In this month’s update we update you on the economic statement announcement, self assessments and the latest guidance for employers.
Government pushes back economic statement
Chancellor of the Exchequer Jeremy Hunt has delayed the announcement of the government's economic plan until 17 November.
The Medium-Term Fiscal Plan was due to be delivered by the Chancellor in the Commons on 31 October, along with a forecast from the Office for Budget Responsibility.
This had been brought forward because of the market turmoil that followed September's Mini Budget.
But it will now be put back by more than two weeks and be turned into a full Autumn Statement - expanding its remit and providing longer term plans.
The delay followed the reversals of most of the measures announced in the recent Mini Budget.
Mr Hunt announced that the following tax policies will no longer be taken forward:
- cutting the basic rate of income tax to 19% from April 2023. The basic rate of income tax will remain at 20% indefinitely.
- cutting dividend tax by 1.25 percentage points from April 2023. The 1.25 percentage point increase, which took effect in April 2022, will remain in place.
- repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will remain in place.
The changes follow decisions not to proceed with proposals to remove the additional rate of income tax and to cancel the planned rise in the corporation tax rate.
Mr Hunt said:
'Our number one priority is economic stability and restoring confidence that the United Kingdom is a country that pays its way. But it is also extremely important the statement is based on the most accurate possible economic forecasts and forecasts of public finances.'
Keep informed on our website and social media where you can read the latest updates and our summary of the government's economic plan on the 17th November.
Internet links: GOV.UK
FCA warns that eight million are struggling to keep up with bills
Almost six in ten UK adults are struggling to keep up with their bills, according to new research from the Financial Conduct Authority (FCA).
The research estimates that 7.8 million people were struggling to keep up with their bills - an increase of around 2.5 million people since 2020.
In addition, 60% of UK adults are estimated to be finding it a 'heavy burden' or 'somewhat of a burden' keeping up with bills.
One in four UK adults has said they were in financial difficulty or could find themselves in difficulty if they suffered a financial shock.
Some 4.2 million people have missed bills or loan payments in the six months before the survey took place.
Sheldon Mills, Executive Director of Consumer and Competition at the FCA, said:
'Our research shows that people up and down the country are struggling to keep up with their bills.
'If you are facing financial difficulty, you don't need to struggle alone. There is free debt advice available, and we have told firms that they must work with their customers to solve any problems with payment.'
If you are struggling to keep up with bills and need our help, contact our Rescue and Recovery team on 028 87752990 for expert support and guidance.
Internet link: FCA website
Self assessment clock ticks down to under 100 days
HMRC has reminded taxpayers that they are now less than 100 days until the deadline for self assessment online return submission.
Self assessment taxpayers have until 31 January 2023 to submit their online return for the 2021/22 tax year.
According to HMRC, more than 66,000 taxpayers beat the clock and filed their tax return on 6 April – the first day of the new tax year.
HMRC is now encouraging others to complete their return as soon as they can so they know what they owe and can budget to make the payment by 31 January 2023. This also means that if a repayment is due, it can be claimed back sooner.
Last year, more than 95% of taxpayers filed online and those who submit their returns early still have until 31 January 2023 to pay.
Speaking on 24 October, Myrtle Lloyd, HMRC's Director General for Customer Services, said:
'With 100 days to go until the online deadline, there's still time to complete your tax return, to budget and look into the range of payment options if you need to.'
Internet link: HMRC press release
Latest guidance for employers
HMRC has published the latest issue of the Employer Bulletin. The October issue has information on various topics, including:
- the reduction in the rate of National Insurance contributions
- making PAYE Settlement Agreement payments and using the PSA1 online form
- the new starter checklist interactive guidance
- Making Tax Digital returns and changes to VAT penalties and interest charges
- the Government Information and Advice Service.
Please contact our dedicated tax team for help with any tax matters.
Internet link: Employer Bulletin
Whilst every effort has been made by CavanaghKelly to ensure the accuracy of the information here, it cannot be guaranteed and neither CavanaghKelly nor any related entity shall have liability to any person who relies on the information herein. Information given here is for guidance only. Detailed professional advice should be taken before acting on any information contained herein. If having read the guidance here, you would like to discuss further; a member of our team would be pleased to help you.