The January Self Assessment deadline seems like a long way off, but you don’t have to wait until the last minute to file your return.

Self Assessment customers can take advantage of four key benefits when filing early, HM Revenue and Customs (HMRC) has revealed.

Filing ahead of time will give customers more control over their financial affairs and beat the January rush.

The four benefits to filing early are:

• Planning: find out what you owe for the 2022 to 2023 tax year as soon as you have filed, which allows for more accurate financial planning.
• Budgeting: spread the cost of your tax bill with weekly or monthly payments using HMRC’s Budget Payment Plan.
• Refund: Check if you’re due a refund in the HMRC app once you’ve filed.
• Help: you can access a range of online guidance and information to help you file your return and get help if you are unable to pay your bill in full by the 31 January deadline. You may be able to set up a Time to Pay plan.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Customers who file their tax return early get to see exactly what they owe and have more time to budget, reducing the stress around Self Assessment.

“Given that January is the busiest month for HMRC’s phone lines, I urge customers to check out the tips on filing your tax return early on GOV.UK and to consider doing so themselves.”

There is lots of help and support available online:

• customers can access the new online tool to check whether they need to do a Self Assessment tax return.
• HMRC’s top tips for filing tax returns early can be found on GOV.UK.
• ask HMRC’s digital assistant to find information about Self Assessment. If they cannot help, chat live with an HMRC webchat adviser.
• access webinars and videos about Self Assessment

Customers need to be aware of the risk of falling victim to phishing scams and should never share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is also available on GOV.UK.

Need support or advice Self Assessment? We can help.

Strong doubts have been raised over the current Making Tax Digital (MTD) timetable.

HMRC launched its flagship digitisation scheme in 2015-16, intending to move tax systems and records to a modern management platform by 2020.

The aim was to maximise tax revenue, make sustainable cost savings and improve customer service by modernising systems for VAT, income tax self-assessment and corporation tax.

HMRC also planned to require business taxpayers to keep and submit quarterly digital tax records.

The flagship tax digitisation project has, however, been beset by issues and delays. A recent National Audit Office (NAO) paper reported that the scheme is now expected to cost around five times its original budget.

Delays ‘undermining credibility’ of the programme

Gareth Davies, the head of the NAO, said: “The repeated delays and rephasing of Making Tax Digital have undermined the programme’s credibility and increased its costs.

“They put at risk the support of taxpayers and delivery partners, including those who are essential to the programme succeeding.

“It has made some recent progress on VAT but it has not yet tackled the most complex elements of the programme and significant delivery risks remain.”

HMRC confident on meeting new timelines

HMRC chief executive Jim Harra has admitted the Government underestimated the scale and complexity of the project.

Since December 2022, the tax authority said it has been undertaking a series of ‘co-creation’ events involving unnamed stakeholders “with the ambition of resolving the most pressing design issues within the coming months”.

They said they were confident about the prospect of delivering MTD for income tax self-assessment to its new timelines.

Those with incomes above £50,000 will join the programme in 2026 while those in the £30,000 to £50,000 bracket will join in 2027. The Treasury is currently reviewing whether MTD quarterly reporting is appropriate for people with income between £10,000 and £30,000.

However, representatives from the business, tax and accountancy world have expressed severe doubts to MPs about HMRC’s ability to get the project online at its current schedule.

Alison Kerrey, chair of the joint Chartered Institute of Taxation and the and the Association of Taxation Technicians Digitalisation and Agent Services Committee, said: “HMRC and the Government’s execution of this major change to the tax system feels like it is out of control, with spiralling costs, unrealistic timescales, and questionable benefits.”

Need support with business tax? We can help.

The current high interest environment can pose expensive challenges for businesses using traditional financing methods.

Bank loans still make sense for some companies; however, there are plenty of alternative finance options.

Being open to innovation and thinking creatively can help businesses access funding while minimising the impact of high interest rates in their financial endeavours.

With all types of funding, however, it is vital to have a strong business pitch to secure investment, as well as a sound understanding of any potential risks and pitfalls.

Peer-to-peer lending

P2P lending websites connect small businesses with smaller scale investors without going through a bank.

