Navigating the Changing Landscape of Business and Finance in the UK
Welcome to our round-up 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!
UK Taxation Reaches Unprecedented Heights in Current Government’s Tenure
The Institute for Fiscal Studies (IFS) recently declared this parliament to be the most significant in terms of tax increases in recorded history, propelling UK tax revenues to unprecedented heights. They assert, “At the time of the previous general election, UK tax revenues constituted roughly 33% of the national income. By the anticipated next election in 2024, according to current projections, taxes will make up approximately 37% of the national income a level not witnessed since the post-war era. When compared to a scenario where taxes remained at 33% of national income, the UK government is set to generate over £100 billion more in tax revenues in the coming year. This translates to around £3,500 additional per household, although it’s important to note that the tax burden will not be evenly distributed.
While the government may contemplate announcing tax reductions leading up to the next election, there’s no plausible scenario in which this parliament – especially since Rishi Sunak took office as Prime Minister – emerges as anything other than a tax-raising one. In fact, it’s currently on a trajectory to be the most significant tax-increasing parliament in comparable recorded history.
At present, the UK government is garnering a larger share of tax revenue, as a percentage of the national income, than at any point since the 1940s. This is largely attributable to a series of tax-raising initiatives unveiled over the past few years. Notable examples encompass the substantial hike in the primary rate of corporation tax, escalating from 19% to 25%, the energy profits levy, and the freezing of various income tax and National Insurance thresholds. Economic shifts imply that some of these measures will now yield substantially more than initially projected or intended. This is particularly evident in the case of income tax allowances, which would otherwise have risen in tandem with inflation.
So, are there any tax planning opportunities on the horizon for the approaching tax year?
The fresh fiscal year commences on April 6, 2024, affording you six months to contemplate your planning strategies. Once this date lapses, the majority of options for Income Tax and Capital Gains Tax planning will be off the table unless proactive steps are taken.
Do you fall into any of these categories?
If you fall into any of these categories, we can assist you in exploring your options before the April 2024 deadline.
Please note that the above list is not exhaustive, and our expertise encompasses all tax categories, including PAYE, NIC, VAT, Corporation Tax, Capital Gains Tax, Income Tax, and Inheritance Tax. book a free consultation with our expert accountants today to find out more.
See: This will be the biggest tax-raising parliament on record | Institute for Fiscal Studies (ifs.org.uk)
Millions Heading for Retirement: Are You Prepared Financially?
Recent research has unveiled a potential financial challenge for millions of individuals aged over 55 in the UK as they approach retirement. A prominent at-retirement advisory firm conducted an independent survey encompassing 2,000 UK adults. The findings revealed that a mere 46% of respondents currently have a solid financial blueprint in place for their retirement. This figure only experiences a slight uptick to 47% among those aged 55 and above.
Concerning retirement savings, only 51% of UK adults have a clear grasp of the contents of their pension funds. Again, a marginal increase is observed among the over-55 demographic, with 56% claiming to be knowledgeable about their pensions.
Additionally, the research underscores that less than one-third (32%) of individuals over 55 feel confident that they will amass sufficient resources to support their envisioned post-retirement lifestyle.
The data also reveals that a mere 16% of those over 55 frequently avail themselves of the services of wealth managers or independent financial advisers (IFAs). A mere 19% have engaged with an IFA within the last 12 months to seek guidance on adapting their pension plans to align with the current economic climate.
Are you a business owner?
For any dedicated entrepreneur, the ultimate aspiration is to establish a business of substantial worth, enabling a graceful and profitable exit. We’ve recently been assisting numerous entrepreneurial clients in formulating comprehensive exit strategies.
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Various critical factors come into play:
We employ a proven methodology to address these crucial questions and facilitate the preparation of your business for sale. This includes identifying potential buyers and skilfully negotiating to secure the highest possible price commensurate with the perceived value of your business.
Should you wish to discuss your individual retirement plans, we’re more than willing to engage in this dialogue with you so book a free consultation with our expert accountants today to optimise your retirement strategy!
HMRC Webinars Addressing Expenses and Benefits
Employees, including directors, receive a diverse array of expenses and benefits. If you’re seeking more guidance or perhaps just a quick refresher on how to navigate these payments and their implications on tax and National Insurance, HMRC offers a selection of informative webinars designed to assist you.
Exploring Expenses and Benefits for Employees with Multiple Workplaces:
Gain insights into:
Explaining Expenses and Benefits Related to Employee Travel:
This webinar delves into reimbursing employees for travel undertaken on behalf of the employer, addressing the tax treatment of:
Explaining Expenses and Benefits Related to Company Cars, Vans, and Fuel:
If your employees have private use of a company vehicle, HMRC will cover:
Enhanced Legislation Unveiled by UK Government to Address Delayed Payments for Small Businesses
The UK government is taking decisive action to address the persistent issue of delayed payments to small businesses. These stringent measures will be outlined in the forthcoming Prompt Payment & Cash Flow Review, set to be released shortly. The aim is to enhance the implementation and enforcement of policies, ensuring that a greater number of small businesses receive their due payments in a timely manner. Read more...