New Powers Of Pension Regulator

New Powers of Pension Regulator There were few changes to the pension scheme Act few weeks ago. The new Pensions Scheme Act received Royal Assent on 11 February 2021.

The Act has been described by government as “the biggest shake-up of UK pensions for decades”. The new Act will provide for enhanced powers for the Pension Regulator, including the power to impose civil penalties of up to £1 million and three new criminal offences.

https://www.legislation.gov.uk/ukpga/2021/1/contents/enacted/data.htm

One of new criminal offences, that could result in up to seven years in prison, will target bosses who run pension schemes into the ground, or plunder pots to line their own pockets. This is expected to strengthen the regulators’ powers to take efficient and timely actions to protect members’ hard-earned savings.

The legislation also introduces a new pensions dashboard creating one single platform to access and review pension pots, and the creation of new style collective defined contribution (CDC) schemes. CDCs have the potential to increase returns for millions, whilst being more sustainable for both workers and employers.

The Act also aims to ensure that pensions help with climate change governance by moving towards a net zero future through climate risk reporting.

The measures in the Act will come into force at different times as secondary legislation is introduced.

If you are looking to know more this new and related laws; feel free to book a free consultation.

Simplified Export Declarations For Exporters

Declaration For Exporters: The UK businesses who export to the EU now need to make customs declarations when exporting goods to the EU as well as to the rest of the world.

Businesses can make customs declarations themselves or hire a third party such as a courier, freight forwarder, or customs agent.

Businesses can use simplified export declarations to help export most goods. The use of simplified export declarations allows businesses to export goods out of the UK by providing basic details to HMRC. This is usually done electronically. Once the goods for export are cleared, they can then be exported without needing to present any supporting documents.

Have a look at our VAT services page.

To use simplified declarations for exports, authorisation is required from HMRC. If you are thinking of applying you need to:

  • have a good customs compliance record, including VAT returns and duty deferments
  • have a regular pattern of customs declarations against their Economic Operator Registration Identification (EORI) number
  • show how they will record all declarations for no less than four years after their submission date
  • have access to the Customs Handling of Import and Export Freight (CHIEF) system. The Customs Declaration Service will eventually replace CHIEF.

Businesses are still required to complete a more detailed customs declaration known as a supplementary declaration, but this can be done at a later point in time.

If you are looking to know more these new and related laws; feel free to book a free consultation.

Employees Tax Relief For Working From Home

These days due to COVI19 most of the employees are working from home. These employees may be able to claim tax relief for any additional costs due to working from home.

No tax relief will be due if employers reimburse employees for the additional household expenses incurred.

What is covered:

The tax relief covers expenses such as business telephone calls or heating and lighting costs. Expenses that are for both for private and business use (such as broadband) cannot be claimed. Employees may also be able to claim tax relief on equipment purchased. For example, a laptop, chair or mobile phone.

Have a look at our Corporation tax page, we are able to advise on which reliefs a business could claim.

Since 6 April 2020, employers can pay up to £6 per week (or £26 a month for employees paid monthly) to cover an employee’s additional costs if they have to work from home. Employees do not need to keep any specific records if they receive this fixed amount.

If the expenses or allowances are not paid by the employer, then the employee can claim tax relief directly from HMRC. Employees will qualify for tax relief based on their highest tax rate. For example, if they pay the 20% basic rate of tax and claim tax relief on £6 a week they would receive £1.20 per week in tax relief (20% of £6).

Employees can claim more than HMRC’s fixed amounts but may need to provide evidence to HMRC of the amount claimed.

This is important to note, that if an employee is working at home voluntarily, they cannot claim tax relief.

However, these tax reliefs are available to anyone who has been asked to work from home due to the COVID-19 outbreak.

 

If you are looking to know more this new and related laws; feel free to book a free consultation.

Why Keeping Adequate Accounting Records Is Important

Keeping Adequate Accounting Records  is really important and a legal requirement for businesses to keep their records for a period of 6 years from the end of the last company financial year they relate to.

