- 5.4 million yet to file their self assessment tax return
- Government must reset EU trade relations, urges BCC
- Employment plan will harm jobs, warns small firms
- CIOT calls on government to rewrite unfair VAT rules
- Regulators must grasp growth opportunity
- UK economy returns to growth as inflation dips
5.4 million yet to file their self assessment tax return
With less than a month to go 5.4 million taxpayers still need to complete and pay their self assessment and avoid penalties, HMRC warns.
Anyone required to file a tax return for the 2023/24 tax year who misses the 31 January 2025 deadline could face an initial late filing penalty of £100.
Thousands of taxpayers have already done so by completing their tax returns before the fizz was barely flat on New Year’s Day.
HMRC revealed that more than 24,800 people filed on 1 January. A further 38,000 had even squeezed theirs in before the bells on 31 December 2024, with 310 filing between 23:00 and 23:59 on New Year’s Eve.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
‘We know completing your tax return isn’t the most exciting item on your New Year to-do list, but it’s important to file and pay on time to avoid penalties or being charged interest.
‘The quickest and easiest way to complete your tax return and pay any tax owed is to use HMRC’s online services – go to GOV.UK and search ‘self assessment’ to get started now.’
Internet link: HMRC website
Government must reset EU trade relations, urges BCC
The need for the UK government to reset trade relations with the EU continues to grow, according to a report from the British Chambers of Commerce (BCC).
The BCC report, assessing the fourth year of Brexit, identifies fresh challenges as regulations continue to diverge, creating ‘further headaches’ for traders on both sides of the Channel.
The Trade and Cooperation Agreement (TCA) was agreed on Christmas Eve in 2020 to allow tariff-free trade with the EU once Brexit took effect.
But services access is limited by rules on business mobility and only 15% of exporters think the deal is helping them to grow sales with Europe, while 41% disagree, according to a BCC survey.
Shevaun Haviland, Director General of the British Chambers of Commerce, said:
‘The government has talked a lot about a new era of trade relations with the EU. But firms are grappling with increasing costs off the back of the Autumn Budget and this change cannot come soon enough.
‘We need to see a smart and flexible approach to these negotiations. Our businesses are clear on what they want to see, less paperwork and bureaucracy, greater flexibility on business travel and a balanced Youth Mobility Scheme between the UK and EU.
‘There is no time to lose in driving forward the changes we need to see. Firms are suffocating under a blanket of rising costs and improving our trading relationship with the EU could provide the growth needed to transform the dour outlook many are facing.’
Internet link: BCC website
Employment plan will harm jobs, warns small firms
Small firms fear the new Employment Rights Bill will harm recruitment, according to a survey by the Federation of Small Businesses (FSB).
The research shows that 92% of small employers have concerns about measures in the Bill.
One of the main concerns cited in the Bill is changes to unfair dismissal legislation, which would expand the grounds for employees to take their new employer to a tribunal from their first day in the job.
In addition, 67% said the Bill would see them recruit fewer staff while 32% said they would reduce headcount before the measures become law.
Tina McKenzie, FSB’s Policy Chair, said:
‘Small firms have made it crystal clear that the Bill will not motivate them to hire more whatsoever. Their feedback is emphatic, resounding, and overwhelming.
‘Ministers must show they get the risk to jobs and avoid a cavalier, dogmatic or patronising approach to the loud and clear feedback from small businesses. The economy is in no fit state for a ‘war on work’.
‘If employers fear they will be sued, fewer will hire – with knock-on effects including a rising benefits bill and a lasting drag on living standards across the UK.’
Internet link: FSB website
CIOT calls on government to rewrite unfair VAT rules
The Chartered Institute of Taxation (CIOT) is calling on the government to address unfair tax rules as interest rates on late payments rise.
The CIOT is urging the government to reintroduce rules which enable HMRC to waive interest on underpaid VAT when no actual tax loss to the Exchequer occurs.
This power was omitted from the new VAT interest regime which came into effect for VAT return periods starting on or after 1 January 2023.
The exposure to interest where there is no tax loss is due to the unique operation of the VAT regime.
The interest rate on late payment of tax is due to increase by a further 1.5% in April, with no equivalent increase in interest on overpaid tax.
Richard Wild, CIOT’s Head of Tax Technical, said:
‘It is possible for a taxpayer to under-declare an amount of VAT due to HMRC, in circumstances where that VAT is reclaimable by a third party, such as the taxpayer’s customer.
Under the previous interest regime the principle of commercial restitution could be applied, providing HMRC with discretion not to charge interest in these circumstances, because there had been no loss to the Exchequer.
Under the present system, HMRC no longer has statutory discretion to not charge interest in these circumstances. So, interest is now being charged in situations where there is no net loss of tax.
We do not understand this to be a deliberate decision on the previous government’s part, but it is vital that this unfairness is removed and commercial restitution reinstated.’
Internet link: CIOT website
Regulators must grasp growth opportunity
The UK’s regulators must grasp the opportunity to help small business grow, says the Federation of Small Businesses (FSB).
The FSB has written to seven of the UK’s regulators with a set of measures to unlock small business growth. The regulators are the Financial Conduct Authority (FCA), Finance Reporting Council (FRC), Ofgem, Ofwat, Ofcom, Competition and Markets Authority and Information Commissioner’s Office.
This follows requests from the Prime Minister, the Chancellor of the Exchequer and the Business Secretary for leading regulators to submit proposals by mid-January for reforms that will spur investments and back economic upturn.
The FSB is calling for a better regulatory policy atmosphere in various areas ranging from financial services to broadband and utilities to digital markets. It has asked the FCA to investigate the use of Personal Guarantees for limited companies, the FRC to include late payments in audits and Ofgem to ensure small firms get quarterly bills from energy companies.
Tina McKenzie, Policy Chair at the Federation of Small Businesses said:
‘We’re glad to see this drive at the start of a new government and new Parliament.
‘Regulators must grasp this opportunity to propose small business growth measures within their activities and remits. We’re also keen to see ministers and all public bodies to put their shoulders to the wheel on growth, alongside business and industry.
‘Regulating for growth doesn’t always mean deregulation – sometimes it means better protection for small firms as consumers.’
Internet link: FSB website
UK economy returns to growth as inflation dips
The UK economy grew for the first time in three months in November, according to the Office for National Statistics (ONS).
ONS figures showed an expansion of 0.1% in GDP after the economy shrank in each of the two previous months.
But the figure was lower than economists had expected, with declines in manufacturing and business rentals and leasing.
Figures showed the services sector drove the marginal growth in November, with pubs, restaurants and IT companies performing well.
UK inflation dipped in December for the first time in three months, the ONS reported.
Prices rose 2.5% in the year to December, down from 2.6% the month before, ONS said.
The ONS said while hotel prices and tobacco prices had fallen last month, the decreases were offset by the cost of fuel and second-hand cars rising.
Ben Jones, CBI Lead Economist said:
‘After a string of disappointing data, it’s good to see that growth returned to positive territory in November, though the economy is still only on track for a very modest expansion at best over the final quarter of last year.
‘In the wake of the Autumn Budget a mood of caution seems to have settled over UK businesses. Many firms are entering 2025 with a focus on reducing operational expenditure, which is likely to weigh on pay, hiring and investment in the months ahead.
‘The government can help shift the UK’s economic narrative with more determined focus on measures that could underpin growth.’
Internet link: ONS website ONS website CBI website
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