Welcome to BPU's New Year Newsletter 2024

In this issue:

• Latest Funding News
• Hot Topics - HMRC Sends Warning to Cryptoasset Users & New Rules Selling Online 
• BPU News - Change of Bank Details, Welcome to New Staff , BPU Backs Big Issue, Charity Fundraisers 
• Tax Update - Autumn Statement, IR35 Latest & Countdown for Tax Return Deadline
• BPU's IFA Ian Sinclair - Over £26 Billion in Lost Pensions Highlights Need for Retirement Planning

Latest Funding News 

The British Business Bank has opened its £130m Investment Fund for Wales

The Investment Fund for Wales will deliver £130 million of new funding and aims to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across Wales.

The fund offers commercial finance options as follows: 

• Smaller loans from £25,000 to £100,000
• Debt finance from £100,000 to £2 million
• Equity investment up to £5 million.

The fund covers the whole of Wales, including rural, coastal and urban areas.

For further information and how to apply please see link here - Investment Fund for Wales (IFW) - British Business Bank (british-business-bank.co.uk)

Innovate UK Funding For Welsh Businesses

Innovate UK have a range of funding opportunities open to Welsh businesses to innovate and invest in Research Development and Innovation.

Innovate UK smart grants

UK registered businesses can apply for a share of up to £25 million to support commercially viable Research, Development and Innovation projects that can significantly impact the UK economy. Closing date tomorrow 17 January 2024. 

For a full detailed list of the grants available and how to apply visit the Business Wales website please click here 

Shared Prosperity Fund

There are still grants and support available through the Shared Prosperity Fund (SPF). The fund aims to provide new opportunities for local communities and support the development and growth of local businesses. To see what is available in your area via local authority please visit the Business Wales Website link here: Shared Prosperity Fund | Business Wales (gov.wales) 

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Hot Topic

HMRC Sends Warning to Cryptoasset Users

As the use of cryptoassets continues to grow HMRC is warning people to check if they need to complete a self- assessment tax return for the 2022/23 tax year and avoid potential penalties.

Anyone with cryptoassets should declare any income or gains above the tax-free allowance on a tax return.

Tax may be due when a person:

• Receives cryptoassets from employment, if they are held as part of a trade, or are involved in crypto-related activities that generate an income
• Sells or exchanges cryptoassets, including:
  • Selling cryptoassets for money
  • Exchanging one type of cryptoasset for another
  • Using cryptoassets to make purchases
  • Gifting cryptoassets to another person
  • Donating cryptoassets to charity.

The deadline to complete a tax return and pay any tax owed is 31 January 2024. HMRC says that those unsure whether they need to complete a tax return can check by using the free online tool on GOV.UK.

Myrtle Lloyd, HMRC's Director General for Customer Services, said: 'People sometimes forget that information about crypto-related income and gains need to be included in their tax return. Some people affected may not have had to do a tax return before, so it is important people check. With the self-assessment deadline just a matter of weeks away, I am urging people not to put off completing it.'

Please contact your usual BPU Advisor if you require any help or advice with self-assessment.

HMRC Targets Side Hustles as Online Platforms Share Information

A 'side hustle tax' came into force on 1 January aimed at those who sell second-hand goods online or let out their spare rooms.

The new measures aim to target people who evade taxes by failing to declare their income to the authorities.

Marketplaces including eBay, Vinted, Airbnb and Etsy for example, will now be required to report what their users earn to HMRC.

The crackdown applies to those who earn more than £1,000 a year through online transactions - such as by selling clothes, delivering takeaway food or renting out accommodation.

Once a seller exceeds this threshold, they must register as self-employed and file a tax return at the end of the year.

It comes after the UK signed up to a global agreement by the Organisation for Economic Co-operation and Development (OECD) that allows tax officials to share information with authorities in other countries.

A HMRC spokesperson said: 'Implementing the OECD rules will enable HMRC to exchange information with other tax authorities to access data from platforms based outside the UK quickly and efficiently.

'The rules will also make it easier for sellers on these platforms to comply [with tax laws] and will help HMRC to detect and tackle tax evasion when they do not.'

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BPU News

BPU Change of Bank Details

Just to confirm that we have recently changed our bank details. We have sent an email to all clients informing them of the new details. We appreciate in the current climate some emails may be of a fraudulent nature but this email is genuine. If you have any queries please contact your usual BPU Advisor.