Borrowers can benefit from lower interest rates, increased lending opportunities and faster loan approval times when compared to traditional financial institutions.

Angel investors and venture capital

Angel investors provide initial seed money for startup businesses, usually in exchange for ownership equity in the company. It’s sometimes called ‘seed’ funding and you can generally expect to raise anything up to £1 million.

Venture capital firms invest in early-stage companies with high growth potential.

Small business grants

You may be eligible for a government small business grant to cover certain types of expenditure such as cost of premises, plant, machinery and IT equipment.

Crowdfunding

Crowdfunding has emerged as a popular way of accessing alternative funds, especially for startups, growing businesses and creative projects.

By leveraging online platforms, entrepreneurs can reach a broad audience of potential investors who are willing to contribute smaller amounts to support their ventures.

Strategic partnerships

Forming strategic partnerships with other businesses can unlock financing opportunities. These partnerships may involve joint ventures, co-branding initiatives or revenue sharing agreements that can help share the financial burden and leverage each other’s strengths.

Need support or advice with raising finance? We can help.

Earnings growth hit 7.3 per cent in the three months to May – the joint highest level on record.

According to the Office for National Statistics (ONS), public sector wages rose 5.8 per cent in the three months to May while earnings in the finance and business services sector leapt by 9 per cent.

In response, the Chancellor of the Exchequer and the Governor of the Bank of England have hinted at a need for wage restraint.

At the annual Mansion House dinner, Governor Andrew Bailey told City figures that current levels of price and wage increases were inconsistent with reducing inflation – now at 8.7 per cent.

‘More borrowing is inflationary’

Jeremy Hunt said the Government would do “what is necessary for as long as necessary” to tackle inflation persistence and bring it down to the two per cent target.

He said: “That means taking responsible decisions on public finances, including public sector pay, because more borrowing is itself inflationary.”

Despite the rise in headline wage growth, real pay when taking inflation into account was down 0.8 per cent, the ONS data showed.

‘Real value of weekly earning is still falling’

ONS director of economic statistics, Darren Morgan, said: “Pay excluding bonuses has again risen at record levels in cash terms.

“Due to high inflation, however, the real value of weekly earnings is still falling, although now at its slowest rate since the end of 2021.”

Workers have sought pay rises to keep up with the rising cost of living and some commentators claim the Government is scapegoating wage increases as the reason for sustained inflation.

It comes after a report in June by the International Monetary Fund (IMF) which said high corporate profits have been the biggest contributor to inflation in Europe since 2021.

Response from TUC

On Twitter, the Trades Unions Congress said: “Wages are not driving inflation. This government must stop blaming workers for its failures.

“Wages are falling by 1.7 per cent. Public sector pay has fallen even faster at 3.1 per cent.

“And the Bank of England’s own data shows that any pay gains are being driven by the very HIGHEST earners.”

The data also revealed that unemployment has risen over the past quarter, with the jobless rate in the UK increasing from 3.8 per cent to 4 per cent in the three months to May.

Need financial advice? We can help.

A one-stop information portal has been set up to help directors make crucial business decisions.

The director information hub was launched by the Insolvency Service, providing advice and support regarding statutory obligations and potential financial pitfalls.

Who is it aimed at?

The hub hosts guidance and information on a range of business themes and is specifically designed for directors of micro, small and medium-size limited companies.

Directors of limited companies, unlike sole traders, must comply with certain statutory obligations. These can range from hairdressers and builders with their own companies to directors of mid-sized companies in the IT sector.

What does it offer?

Examples of the kind of advice available on the information hub include:

• Understanding company finances, director duties and obligations
• The benefits of a good accountant
• How to recognise early warning signs of financial distress
• How and when limited company debts can become personal debts
• How to avoid the risk of insolvency

Leanne Webb, project lead at the Insolvency Service, said: “Our research found that too many company directors struggled to locate the existing guidance that they needed, and that it was often complicated or overwhelming when they did.

“We hope this new one-stop shop provides the solution and helps directors take their companies in a positive direction.”

