time, your repayment amounts have just gone up. Luckily, CIGMA Accounting can help you with this process.
The Bank of England’s Monetary Policy Committee (MPC) met on 2 February 2023 and voted 6-3 in favour of raising interest rates by 50 basis points to 4% in a move to try and continue to tackle upward pressures on inflation. This is the tenth time in a row that the MPC has increased interest rates with rates now the highest they have been since November 2008.
This means that the late payment interest rate applied to the main taxes and duties that HMRC charges interest on increases by 0.5% to 6.50%.
When do these changes come into effect?
These changes will come into effect on:
- 13 February 2023 for quarterly instalment payments
- 21 February 2023 for non-quarterly instalments payments
The repayment interest rates applied to the main taxes and duties that HMRC pays interest on will increase by 0.5% to 3% from 21 February 2023. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.
Becoming an Authorised Economic Operator
Authorised Economic Operators (AEO) status is a recognised quality mark of businesses who deal with imports, and customs control procedures. Businesses that hold the AEO standard can demonstrate that their role in the international supply chain is secure and that they have customs control procedures that meet Authorised Economic Operator standards and criteria.
There are 2 types of status:
- Authorised Economic Operator Customs Simplification (AEOC)
- Authorised Economic Operator Security and Safety (AEOS)
You can apply for customs simplification or security and safety, or you can apply for both (Customs simplifications & Security and safety-AEOF).
What are the benefits of being an Authorised Economic Operator?
Businesses with AEOS status benefit from Mutual Recognition Agreements (MRAs). The UK negotiates MRAs with other customs authorities to reduce friction and excessive taxation. The UK currently has negotiated agreements with the EU, Japan, China and USA. Following Brexit, all Northern Ireland AEO authorisations continue to be recognised in the EU.
HMRC’s list of approved Authorised Economic Operator businesses has recently been updated and lists 1,237 businesses that hold status with HMRC.
Change in approved ISA managers list
Individual Savings Accounts (ISAs) are accounts for cash and investments (such as stocks and shares) for which you are not charged tax on interest, income, or capital gains. The maximum you can save in ISAs for the current tax year is £20,000.
HMRC releases lists of individuals and firms who it deems are able to manage ISAs satisfactorily. However, HMRC has not approved any ISA that the ISA manager may offer. Potential investors are advised to take independent advice if they’re in any doubt about the suitability of the ISA manager or of a particular ISA.
What can i hold in an ISA?
The list of investments that can be held in a tax-advantaged ISA also includes:
- securities (including retail bonds) and shares issued by housing associations and other co-operative societies or community benefit societies (registered societies – formerly known as industrial and provident societies);
- a broader range of securities issued by companies, including those admitted to trading on certain Small and Medium Size Enterprise (SME) market; and
- shares in a wider range of investment trusts.
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