Fears that the State Pension age (SPa) could rise to 70 have been allayed – for now – as the Government announced it plans to stick to the current timetable for increases.

A further review into the age at which a state pension can be claimed will be carried out in the next Parliament, but in the meantime, the next rise – from 66 to 67 – is due to be introduced between April 2026 and April 2028.

Experts believe the SPa could still return to 70 – which it was when state pension was first introduced in the early 20th century.

But under the existing plans, the next increase, from 67 to 68, will happen between April 2044 and April 2046. There is due to be further discussion within two years of the next Parliament. The Government remains committed to the principle of providing 10 years’ notice of changes to the SPa.

The Government’s review was informed in part by a report from the Government Actuary that set out the results of calculations illustrating when SPa would increase under different scenarios.

How pension age is calculated

The report considered what the timetable may look like for different target proportions of adult life being spent in retirement and different projections of life expectancy. Other assumptions were prescribed by the Secretary of State, such as the age someone starts their working life and the life expectancy tables to be considered.

The calculated SPa timetables are shown to be highly sensitive to the proportion of adult life in retirement and to the life expectancy assumptions adopted.

Recent slowing improvements in life expectancy and the unknown long-term impact of the COVID-19 pandemic make projecting future trends even more uncertain.

Sustainability of the State Pension

A report from Baroness Neville-Rolfe explained there are many factors to take account of when setting the SPa timetable. These include sustainability and affordability, as well as intergenerational fairness.

Her recommendations included two metrics:

• the proportion of adult life that people should, on average, expect to spend in retirement should be up to 31 per cent
• the Government should set a limit on State Pension-related expenditure of up to six per cent of Gross Domestic Product

Based on these metrics, SPa would increase to 68 between 2041 and 2043.

The government welcomed the findings from the Government Actuary and Baroness Neville-Rolfe. It also noted a level of uncertainty in relation to the longer-term data on life expectancy, labour markets and the public finances.

Due to this uncertainty, the Government concluded that the current rules for the rise to 68 remain appropriate. It does not intend to change the existing legislation prior to the conclusion of the next review which is planned to be within two years of the next Parliament.

Do you have a plan in place for retirement? We can help. Contact us today.

The Monetary Policy Committee decided last month to increase the Bank of England (BoE) base rate to 4.25% from 4% and HMRC has followed with an announcement to increase the interest charged on late payment and repayment.

When will this happen?

As HMRC interest rates are linked to the BoE base rate, these changes will come into effect on:

• 3 April 2023 for quarterly instalment payments
• 13 April 2023 for non-quarterly instalment payments

Further guidance and information on rates can be found here.

The impact to UK businesses

The increase in interest rates on late payments means that individuals and businesses that fail to pay their taxes on time will face higher costs. This may incentivise more timely payment of taxes, as the cost of delaying payment becomes greater.

• Greater financial strain on businesses

For businesses that are already struggling financially, the increase in interest rates on late payments may exacerbate their financial difficulties. Higher interest costs could make it more difficult for these businesses to manage their cash flow and meet their financial obligations.

• Increased revenue for HMRC

The increase in interest rates on late payments and repayments is likely to result in increased revenue for HMRC. This revenue could be used to fund public services and infrastructure projects.

• Improved taxpayer compliance

The increase in interest rates on late payments could also improve taxpayer compliance. Individuals and businesses may be more motivated to pay their taxes on time to avoid the increased costs associated with late payment.

If you are concerned about the increasing interest rate and impact on your business, our team can help. Call us today.

1 April 2023 – Due date for Corporation Tax due for the year ended 30 June 2022.

19 April 2023 – PAYE and NIC deductions due for month ended 5 April 2023. (If you pay your tax electronically the due date is 22 April 2023).

19 April 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2023.

19 April 2023 – CIS tax deducted for the month ended 5 April 2023 is payable by today.

30 April 2023 – 2021-22 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.

1 May 2023 – Due date for corporation tax due for the year ended 30 July 2022.

19 May 2023 – PAYE and NIC deductions due for month ended 5 May 2023. (If you pay your tax electronically the due date is 22 May 2023).

19 May 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2023.

19 May 2023 – CIS tax deducted for the month ended 5 May 2023 is payable by today.

31 May 2023 – Ensure all employees have been given their P60s for the 2022/23 tax year.

There is a significant amount of information about companies that can be obtained from Companies House. Companies House is responsible for incorporating and dissolving limited companies, examining and storing company information and making company information available to the public.

Much of this information is freely available. This is in line with the government’s commitment to free data and means that all publicly available digital data held on the UK register of companies is accessible without a charge.

This includes:

• company information, for example, registered address and date of incorporation;
• current and resigned officers;
• document images;
• mortgage charge data;
• previous company names; and
• insolvency information.

There is also a service called WebCheck that allows you to view a company's filing history and purchase copies of document images and a selection of company reports for a nominal fee. You can also elect to monitor a company and receive email alerts of any new documents filed at Companies House. This can be a useful resource to check your own company records at Companies House to ensure there no unexpected filings.

The first monthly returns and payments affected by HMRC’s new VAT penalty regime were due by 7 March 2023. The new VAT penalty rules apply to the late submission and / or late payments of VAT returns for VAT return periods beginning on or after 1 January 2023.

Under the new regime, there are separate penalties for late VAT returns and late payment of VAT as well as a new methodology to the way interest is charged. This replaces the old default surcharge regime and for most taxpayers should represent a fairer system.

The new system is points-based. This means that taxpayers will incur a penalty point for each missed VAT submission deadline. At a certain threshold of points, a financial penalty of £200 will be charged and the taxpayer will be notified. The threshold varies depending on the required submission frequency (monthly, quarterly, annual). For quarterly VAT returns, the penalty points threshold will be 4 points. The penalty points will reset to zero following a period of compliance, for quarterly returns this requires 12-months of compliance. There are also time limits after which a point cannot be levied.

The new regime also sees the introduction of two new late payment penalties. A first payment penalty of 2% of the unpaid tax that remains outstanding 16-30 days after the due date. The second payment penalty increases to 4% of any unpaid tax that is 31 or more days overdue. To help with the introduction of the new system, HMRC has confirmed that it will not be charging a first late payment penalty for the first year of the new regime (1 January – 31 December 2023) once the debt is paid in full within 30-days of the payment due date or if a payment plan is agreed.

Late payment interest will be charged from the date a payment is overdue, until the date it is paid in full. Late payment interest is calculated as the Bank of England base rate plus 2.5%.