‘Need-to-know information in one place’

As well as direct research with company directors, the project also worked closely with teams in HMRC and Companies House, business finance specialists at Royal Bank of Scotland, and business groups, including The Directors Helpline and the Institute for Turnaround (IFT).

Milly Camley, CEO at the IFT, said: “Getting the right information and advice is crucial throughout the business cycle and most especially at points of stress.

“It’s great to see the need-to-know information – in plain language – in one place to enable directors to access what they need for business success.”

More information can be found at gov.uk.

Need support or advice concerning company finances? We can help.

Drinkers face paying more for their glass of Chardonnay when a freeze on alcohol duty is lifted at the start of next month.

From August 1, every pint in every pub and restaurant will be subject to less tax, but at the same time the current hold on alcohol duty comes to an end.

Drink prices will go up with inflation and prices in supermarkets are likely to rise – especially for wine.

The new Alcohol Duty system will see drinks taxed based on their alcohol by volume (ABV). It replaces the current system, which consists of four separate taxes covering beer, cider, spirits and wine.

Small businesses that produce any alcoholic products with an ABV of less than 8.5 per cent will be eligible for reduced rates on qualifying products, if they produce less than 4,500 hectolitres per year.

Draught products in pubs cheaper than in supermarkets

Low strength drinks below 3.5 per cent ABV will be charged at a reduced rate of duty.

There will also be a reduced rate for draught products, which will reduce tax on qualifying beer and cider by 9.2 per cent, and by 23 per cent on qualifying wine-based, spirits-based and other fermented products, sold in on-trade premises such as pubs and restaurants.

It means the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets.

Jonathan Athow, Director General of Customer Strategy and Tax Design, HMRC, said: “After listening to feedback from industry, economists, public health groups and many business owners, the new Alcohol Duty system will be based on the founding principle of taxing alcoholic products by strength, ensuring consistency across the board for the first time.

“The new system will support the Government’s public health objectives and provide extra support to small producers, pubs and the hospitality sector.”

‘System will be simpler’

Exchequer Secretary to the Treasury, Gareth Davies said: “Because we left the EU, we can make sure our alcohol duty system works for us. From next month the whole system will be simpler – the duty will reflect the strength of the drink.

“We will also protect pubs and brewers with our Brexit Pubs Guarantee keeping Draught Duty down, and a new Small Producer Relief.”

To support wine producers and importers in moving to the new method of calculating duty on their products, temporary arrangements will be in place for 18 months from 1 August 2023 until 1 February 2025.

Motorists are being put in the driving seat to find the best fuel prices after a watchdog found many were being overcharged at the pumps.

A new fuel price reporting scheme will allow consumers to compare prices in real time in any area of the UK, as the Government changes the law, forcing retailers to comply by providing up-to-date price information.

This is expected to lead to greater transparency and competition, in turn driving down prices and easing the cost of living.

Over-charging by 6p a litre

The tough action follows publication of a Competitions and Markets Authority (CMA) report that showed some supermarkets charged drivers 6p more per litre for fuel. This amounts to £900m in extra costs in 2022 alone.

The report found a concerning weakening of competition in the fuel market and an overall increase in retailers’ margins, especially in respect of diesel. Supermarkets were reportedly the worst offenders.

New powers will be handed to a public organisation yet to be decided, to monitor the UK road fuel market, scrutinise prices and alert government if further intervention is needed.

Grant Shapps, Energy Security Secretary, said: “Some fuel retailers have been using motorists as cash cows – they jacked up their prices when fuel costs rocketed but failed to pass on savings now costs have fallen.

“It cannot be right that at a time when families are struggling with rising living costs, retailers are prioritising their bottom line, putting upwards pressure on inflation and pocketing hundreds of millions of pounds at the expense of hardworking people.”

Similar schemes in Germany and Australia

The move follows a similar scheme in Germany, which boosted competition among fuel retailers. Meanwhile, motorists who shopped around in Queensland, Australia, saved on average $93 per year off the back of a statewide scheme rolled out in the area.

The Government will consult on the design of the open data scheme, and market monitoring function this autumn with changes to the law needed to bring it in.

