Archive for April, 2018

Spring Statement

Monday, April 9th, 2018

The Chancellor, Philip Hammond, was keen to promote the positive aspects of the UK’s economic performance when he stood to present his Spring Statement on 13 March.

  • Employment and manufacturing growth rising,
  • Inflation and debt falling.

The speech was also peppered with the usual political gambits to boost his party at the expense of the opposition.

The one practical change that was disclosed was a change to the next business rates revaluation that will now take place a year earlier than planned, in 2021, with further reviews every three years starting 2024.

The Chancellor also revealed new consultations that may eventually shape future legislation. These will include:

  • Reducing single-use plastic waste through the tax system. This will look at ways to reduce the impact of plastic waste in our environment such as disposable plastic cups, cutlery and foam trays. Some of the tax revenue raised will be used to fund research into new ways to encourage a more responsible use of plastic.
  • Making sure multinational digital businesses pay a fair share of tax. This is an ongoing attempt to ensure that the larger digital players pay tax in the UK on sales they make in the UK.
  • Seeking views on the role of cash in the new economy. Will cash become less relevant as digital payment processes become more widely used? This and the prevention of the use of cash to avoid tax and to launder the proceeds of criminal activity will be opened to a wider debate.
  • Supporting people to get the skills they need. Improving skills to benefit growth in the economy by investing in upskilling and retraining, especially by the self-employed.

It will be interesting to see if these initiatives subsequently drive government policy and new legislation.

2m workers to receive a pay rise from 1 April 2018

Thursday, April 5th, 2018

And no, this is no April fool…

Over 2 million people will get a pay rise from 1 April 2018 thanks to an above-inflation rise in the National Living Wage (NLW).

The National Living Wage will go up by 4.4%, from £7.50 to £7.83, meaning a full-time minimum wage worker will be over £2,000 better off since the introduction of the National

Living Wage in April 2016. From April 2018, the tax-free personal allowance will also increase from £11,500 to £11,850.

Almost 400,000 young workers are expected to benefit from the increases in the National Minimum Wage.

From 1 April 2018 the rates for:

  • workers aged 25 and over will be £7.83 per hour
  • workers aged 21 to 24 will be £7.38 per hour
  • workers aged 18 to 20 will be £5.90 per hour
  • workers aged under 18 will be £4.20 per hour
  • apprentices under 19 or in the first year of their apprenticeship will be £3.70 per hour

Employers who underpay minimum wage rates can face fines of up to 200% of the back pay they owe to workers and can be publicly named by the Department for Business, Energy and Industrial Strategy.

Since 2013 the naming scheme has identified more than £9 million in back pay for around 67,000 workers, with more than 1,700 employers fined a total of £6.3 million. Since 2015, the government has doubled investment in minimum wage enforcement, spending £25.3 million in 2017 to 2018.

The uplift comes after the government published its Good Work plan in February, which announced the right to a payslip for all workers. The new law is likely to benefit around 300,000 people who do not currently get a payslip.

For those paid by the hour, payslips will also have to include how many hours the worker is paid for, making pay easier to understand and challenge if it is wrong. The move is part of the government’s Industrial Strategy.

HMRC deals with online VAT abuse

Tuesday, April 3rd, 2018

Fulfilment houses are being drawn into government endeavours to deal with the loss of revenue by the activities of traders based outside the EU. From 1 April 2019, approved fulfilment businesses will be required to complete due diligence checks on their overseas customers and maintain records about the goods they store.

HMRC have announced that if you run a business in the UK, such as a warehouse, that stores goods imported from outside the EU that are owned by, or on behalf of, someone established outside the EU, you will need to apply to register for the Fulfilment House Due Diligence Scheme (FHDDS).

The deadline for applications from existing fulfilment businesses is 30 June 2018, and businesses that start trading on or after today to 30 June 2018 will need to apply on or before 30 September 2018. There are penalties for late applications.

Businesses that meet the FHDDS criteria will not be allowed to trade as a fulfilment business from 1 April 2019 unless they are approved by HMRC and they will risk a £10,000 penalty and a criminal conviction unless they register.

The FHDDS will help HMRC identify and combat non-compliant overseas suppliers more easily and make it more difficult for them to trade in the UK.

This will make the market fairer for the many legitimate and compliant businesses trading in the UK that pay the VAT and customs duty that they owe.

The scheme was announced by the government at Budget 2016 as part of a package of measures that will disrupt and deter abuse by some overseas businesses selling goods to UK customers through online marketplaces – HMRC estimated that this was costing the Exchequer £1 billion to £1.5 billion of unpaid VAT a year.

Businesses that only store or fulfil goods that they own, or only store or fulfil goods that are not imported from outside the EU, are not required to register. Transport businesses that need to store goods temporarily as part of their service, such as during an overnight break, are also not required to register.

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