HMRC together with the Department for Work and Pensions (DWP) have issued a press release urging tens of thousands of people to check if they are eligible to boost their State Pension utilising Home Responsibility Protection (HRP).

This HRP scheme has helped protect parents’ and carers’ State Pension. HRP reduces the number of qualifying years a person with caring responsibilities needed to receive, to secure a full basic State Pension. HRP was replaced by National Insurance credits in 2010.

Between 6 April 1978 and 5 April 2010, most eligible individuals automatically received Home Responsibilities Protection (HRP). However, this did not apply in all cases, and it is still possible to apply for HRP if you believe it’s missing from your National Insurance (NI) record. During Pensions Awareness Week, HMRC is encouraging those affected-primarily women at or near State Pension age-to check their NI records for gaps and potentially increase their State Pension at no cost.

If HRP is missing from someone’s NI record, it does not necessarily mean that their State Pension calculation is wrong, but it could be, especially if they took significant time-out from employment to raise a family.

The Exchequer Secretary to the Treasury said:

‘The State Pension is the foundation of state support for people in retirement. We are urging people to check their National Insurance records to make sure they will receive the pension they deserve.’

If a claim is successful, HMRC will update the individual’s NI record, and the DWP will recalculate their State Pension entitlement. Depending on the individual’s situation, their State Pension entitlement may increase or stay the same.

Most gifts made during a person’s lifetime are not subject to tax at the time of transfer. These gifts, known as “potentially exempt transfers” (PETs), can become fully exempt if the donor survives for more than seven years after making the gift.

If the donor passes away within three years of the gift, the inheritance tax is treated as if the gift was made upon death. A tapered relief applies if death occurs between three and seven years after the gift, reducing the tax liability based on the time elapsed.

The effective tax rates on the amount exceeding the Inheritance Tax nil rate band are as follows:

• 0 to 3 years before death: 40%
• 3 to 4 years before death: 32%
• 4 to 5 years before death: 24%
• 5 to 6 years before death: 16%
• 6 to 7 years before death: 8%
• 7 or more years before death: 0%

However, these tapered rates do not reduce the tax on a lifetime chargeable transfer below the amount initially chargeable and offer no benefit for transfers within the nil rate band.

We strongly recommend maintaining a record of any PETs you make, including details of exemptions used and any regular gifts made out of surplus income.

1 October 2024 – Due date for Corporation Tax due for the year ended 31 December 2023.

19 October 2024 – PAYE and NIC deductions due for month ended 5 October 2024. (If you pay your tax electronically the due date is 22 October 2024.)

19 October 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2024. 

19 October 2024 – CIS tax deducted for the month ended 5 October 2024 is payable by today.

31 October 2024 – Latest date you can file a paper version of your 2023-24 self-assessment tax return.

1 November 2024 – Due date for Corporation Tax due for the year ended 31 January 2024.

19 November 2024 – PAYE and NIC deductions due for month ended 5 November 2024. (If you pay your tax electronically the due date is 22 November 2024.)

19 November 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2024. 

19 November 2024 – CIS tax deducted for the month ended 5 November 2024 is payable by today.

There are late filing penalties which are designed to encourage companies to file their accounts and reports on time. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. A penalty is automatically imposed by Companies House if the accounts are late.

The table of penalties for late submission is as follows:

Failure to file confirmation statements or accounts is a criminal offence which could result in the directors being personally fined in the criminal courts. Late penalties which are unpaid will be referred to collection agents and could result in a County Court judgement or a Sheriff Court decree against the company.

It is possible to appeal against a penalty, but it will only be successful if the appellant is able to demonstrate that the circumstances of the late filing were exceptional, for example, a fire destroying records a few days before the filing deadline.

According to Companies House guidance, an appeal is unlikely to be successful if it’s based on the following examples:

• your company is dormant
• you cannot afford to pay
• your accountant was ill
• you relied on your accountant
• these are your first accounts
• you are not familiar with the filing requirements
• your company or its directors have financial difficulties (including bankruptcy)
• your accounts were delayed or lost in the post
• the directors or LLP members live (or were travelling) overseas
• another director or LLP member is responsible for preparing the accounts.