HMRC suggests that companies should keep records of all money received and spent, including grants and payments from coronavirus support schemes.

https://www.gov.uk/running-a-limited-company/company-and-accounting-records#:~:text=You%20must%20keep%20records%20for,years%2C%20like%20equipment%20or%20machinery

The Insolvency Service recently conducted an investigation, leading to the imprisonment of the sole director of a Leicester clothing manufacturer for six months. This occurred due to their failure to provide adequate company accounting records.

https://www.gov.uk/government/news/clothing-boss-jailed-for-failing-to-keep-adequate-accounts

 

In addition, the company failed to pay tax liabilities of more than £300,000. The director was found to be taking contributions from employees without passing on National Insurance and PAYE payments, which partly explains the situation.

In addition to the prison sentence, the court has banned the defendant from acting as a company director for five years. This disqualification prohibits the director from participating, directly or indirectly, in the formation, promotion, or management of a company without court permission for the specified period.

This case serves as an important reminder that a company director must ensure that they meet their responsibilities. Directors are duty-bound to keep adequate records to demonstrate their company’s financial position and to prepare accounts.

 

If you are looking to know more and see how we could help, feel free to book a free consultation with us.

Protecting Your Business

Protecting Your Business Since the time COVID has started business owners specially in vulnerable sectors predominantly retailers, leisure and entertainment trades, will have seen their hard-won capital all but exhausted by the needs to meet fixed costs when income generation has been restricted or eliminated by lock-down directives. The situation is more or less the same for the rest of the business sectors.

And this is in spite of the valiant attempts by the Treasury to provide financial support to those businesses in the COVID firing-line.

Even with a gradual taming of COVID infections as the vaccines start to do their work, we probably have at least another six months of disruption to cope with before its back to business as usual.

Protecting Your Business In the face of these challenges, what can beleaguered business owners do to protect their capital base and be in a position step back into the ring as and when consumers start to edge out of their front doors and start spending?

I suggest the businesses should look at their business in the following way:

  • List all of your fixed costs, those that you have to pay even if you have no income coming in and cancel as many as you can that can be re-established when markets open up again. Obviously, many will be tied to contracts that cannot be broken. In which case:
    • Contact suppliers, landlords, service providers etc., and see if you can negotiate a moratorium on payments for a period, a reduction in payments or the cancellation of contracts.
    • When this work is done rework your business plan for the next year and speak to your bank or other sources to secure any cash required to meet the likely dips in cash resources.
  • Start to think about waking up your business when consumer interest in spending starts to increase demand for your goods or services.

Finally, speak to us.

There is no substitute for sharing this planning process with your professional adviser. We know your business.

We can, and we want to help. Contact us now so we can start to unravel your options.

Landlords – Tax Year End Planning Tips

Landlords – Tax Year End Planning Tips A few housekeeping tips for landlords of buy to let or holiday let properties to think about and action – if applicable – before the end of the current tax year on 5th April 2021.

Buy-to-let Properties:

Have you experienced a drop in rental income since April 2020? If yes, make sure you let us have estimates of your buy-to-let income and expenses to say 31 December 2020 (covering the nine months from 1 April 2020) and we will see if an election to reduce tax payments on account is possible.

If you are contemplating repairs to your property(ies) consider the timing of expenditure. Incurring costs before or after 5 April 2021 will affect your tax payments.

Have a look at our Tax planning page.

If you have improved your rental property during 2020-21, please keep details as we will need those if and when you come to sell the property.

In 2023, you may need to computerise your record keeping meeting HMRC’s Making Tax Digital regulations. There are a number of cloud based software packages you could use.

Holiday Let Properties:

To retain the tax advantages you enjoy – holiday let property businesses are treated as trades – you must meet certain occupancy rules. As it is likely occupancy has dropped during 2020-21 due to lock-down periods, a review is critical.

 

Please contact us if you would like to discuss your options.

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