Fears that the State Pension age (SPa) could rise to 70 have been allayed – for now – as the Government announced it plans to stick to the current timetable for increases.

A further review into the age at which a state pension can be claimed will be carried out in the next Parliament, but in the meantime, the next rise – from 66 to 67 – is due to be introduced between April 2026 and April 2028.

Experts believe the SPa could still return to 70 – which it was when state pension was first introduced in the early 20th century.

But under the existing plans, the next increase, from 67 to 68, will happen between April 2044 and April 2046. There is due to be further discussion within two years of the next Parliament. The Government remains committed to the principle of providing 10 years’ notice of changes to the SPa.

The Government’s review was informed in part by a report from the Government Actuary that set out the results of calculations illustrating when SPa would increase under different scenarios.

How pension age is calculated

The report considered what the timetable may look like for different target proportions of adult life being spent in retirement and different projections of life expectancy. Other assumptions were prescribed by the Secretary of State, such as the age someone starts their working life and the life expectancy tables to be considered.

The calculated SPa timetables are shown to be highly sensitive to the proportion of adult life in retirement and to the life expectancy assumptions adopted.

Recent slowing improvements in life expectancy and the unknown long-term impact of the COVID-19 pandemic make projecting future trends even more uncertain.

Sustainability of the State Pension

A report from Baroness Neville-Rolfe explained there are many factors to take account of when setting the SPa timetable. These include sustainability and affordability, as well as intergenerational fairness.

Her recommendations included two metrics:

• the proportion of adult life that people should, on average, expect to spend in retirement should be up to 31 per cent
• the Government should set a limit on State Pension-related expenditure of up to six per cent of Gross Domestic Product

Based on these metrics, SPa would increase to 68 between 2041 and 2043.

The government welcomed the findings from the Government Actuary and Baroness Neville-Rolfe. It also noted a level of uncertainty in relation to the longer-term data on life expectancy, labour markets and the public finances.

Due to this uncertainty, the Government concluded that the current rules for the rise to 68 remain appropriate. It does not intend to change the existing legislation prior to the conclusion of the next review which is planned to be within two years of the next Parliament.

Do you have a plan in place for retirement? We can help. Contact us today.

The Monetary Policy Committee decided last month to increase the Bank of England (BoE) base rate to 4.25% from 4% and HMRC has followed with an announcement to increase the interest charged on late payment and repayment.

When will this happen?

As HMRC interest rates are linked to the BoE base rate, these changes will come into effect on:

• 3 April 2023 for quarterly instalment payments
• 13 April 2023 for non-quarterly instalment payments

Further guidance and information on rates can be found here.

The impact to UK businesses

The increase in interest rates on late payments means that individuals and businesses that fail to pay their taxes on time will face higher costs. This may incentivise more timely payment of taxes, as the cost of delaying payment becomes greater.

• Greater financial strain on businesses

For businesses that are already struggling financially, the increase in interest rates on late payments may exacerbate their financial difficulties. Higher interest costs could make it more difficult for these businesses to manage their cash flow and meet their financial obligations.

• Increased revenue for HMRC

The increase in interest rates on late payments and repayments is likely to result in increased revenue for HMRC. This revenue could be used to fund public services and infrastructure projects.

• Improved taxpayer compliance

The increase in interest rates on late payments could also improve taxpayer compliance. Individuals and businesses may be more motivated to pay their taxes on time to avoid the increased costs associated with late payment.

If you are concerned about the increasing interest rate and impact on your business, our team can help. Call us today.

1 April 2023 – Due date for Corporation Tax due for the year ended 30 June 2022.

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

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

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

30 April 2023 – 2021-22 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.

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

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

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

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

31 May 2023 – Ensure all employees have been given their P60s for the 2022/23 tax year.

There is a significant amount of information about companies that can be obtained from Companies House. Companies House is responsible for incorporating and dissolving limited companies, examining and storing company information and making company information available to the public.

Much of this information is freely available. This is in line with the government’s commitment to free data and means that all publicly available digital data held on the UK register of companies is accessible without a charge.

This includes:

• company information, for example, registered address and date of incorporation;
• current and resigned officers;
• document images;
• mortgage charge data;
• previous company names; and
• insolvency information.

There is also a service called WebCheck that allows you to view a company's filing history and purchase copies of document images and a selection of company reports for a nominal fee. You can also elect to monitor a company and receive email alerts of any new documents filed at Companies House. This can be a useful resource to check your own company records at Companies House to ensure there no unexpected filings.

