Welcome to BPU's Autumn Newsletter 2023

In this issue:

  • Hot Topic - Staying Safe from Impersonation Scams
  • HMRC Revises Late Payment Interest Rates - File on Time!
  • Almost a Million Child Trust Funds Not Yet Accessed
  • Tax Update - Legislation Day - Proposed Changes for R&D, Pensions, Childcare and More!
  • BPU Staff News - BPU Staff Take on Cardiff 10K, BPU Baby News, Welcome Shelli

Hot Topic - Staying Safe from Impersonation Scams

The fight against scammers and fraudsters continues for both businesses and individuals. Modern technology has helped to create new ways for fraudsters to target and bombard individuals with texts, calls and emails. Fraudsters often use impersonation tactics to pose as a trusted organisation.

It is vital that businesses and individuals are on their guard against potential scams. Here, we take a look at the threat posed by scams and consider some steps to protect against them.

Millions of Pounds Lost to Scams

£177.6 million was lost to impersonation scams in 2022, according to data from UK Finance.

The data showed that there were 45,367 cases of impersonation scams in 2022. It also revealed that just 51% of individuals always check whether a request for personal data or money is legitimate.

Impersonation scams take place when a criminal pretends to be a trusted organisation such as a bank, the police, a delivery or utility company, or even a friend or family member. The scams can be very sophisticated and often start with a call, text, email or direct message with an urgent request for money or personal and financial information.

The research found that younger adults are particularly at risk. Just 38% of 18–34-year-olds always check a request for their money or information is genuine – the lowest of any age group. This age group was also the most likely to believe that they had been contacted by a criminal after they had responded to an initial request for information from what they thought was a trusted organisation.

UK Finance says individuals should stop and take a moment to think before parting with money or information; challenge any unsolicited communication; and protect themselves and their finances by contacting their bank immediately if they think they've fallen for a scam.

Take Five

The Take Five to Stop Fraud campaign urges people to take a moment to stop and think before parting with their money or information.

The campaign encourages members of the public to be more vigilant against fraud, particularly about sharing their financial and personal information, as criminals seek to capitalise on the cost-of-living crisis.

Criminals are experts at impersonating people, organisations and the police. The Take Five campaign suggests the following:

  • Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
  • Challenge: Could it be fake? It's ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
  • Protect: Contact your bank immediately if you think you've fallen for a scam and report it to Action Fraud.

Too Good to be True

The cost-of-living crisis has provided another avenue of attack for fraudsters with a rise in fake fuel vouchers, phone bill discounts and supermarket offers being reported.

These scams use tactics like phishing emails and fake ads in order to encourage people to handover their personal information over the phone or by registering on a bogus website.

If you see an offer that sounds too good to be true, it probably is. Always check the brand's official website or social media channels to verify whether an offer is authentic.

Devastating Pension Savers

Pension savers have long been a target of scammers. Pension scams often include free pension reviews, 'too good to be true' investment opportunities and offers to help release money from your pension, even for under 55s, which is not permitted under the pension freedom rules.

Pension fraud can have a devastating impact, both financially and emotionally, but anyone can fall victim to a fraud if they are not careful.

Protecting your Pension

Although a ban on cold calling in the UK, including emails and texts, was introduced at the beginning of 2019, the problem continues. Cold calls are a major red flag for scams and unsolicited offers should be ignored or rejected. Cold callers will often offer a free pension review. Professional advice on pensions is not free – a free offer out of the blue is probably a scam.

It is crucial that pension savers know who they are dealing with so checking the FCA Register is imperative. Dealing with an authorised firm gives access to the Financial Ombudsman Service or the Financial Services Compensation Scheme (FSCS), which can hold firms to account and give financial protection.

A common scam is to pretend to be a genuine FCA-authorised firm (called a 'clone firm'). The contact details on the FCA Register should always be used, not the details the firm gives out.

Pension savers should never allow themselves to be rushed or pressured into making a decision. They should not be afraid to miss out on an 'amazing deal' because of artificial deadlines, and if promised returns sound too good to be true, they probably are.