You can typically claim tax relief on private pension contributions up to 100% of your annual earnings, subject to certain limits. Tax relief is applied at your highest rate of income tax, meaning:

• Basic rate taxpayers receive 20% pension tax relief
• Higher rate taxpayers can claim 40% pension tax relief
• Additional rate taxpayers can claim 45% pension tax relief

For basic-rate taxpayers, the initial 20% tax relief is usually applied by the employer. Higher and additional rate taxpayers can claim the extra relief through their self-assessment tax return.

Taxpayers can claim on their self-assessment return for private pension contributions as follows:

• 20% relief on income taxed at 40%
• 25% relief on income taxed at 45%

Alternatively, taxpayers can contact HMRC to claim the relief if they pay 40% income tax and do not submit a self-assessment return.

These rates apply in England, Wales, and Northern Ireland, but there are some regional variations for Scotland.

There is an annual allowance of £60,000 for pension tax relief. Taxpayers can carry forward any unused allowance from the previous three tax years, provided they made pension contributions during those years. The lifetime limit for pension tax relief was abolished as of 6 April 2023.

According to numerous government sources, entrepreneurs in the UK currently have several pressing concerns that directly affect their ability to operate and grow their businesses. These issues are largely shaped by ongoing economic challenges, regulatory changes, and labour market pressures.

Economic Uncertainty and Inflation: Rising costs are a primary concern. Inflation has driven up the price of raw materials, goods, and labour, squeezing profit margins and making it difficult for businesses to maintain competitiveness. Many businesses are struggling to absorb these costs without passing them onto consumers, which could reduce demand. Additionally, ongoing uncertainty about economic conditions exacerbates concerns about future growth.

Access to Finance: The availability of financing has tightened, particularly for small businesses and startups. Rising interest rates have made borrowing more expensive, and banks have become more cautious in lending. Many entrepreneurs are facing cash flow issues, further limiting their ability to invest in growth or expand their operations.

Labour Shortages: The difficulty of recruiting skilled workers continues to be a major issue. Post-Brexit immigration rules have reduced the pool of available workers, especially in sectors like technology, healthcare, and hospitality. Coupled with the rising competition for talent, businesses are facing increasing wage costs to attract and retain staff.

Regulatory Compliance: Changes in taxation, data protection, and employment laws are creating additional compliance burdens. Entrepreneurs must navigate the complexity of these changes while ensuring their businesses remain compliant. Recent increases in corporation tax, along with ongoing shifts in the regulatory environment, are causing concern for many small business owners.

Supply Chain Disruptions: Entrepreneurs continue to grapple with supply chain issues, which have been exacerbated by Brexit, global shipping delays, and rising energy costs. These disruptions have led to increased prices for materials and longer delivery times, which directly impact business operations and profitability.

Sustainability Pressures: As the UK government pushes for a greener economy, many businesses are feeling the pressure to adopt sustainable practices. However, the cost of transitioning to environmentally friendly technologies and processes can be prohibitive, especially for smaller businesses.

Budget 2024. Individuals and business owners are also concerned that the Chancellor will effectively place a break on her promise to expand the economy by increasing taxation and reducing incentives to invest. It is ironic that the budget is to be delivered to parliament the day before Halloween…

From 1 October 2024, you can be reasonably sure that when you leave a tip or pay a service charge your largesse will benefit the establishment staff, not the business owners.

The following update is reproduced from a news story released by the Department for Business and Trade.

“From Tuesday 1st October, millions of hard working and dedicated workers will benefit from new laws which will ensure they keep 100% of the money they have earned through tips.

“Introduced through a Private Members’ Bill last year, the Employment (Allocation of Tips) Act and the statutory Code of Practice on fair and transparent distribution of tips came into force today. These changes will require employers to pass all tips, gratuities, and service charges on to workers, without deductions.

“From 1 October, if an employer breaks the law and retains tips, a worker will be able to bring a claim to an employment tribunal. 

“Most employers already pass on tips to the staff who earn them; however, these laws will crack down on the minority of businesses who continue unacceptable tipping practices.

“Employers in the wrong could be made to pay fines or compensation to staff, with workers able to hold bosses fully accountable through employment tribunals.

“The Department for Business and Trade estimates that today’s changes will mean around £200 million will be received by workers that would otherwise have been retained by these employers. 

“It is hoped that this will build further trust between customers and businesses, as well as create a level playing field for all businesses through the fair and transparent distribution of tips across the board.”