The first monthly returns and payments affected by HMRC’s new VAT penalty regime were due by 7 March 2023. The new VAT penalty rules apply to the late submission and / or late payments of VAT returns for VAT return periods beginning on or after 1 January 2023.

Under the new regime, there are separate penalties for late VAT returns and late payment of VAT as well as a new methodology to the way interest is charged. This replaces the old default surcharge regime and for most taxpayers should represent a fairer system.

The new system is points-based. This means that taxpayers will incur a penalty point for each missed VAT submission deadline. At a certain threshold of points, a financial penalty of £200 will be charged and the taxpayer will be notified. The threshold varies depending on the required submission frequency (monthly, quarterly, annual). For quarterly VAT returns, the penalty points threshold will be 4 points. The penalty points will reset to zero following a period of compliance, for quarterly returns this requires 12-months of compliance. There are also time limits after which a point cannot be levied.

The new regime also sees the introduction of two new late payment penalties. A first payment penalty of 2% of the unpaid tax that remains outstanding 16-30 days after the due date. The second payment penalty increases to 4% of any unpaid tax that is 31 or more days overdue. To help with the introduction of the new system, HMRC has confirmed that it will not be charging a first late payment penalty for the first year of the new regime (1 January – 31 December 2023) once the debt is paid in full within 30-days of the payment due date or if a payment plan is agreed.

Late payment interest will be charged from the date a payment is overdue, until the date it is paid in full. Late payment interest is calculated as the Bank of England base rate plus 2.5%.

In some 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 allow 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 has now been extended until 31 July 2023 after the government accepted significant public concern that many taxpayers would not meet the deadline.

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 you have low profits.
• You live outside the UK but want to qualify for certain 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.

The government published the Spring Finance Bill 2023 on 23 March 2023. The Bill is officially known as the Finance (No 2) Bill, because it is the second Finance Bill of the 2022–23 Parliamentary session. The Bill contains the legislation for many of the tax measures announced in the recent Spring Budget as well as previously announced changes. The Bill is 478 pages long, with 352 clauses and 24 schedules. Explanatory notes to the Bill have also been published.

Some of the many measures included within the Bill are:

• The introduction of full expensing for expenditure on plant and machinery
• The extension of the 50% First Year Allowance
• The permanent increase to £1m of the Annual Investment Allowance
• Changes to R&D relief
• Changes to the Seed Enterprise Investment Scheme
• Abolition of the pension's lifetime allowance charge
• Changes to alcohol duty
• Air Passenger duty changes

The Bill received its first reading in Parliament on Tuesday 21 March, and the majority of measures will come into effect for financial year 2023-24. It will now follow the normal passage through Parliament.

The challenge of increasing energy costs for UK businesses is a significant concern, particularly in the context of ongoing efforts to reduce greenhouse gas emissions and tackle climate change.

The current Chancellor, Jeremy Hunt, pledged in his November statement that the government would continue to support those businesses that need it the most. However, the changes to the scheme and its funding represent a fall from £18bn over six months to £5.5bn for EBDS.

The Energy Bills Discount Scheme

The scheme is now live and will last until 31 March 2024. A unit discount of up to £6.97/MWh for gas and up to £19.61/MWh for electricity for all eligible non-domestic customers will be automatically applied.

EBDS organisational eligibility

The criteria are the same as the previous Energy Bill Relief Scheme and is available to anyone on a non-domestic contract, including:

• Public sector organisations such as schools, care homes and hospitals
• Voluntary sector organisations
• Businesses

EBDS energy contract eligibility

Businesses and organisations must either be:

• on existing fixed price contracts that were agreed on or after 1 December 2021
• signing new fixed price contracts
• on deemed / out of contract or standard variable tariffs
• on flexible purchase or similar contracts
• on variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only)

How is this different to the previous scheme?

The unit discount of £6.97/MWh for gas and up to £19.61/MWh for electricity is subject to a wholesale price threshold of £107/MWh for gas and £302/MWh for electricity – this means that businesses who have energy cost below those thresholds will not receive support.

This change will mean some businesses are no longer within the scope for receiving government support because under the previous Energy Bill Relief Scheme, the supported price was set at £211/MWh for electricity and £75/MWh for gas.

Energy and trade intensive industries

Eligible Energy and Trade Intensive Industries (ETII) will receive a discount that reflects the price difference of £99/MWh for gas and £185/MWh for electricity and the relevant wholesale price.