Impartial information, financial guidance and advice are all key to making a good decision before changing pension arrangements.

HMRC Revises Late Payment Interest Rates - File on time!

HMRC has revised interest rates for late payments following the Bank of England's interest rate rise to 5.25%. The Bank's Monetary Policy Committee (MPC) recently increased the interest rate by 0.25% from 5% – the 14th increase in a row. It is a 15-year high for the base rate.

From the 22nd August late payment bills are now charged 7.75%. This figure represents the highest rate since 2001.

Late payment interest rates are set in legislation and are linked to the Bank's base interest rate. Late payment interest is set at base rate plus 2.5%, whilst repayment interest is set at base minus 1% with a lower limit of 0.5%.

HMRC stated that the late payment rate encourages prompt payment and makes sure the system is fair for individuals who pay their tax on time.

The new late payment interest rate took effect from 14 August for quarterly instalment payments of Corporation Tax (where applicable) and from 22 August for non-quarterly instalment payments.

Almost a Million Child Trust Funds Not Yet Accessed

The Public Accounts Committee (PAC) has stated that nearly a million young people have yet to access savings contained in Child Trust Funds (CTFs).

The PAC said over £1.7 billion is waiting to be claimed by a million young adults, at an average value of £1,900 each.

According to the PAC, many young adults don't know about their savings or have lost track of them. It found that CTF providers are charging fees for passively managing accounts, but are not doing enough to link these accounts to their owners.

HMRC has a dedicated service to help you find your Child Trust Fund click here for more information.

BPU Staff News

BPU Staff Run Cardiff 10K for Kidney Wales

BPU staff have again hit the tarmac and successfully completed the Cardiff 10K on Sunday 3rd September 2023. Team BPU Unleashed ran to raise funds for the Kidney Wales Foundation.

BPU chose the Kidney Wales Foundation for the help and support friends and colleagues of the staff have received from the charity over the years. It is a charity very close to our hearts.

Staff in the office trained hard, swapped cakes for fruit, ran at lunchtime and set weekly goals. Some staff had never run a race like this before and some even went from the couch to running 10K by September. We are so so proud of all the team that completed the race under very hot conditions on the day - congratulations.

By donating to this years BPU Just Giving Page you will be supporting Kidney Wales with their work to improve the lives of nearly 100,000 patients across the country living with kidney disease. Being diagnosed with chronic kidney disease can have a massive impact on the lives of an individual and their families, and can result in lengthy dialysis sessions and the need for a transplant.

Thank you to all those who have already donated.

We would be grateful for any donation if you would like to donate click on the just giving button below - thank you in advance for your support.

From all at BPU Chartered Accountants

BPU Baby News

Congratulations to our Tanya, husband Stuart and now big brother Jax on the birth of a beautiful baby boy. Arlo Thomas Hanbury was born on 10th June 2023 weighing 9lb. The BPU team are very happy that Tanya lives so close to the BPU office at Cardiff Gate as she often drops in with Arlo so all the staff have had plenty of cuddles! Super mum Tanya ran the Cardiff 10K with the BPU team just 12 weeks after giving birth! Tanya we miss you in the office and can't wait for you to come back after your maternity leave.

Welcome Shelli to BPU!

Shelli Crumb has joined BPU as Payroll Senior. Shelli joins BPU following 12 years experience working in payroll in the accountancy sector. Shelli started her career working in Credit Control in the manufacturing industry before retraining in payroll and the rest is history! Now a highly experienced and focused payroll Senior, Shelli brings a wealth of payroll knowledge and skills with her to BPU helping the payroll department to deliver this service to clients to a very high standard.

Shelli has quickly become a valued member of the team in payroll and has a natural ability to make clients feel at ease with any payroll queries. Shelli is very efficient and disciplined when it comes to getting work done and this is reflected in what she enjoys doing in her spare time. When not in work Shelli can be found at her local commando fit military bootcamp where she trains 4 to 5 times a week! On the weekends Shelli can be found at her allotment with her partner but does admit she takes time to relax there and pick the fruit and veg rather that plant it! Welcome Shelli another great addition to our ever growing payroll team.

