Archive for July, 2016

Business as usual

Tuesday, July 12th, 2016

The hiatus continues. Both major political parties are locked into leadership issues and until these are resolved it is difficult to see in which direction the UK will take. Apparently, the present government, with its new leadership team, will continue until the next scheduled general election, 7 May 2020.

George Osborne’s last budget, March 2016, is still working its way through parliament and we can expect this process to complete once the report stage is finished and the bill receives Royal Assent. No doubt the new incumbents will consider a further finance bill later this year to smooth the way for Brexit?

 Meanwhile, we are faced with two dilemmas:

  • When will we formally separate from Europe and what continuing trade agreements will we secure with the EU?
  • What trade agreements will we secure with the rest of the world?

 It is encouraging to see that the present government are not entirely inactive in this regard. The Business Secretary, Sajid Javid, has kicked off preliminary trade talks with India this month, and there are further, tentative talks organised with the USA, China, Japan and South Korea.

The Business Secretary Sajid Javid said:

“Following the referendum result, my absolute priority is making sure the UK has the tools it needs to continue to compete on the global stage.

That is why I am in India today to launch these initial trade discussions. There is a strong bilateral trade relationship between our 2 countries and I am determined that we build on this.

Over the coming months, I will be conducting similar meetings with other key trade partners, outlining the government’s vision for what the UK’s future trade relationship might look like.”

As part of the discussions, the Business Secretary is expected to make clear that he would like the UK and India to have a trade agreement in place as soon as possible after the UK leaves the EU.

So we are not without leadership. Meanwhile, now would be a good time to consider, and reconsider, investment options for small businesses across the UK while we wait for the wider trade negotiations to complete.

Changes to business market place post Brexit

Wednesday, July 6th, 2016

While we wait for the politicians to sort themselves out it may be prudent to reflect on the likely changes to the business market place post Brexit. For example:

  • If the sterling exchange rate settles at a lower level the cost of imported goods will rise and our exporters may benefit as their goods and services will be priced lower in overseas buyer’s markets.
  • If the rising cost of imports triggers inflation the Bank of England may have to step in and increase interest rates. This will increase the cost of borrowing; business profits will suffer as will cash flow.
  • An alternative scenario is also possible. The Bank of England may reduce interest rates to encourage investment and lower the cost of borrowing for UK businesses and home owners.
  • Firms that trade in the property sector will need to keep a weather eye on demand as buyers may be discouraged by the overall uncertainty about the longer term outlook for interest rates. As a consequence, we may see the property market flat-line or prices fall.
  • Uncertainty may encourage banks and other lenders to be more cautious when considering loans. Cash flow management should possibly shift towards the top of to-do lists, just in case there is downward pressure if credit does tighten up.
  • Businesses and non-profit making enterprises that rely on EU funding should contact their funding agencies as soon as possible. Be prepared. Start looking for alternative funding now. Support for farmers and other key groups will hopefully be replaced by UK government grants.
  • Businesses that trade with the rest of the EU will need to re-examine their sales and marketing strategy for the future. If and when the final EU curtain falls they may find their exports subject to tariffs. Time to start looking for alternative export markets or ways to increase penetration in the home market.
  • Firms that are part of the supply chain for multinational concerns will need to be vigilant. Car manufactures, pharmaceutical companies, international banks and others, that have based their operations in the UK as a spring board to the EU markets, could possibly reconsider their options.  
  • If consumer demand in the UK hardens, the ability to pass on increased costs may become a problem for smaller businesses already coping with smaller margins and shrinking demand for their products and services.
  • Finally, we may have face tax increases as the UK struggles to balance its books and repay debt.

Businesses will need to be on their guard. Businesses and individuals should be watchful and stay positive. There are small business owners who would say that they were held back by EU regulation and will now be free to explore alternative markets. There are others that will be concerned by any loss of access to European markets. In any event, it pays to trim your sails if a storm is forecast, even if it blows over.

Tax Diary July/August 2016

Monday, July 4th, 2016

 1 July 2016 – Due date for Corporation Tax due for the year ended 30 September 2015.

 6 July 2016 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs, and give copies of the information to your employees.