Four More Join BPU

BPU has welcomed four new staff to its ever growing team of professionals to support growth and continue to provide an excellent personal service to its clients. BPU has taken on two new graduates again this year onto its Chartered Accountancy Training Programme and also welcomes a new Accounts Assistant and Tax Administrator.

Georgia Laflain has relocated from Llanfair Caereinion in Mid Wales to Cardiff to support BPU's accounts team. Having previously worked for an accountancy firm where she qualified as an AAT finance professional, Georgia is supporting the BPU accounts team working for primarily owner managed businesses across a variety of sectors. Before starting her career in the accountancy profession, Georgia travelled and worked in the hospitality industry in Australia, Mexico and America which is shown in her excellent communication and client services skills. 

Georgia said: "I wanted to relocate to a vibrant city and the job at BPU provided the perfect opportunity. I am really enjoying working and living in Cardiff , I particularly like the variety of work that I now do for clients across some sectors I have never worked in, especially media, construction, charities and education." 

Sian Roberts joins BPU as Tax Administrator and brings with her a wealth of experience in administration having worked in the professional services sector for over 20 years. Sian is supporting BPU's ever growing tax department and has proved to be a great asset to the team with her excellent organisational skills and attention to detail. 

Sian said: 'I have really enjoyed learning the new systems and processes surrounding tax and what is required by HMRC. My day to day job is so varied completing admin work for personal tax clients and the tax team have made me feel so welcome. Its really nice being part of a close team."

BPU has also appointed trainees Briony Thomas and George Jones onto its graduate recruitment programme which supports recruits to study and qualify as Chartered accountants while they work. BPU took on its first graduate 18 years ago and has continued to make a significant investment in the scheme, as previous graduates have worked their way up to the senior level at BPU. 

Graduate Briony Thomas, aged 22 from Bridgend joins BPU having studied a degree in Medicine and Psychology at Cambridge University. George Jones from Hertfordshire, also 22, graduated from Cardiff University having studied Economics. BPU's training programme provides the perfect opportunity for Briony and George to learn on the job and study to qualify as Chartered Accountants.

Briony said: “I am very proud to have joined a leading firm straight out of University, BPU want you to learn quickly and develop the skills early, I have already been out to clients and am really enjoying the variety of work."

George added: "I was keen to join BPU as it is a firm that provides many services besides accountancy, I am able to learn about other fields including tax, VAT and accountancy software packages. The mentoring that I receive from the BPU staff has been exceptional and I am enjoying being part of a great team of people."

Managing Director Huw Palin of BPU Accountants said: “We are delighted to welcome our new staff to the firm. As one of the few independent Chartered accountancy firms left in South Wales, we are proud to continue to invest in our team and recruit the right people to offer the personal service to clients that we pride ourselves on."

BPU Staff Halloween Bake off

Well done to the BPU team together we raised £160 for Noah's Ark Children's Hospital Charity. Working with the NHS, Noah's Ark aims to provide the Noah’s Ark Children’s Hospital for Wales with state of the art equipment, facilities and family support services. Helping to ensure the best treatment and outcomes possible for its young patients.

BPU Backs The Big Issue 

BPU is delighted to once again be supporting The Big Issue in 2024 through its Corporate Supporters Programme. The Programme enables The Big Issue to create paid work opportunities for people who are vulnerable and in poverty via their Sheltered Employment Programme. Mark Richards is an example of somebody who has been helped on the Programme, he now has a job in an office environment which each week gives him a regular income and a chance to be part of the team. Before he sought help from The Big Issue he was homeless and begging on the streets, the Programme has helped him turn his life around. .

The Big Issue’s mission is to dismantle poverty through creating opportunity, and help to continue to support people who are amongst the most vulnerable in the UK. The Big Issue Corporate Supporters Programme extends The Big Issue's mission by bringing together organisations that share its commitment 'to creating a more equal society and supporting those most in need'. There are a variety of affordable sponsorship and subscription packages that fund The Big Issue's core work.

For further information on the Big Issue Corporate Supporters Programme please visit: https://www.bigissue.com/corporate-sponsors/

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Tax Update

Martin Knight BPU Director 

Reflecting on the Autumn Statement

Chancellor Jeremy Hunt presented the 2023 Autumn Statement in November describing it as a budget to 'stimulate economic growth' and highlighted 110 measures for businesses.

