Since January 2021, large companies have been requested to sign up to a government initiative that requires them to set out how effective they are at settling supplier payments.

This information can be a critical factor if you are a small company supplying goods or services to a larger concern and cannot afford to wait for extended periods for your invoices to be paid.

The changes that came into effect from January 2021are:

• requiring a company’s CEO or Finance Director, or the business owner where it is a small business, to personally sign the Code to ensure responsibility for payment practices is taken at the highest level of an organisation
• introducing a new logo for signatories to use in external communications to show their commitment to the Code, making it more damaging to a company’s reputation to breach it
• acknowledgement as a condition of signing the Code that suppliers can charge interest on late invoices
• enabling administrators of the Code to investigate breaches based on third-party information

In addition, the new requirement for signatories to pay 95% of invoices from small businesses (those with less than 50 employees) within 30 days will be effective from 1 July 2021.

The target for larger businesses will remain 95% of invoices within 60 days.

To make it easy to check the reports made by companies there is an online process on the GOV.UK website at https://www.gov.uk/check-when-businesses-pay-invoices.

Simply enter the name of your ‘large business’ customer to access their payment effectiveness reports, these display:

• the average time it takes for a large business to pay its suppliers, and
• the proportion of payments (for example, invoice payments) that it doesn’t pay on time.

If you are considering supplying goods or services to a large company for the first time, this facility should be used to check their payment history. As we have mentioned above, you may be anxious to take their business, but you need to know that your standard credit terms will be met.

The following press release issued by the Charity Commission sets out how to ensure your donations reach those affected by the invasion of Ukraine.

“The Charity Commission and Fundraising Regulator have urged the public to ‘give safely’ to registered charities as people make generous donations to causes helping to support and protect people affected by the invasion of Ukraine.

“As the conflict and ensuing humanitarian situation in Ukraine continues to escalate, it is vital that charitable donations of goods and money reach their intended causes. UK charities are pivotal to a collective response to this crisis.

“The Disasters Emergency Committee, a coalition of 15 leading UK charities, has launched its collective appeal to provide emergency aid and rapid relief to civilians suffering during the conflict. Many registered charities are also helping to provide vital life-saving services, like water, food and healthcare, to those caught up in the conflict, including those forced to flee to neighbouring countries.

“By giving to a registered, regulated charity, the public can have assurance that their funds will be accounted for in line with the charity law framework. Established charities with experience of responding to disasters are usually best placed to reach victims on the ground.

“Members of the public initiating their own informal fundraising appeals that are not linked to established registered charities should be aware of the ongoing responsibilities associated with overseeing and managing funds and ensuring they are applied in line with donors’ wishes.

“People looking to donate to causes working in Ukraine and neighbouring countries, should make a few simple checks before giving:

• check the charity’s name and registration number at www.gov.uk/checkcharity. Most charities with an annual income of £5,000 or more must be registered, and you can use the advanced search function to identify charities working in specific regions and countries,
• make sure the charity is genuine before giving any financial information,
• be careful when responding to emails or clicking on links within them,
• contact or find out more online about the charity that you’re seeking to donate to or work with to understand how they are spending their funds,
• look out for the Fundraising Badge on charity fundraising materials, this is the logo which shows that a charity has committed to fundraise in line with the Code of Fundraising Practice.

Many of us have chosen to donate to relief organisations in the past week as the plight of displaced persons in Ukraine continues to dominate the news.

The following notes explain how you can claim for tax relief on these, and any other charitable donations made this tax year.

Giving from your personal funds

Donations made personally generally qualify for Gift Aid. This is of great benefit to the charities and means they can claim an extra 25p for every £1 you give. It will not cost you any extra.

So that the donations you have made qualify for Gift Aid you will need to make a Gift Aid declaration. You usually do this by filling in a form or checking the appropriate box if donating online. You must give a declaration to each charity you want to donate to through Gift Aid.

