Banks remain risk averse

The quarterly Business Monitor report from BDRC has found that the proportion of successful new applications for bank lending was in steady decline with 53% of loan applications from SMEs, including renewals, being successful in the 18 months to June compared with 60% in the period to March 2013.  The Forum of Private Business warned that "distrust of the banking sector is continuing to affect the growth plans of some small businesses and the pace of the recovery" while EFF, the manufacturers' group, said that "discouraged demand" for bank lending remained an issue.

Scrap HMRC’s recovery powers

The Law Society has joined the call from the accountancy profession and the leading building societies for HMRC to scrap its plans which would allow it to seize money from taxpayer bank accounts. The Law Society branded the debt recovery position as “draconian & regressive” . Whilst there is no doubt that tax due should be paid there are already procedures in place which are deemed to be perfectly adequate and sufficient. Data Protection and human rights legislation will need to be examined closely if HMRC insist upon proceeding with their plans. ACCA have re-stated their concerns and in particular the view that HMRC will continue with implementation of the practice irrespective of what people say.

SME Lending

Lending by the major UK Banks to business fell again in July on a net basis. The British Bankers Association said that the fall in July of £941m was not as steep as previous months. A report by The Federation for Small Businesses suggests that its members were now in a position to take advantage of the economic recovery but with firms looking to invest and recruit to achieve this Walker Thompson still finds the figure disappointing and reflects the ongoing trust issue with the banks.

Newsletter 83

Headlines from our latest newsletter.  Please click on any of the links below for more information :

GUIDANCE ON CHANGES TO VAT FILING RULES

The majority of businesses have to file their VAT returns online. HMRC have issued guidance on changes to VAT rules which introduce additional exemptions to the requirement to file VAT returns online. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Guidance

PENSIONS REGULATOR USES FORMAL POWERS OVER AUTO ENROLMENT

The Pensions Regulator (TPR) has issued the first quarterly bulletin which details how many times it has needed to use its formal powers to ensure employers comply with their automatic enrolment duties. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Pensions

PENSION SCAMS

HMRC and the Pensions Regulator (TPR) are publicising the availability of revised leaflets which warn people of the consequences of pension liberation scams. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Pension

HMRC LATEST DISCLOSURE OPPORTUNITY

HMRC have announced the details of their latest disclosure opportunity which is expected to give approximately 16,000 tax avoidance scheme users the opportunity to pay the tax they owe. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Disclosure

HMRC WARN OF INCORRECT RTI LETTERS

HMRC have warned that incorrect RTI letters have been issued. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#RTI

HMRC TO ISSUE PENALTIES FOR LATE SUBMISSION OF PAYE RETURNS

In the latest Employer Bulletin HMRC are warning that employers’ who fail to submit their PAYE submissions, Full Payment Submission (FPS) or where appropriate Employer Payment Summary (EPS) on time will face penalties. The penalties are being introduced from October 2014. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Penalties

Crowdfunding For Clear Books

Tim Fouracre, the founder and CEO of cloud-based accounting software business Clear Books, is looking to use crowd funding to raise additional capital by offering 275,000 shares at a subscription price of £12 per share when it goes live on to the general public from 4 August, and is initially open to existing shareholders.

Clear Books has increased its customer base from 5,000 to more than 7,000 small businesses since September 2013, and increased its monthly revenue from £60k to £100k, achieving a 74% increase in annual revenue to the financial year 31 March 2014.

HMRC DENY TERMINAL ILLNESS AS REASONABLE EXCUSE !

HM Revenue & Customs have succeeded in a penalty claim for late tax payment when the taxpayer was diagnosed as terminally ill.  Given the circumstances, the amount of tax due and the amount of recoverable penalty it does question HMRC's approach to tax recovery on a cost benefit basis.

The full story can be found at  http://www.accountingweb.co.uk/article/man-s-terminal-illness-not-reasonable-excuse-late-payment-tax/562710

Living In A Fools Paradise

Business confidence might be galloping ahead, but many companies - not just the fabled zombies - continue to live in a fool's paradise of low interest rates and bank forbearance. Such complacency about the levels of corporate insolvency would be premature at best and naive at worst. The modest overall fall in company insolvencies should not be confused with a sustainable recovery.

Insolvencies On The Slide

The number of companies entering administration has fallen to the lowest level since the first quatre of 2005, government statistics show.

According to the latest figures from the Insolvency Service, fewer companies entered into administrations, company voluntary arrangements and receivership in the second quarter of 2014 than over the same period the previous year.

Inheritance Tax Still Takes A Big Bite

Families were charged £3.4bn in death duties last year, an increase from £3.1bn in the previous 12 months, the Office for National Statistics said. The total was only slightly below the £3.5bn anticipated by the Office for Budget Responsibility, the government's financial forecaster.

New Rules For Non Doms Living In The UK

Non-doms living in the UK are only taxed on their non-UK income to the extent that they bring it into the UK. The proposed change relates to a situation where a non-dom takes out a loan - in the UK or elsewhere - which they use in the UK, for example to buy a property. If that loan were repaid using foreign income or gains the law has always recognised that repayment as an indirect remittance & taxed it accordingly.

Less clear perhaps is a situation where the offshore income or gains are used as collateral for the loan. In most situations the collateral is just a safety net and the loan will be fully repaid using other means. HMRC previously took a view that this should be treated as a remittance only in obvious avoidance cases. The withdrawal of this treatment could mean that there is a remittance, even if the arrangement was always that the loan would be repaid using monies already in the UK.