HARBOUR KEY ENTERS BUSY SEASON
The shift in time has brought about earlier dark evenings, signaling the arrival of winter! At team Harbour Key, this change ushers in our busiest period of the year. With the imminent deadline of the busiest accounts filing date on 31st December and the approaching 31st January deadline for personal tax returns, our team gears up for an influx of tasks.We'll be diligently pursuing those who haven't provided necessary information and following up on queries. However, if you submit your information now, please understand that we operate on a first-come, first-serve basis due to our workload pipeline. Unless it's an urgent matter, we'll address tasks based on the order they're received.
XEROCON
Emma and James recently participated in the Xero regional conference, which focused on the preferred accounting software that a majority of our clients use. The purpose was to delve deeper into the various packages that can be integrated with Xero. These packages aim to streamline processes, save time, and enhance financial management.
Following their attendance at the Xero regional conference, Emma and James are diligently working on compiling a comprehensive list highlighting the array of Xero tools that promise significant advantages for Harbour Key's clients. This list will outline the specific benefits and functionalities of these tools, aiming to assist our clients in optimising their financial management processes. This will form part of our year end planning with clients.
THE AUTUMN STATEMENT - 22 NOVEMBER 2023!
The Chancellor is scheduled to deliver the Autumn Statement on 22nd November 2023. Currently, there is little indication of the content that might be announced, however, we anticipate that significant tax announcements might be reserved for the March Budget. For insights into our expectations regarding the Statement, you can refer to last month's newsletter.
As always, we will provide a comprehensive summary of the Chancellor's Statement immediately following the speech, ensuring our clients receive timely updates.
THE ECONOMIC CRIME & CORPORATE TRANSPARENCY BILL – MORE REGULATIONS!
The Economic Crime and Corporate Transparency Act 2023 (ECCTA), which received Royal Assent on 26 October 2023, is part of a comprehensive set of reforms designed to combat economic crime and prevent the misuse of corporate structures within the UK. Its primary goal is to enhance transparency within corporations and shed light on the individuals associated with them. This law is expansive in its reach and has been hailed by Companies House as one of the most pivotal moments in its history.
The impact of this new law will affect all companies, irrespective of their size. Whether you're a small company with only one director and shareholder or a husband-and-wife-owned business, it's essential to note that these regulations are applicable to all. They signify a significant shift, requiring even small companies and those filing micro accounts to include a profit and loss account, signaling substantial changes in compliance requirements.
See our summary of the new legislation.
HMRC ISSUE WARNING RE TAX-REBATE SCAM
Fraudulent HMRC impersonators are targeting taxpayers with fake tax rebates and false threats of demands for unpaid taxes, intensifying their scams as the 31 January deadline nears. HMRC has issued a warning, reporting over 130,000 scam reports in the past year, with 58,000 involving fake tax rebates. If you're our client, we would have notified you about any entitled repayments. Stay alert to scam texts, calls, or emails regarding tax refunds or outstanding payments.
HMRC ACTIVITY
HMRC is preparing to launch an extensive tax crackdown on what they call “side hustles” and the wider gig economy, which could severely impact workers. New rules, effective from 1st January 2024, will require platforms like Uber, Etsy, and Airbnb to record users' income and report it to HMRC, who will then cross check using their AI software, if the individual is filing a tax return, or if they are reporting the income.
CHARGING OF ELECTRIC COMPANY CARS
Many of our clients have heard us banging on about the tax efficiency of electric company cars. Even with the increase in their taxation from 2025, an electric car is still tax efficient. Currently until 5 April 2025, full battery electric vehicles pay 2% benefit in kind tax, with no tax increase during this period. This compares to 37% at the opposite end of the emissions scale. The taxation of an electric car will change in April 2025, the company car personal tax benefit increasing 1% each year until 2028, but that is still only 5% as at 2028.
Recently HMRC has amended its guidance on the tax treatment of electric charging of company cars and vans at the employee’s home. The costs of charging are now treated as a tax-free benefit, whereas in the past HMRC said that where an employer reimburses their employee for the cost of charging a company-owned, wholly electric car that is available for private use, the reimbursement was taxable as earnings.
The exemption will however only apply providing it can be demonstrated that the electricity was used to charge the company car or van. Employers will need to make sure that any reimbursement made towards the cost of electricity relates solely to the charging of their company car or van, therefore the employee will need to be able to record the level of electric used for the charge.
ENTERPRISE INVESTMENT SCHEME (EIS) AND SEED ENTERPRISE INVESTMENT SCHEME (SEIS) REACHES AN ALL-TIME HIGH
HMRC has announced recently that EIS and SEIS (tax efficient investment relief for those individuals who invest in qualifying companies), reached an all-time high, with total investment for the 2022 tax year amounting to more than £2.5bn. Data for 2021-22 shows that the total EIS investment was £2.3bn, an increase of 39% compared to the previous year, while SEIS investments reached £205m, a 16% increase. Christiana Stewart-Lockhart, director general of the EIS Association, said: "These figures demonstrate the continued success of the EIS and SEIS in driving innovation and entrepreneurship across the UK by encouraging investment in small and early-stage businesses.”
EIS and SEIS are tax efficient for the investor, where investing in a qualifying company. More details can be found HERE. Investment however comes with risk, and is the reason the tax relief is given. The qualifying companies are early stage businesses, and investments should only be made, understanding that you may not get your money back, the tax relief cushioning the blow!
DATES FOR YOUR DIARY
- 22 November 2023 - Autumn Statement;
- 31 December 2023 - Accounts with 31 March year-end to be filed, and corporation tax paid.
- 31 January 2024 - Self-Assessment filing deadline.
Should you wish to speak with us about a specific matter, or just to be a sounding board or for a chat, please do not hesitate to give us a call.
Please do not hesitate to give us a call us on 01452 713277