Paying enough tax to qualify for Gift Aid

Your donations will qualify as long as they are not more than four times what you have paid in tax in the relevant tax year. The tax could have been paid on income or capital gains. You must tell the charities you support if you stop paying enough tax.

Paying tax at higher rates?

If you pay income tax above the basic rate, you can claim the difference between the rate you pay and basic rate on your donation. It’s the same if you live in Scotland. Do this either:

• through your Self-Assessment tax return
• or by asking HMRC to amend your tax code.

For example, if you donate £100 to charity – they claim Gift Aid to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).

Getting tax relief sooner

On your Self-Assessment tax return, you normally only report things from the previous tax year, but for Gift Aid, you can also claim tax relief on donations you make in the current tax year (up to the date you send your return) against earnings in the previous tax year.

This is a useful way to speed up tax relief or reduce liability in a previous year when your income – and therefore tax paid – was higher than the current tax year.

You cannot do this if you miss the filing deadline (31 January if you file online) or if your donations do not qualify for Gift Aid. Also, your donations from both tax years together must not be more than four times what you paid in tax in the previous year.

Giving through your limited company

Companies cannot donate using Gift Aid. Any charitable donations made are treated as a business expense and will reduce profits subject to corporation tax.

High street retailers will be interested in the recent publication of an early-stage consultation that explores the argument for and against an Online Sales Tax. It is argued by the retail sector that business rates discriminate against the high street. The idea is to use any revenue from this tax to fund reductions in business rates for retailers with properties in England and to fund the block grants of the devolved administration so they can also fund rates reductions.

Addressing this issue, a recent Treasury news story states:

“As part of the three-month consultation stakeholders will be asked for their views on the challenges on the design of an Online Sales Tax, including which products and services would be in scope and whether it would be a flat-fee tax based on the number of transactions or deliveries, or a revenue-based tax.

“The consultation delves into what effect an Online Sales Tax would have on consumers and businesses alike, which will also be a key determining factor in policy decisions.”

Offer your point of view

Business owners of shop outlets or online sales facilities can offer their point of view by making a formal submission to the consultation. To access an online response form Google ‘Online Sales Tax: Policy Consultation’.

You could also submit your views on this issue by email to: OSTconsultation@hmtreasury.gov.uk or by post to:

Corporate Tax Team,

1 Yellow, HM Treasury,

1 Horse Guards Road,

London, SW1A 2HQ.

In an attempt to provide a rounded approach to the issue the government acknowledges:

“…that an array of business models operates in UK retail – a mark of the vibrant and innovative sector – and this will lead to a diverse range of opinions. Some retailers with a stronger bricks and mortar presence consider that their sector is overburdened by business rates relative to online competitors. Others view the growing market share of online retail as a signal of consumer choice and innovation which should not be subject to an increased tax burden. Many businesses operate both in-store and online. The government wants to review the evidence in the round.”

1 March 2022 – Due date for Corporation Tax due for the year ended 31 May 2021.

2 March 2022 – Normally Self-Assessment tax for 2020-21 would need to be paid by 2 March or a 5% surcharge would be incurred. This year HMRC is giving taxpayers more time to pay and no surcharge will be incurred if liabilities are cleared by 1 April 2022, or an agreement has been reached with HMRC under their time to pay facility by the same date.

19 March 2022 – PAYE and NIC deductions due for month ended 5 March 2022 (If you pay your tax electronically the due date is 22 March 2022).

19 March 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2022.

19 March 2022 – CIS tax deducted for the month ended 5 March 2022 is payable by today.

1 April 2022 – Due date for corporation tax due for the year ended 30 June 2021.

19 April 2022 – PAYE and NIC deductions due for month ended 5 April 2022. (If you pay your tax electronically the due date is 22 April 2022).

19 April 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2022.

19 April 2022 – CIS tax deducted for the month ended 5 April 2022 is payable by today.

30 April 2022 – 2020-21 tax returns filed after this date may be subject to an additional £10 per day late filing penalty for a maximum of 90 days.