HLAS

It has recently been reported that over half a million taxpayers paid a marginal income tax rate of 60% in 2022/23, a rise of 23% from the previous year. This marginal rate applies when an individual’s adjusted net income falls between £100,000 and £125,140, where every £2 of income over £100,000 reduces the £12,570 personal allowance by £1, such that it is fully eroded at £125,140. Planning to Mitigate the Problem The definition of "adjusted net income" is the individual’s total taxable income minus personal pension payments and charitable payments under Gift Aid. Such payments can effectively save income tax [...]

The previous government included plans to end non-domiciled tax status at the Spring Budget and replace it with a 4-year foreign income and gains (FIG) regime. The new government have now announced their intention to continue with these plans, while ending some advantages for existing non-domiciled individuals. What the change in tax status will mean Preferential tax treatment based on domicile status will be removed for all new FIG arising from 6 April 2025. This means that foreign income and gains will all be taxable in the UK where you are classed as residing in the UK, not just that [...]

Last week, the government updated the remit for the Low Pay Commission (LPC), now requiring it to consider the cost of living when recommending minimum wage rates. Additionally, the LPC has been directed to reduce the gap between the minimum wage for 18-20-year-olds and the National Living Wage, with a long-term goal of eliminating age bands entirely and implementing a single adult rate. Each October, the LPC provides recommendations to the government on minimum wage rates for the following April. The updated remit retains this schedule, giving businesses time to plan for any wage increases. Along with the cost of [...]

Starting 1 August 2024, Amazon will begin charging VAT at 20% on selling fees for UK vendors. This change results from a shift in the legal entity responsible for charging these fees. Previously, fees were billed by Amazon Services Europe S.a.r.l (ASE), which didn't have a UK establishment, making the fees subject to the VAT reverse charge procedure. However, from 1 August, fees will be charged by Amazon EU S.a.r.l (AEU), which has a UK branch. Consequently, AEU is required to apply VAT at 20% to these fees. VAT-registered vendors can reclaim the VAT, following the usual partial exemption rules. [...]

HM Revenue and Customs (HMRC) have released draft legislation and a policy paper detailing the proposed abolition of the furnished holiday lettings (FHL) tax regime. Originally announced by the previous government, any hopes that this might be delayed under the new administration have now been dispelled. The new measures are set to take effect from 6 April 2025 for income and capital gains tax, and from 1 April 2025 for corporation tax. These changes will eliminate the tax advantages that furnished holiday let landlords currently enjoy over other property businesses, as outlined below: Loan interest will be limited to the [...]

As anticipated, the Bank of England reduced their base interest rate on August 1 from 5.25% to 5%. The decision was a close call, with a majority of five to four voting in favour of the cut. The Monetary Policy Report that accompanies the decision explains that while higher interest rates have helped return inflation to the Bank’s target of 2% and allowed them to make this cut, they are expecting a temporary increase to 2.75% later this year. Why might inflation increase again? The fall in household energy prices has been helping to bring inflation down, however as energy [...]

Last week, Chancellor of the Exchequer Rachel Reeves addressed the House of Commons to present the findings of a Treasury spending audit. She had previously hinted at this during discussions about assessing the public spending legacy. According to the Chancellor, the audit uncovered £22 billion in unfunded commitments inherited from the previous government. These include obligations related to the Rwanda scheme, the Advanced British Standard, and the New Hospital Programme. Additionally, there were shortfalls due to the failure to increase Departmental budgets to accommodate public sector pay settlements. To begin addressing the overspend, the Chancellor announced savings of £5.5 billion [...]

The new Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into effect on 26 October 2024. This Act imposes a new legal duty on employers to take reasonable steps to protect their workers from sexual harassment. The Equality and Human Rights Commission (EHRC) holds the authority to take enforcement action against employers who fail to comply with their duties under the Act. Employment tribunals will also have the power to increase compensation for sexual harassment by up to 25%. To assist employers in understanding their obligations and adhering to the new requirements, the EHRC has updated its [...]

Losing a job can be a very challenging and stressful experience. However, if your employer has become insolvent and cannot pay you money that you are owed this adds even further to your stress. If you are in this situation, the latest Annual Report from the Insolvency Service highlights some important information about the support available that may be available to you through the Redundancy Payments Service (RPS). Here’s what you need to know. Key Figures and Support In 2023-2024, the RPS received 85,592 claims for redundancy payments. Funded by National Insurance Contributions, the service disbursed a total of £494 [...]

On Friday 19th July, significant IT outages impacted businesses worldwide. The outages primarily affected companies using security software from CrowdStrike. An error in a recent update to their antivirus software caused disruptions in many leading businesses' systems. The National Cyber Security Centre (NCSC) has confirmed that the outages were not the result of a security incident or malicious cyber activity. They have encouraged affected businesses to apply the fix that has already been issued and emphasised the importance of continuing to install security updates as an essential security practice. The NCSC has also reported an increase in phishing attempts referencing [...]