In this edition’s eNews, there is news on HMRC’s measures to make Research and Development tax relief easier for businesses to understand, news on enforcement action on employers that fail to comply with the minimum wage, HMRC’s latest tax guidance for businesses, and news on a recommendation from the Low Incomes Tax Reform Group (LITRG) to make it easier for state pensioners to pay tax owed via a Pay as You Earn Scheme. There is also news on Chancellor Rachel Reeves’ ‘blitz on business bureaucracy’ and findings from the British Chambers of Commerce’s (BCC’s) latest Quarterly Recruitment Outlook to update you on.
- Expert Advisory Panel to provide industry insight on R&D tax relief
- Employers named and shamed for minimum wage breaches
- Latest guidance for employers
- Give State Pension its own PAYE scheme, says LITRG
- Chancellor announces ‘blitz on business bureaucracy’
- Budget should tackle hiring issues, says BCC
Expert Advisory Panel to provide industry insight on R&D tax relief
HMRC has appointed six independent industry specialists to a new Research and Development (R&D) Expert Advisory Panel.
The introduction of the panel is one of a number of practical enhancements that the tax authority says will make it easier for UK firms to understand R&D tax relief.
R&D tax reliefs are valuable incentives designed to encourage businesses to invest in innovative science and technology projects, driving economic growth across the UK.
These improvements include an expanded reporting channel for agents; and a user-friendly free online tool to help businesses check their eligibility before submitting a R&D claim.
HMRC says that together, these enhancements are designed to support business innovation, improve claim accuracy, and strive to make the system work for everyone.
The new panel brings together experts with real world experience, offering deep sectoral knowledge across manufacturing, technological development, life sciences and AI, says HMRC.
Jonathan Athow, HMRC’s Director General, Customer Strategy and Tax Design, said:
‘HMRC welcomes the advisory panel and their sectoral insight and expertise. Along with the new guidance tool, we are delivering on feedback from agents and businesses, making it easier for genuine innovators to access the support they deserve, while protecting the system from abuse.’
Internet link: HMRC press release
Employers named and shamed for minimum wage breaches
The government has named and shamed nearly 500 employers who failed to pay the National Minimum Wage (NMW).
The employers have been fined over £10 million for failing to comply with NMW laws.
In addition, £6 million has been repaid to 42,000 workers by employers who have been underpaying their staff.
The government says that enforcement of workers’ rights is set to be beefed up through the new Fair Work Agency which will shield workers from employers who flout the law.
It says that this strong enforcement does not just protect workers; it protects those businesses who do right by their staff from being undercut.
By taking swift action against these employers, the government is sending a clear message that it will not tolerate those who short-change their workers, regardless of their size or sector, it adds.
Business Secretary Peter Kyle said:
‘Every worker deserves a fair day’s pay for a fair day’s work, and this government will not tolerate rogue employers who short-change their staff.
‘I know that no employer wants to end up on one of these lists. But our Plan to Make Work Pay cracks down on those not playing by the rules.
‘This ensures a level playing field where all businesses pay what they owe whilst workers receive the boost to their living standards they deserve.’
Internet link: GOV.UK
Latest guidance for employers
HMRC has published the latest issue of the Employer Bulletin. The October issue has information on various topics, including:
- Making your PAYE Settlement Agreement payment.
- Guidance for labour supply chains featuring umbrella companies.
- New Advisory Electric Rate for fully electric company cars.
- Spotlight 71 — Warning for agency workers and contractors who are moved between umbrella companies.
- ‘Tax Help for Hustles’ campaign — new resources for employees.
- Update on Winter Fuel Payments recovery through the tax system.
Internet link: GOV.UK
Give State Pension its own PAYE scheme, says LITRG
The Treasury should make it easier for state pensioners to pay any tax they owe with a Pay as You Earn (PAYE) scheme, says the Low Incomes Tax Reform Group (LITRG).
The LITRG told the Treasury that there is a ‘pressing need’ to change the way the payments are taxed to make the process easier to understand and manage.
This is due to the increasing number of pensioners finding out that they owe income tax on their state pension for the first time. The LITRG has recommended that the State Pension be given its own PAYE scheme, so that any tax is collected at source by the DWP before State Pension payments are made.
Currently, any tax due on a person’s State Pension is collected by adjustments to tax codes, self assessment or simple assessment.
Sarah Weston, Technical Officer at the LITRG, said: ‘The continued freezing of the tax-free personal allowance and triple-lock pension increases mean growing numbers of people are facing a tax bill on their State Pension for the first time.
‘Some people are unaware of this and can end up with a nasty shock if they receive an unexpected tax bill from HMRC after the end of the tax year. For those who are affected, it can be unclear and confusing.
‘We think that bringing the State Pension into its own separate scheme of PAYE would be a simplification that will make it easier for HMRC to collect the tax it is owed.’
Internet link: LITRG website
Chancellor announces ‘blitz on business bureaucracy’
Chancellor Rachel Reeves recently announced a ‘blitz on business bureaucracy’, with cuts to red tape that the government says will save firms £6 billion.
Ms Reeves says the government will be ‘scrapping pointless paperwork’ and speeding up planning to deliver on the Prime Minister’s 25% admin reduction target – a central commitment in the Modern Industrial Strategy.
The government says the crackdown on ‘needless form-filling will see over 100,000 firms qualify for simpler corporate reporting rules’, removing the need for small business owners like family-run cafes to submit lengthy Director reports to Companies House.
Businesses will also save time and money when building, with the Chancellor setting out plans for digital planning checks that could see developers sending photo evidence to authorities online which are then approved using trained AI models.
John Foster, Chief Policy and Campaigns Officer at the Confederation of British Industry (CBI), said: ‘There is a fierce urgency in the need to get the UK economy growing at a sustainable rate so it can make a meaningful difference to our nation’s prosperity. For businesses to fully contribute to this mission they need room to invest, not be constantly battling costly regulation that adds little or no value.
‘The government deserves credit for recognising this challenge and taking action to address it. We now need business and government to work together at pace, to deliver a growth-enabling regulatory system that sensibly balances appetite to risk while giving businesses confidence to invest and thrive.’
Internet link: GOV.UK, CBI website
Budget should tackle hiring issues, says BCC
The British Chambers of Commerce (BCC) has called for Chancellor Rachel Reeves to use the Autumn Budget to combat ‘persistent’ hiring problems.
According to the BCC’s latest Quarterly Recruitment Outlook, 54% of businesses have attempted to hire employees in the last three months. However, most firms continue to face recruitment challenges, with 75% of employers stating they have experienced issues.
Just 22% of businesses hired new employees in the third quarter of this year, the BCC found. 25% reported that they intend to increase their workforce in the next three months.
‘Employers are battling against sky-high employment costs and widespread skills shortages,’ said Jane Gratton, Deputy Director of Public Policy at the BCC.
‘With 72% of firms saying costs are putting pressure on them to raise prices, the spectre of higher inflation will continue to hover.
‘The government should use the tax system to help people stay in – or quickly return to – employment when they experience ill health. Tax breaks for health services that businesses provide to their workforce are an obvious solution, to protect people’s livelihoods and keep skills in the workforce.’
Internet link: BCC website
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