In the interim, the CMA will create a voluntary scheme encouraging fuel retailers to share accurate, up-to-date road fuel prices for publication by August and continue to monitor fuel prices using its existing powers.

As the outlook for the UK economy remains uncertain, UK business fears over potential insolvency appear to be easing.

While government data shows insolvencies are at a four-year high, research suggests that these figures are reaching their peak.

Wealth management and professional services group Evelyn Partners found that just under one in three businesses (32 per cent) acknowledged there is a risk they will become insolvent over the next 12 months.

This is considerably lower than in September 2022 when 47 per cent of firms believed there was a risk of insolvency.

According to the firm, businesses now seem to “be in a stronger position to weather this uncertainty and have rowed back from plans to batten down the hatches”.

Alternative means of funding

It also found that with traditional lender appetite suppressed, UK business owners are looking to alternative means of funding. Of the total capital UK businesses are looking to raise in the next six months, just 12 per cent of this funding will be from traditional banks.

More are turning to alternative means of funding, such as credit funds, where nine per cent of funding is set to be raised in the next six months.

‘Survival prospects have improved’

Claire Burden, partner at Evelyn Partners, said: “Businesses have weathered an exceptionally challenging winter, in which the cost of funding has soared, consumer confidence has taken a sizeable hit and energy prices have rocketed.

“Emerging out of these challenging months, it is encouraging that business confidence remains stable, and survival prospects have improved as businesses look ahead over the next year.

“Businesses are not out of the woods just yet, however. Although funding remains in ample supply, banking instability and interest rate rises have led to a buyers’ market. For borrowers and management teams this has resulted in more cumbersome financing processes.

“Businesses looking to re-finance or take on additional funding should therefore start the process early and enlist the support of specialist advisors to help identify funding options and the providers best aligned to their business needs.”

Need financial advice or advice on funding options? Get in touch.

1 July 2023 – Due date for corporation tax due for the year ended 30 September 2022.

6 July 2023 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2023 – Pay Class 1A NICs (by the 22 July 2023 if paid electronically).

19 July 2023 – PAYE and NIC deductions due for month ended 5 July 2023. (If you pay your tax electronically the due date is 22 July 2023).

19 July 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2023.

19 July 2023 – CIS tax deducted for the month ended 5 July 2023 is payable by today.

1 August 2023 – Due date for corporation tax due for the year ended 31 October 2022.

19 August 2023 – PAYE and NIC deductions due for month ended 5 August 2023. (If you pay your tax electronically the due date is 22 August 2023)

19 August 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2023.

19 August 2023 – CIS tax deducted for the month ended 5 August 2023 is payable by today.

In certain circumstances it can be beneficial to make voluntary National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New State Pension.

Usually, HMRC allows you to pay voluntary contributions for the past 6 tax years. The deadline is 5 April each year. However, there is currently an opportunity for people to make up for gaps in their NICs for the tax years from April 2006 to April 2017 as part of transitional measures to the new State Pension.

This deadline was set to expire on 5 April 2023 but had been extended until 31 July 2023. The deadline has now been further extended until 5 April 2025 to help allay continued concerns that the existing deadline would not have allowed many taxpayers to fill gaps in their NIC records. HMRC’s helplines have been struggling to meet the demands for information and processing claims to pay additional NIC contributions.

HMRC has also confirmed that all relevant voluntary NIC payments will be accepted at the rates applicable in 2022-23 until 5 April 2025.

You might want to consider making voluntary NICs if:

• You are close to State Pension age and do not have enough qualifying years to get the full State Pension.
• You know you will not be able to get the qualifying years you need to get the full State Pension during the remainder of your working life.
• You are self-employed and do not have to pay Class 2 National Insurance contributions because they have low profits.
• You live outside the UK but want to qualify for benefits.

If you fall within any of these categories, it may be beneficial to get a State Pension forecast and examine whether you should consider making voluntary NICs to make up missing years, known as topping up. Not everyone will benefit from making voluntary NICs and a lot depends on how close you are to retirement age and your NIC payments to date. If you think this opportunity may be relevant to your circumstances, please be in touch.