The Chancellor stated that the 2023 Autumn Statement 'gets the economy growing, debt falling and helps return inflation to its 2% target – long-term decisions to build a brighter future'. In addition, there were significant statements relating to National Insurance changes and also the reform of work-related state benefits. He used his Autumn Statement to make tax cuts for businesses, workers and the self-employed.

Mr Hunt made Full Expensing permanent for those businesses investing in IT equipment, plant and machinery. Full Expensing was first announced in the March Budget and was scheduled to last for three years. It allows businesses to claim back up to 25p in corporation tax for every £1 they invest. Mr Hunt has now made it permanent and said it represents the 'largest business tax cut in modern British history', worth £11 billion per annum.

The Chancellor also extended the tax reliefs and incentives for freeports and the Investment Zones programme from five to ten years.

There is a business rates support package worth £4.3 billion to be rolled out over the next five years to help high streets and protect small businesses. This includes a rollover of the 75% retail, hospitality and leisure relief.

The Chancellor cut the main rate of employee national insurance contributions (NICs) by two percentage points from 12% to 10%, effective from this month January 2024.

Mr Hunt also cut and reformed NICs for the self-employed. He abolished Class 2 NICs – the flat rate compulsory charge which is currently £3.45 paid by self-employed people earning more than £12,570. In addition, from April 2024, Class 4 NICs for the self-employed will be reduced from 9% to 8%.

From 1 April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44 an hour for eligible workers. The minimum age for the NLW was also lowered to 21 from 23. The government says this will mean an increase of over £1,800 to the annual earnings of a full-time employee on the NLW and is expected to benefit over 2.7 million low paid workers.

The pensions triple lock was maintained and pensioners will now get an 8.55% rise from next April, while benefits are set to increase in line with September's inflation figure of 6.7%.

Mr Hunt delivered the Autumn Statement to the House of Commons against a mixed economic backdrop. The Office for Budget Responsibility (OBR) revised down its growth forecasts for 2024, 2025 and 2026 – even as it offered an improved outlook for this year and for 2027.

To view our full Autumn Statement Report please click here. Additionally, throughout the Report you will find informative comments to help you assess the effect that the proposed changes may have on you personally and on your business.

Chancellor Jeremy Hunt has now confirmed he will deliver the 2024 Spring Budget on 6 March 2024. 

For specific advice on any of the announcements raised please speak to your usual BPU advisor or contact me directly.

HMRC Updates IR35 Compliance Guidance

HMRC recently updated its guidance on IR35 compliance for employers.

The new guidance sets out 'practical steps' for organisations to follow. It affects employers who are responsible for operating off-payroll working rules and who engage workers who provide their services through their own intermediary.

The guidance states that organisations should apply the new guidelines to 'reflect the complexity and scale of their own off-payroll working engagements'. It said that the guidelines should be used to 'help make informed decisions based on individual circumstances'.

The guidance also outlines a change in policy that could affect organisations with an open compliance check as part of the reformed IR35 rules. This was initially announced at the Autumn Statement on 22 November.

From 6 April 2024, HMRC will take into account the taxes a worker or their intermediary have already paid against the amount the deemed employer owes. This change applies to income tax and national insurance contributions (NICs) assessed by HMRC on or after 6 April 2024 from off-payroll working errors in payments since 6 April 2017.

More information on the guidance click here.

Countdown For 5.7 Million to File Their 2022/23 Self-Assessment Tax Returns

With less than a month to go until the self-assessment deadline, 5.7 million taxpayers have been urged to file their 2022/23 tax returns by HMRC. Self-assessment taxpayers have until 31st January 2024 to submit their online return for the 2022/23 tax year.

HMRC data shows almost 6.5 million customers have already beaten the self-assessment clock by filing their tax return. This includes 49,317 taxpayers who used the New Year holiday to get a head start on their tax obligations.

The self-assessment cycle

Under the self-assessment regime an individual is responsible for ensuring that their tax liability is calculated, and any tax owing is paid on time.

Late filing penalties

For those that fail to file their returns on time there is an automatic £100 penalty (even if there is no tax to pay or the tax due has already been paid).

The full penalty of £100 will be due if your return is filed late even if there is no tax outstanding unless a ‘reasonable excuse’ can be provided.

