We provide our clients with regular updates on changes in taxation regulation, news from the world of accounting and, of course, information about the latest developments at Add Value Accountants Ltd.
Thirty-six per cent of employees in the UK describe themselves as highly engaged, according to a survey by Red Letter Days for Business.
Of the 2,006 respondents to the survey, Employee Engagement: How British Business Measures Up, 48% described their degree of engagement as moderate, and just 4% described themselves as not engaged at all. Those working in financial services were most engaged (72%), compared with 45% of retail and consumer industry staff and 38% of employees in government and public service.
The respondent’s level of responsibility also appears to influence motivation. Just 39% of employees with no reports described themselves as engaged, compared with 69% of senior managers and department heads. But perhaps there is such a thing as too much responsibility, as the figure falls to 47% amongst CEOs, managing directors, and divisional heads.
Researchers found that factors such as the respondent’s gender, age, length of service, the size of the company, or their manager’s gender, did not have a significant impact on engagement levels.
Read on to discover what motivates a workforce: Continue reading
The taxman could be forced to pay up to £43 billion in refunds if it loses its current legal battles against big businesses. Her Majesty’s Revenue & Customs (HMRC) has revealed the worst-case-scenario figure if it loses its disputes with companies which believe they have paid too much tax.
The staggering estimate was announced in the latest annual accounts. HMRC is fighting multi-billion-pound court cases with dozens of corporations which believe they are owed refunds – in some cases dating back decades. This includes a long-running dispute with mail order catalogue Littlewoods, which, it is claimed, overpaid on commission sent to agents between 1973 and 2004.
The taxman is also involved in wrangles with British American Tobacco, insurers the Prudential and a host of other multinationals, in complex and drawn-out hearings in London and Luxembourg. If it loses every case, it would have to pay out £42.8 billion. It comes as HMRC is under growing pressure to clamp down on tax avoidance and challenge big corporations.
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The majority of UK households now expect interest rates to rise within 12 months, an influential survey has said. In all, 78% of UK households expect the Bank of England to raise interest rates within the next year, according to the Markit Household Finance Index. And 48% anticipate a rate rise within the next six months, the highest percentage since July 2014.
The Markit Household Finance Index also found that UK households saw their sharpest deterioration in finances so far this year in August. They are slightly downbeat about their financial prospects for the next year, even as the country’s economic picture improves. “Improving economic fundamentals and gradually rising income from employment should continue to support household finances through the remainder of this year,” said Tim Moore, senior economist at Markit. “But the ongoing strains reported in August highlight an underlying fragility around the edges of the recovery,” he added.
The survey came out after a Bank of England policymaker forecast that rates would rise “pretty soon”. Prof David Miles made the prediction as he prepares to leave his role on the Bank’s Monetary Policy Committee (MPC), which takes the decision each month.
Prof Miles said that the time to raise the bank rate from its current historic low of 0.5% was “coming” and he expects the “new normal” for interest rates to be between 2.5 and 3%: “I don’t think it’s anything to worry about, it’s a sign of health,” he said.
Read on for more about the MPC discussions: Continue reading
It’s as predictable as Britons moaning about the weather. Why, accountants ask, is it so hard to get through to the right person at HMRC?
In December, an investigation by Which? found that nearly a third of calls to HMRC’s helplines were cut off because the system was too busy.
For those who did get through, the wait was as long as 41 minutes. There have been many complaints about problems with HMRC’s helpline for tax agents, including taking weeks to contact the right expert at HMRC or being told a helpline was unobtainable.
Rebecca Benneyworth, a tax lecturer, says anecdotal evidence from accountants suggests HMRC’s phone service is worsening.
Read on for more on what Rebecca had to say: Continue reading
A small business commissioner will help firms tackle the issue of the billions of pounds in late payments for goods and services, under government plans. It estimates small firms are owed £26bn in late payments – and chasing debts costs them millions of pounds more.
Business minister Anna Soubry said the role would tackle the power “imbalance” between small and large UK businesses. The Federation of Small Businesses welcomed the move but said it must be properly funded and be high profile.
Plans for a new small business conciliation service to help settle disputes – specifically over late payment – were announced in the Queen’s Speech. The service aims to handle problems without the need for court action.
As part of the new Enterprise Bill, the government also wants to create a commissioner role to deal with outstanding payments and supply-chain bullying, where suppliers are forced to cut their prices in order to retain the custom of much bigger firms.
Read on to discover more about the commissioner’s role: Continue reading
Internet companies may have to provide more information on people and businesses who sell goods and services online, in a crackdown on tax evasion. HM Revenue & Customs wants to target businesses that have failed to register for tax, and individuals who fail to declare the money they make online. It said this “hidden economy” could equate to £5.9bn a year in tax.
HMRC has launched a consultation on extending its powers to collect extra data from firms and individuals. No specific firms have been named, but sellers on internet marketplaces such as online advert site Gumtree, holiday home rental site Airbnb and e-commerce giant eBay could be among those targeted.
Existing laws allow HMRC to access certain data but it wants to broaden its scope.
