The Bank of England’s Monetary Policy Committee voted on 4 August to reduce their base rate to 0.25%.

This is good news for individuals and businesses about to borrow money, as it should mean that the interest rate applied will be lower.

Certainly, the interest rates charged by HMRC for late payment of taxes are linked to the base rate and will be cut accordingly. These reductions will apply from 15 August 2016 for quarterly instalment payments, and from 23 August 2016 for non-quarterly instalment payments.

The rate reduction is being made in tandem with a package of measures to provide additional monetary stimulus. As part of their published reasoning for their actions the Bank of England have said:

“The cut in Bank Rate will lower borrowing costs for households and businesses.  However, as interest rates are close to zero, it is likely to be difficult for some banks and building societies to reduce deposit rates much further, which in turn might limit their ability to cut their lending rates.  In order to mitigate this, the MPC is launching a Term Funding Scheme (TFS) that will provide funding for banks at interest rates close to Bank Rate.  This monetary policy action should help reinforce the transmission of the reduction in Bank Rate to the real economy to ensure that households and firms benefit from the MPC’s actions.  In addition, the TFS provides participants with a cost effective source of funding to support additional lending to the real economy, providing insurance against the risk that conditions tighten in bank funding markets. 

The expansion of the Bank of England’s asset purchase programme for UK government bonds will impart monetary stimulus by lowering the yields on securities that are used to determine the cost of borrowing for households and businesses.  It is also likely to trigger portfolio rebalancing into riskier assets by current holders of government bonds, further enhancing the supply of credit to the broader economy.”

Doctor Samadian works from home and has contracts with a number of private and NHS hospitals.

As he has a home-based office, from where he runs and administers his business, he has claimed for the costs of travel as follows:

·         from his home/work base to his various, contracted private hospital clients;

·         from the NHS hospitals, where he was an employee, to the private hospitals.

HMRC considered that the claims were not bona fide business costs and sought to disallow them. Dr Samadian appealed.

The case, when heard by the First Tier Tribunal (FTT), decided that neither of these circumstances qualified the travel costs as incurred “wholly and exclusively” for the purposes of a trade, and Dr Samadian’s appeal was denied.

The case was then heard, on appeal, by the Upper Tier Tribunal, who upheld the decision of the FTT.

This seems to be an odd conclusion by the courts. Essentially they are saying that:

·         Travel expenses for journeys between home (even where the home is used as place of business) and places of business are treated as non-deductible (other                than in very exceptional circumstances).

·         Travel expenses for journeys between a location which is not a place of business and a location which is a place of business are not deductible.

If applied to all self-employed persons who worked from home this would seem to deny tax relief on travel costs that they believe are expended solely for business purposes.

The UK’s 5 major high street banks have signed up to work with the new Department for International Trade to revolutionise the way businesses access international markets.

Barclays, HSBC, Lloyds, NatWest and Santander are getting behind the government’s drive to populate a new and unique Directory of Exporters. The Directory will link UK companies with contacts from around the world. Potential customers and buyers from global markets will be able to search for companies from across the whole of the UK which are ready to supply the products, services and skills they need.

The directory heralds an incredible opportunity for the UK economy and is part of wider government plans for a more digital service that will provide a world-leading platform for British businesses and the UK economy. The government and banks see this unique collaboration as the critical first stage in creating a ground-breaking service, aiming to make the UK the easiest place in the world from which to start exporting. Further details of the service will be revealed as the offer develops in advance of its launch in November 2016.

Business customers of the 5 banks will be encouraged to join the directory and take advantage of this exciting opportunity to promote themselves in lucrative global markets.

Announcing the partnership at an event in London on the 21 July, Secretary of State for International Trade, Dr Liam Fox, said:

“The new Department for International Trade is perfectly placed to bring together the whole of government, industry and our extensive overseas network to help UK businesses win lucrative deals. We want to help UK businesses scale up and take advantage of the global appetite for British goods and services, as well as to demonstrate that there has never been a better time for international companies to partner with UK suppliers.

The first of its kind, this directory will deliver a unique and new route to global markets, promoting British goods and services on an unprecedented scale. With this kind of creativity and collaborative working between government and industry, I’m confident that we can make the whole of the UK a beacon for open trade around the world.”

This new scheme will be rolled out to parents next year. The scheme will be made available gradually to families, with parents of the youngest children able to apply first. You’ll be able to apply for all your children at the same time, when your youngest child becomes eligible. All eligible parents will be able to join the scheme by the end of 2017.

In the meantime, HMRC are gearing up to advise childcare providers to register to use the scheme.

The top ten things that parents should know about Tax-free Childcare have recently been updated and are reproduced below:

1.      You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website, GOV.UK.

2.      For every 80p you or someone else pays in, the government will top up an extra 20p. This is equivalent of the tax most people pay – 20% – which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 – the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).

3.      The scheme will be available for children up to the age of 12. It will also be available for children with disabilities up to the age of 17, as their childcare costs can stay high throughout their teenage years.

4.      To qualify, parents will have to be in work, and each earning around £115 a week and not more than £100,000 each per year.

5.      Any eligible working family can use the Tax-Free Childcare scheme – it doesn’t rely on employers.

6.      The scheme will also be available for parents who are self-employed. Self-employed parents will be able to get support with childcare costs in Tax-Free Childcare, unlike the current scheme (Employer-Supported Childcare) which is not available to self-employed parents. To support newly self-employed parents, the government is introducing a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level.

7.      If you currently receive Employer-Supported Childcare then you can continue to do so; you do not have to switch to Tax-Free However, Tax-Free Childcare will be open to more than twice as many parents as Employer-Supported Childcare.

8.      Parents and others can pay money into their childcare account as and when they like. This gives you the flexibility to pay in more in some months, and less at other times. This means you can build up a balance in your account to use at times when you need more childcare than usual, for example, over the summer holidays. It’s also not just the parents who can pay into the account – if grandparents, other family members or employers want to pay in, then they can.

9.      The process will be as simple as possible for parents. A bespoke online process will be provided.

10.  You’ll be able to withdraw money from the account if your circumstances change or you no longer want to pay into the account. If you do make withdrawals, the government will withdraw its corresponding contribution.

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.

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

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

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

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