Additional penalties can be charged as follows:

• Over three months late – a £10 daily penalty up to a maximum of £900
• Over six months late – an additional £300 or 5% of the tax due if higher
• Over 12 months late – a further £300 or a further 5% of the tax due if higher. In particularly serious cases there is a penalty of up to 100% of the tax due.

Enquiries

HMRC may enquire into any return by giving written notice. In most cases the time limit for HMRC is within 12 months following the filing date.

The main purpose of an enquiry is to identify any errors on, or omissions from, a tax return which result in an understatement of tax due. Please note, however, that the opening of an enquiry does not mean that a return is incorrect.

If there is an enquiry, we will also receive a letter from HMRC which will detail the information regarded as necessary by them to check the return. If such an eventuality arises we will contact you to discuss the contents of the letter.

Keeping records

HMRC wants to ensure that underlying records to the return exist if they decide to enquire into the return.

Records are required of income, expenditure and reliefs claimed. For most types of income this means keeping the documentation given to the taxpayer by the person making the payment. If expenses are claimed records are required to support the claim.

For advice on any of the above please contact your usual BPU advisor or get in touch with me directly.
Martin Knight Director
BPU Chartered Accountants
Email: martink@bpuaccountants.co.uk
Call: 029 20734100/p>

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Over £26 Billion in Lost Pensions Highlights Need for Retirement Planning

An astounding total of £26.6 billion is currently sitting lost and unclaimed in UK pension pots, according to recent figures. This shocking number comes as many people face working longer before retiring or having to deal with a pension shortfall. Planning for retirement in advance is vital, with many people neglecting to make suitable arrangements until it is too late.

Here, we look at how to find lost pensions, consolidate pots and put tax-efficient plans into action.

Lost and unclaimed

One in four people have lost track of at least one pension in the UK, with almost three million pension pots unclaimed. The estimated combined value of these unclaimed pensions is £26.6 billion. The average value of each pension pot is £9,500, which increases to £16,004 for those aged between 55 and 75.

One of the major reasons for these unclaimed pots is the change in modern working lives, with few people now working for 30 years with the same employer before retiring. The average number of jobs a person will have over their lifetime is now 11 and a pension could have been started in each of these.

However, only 4% of people tell pension providers when they change address and the average number of times a person will change address is eight.

The advent of auto enrolment will push the numbers of unclaimed pensions higher still.

Track and trace

These pots are safe with the provider, usually invested in the default fund and still growing. But the saver has lost contact with the provider.

Tracking down these lost pension pots is a matter of going through past employers and finding out who the provider for the pension scheme is. Contacting the employer directly is easiest but where that is not possible getting in touch with former colleagues is recommended.

A government tracing service is available on GOV.UK while the Association of British Insurers (ABI) can also help. There are also private tracing services, although these cost money.

Those attempting to find lost pensions should be aware that it is an area that has been targeted by scammers in the past and cold calling is banned.

Pension dashboards

One development that aims to help clarify people's pension situations is pensions dashboards. These are a digital service that allow people to keep track of all their pension savings. The roll-out of dashboards is currently scheduled to happen before October 2026.

Consolidating pots

The increase in people with multiple employers over their lives means that now over half of pension savers have two or more pension pots. A third of these savers want all their pension pots in one place but many people don't know how to combine their pensions.

There are several reasons for consolidating pension pots. Keep pensions together makes keeping track of retirement savings easier while fewer providers will lower the charges payable for managing funds.

Consolidating pensions also gives access to different investment options and funds while different providers offer access to different feature that may make retirement planning easier.

Consolidating pensions is another area that has been targeted by scammers so those thinking of consolidating must be wary.

Complex system

The UK's pension system remains complex and recent years have seen substantial changes to the rules. Planning for retirement is more important than ever: please contact us for information on the right strategies for you.

Ian Sinclair DipPFS
Independent Financial Adviser
BPU Financial Solutions Ltd
T: 02920 734100
E: ians@bpufinancialsolutions.co.uk
W: www.bpufinancialsolutions.co.uk

BPU Financial Solutions Ltd is an Appointed Representative of ValidPath Limited which is authorised and regulated by the Financial Conduct Authority. ValidPath Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference 197107.

The FCA do not regulate tax and estate planning.

The value of investments and the income from them can go down. You may not get back the original amount invested.

A pension is a long term investment the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

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