With the recent launch of our new accountants hub platform specifically to help accountants find the information they need for their clients, we know more of you are coming to the site and reading our blogs.
We love having you here and we’re keen to give you more pertinent and interesting content to look at.
So as well as our usual output of the latest interesting and intriguing insolvency stories and news we thought it might be worthwhile to start producing a regular news round-up for accountants.
A regular bulletin of items you might have missed over the past month that could affect you and the profession.
Please let us know what you think on our social channels or at ask@businessrescueexpert.co.uk and we’ll tailor our future updates closer to what you’d like to see.
It’s you we’re writing for!
HMRC “not heavy handed” in their loan charge handling – says HMRC
Under scrutiny from the Treasury Committee, Jim Harra, chief executive of HMRC said it does not operate without scrutiny and that its staff had not been “heavy handed” about pursuing individuals over the loan charge or IR35 remuneration cases.
He did reiterate that even if anybody entered into disguised remuneration (DR) schemes unwittingly, they would still be targeted as the schemes themselves were “contrived tax avoidance”.
He said: “The motives of those engaging in tax avoidance schemes do not affect whether tax is due.
“We recognise that people who join a DR scheme may have been given false assurances by the promoter of the scheme and may have varying levels of awareness of the nature and risks of the scheme.”
“We do not recognise recent claims that HMRC operates without scrutiny, particularly on the Loan Charge. It is simply not the case that HMRC is unaccountable or operates without oversight. We act under the general direction of ministers as to our operational priorities, targets, strategies and policies. We have also been subject to several judicial review challenges in respect of the Loan Charge and have successfully defended each one.
“We do not intentionally write to taxpayers on specific days, such as their birthday, to increase the impact of our interventions. We do not play with people’s emotions. We recognise that there is a human story behind each of these cases and we take our Charter responsibilities very seriously.”
He confirmed that around 40,000 individuals and 5,000 employers were affected by the Loan Charge and were yet to settle with HMRC, including those who had settled some liabilities but not all.
The median settlement for individuals on disguised remuneration schemes is £19,000 and £205,000 for employers. 25% of cases were for £55,000 or more.
SME employee threshold will rise to 500
The threshold that determines a company’s size is being raised by 50% for SMEs from 250 to 500 meaning that 1,000 more large companies could technically become an SME.
The current definition of a medium sized business is having between 50 and 249 employees and a turnover of less than or equal to £42.7 million or a balance sheet total less than or equal to £36.7 million.
The move announced by the Prime Minister to the Small Business Conference recently is expected to benefit 132,000 businesses from non-financial reporting requirements as a result. He said they would also look to exempt medium-sized companies from producing strategic reports which could save an estimated £148 million a year.
There will also be post Brexit changes including the removal of several duplicate EU reporting requirements including changes to what companies must set out in their annual reports and making it easier for them to share digitised versions rather than paper copies.
In the same speech the Prime Minister also announced that the government would fully fund apprenticeships for small businesses from April, paying the full cost of training for anyone under the age of 21.
They would also increase the amount of funding that can be passed onto other businesses from employers that are paying the apprenticeship levy. Currently apprenticeships can be funded by a levy-paying employer transferring up to 25% of their unused levy to a different employer.
HMRC Helpline reductions reverse immediately
Less than 24 hours after HMRC unveiled proposals to only answer calls to Self-Assessment, VAT and PAYE helplines on five business days a month, they announced that the changes would be halted.
A multi-sector outcry led by accountants and representative bodies forced the change.
HMRC chief executive Jim Harra said: “Making the best use of online services allows HMRC to help more taxpayers and get the most out of every pound of taxpayers’ money by boosting productivity.
“The pace of this change needs to match the public appetite for managing their tax affairs online. We’ve listened to the feedback and we’re halting the helpline changes as we recognise more needs to be done to ensure all taxpayers’ needs are met, whilst also encouraging them to transition to online services.”
Caroline Miskin, senior technical manager of digital taxation at ICAEW said: “This surprising u-turn is good news for taxpayers and our members, who need HMRC customer service to be responsive to their queries.
“If they can’t speak to a human when they need to, there is a real risk that they give up on trying to do the right thing and that errors and non-compliance increase.”
New Companies House powers – will they work to clean up the register?
Companies House was granted new powers to crack down on fraud recently but questions remain about whether it has the resources to fully take advantage of them.
Following the full introduction of the Economic Crime and Corporate Transparency Act 2023, the new powers are intended to improve the accuracy of data held on the Companies House register and prevent businesses being used to carry out unlawful activities.
Now, for the first time, they have enhanced information gathering powers and the ability to reject documents before they are filed on the register.
Chris Horner, insolvency director with businessrescueexpert, said: “Companies House has historically been an information depositary but these new powers move it closer to being a fraud detection and prevention agency.
“That’s great, and would help cut down on fraud, waste and illegal activity but it would need more funding and resources to fully achieve that. There are more than five million companies registered in the UK and there’s been no systematic examination of the information submitted by these companies yet.
“There are always reports of fake names and addresses being used to register companies and incorrect information being submitted to the register. We just don’t know how many inaccuracies are the result of mistakes and oversight rather than fraud but Companies House will still have their work cut out to identify and resolve these issues even with new powers.
“For instance, asking new companies if they are being formed for illegal purposes is like when you travel to America and you’re given a customs form asking if you’re already a criminal or if you’re planning to do some crime during your trip. Not many actual criminals will tick the box marked yes.”.
Companies House have confirmed that they have recruited more than 160 additional staff and have plans to hire more to their existing full time employee roster of over 1,000 professionals.
They are also increasing their fees next month (May 2024) with the new financing structure affirming that these will be reinvested to cover the costs of the services but even now they confirm that some measures including identity verification won’t be introduced immediately but will arrive over an unspecified “longer period”.