November 2023
Technical and Client Update
In this issue
Autumn Statement summary
Tax Investigation Service
Staff entertaining & trivial benefits
Christmas opening hours
Exam success
Charity of the year 2023
Autumn Statement summary
With the Autumn Statement just recently announced by Chancellor Jeremy Hunt, we have put together a summary to highlight the key points that may affect you and your business.
In his statement to Parliament, the Chancellor set out a plan to cut National Insurance paid by employees, while also unveiling the government’s tax and spending plans for the economy.
Our summary will cover the following areas:
- Cutting tax and rewarding hard work
- Backing British Business
- Income tax
- VAT
- Pension reform
- Corporate taxes
- Employment taxes
We have also included a useful Q&A section to communicate some of the key issues that may impact you, along with an infographic showing how you can reduce your 2023/24 tax bill.
Tax Investigation Service
With a budget deficit of over £355 billion, we fully expect HMRC to raise more enquiries this year to increase tax revenue and plug the hole left in the government’s finances due to the economic damage caused by COVID-19. HMRC opened 102,000 investigations into taxpayers in the first quarter of 2021 – up 36% from 75,000 in the previous quarter.
Tax investigations continue to represent the main method HMRC employs to reduce this deficit. Some are launched at random, whilst others are targeted towards specific business sectors. Either way, we have noticed a continued increase in activity as their computer systems become more extensive and sophisticated. All taxpayers are at risk.
Humphrey & Co has offered a Tax Investigation Service (TIS) to our clients for several years now, and we invite all our clients to share in the protection offered. During an investigation, the questions can be detailed and time consuming to answer. Whether or not HMRC finds extra tax to pay, the costs to defend you can be substantial. Indeed, it has been known for clients to agree to HMRCs demands simply because of the costs involved in continuing to fight the case. For our subscribers, there is no cost whatsoever (subject to policy limits).
Please remember that businesses are also entitled to unlimited free access to the business helplines. Qualified experienced specialists are available in the fields of employment, health & safety and commercial law to assist in these increasingly litigious areas. Your business could potentially save considerable amounts of time, expense and disruption from this add-on service.
We believe that we know you and your business best and we want to be there for you when you need us most. We will manage your case from start to finish, reducing stress and providing peace of mind.
For a reminder of the benefits of the service, exclusions and extent of cover provided, please refer to the TIS leaflet and/or browse our dedicated website at www.humph.co.uk/tis.
Staff entertaining & trivial benefits
With the Christmas season suddenly on the horizon, principals will be looking at ways to thank their staff for their contributions and hard work during the year. Whatever your plans are, you do need to be aware of the tax implications of entertaining and making such gifts.
STAFF ENTERTAINMENT
As an employer providing social functions and parties for your employees, you have certain National Insurance and reporting obligations.
What you need to report and pay depends on:
- if it’s an annual event
- if it’s open to all of your employees
- if it costs more than £150 per head
- how many events you provide during the tax year
- whether the employee is a director, and how much they earn
You might not have to report anything to HM Revenue and Customs (HMRC) or pay tax and National Insurance. To be exempt, the party or similar social function must be all the following:
- £150 or less per head per year
- annual, such as a Christmas party or summer barbecue
- open to all your employees
TRIVIAL BENEFITS
You do not have to report a benefit for your employee if all of the following apply:
- it costs you £50 or less to provide (per employee)
- it is not cash or a voucher that can be exchanged for cash
- it is not a reward for their work or performance
- it is not in the terms of their contract
This is known as a ‘trivial benefit’. You do not need to pay tax or National Insurance or let HMRC know.
The employee will have to pay tax on any benefits that do not meet all of the above criteria.
If a business provides a bottle of wine in a nice gift bag as a Christmas gift, for example, the value of the gift bag should be included in the value of the gift when deciding whether the total value exceeds the trivial benefits limit.
STAFF CHRISTMAS BONUSES
Staff bonuses issued must be reported through payroll as these are subject to Income Tax and National Insurance.
Bonuses paid to staff must be included in payroll as additional earnings. If you do have plans to pay a bonus, you will need to speak to your payroll provider in advance of the payment to ensure that this is reported to HMRC at the time of payment.
As always, do feel free to contact us if should you require advice.
Christmas opening hours
The office will be closed from 5pm on Friday, 22 December 2023
Our Opening Times during the Christmas Period will be:-
| Monday | 25 December | Closed |
| Tuesday | 26 December | Closed |
| Wednesday | 27 December | Closed |
| Thursday | 28 December | Closed |
| Friday | 29 December | Closed |
| Monday | 1 January | Closed |
| Tuesday | 2 January | Open |
On behalf of everyone at Humphrey & Co we would like to wish you a very Merry Christmas and a happy, healthy and prosperous 2024.
Exam success
We are pleased to announce that Tom Newton has passed his exams to qualify as a Chartered Accountant (ACA).
Tom joined the firm in 2017 as an Apprentice Accounting Technician qualifying in 2020, he then went on to study towards his Chartered Accountancy qualification (ACA) which he achieved in September of this year. Tom works for Partner Karen Wicks assisting with her portfolio of dental clients.
“I’m so proud of myself and overwhelmed to have qualified as a chartered accountant. I’m incredibly grateful to Humphrey & Co and my friends and family for their support and encouragement over the last few years. I’m looking forward to using the knowledge I have obtained over the course of my studies to provide the best possible service to our clients with their accounting and tax needs.” said Tom.
Senior Partner Anthony Smith comments “Our staff represent our biggest asset as a firm, and we are always happy to invest in their training and development so that we can continue to provide the very best service to our clients. Tom has worked extremely hard to reach this goal and we are delighted he has achieved success in his examinations. Now the real work begins!”
We are delighted to have yet more exam success within the firm and congratulate Tom on all his hard work in achieving this qualification.
Charity of the year 2023
During 2023 we chose to support The Brain Tumour Charity the world’s leading brain tumour charity and the largest dedicated funder of research into brain tumours globally.
Committed to saving and improving lives, they are moving further, faster to help every single person affected by a brain tumour. They are set on finding new treatments, offering the highest level of support and driving urgent change.
We are very appreciative to all members of our staff who have helped to raise over £1,200 for this very worthy cause.
We will update you on our charity of the year for 2024 in future news updates.