Recovery Team Scaling up at RMT Accountants
March 11, 2019
With the Chancellor’s annual Budget on the horizon, this first quarter has already seen an abundance of propositions and conjecture on Government policy for the coming year and beyond.
Despite some querulous voices from the Opposition, Chancellor George Osborne has demonstrated confidence in the state of the economy and the future of the UK in the aftermath of recession. The International Monetary Fund (IMF) has also announced a more optimistic UK growth forecast of 2.4%, amid predicted global economic growth of 3.7%.
However, despite the suggestion of a momentary breathing space for the economy, plans to reform the National Minimum Wage – including an above inflation increase – have been greeted with less enthusiasm by some business groups.
More welcome amongst some campaigners was the announcement that Child Trust Funds can be transferred to Junior ISAs from next year, in a move which is set to benefit more than six million young savers.
To find out more about the Budget and what it means to you and your business please join us at our forthcoming Budget Seminar on Friday 21st March at the Assembly Rooms CLICK HERE TO BOOK
Following an announcement of tougher penalties for employers found to be flouting the National Minimum Wage (NMW), the same week also saw proposals for an increase in the rate itself.
First, Business Secretary Vince Cable set out plans to quadruple fines for employers who fail to pay the current NMW of £6.31 per hour for workers aged 21 and over. It was confirmed that the maximum fine of £5,000 will rise to £20,000 this February, while the financial penalty will also increase from 50% to 100% of the missing wages.
Mr Cable said, ‘Anyone entitled to the national minimum wage should receive it. Paying anything less than this is unacceptable, illegal and will be punished by law. So we are bringing in tougher financial penalties to crack down on those who do not play by the rules. The message is clear – if you break the law, you will face action’.
Shortly after this news, Chancellor George Osborne presented his proposal to dramatically increase the NMW, which is set by the independent Low Pay Commission. This would mark the first time since 2008 the rate has increased in any significant way with respect to inflation. Mr Osborne’s proposal is a 10% rise, which in real terms means moving up from £6.31 to £7 per hour by 2015, at the current 2% rate of inflation.
Frances O’Grady, General Secretary of the Trades Union Congress (TUC), welcomed both proposals, commenting, ‘The TUC has long argued that successive governments have been soft on minimum wage dodgers’.
O’Grady added, ‘We welcome George Osborne’s acceptance of the TUC’s case for an above inflation rise in the minimum wage. But while this would help many, the Chancellor should be more ambitious about achieving decent pay rises across the whole of the UK workforce’.
However, the Director General of the Confederation of British Industry (CBI), John Cridland, warned, ‘An unaffordable rise would end up costing jobs and hit smaller businesses in particular. Any increase in wages must reflect improved productivity’.
The Government may be hoping that these changes, coupled with the forthcoming reforms to national insurance, will put them in good stead for the 2015 election campaign.
Following criticism by some industry experts over the lack of action on Child Trust Funds (CTFs) in the 2013 Autumn Statement, the Government has now announced that parents will be able to transfer money held in CTFs into more favourable Junior Individual Savings Accounts (JISAs). In a major change to the existing rules, Chancellor George Osborne has revealed that the current ban on such transfers will be lifted from April 2015.
CTFs were introduced by the previous Labour Government and were available to children born between 1 September 2002 and 31 December 2010 inclusive. From that point they were replaced by the JISA – but the two types of account are currently treated separately, meaning those with a CTF are unable to open or move money into a JISA.
An estimated £5 billion is currently held in CTFs, with interest rates often as low as half those available for JISAs. From 6 April 2014, subscription limits for both types of account will rise to £3,840, in line with the consumer price index (CPI) measure of inflation.
The move will no doubt come as welcome news to parents, with over six million young savers set to benefit from greater choice and more generous savings rates when the new ruling comes into effect next year.
Founder of MoneyComms, Andrew Hagger, advised: ‘Parents should continue contributing to their CTF for now, but as soon as they are able they should consider switching to a JISA where it’s possible to secure a better return’.
Another advantage is that when the child turns 18 the JISA will automatically upgrade to an adult ISA so those savings can continue into their adult life.
We can help to ensure that your personal finances are as tax-efficient as possible – please contact us for advice.
RMT Accountants & Business Advisors are wishing the North East business community an ‘appy new year by launching a new, free smartphone app.
The RMT Tax Tools app contains a comprehensive range of up-to-date information about different aspects of the taxation regime, as well as tools which can be used to assist with everyday business-related calculations.
A mileage calculator uses in-built GPS technology to save, collate and download precise distances for car journeys, while an expenses log allows for a categorised list of personal business costs to be easily maintained. Click here to read more
Dozens of North East jobs have been saved after a buyer was found for one of the Tanfield Group plc’s divisions. Tanfield Engineering Systems Ltd was placed into administration in November last year by its directors after posting substantial losses in the previous financial year.
The Recovery & Insolvency team at RMT Accountants & Business Advisors was appointed as administrators for the Tanfield-based business with a view to trading the business to protect its substantial debtor book, marketing it and attempt to sell it as a going concern. Click here to read more
Employment law essentials with Collingwood Legal – Thursday 13th Feb 2014 click here for more information
RMT Budget Breakfast Seminar – Friday 21st March 2014 @ The Assembly Rooms click here to find out more
Pros and Cons Poker Night – Thursday 6th March 2014 @ Aspers Casino click here to find out more
£100 penalty if 2013 Tax Return not yet filed online. Additional penalties may apply for further delay. Interest starts to accrue on 2012/13 tax not yet paid.
Submission date of P46 (Car) for quarter to 5 January.
Last date (for practical purposes) to request NIC deferment for 2013/14.
“My great hope is that 2014 will prove momentous.”
Managing Director of the IMF, Christine Lagarde, commenting on optimistic new expectations of UK growth.
Advice and information on choosing and setting up the right Junior Individual Savings Account for your child.
For advice on effective business planning, visit the Tax Strategies section of our website.
Savings and Investments
For essential tips and information on making the most of your finances, visit the Your Money section of our website.
New campaign to protect businesses against cyber crime
Small businesses are being encouraged to take steps to protect themselves against cyber criminals, with the launch of the Government’s new ‘Cyber Streetwise’ campaign.
National insurance cuts ‘will save £200 per employee’
Forthcoming changes to the national insurance regime will save an average of £200 per employee by the end of this Parliament, the Government has announced.
Interest-free loans offered to businesses affected by UK flooding
A fund worth £250 million is to be made available to UK businesses after strong winds and heavy rainfall led to severe flooding in many parts of Britain.
Pensioners should be allowed to switch annuities, says Pensions Minister
Pensioners should be allowed to break their annuity contract and shop around for a better deal, the Pensions Minister Steve Webb has suggested.
Business confidence ‘improving’
‘Quiet optimism’ among manufacturers has been reported in a survey by the Engineering Employers’ Federation (EEF).