 19 July 2016 – Pay Class 1A NICs (by the 22 July 2016 if paid electronically).

 19 July 2016 – PAYE and NIC deductions due for month ended 5 July 2016. (If you pay your tax electronically the due date is 22 July 2016)

 19 July 2016 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2016.

 19 July 2016 – CIS tax deducted for the month ended 5 July 2016 is payable by today.

 1 August 2016 – Due date for Corporation Tax due for the year ended 31 October 2015.

 19 August 2016 – PAYE and NIC deductions due for month ended 5 August 2016. (If you pay your tax electronically the due date is 22 August 2016)

 19 August 2016 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2016.

 19 August 2016 – CIS tax deducted for the month ended 5 August 2016 is payable by today.

Bogus emails and now, bogus phone calls

Monday, July 4th, 2016

The “phishing” emails sent by nefarious individuals, purporting to be from HMRC, have now been joined by bogus phone calls.

We have received information that taxpayers are being called, apparently by HMRC, and advised that they have significant tax bills to pay and the caller encourages the offended taxpayer to settle the bill during the phone call.

We have reproduced below a warning issued by Action Fraud involving the use of iTunes gift cards:

Action Fraud is warning people of a new trend that has hit the UK where fraudsters contact victims claiming to be from HM Revenue & Customs (HMRC) and trick them into paying bogus debts and taxes using iTunes gift cards. 

Victims are being contacted in a variety of methods by fraudsters claiming to be from HMRC and are told they owe an outstanding debt. In the hundreds of cases reported to Action Fraud in the past month, the fraudsters all ask for payment in iTunes gift card voucher codes. 

Fraudsters are now moving onto iTunes gift cards to collect money from victims because they can be easily redeemed and easily sold on. The scammers don’t need the physical card to redeem the value and instead get victims to read out the serial code on the back over the phone. 

Fraudsters are contacting victims in three ways:

  • Voicemails: Fraudsters are leaving victims automated voicemails saying that they owe HMRC unpaid taxes. When victims call back on the number provided, they are told that there is a warrant out in their name and if they don’t pay, the police will arrest them.
     
  • Spoofed calls: Fraudsters are cold calling victims using a spoofed 0300 200 3300 number and convincing them that they owe unpaid tax to HMRC. 
     
  • Text messages: Fraudsters are sending text messages that require victims to urgently call back on the number provided. When victims call back, they are told that there is a case being built against them for an outstanding debt and they must pay immediately.  

How to protect yourself: 

  • HMRC will never use texts to tell you about a tax rebate or penalty or ever ask for payment in this way.
  • Telephone numbers and text messages can easily be spoofed. You should never trust the number you see on your telephones display. 
  • If you receive a suspicious cold call, end it immediately.

You can also report a fraud and receive a police crime reference number, call Action Fraud on 0300 123 2040.

Transferring ISAs

Monday, July 4th, 2016

ISA investors may be interested to read the following guidance issued by HMRC regarding the transfer of ISAs from one provider to another.

What you can transfer

You can transfer a cash ISA to another cash ISA with a different provider. You can do the same with stocks and shares ISAs. You can also transfer a cash ISA to a stocks and shares ISA or vice versa.

If you want to transfer money you’ve invested in an ISA this current year, you must transfer all of it. For previous years, you can choose to transfer all or part of your savings.

Check with your provider for any restrictions they may have on transferring ISAs. They may also make you pay a charge.

How to transfer your ISA

To switch providers, contact the ISA provider you want to move to and fill out an ISA transfer form to move your account. If you withdraw the money without doing this, you won’t be able to reinvest that part of your allowance again.

Deadlines and complaints

ISA transfers should take no longer than:

  • 15 working days for a cash ISA
  • 30 working days for a stocks and shares ISA

If your transfer takes longer than this, contact your ISA provider. If you’re unhappy with the response, you can take the matter up with the Financial Ombudsman Service.

Financial Ombudsman Service
Telephone: 0845 080 1800
Monday to Friday, 8am to 8pm
Saturday, 9am to 1pm

 

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