This will apply to 70 per cent of energy volumes and will be subject to a maximum available discount of £40/MWh for gas and £89.10/MWh for electricity.

The industries eligible under this scheme are varied, from nature reserves and libraries to meat processing.

If you’re concerned about the impact of rising costs to your business, speak to a member of our team for cashflow forecasting and management accounts.

Steps have been taken to simplify VAT guidance for overseas sellers that sell goods online into the United Kingdom to help reduce the tax gap.

The guidance published by HMRC, Selling goods using an online marketplace or direct to customers in the UK, has also been translated into simplified Mandarin to support sellers exporting goods from China to comply with UK import and VAT regulations.

In 2022, the UK imported £83.3 billion in goods and services from China and Hong Kong. Online shopping accounted for 26.5 per cent of all UK retail sales in 2022, with a substantial number of goods being bought from international sellers via online marketplaces.

Marc Gill, HMRC’s Director for Individuals and Small Business Compliance, said: “We have been working closely with international partners to better understand what information overseas sellers need in order to comply with their UK tax obligations.”

HMRC is encouraging UK agents and shipping companies to share the simplified guidance with their customers.

The information explains when and how VAT and import duties must be charged to customers by international sellers. It explains the different processes for direct to customer sales, and for sellers using online marketplaces.

“We have acted on feedback from businesses to simplify and compile this online guidance into one, easily accessible place on GOV.UK. We have also recently published a simplified Mandarin translation of our guidance following research conducted with Chinese businesses.

“By making our VAT and import duty rules easier to understand, we will be able to increase tax compliance levels for online sellers. We are asking UK freight, customs and shipping agents to help us reduce the tax gap by sharing this simplified guidance with their customers. By working together, we can help everyone pay the right amount of tax at the right time.”

HMRC’s updated guidance has been published following detailed consultation and research with overseas sellers and brings together all relevant guidance in one place on GOV.UK. By making the process clearer and easier to follow, it will support overseas sellers to comply with their tax obligations and help HMRC to reduce the tax gap.

In 2018, HMRC signed an updated Memorandum of Understanding (MOU) with the General Administration of Customs China (GACC). During the 10th UK-China Economic and Financial Dialogue in 2019, HMRC agreed to provide Chinese businesses with appropriate tax and customs guidance.

In 2020, HMRC commissioned research with Chinese online sellers. The report, Knowledge and attitudes of online sellers in China to UK tax compliance, was published in 2021. Recommendations from that research led to the development of new guidance and its translation into simplified Mandarin.

• If you need any help with VAT, get in touch and we will help.

The biting cost of living crisis and yet another rise in interest rates means families need all the financial help they can get.

With the Easter school holidays nearly here, HMRC is reminding mums and dads not to miss out on Government help to pay for childcare to help lift some of the burden.

Tax-Free Childcare can pay for any approved childcare for children aged 11 or under, or 16 if the child has a disability. More than 405,000 families used the scheme in December 2022, with each benefitting from a share of £41.5 million in government top-ups.

Victoria Atkins, Financial Secretary to The Treasury, said: “Tax-Free Childcare provides extra help with childcare costs which could make all the difference to working families and make childcare expenses more manageable. I would urge families to go online today to find out how it can help you.”

Working families, where each parent or carer earns up to £100,000, can use it, meaning for every £8 paid into an online account they will receive an additional £2 from the Government. This means parents and carers can receive up to £500 every three months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.

for every £8 paid into an online account they will receive an additional £2 from the Government. This means parents and carers can receive up to £500 every three months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.

Whether children go to nursery, a childminder, attend breakfast, after school or holiday clubs, as well as out of school activities, Tax-Free Childcare could be used.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Childcare is so important for working families, especially during school holiday time. Tax-Free Childcare provides financial support when it’s needed the most. Search ‘Tax-Free Childcare’ on GOV.UK to find out how it could help you.”

A Tax-Free Childcare account can be opened online in just 20 minutes. Money can be deposited at any time to be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time.

Families could be eligible for Tax-Free Childcare if they:

• have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they can receive support until 1 September after their 16th birthday
• earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
• each earn no more than £100,000 per annum
• do not receive tax credits, Universal Credit or childcare vouchers

A full list of the eligibility criteria is available on GOV.UK.

Also, check GOV.UK to find out what other cost of living support, including help withchildcare costs , families could be eligible for.