Tax Update

Martin Knight BPU Director

Legislation Day

Legislation Day took place on the 18 July 2023, with the Government publishing draft legislation for Finance Bill 2023-2024 (commonly referred to as Finance Bill 2024). Most measures had been previously published or were announced at the Spring Budget 2023 but there were also some new announcements around pensions and planned administrative changes to the high income child benefit charge. Below is an outline of some of the main changes.

- Abolishing the Pensions Lifetime Allowance (LTA)

At the Spring Budget 2023 the Government announced that it would abolish the Lifetime Allowance (LTA) and clarify the tax treatment of pension savings. The current lifetime allowance is £1,073,100.

Formally the rate of the tax payable on pension savings above the lifetime allowance would depend on how the money is paid but could be up to a rate of 55% on a lump sum withdrawal.

If you withdraw funds from a pension on or after 6 April 2023, there is no lifetime allowance charge and this applies on withdrawals including lump sum, pension payments or cash withdrawals. The new proposals clarify how lump sums and lump sum death benefits will be taxed in its absence, the position of individuals with LTA protections, lump sum protections or LTA enhancement factors.

A surprise was however, included within the new pension proposals in relation to death benefits of those who die before reaching the age of 75.

Currently if a pension holder dies before the age of 75, any payment made to a qualifying person is generally not taxable. New proposals suggest that The Government are considering lowering the age limit to before 75 when tax on pension benefits will have to be paid. More details are expected on this and its implications on beneficiaries.

For those individuals with valid LTA protection they will retain their right to a higher level of tax-free lump sum. For full details on these proposed changes visit the Government link here.

- Proposed Single R&D Tax Credits Scheme

The Government are considering a single system of relief combining the current SME and RDEC R&D Tax Reliefs. If this goes ahead it will be introduced in April 2024. The full published document by HMRC on this proposal can be found here. The proposed merged scheme will apply for expenditure incurred on or after 1 April 2024. The proposed merged scheme will have a significant impact for businesses currently making R&D claims under the SME regime, and businesses involved in subcontracted R&D. If you are considering making an R&D claim we would advise to do this as soon as possible and contact us for further advice or further information.

- Overseas R&D

The previously proposed reforms to overseas R&D expenditure have been reintroduced. The extent to which expenditure on overseas R&D activity is claimable will be significantly restricted from 1 April 2024. Expenditure on R&D activities undertaken outside of the UK will no longer be claimable, unless the expenditure falls within the boundaries of ‘qualifying overseas expenditure' due to geographical, environmental or social conditions that are not present or replicable in the UK. Please get in touch with us to discuss this in detail.

- Additional tax relief for Research and Development intensive enterprises

There are proposals to introduce a higher rate of relief for R&D intensive companies, where they are also loss-making. An R&D intensive company is where 40% or more of expenditure is on R&D. Companies claiming the existing SME tax relief will be eligible for a higher payable credit rate of 14.5% if they meet the definition for R&D intensity, instead of the 10% credit rate for non-intensive companies.

For further information see the Government website here.

- Creative Industry Tax Reliefs - Additional Information Required

There are some administrative changes when claiming creative and cultural tax relief. All claims will now require an additional online information form and will be mandatory for all claims from the 1st April 2024. For those claiming the new audio-visual relief the additional information form must be submitted with all claims from 1st January 2024. Creative Industry tax reliefs are available to the following: Film production companies , Television production companies producing relevant animation, children's television or high-end television programmes, Video game development companies, Theatre production companies, Orchestra production companies.

- Tackling Avoidance and Evasion

The Government has published draft legislation to create a new criminal offence which can apply to promoters of tax avoidance schemes. This will allow HMRC to apply to the court for a disqualification order against directors of companies involved in promoting tax avoidance.

A proposal has also been put forward to double the maximum prison sentences for those convicted of the most egregious examples of tax fraud from 7 to 14 years.

For further information on any of the above please contact:
Martin Knight, Director
Email: martink@bpuaccountants.co.uk

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