Government urged to take ‘tough action’ on late payments
A report published by the Business, Energy and Industrial Strategy (BEIS) Committee recently highlighted how ‘bad payment practices’ have led to the ‘failure’ of many small and medium-sized enterprises (SMEs).
The government’s Prompt Payment Code, which was created to address poor payment practices, has ‘too often’ been ‘ineffective’, according to the Committee. A ‘statutory requirement’ for companies to pay within 30 days should be introduced, the Committee stated.
It also recommended giving the Small Business Commissioner the power to fine large businesses who pay their suppliers late.
Commenting on the report, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘Eliminating the scourge of late payments would see 50,000 businesses saved each year and add £2.5 billion to GDP, which would be a real boost to UK productivity.
‘The government must respond to this report with tough action on late payments, supporting smaller businesses to further develop their leadership and management capability and to improve the adoption of basic digital technologies that small businesses need to grow and become more productive.’
UK SMEs ‘unmindful of risks posed by cyber-attacks’, poll suggests
A poll commissioned by insurance firm Aon recently suggested that UK small and medium-sized enterprises (SMEs) are ‘unmindful of the risks’ that cyber-attacks and data breaches pose to their business.
The poll found that eight out of ten small firms don’t regard cyber-attacks or data breaches to be significant risks to their business.
A survey carried out by the National Cyber Security Centre (NCSC) in 2018 revealed that almost half of UK firms fell victim to a cyber-attack or data breach in 2017. 66% of SMEs were affected by a loss of data, according to the survey.
Aon’s poll also revealed that 31% of SMEs don’t currently insure against cyber and data risks. An additional 68% were unaware that data breaches must be reported to the Information Commissioner’s Office (ICO).
Commenting on the poll, Chris Mallett, Broking Manager at Aon, said: ‘What’s more, it revealed one in three don’t see personal information stolen as a result of a cyber-attack or fraud as a data breach.’
‘There is a lot of misunderstanding of risks and still a worry among SMEs that it must be complicated,’ said Dr Emma Philpott, Founder of the UK Cyber Security Forum.
‘It is not always about high end security. It’s about having the basics in place to protect you from indiscriminate attacks. Educating staff takes time, but doesn’t cost anything at all.’
The new Welsh rates of income tax
6 April 2019 sees the introduction of the new Welsh Rates of Income Tax (WRIT), which will be payable by individuals whose main residence is in Wales.
Currently, all income tax from Wales is paid to the UK government. From 6 April 2019, a proportion of that income tax will be paid directly to the Welsh government. The UK government will reduce the basic, higher and additional rates of income tax by 10p for Welsh taxpayers, and the Welsh government will set the three WRIT. These will then be added to the UK rates.
The Welsh Assembly has agreed the government’s proposal to set the first WRIT at 10p, meaning that for 2019/20 Welsh taxpayers will pay the same income tax as those in England and Northern Ireland.
Income tax will continue to be collected via PAYE and self assessment. However, Welsh taxpayers will have a new ‘C’ prefix added to their tax code.
The personal allowance and tax rates on dividends and savings income will continue to be set by the UK government for all UK taxpayers, regardless of where they live in the UK.
Taxpayers are being advised to ensure that they keep HMRC informed of any change of address.
Making Tax Digital for VAT – exemptions and deferrals
Making Tax Digital for VAT (MTD for VAT) is set to come into effect from 1 April 2019 for businesses whose turnover is greater than the current VAT registration threshold of £85,000. However, there are deferrals and exemptions to this as listed below.
Firms that fall into the categories below are exempt from MTD for VAT:
- Businesses run by practicing members of a religious society or order with beliefs incompatible with the regulation’s requirements
- Businesses subject to an insolvency procedure
- Those satisfying HMRC that, for reasons of age, disability, remoteness of location or for any other reason, it is not reasonably practicable for them to use digital tools to keep business records in order to submit returns.
Furthermore, HMRC’s MTD for VAT guidance was updated in October 2018, outlining a significant deferral of the initiative for a small group of taxpayers with ‘more complex’ requirements. They will be given an additional six months to prepare for MTD for VAT, and will therefore not be mandated to use the system until 1 October 2019.
The deferral applies to: not-for-profit organisations that are not set up as a company; trusts; VAT divisions; VAT groups; local authorities; public corporations; and traders based overseas. Public sector entities required to provide additional information on their VAT return, those who must make payments on account and annual accounting scheme users are also covered by the deferral.