Read on to find out what’s in the consultation document published online by HMRC: Continue reading
The Finance Director or Chief Finance Officer (CFO) of the future will be less tactical and more strategic, deeply versed in operational finance, and will maintain a keen focus on customers, shareholders, and employees. The finance chief will have worked in functions across the organisation, becoming a masterful manager of people and communicator of results and strategy to a range of audiences. And he or she will foster a team that will accept a lifetime of learning and application of skills.
Finance no longer is just about recording and reporting performance. It’s about partnering with the whole organisation to mitigate risks, drive strategy, and add value. The problem: The rising talent pool isn’t evolving fast enough for the new demands of the role. Last year, 87% of UK CFOs said they faced challenges finding skilled talent, according to a 2015 survey by staffing firm Robert Half, which polled 2,100 finance chiefs.
So finance leaders must venture beyond the once-siloed scope of their department to become business partners critical to the success of the broader organisation. That was the crux of a CGMA panel, “From Conformance to Performance: Developing the Finance Leaders of Tomorrow,” hosted recently by Bloomberg Radio in New York. “The technical skillsets that we have as financial professionals are not adequate anymore,” said Ash Noah, CPA, FCMA, CGMA, vice president–External Relations for Management Accounting, who was one of the panellists. “So we need to go beyond that.”
Read on to discover some key themes that emerged from the panel: Continue reading
Businesses and their activities are under increasing public scrutiny, and digital communications mean that perceived transgressions can be broadcast throughout the world within seconds. A recent round table hosted by the Chartered Institute of Management Accountants (CIMA) examined the state of public trust in business today and outlined the steps leaders must take to meet these challenges.
In his keynote speech, author Robert Phillips, who has spent the past decade researching and writing about the concept of trust, argued that it had been “used and abused to the point of exhaustion” by the corporate world in recent years. Research conducted for the event found that in 2014, the annual reports of FTSE 100 companies mentioned trust 317 times. In contrast, in the 2005 editions, it appeared just 38 times. Phillips thinks that trust often spoken is trust rarely earned.
Furthermore, the traditional methods companies have relied on to control their message, such as public relations and corporate social responsibility (CSR) initiatives, are no longer effective. “No one is in control any longer,” Phillips said. “Anyone who thinks they are – and that they can impose, rather than negotiate, trusted relationships – is living in the wrong century.” In the era of social networks and the culture of activism they engender, everyone knows everything and can connect with anyone, Phillips said. This explains why many old institutions struggle to be as trusted as they once were, he added.
This lack of trust in business in general poses a challenge to many organisations’ long-term viability. Samantha Peters, chief executive and registrar of the General Optical Council, regulator of optometrists and opticians in the UK, told the audience that if the younger generation doesn’t trust your organisation, technology provides them the opportunity to “replace you: they can walk around you and set up an alternative means of doing what you do using the online space. “Any traditional hierarchy or institution can be replaced.”
Read on for the steps Robert Phillips proposes that organisations can take to foster greater trust: Continue reading
George Osborne has delivered his seventh Budget as chancellor, the first for a majority Conservative government since November 1996. Here is a summary of his main announcements.
Personal taxation and pay
- Introduction of a new national living wage for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 – giving an estimated 2.5 million people an average £5,000 rise over five years
- Low Pay Commission to advice on future changes to rate
- Inheritance tax threshold will be increased to £1m from 2017
- Personal allowance, at which people start paying tax, to rise to £11,000 next year
- The point at which people start paying income tax at 40p to rise from £42,385 to £43,000 next year
- Mortgage interest relief for buy-to-let homebuyers to be restricted to basic rate of income tax
Welfare and pensions
- Tax credits and Universal Credit to be restricted to two children, affecting those born after April 2017.
- Income threshold for tax credits to be reduced from £6,420 to £3,850
- Working-age benefits to be frozen for four years – including tax credits and local housing allowance, but maternity pay and disability benefits exempted
- Rents in social housing sector will be reduced by 1% a year for the next four years
- Higher-income households in social housing will be required to pay rents at the market rate
- Disability benefits will not be taxed or means-tested while state pension triple lock to be protected
- 18-21-year-olds will not be entitled to claim housing benefit automatically, with a new “earn to learn” obligation
- Employment and Support Allowance payments for claimants deemed able to work to be “aligned” with Jobseeker’s Allowance for new claimants
- Green Paper published on proposals for “a radical change” to pension saving system
- Annual tax relief on pension contributions to be limited to £10,000 a year
Read on for the remaining budget highlights: Continue reading
The taxman is warning that fraudsters are targeting people claiming tax credits with scam emails, websites and text messages in the run up to the July 31 renewals deadline. HMRC said it will never ask people to disclose personal information via email.
Nearly 51,000 scam “phishing” emails were reported to HM Revenue and Customs (HMRC) between April and July 2014, which is double the number reported during the same period in 2013.
Some scam messages claim to be from a “tax credit office agent”, offering a tax refund, or include a link to a fake version of the gov.uk website.
The messages try to trick people into giving personal information such as bank details and passwords – and fraudsters will then try to take money from their account or sell their identities to other criminals.
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