Welcome to our roundup of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you.
Autumn Statement Reminder
Chancellor Jeremy Hunt will deliver the Autumn Statement on Wednesday 22nd November 2023. Look out for our update towards the end of the month.
Inflation holds steady at 6.7%
UK inflation unexpectedly held stable in September at 6.7% to maintain pressure on households during the cost of living crisis. Rising fuel costs offset the first monthly fall in food prices for two years .
The largest downward contributions to the monthly change came from food and non-alcoholic beverages, where prices fell on the month for the first time since September 2021. Furniture and household goods, prices rose by less than they did a year ago.
The Consumer Prices Index including owner-occupiers’ housing costs (CPIH) rose by 6.3% in the 12 months to September 2023, the same rate as in August.
The Office for National Statistics (ONS) said the annual inflation rate as measured by the consumer prices index (CPI) remained unchanged from August’s reading. The news raises questions by experts over the Bank of England’s next decision on interest rates due in November. City economists had forecast a modest fall to 6.6%.
Occupiers’ Housing Costs (OOH) increased by 5% in the twelve months to September 2023.
Source: Office for National Statistics.
So what actions can a business take now to remain resilient to any changes in the economy?
Here are a few suggestions to help you think about your business:
- Review your Budgets and set realistic and achievable targets for 2024.
- Review your debtors list and chase up overdue invoices (if appropriate).
- Assign responsibility to one individual for invoicing and collections.
- Put extra effort into making sure your relationships with your better customers are solid.
- Review and flow chart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc) and challenge the need for each step.
- Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
- Review your staffing needs over the next few months.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
Talk to us about your business, we have many clients who have changed the way they do things and some really innovative stories to share with you!
Do you have a side income?
If you do then you are probably aware of the requirement to disclose this on your Self-Assessment tax return. It is important to record any side income accurately and HMRC is going to be able to see exactly how much income you receive when using a digital platform from 1 January 2024.
HMRC have new powers which means that anyone in the UK who makes money selling goods or services online will have their incomes recorded on the digital platform that they use and HMRC will have direct access to this.
Digital platforms include apps and websites which facilitate the provision of goods and services such as the provision of taxi and private hire services, food delivery services, freelance work, and the letting of short-term accommodation.
HMRC will have access to the digital records of online businesses such as Airbnb, Fiverr, Upwork, Uber, Deliveroo, Etsy .
The change is part of a wider plan for HMRC to keep a more accurate eye on people adding to their existing income through side profits or freelancing and they will be checking tax returns to ensure the figures tally with the records from the platforms themselves.
The power to enable these regulations to be made was introduced under section 349 of the Finance (No.2) Act 2023.
From 1 January 2025, certain UK digital platforms will be required to report information to HMRC about the income of sellers of goods and services on their platform. HMRC will then exchange the information with the other participating tax authorities for the jurisdictions where the sellers are tax resident.
Under the Organisation for Economic Co-operation and Development (OECD) rules, digital platforms in participating jurisdictions will be required to provide a copy of the information to the taxpayer to help them comply with their tax obligations.
The legislation, ‘The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023’, as issued in July 2023, can be seen here: The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 (legislation.gov.uk) and the reporting rules for digital platforms can be seen here: Reporting rules for digital platforms – GOV.UK (www.gov.uk)
If you are not currently filing a tax return then you can check how to register for Self-Assessment here: Check how to register for Self Assessment – GOV.UK (www.gov.uk)
Please talk to us if you have any questions about a side income and how to declare this on your tax return, we have considerable experience in helping our clients comply with the complex HMRC disclosure requirements.
Is your business winter ready?
Disruptions due to the weather can happen anywhere at any time.
Taking time to plan and prepare your business can save you time and money when something untoward happens.
There are simple steps all businesses can take to ensure that they are prepared for adverse weather such as:
- signing up for flood warnings;
- installing flood protection systems;
- checking your insurance policy covers weather damage to your property – make sure you have suitable insurance, the Association of British Insurers provides helpful information; Commercial property insurance is particularly relevant;
- having a business continuity plan;
- making copies of your insurance documentation and key contact information; and
- preparing a grab bag with essential items which can be easily accessed should the premises be evacuated.
Businesses are also encouraged to be aware that harsh weather conditions could leave staff unable to travel to work and therefore should evaluate the risks and provide solutions to being understaffed during this time.
October employee of the month
Well done to Nathan Robinson for being October employee of the month.
Nathan joined Maple in February 2021 and he’s proved himself to be a great Accountant in-the-making.
He consistently produced a high standard of work, is great mentor and coach for our level 3 apprentices and a super team player.
Nathan passed his AAT Level 4 in July and is now planning to undertake his ACCA qualification soon.
Keep up the good work Nathan!
The VAT Flat Rate Scheme – new online form
The amount of VAT a business pays or claims back from HM Revenue and Customs (HMRC) is usually the difference between the VAT charged by the business to customers and the VAT the business pays on their own purchases.
With the Flat Rate Scheme a business:
- Pays a fixed rate of VAT to HMRC.
- Keeps the difference between VAT charged to customers and VAT paid to HMRC.
- Cannot reclaim the VAT on purchases – except for certain capital assets over £2,000.
- Business VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC for permission to join the scheme
The main benefits of the scheme are:
- Simplified record keeping, as you do not have to keep detailed records of sales and invoices.
- Fixed rate percentages are often lower than the standard rate.
- Helps forecast and manage cash flow.
HMRC has launched new online form for businesses to apply for the VAT flat rate scheme: Form VAT600FRS. The Flat Rate Scheme isn’t the best choice for all businesses.
Depending on your sector, you may find that you pay more VAT this way than through standard VAT accounting. Please talk to us and we can give you all the information to make the right choice. See: Flat Rate Scheme for small businesses (VAT Notice 733) – GOV.UK (www.gov.uk)
You might like to read these: UK Flat Rate VAT (Value Added Tax) – Maple Accountants