Newsletter November 2024

November 2024 Newsletter

Good news for small businesses and self-employed people who suffer from late payments as new reporting legislation is being introduced to make larger firms' payment terms more accountable. More welcome news affects employees within sectors where tipping is common practice, typically hospitality. It's now law that tips must be passed to employees. You can find out what is expected of you if you take goods to sell abroad - the declaration threshold has now been increased to £2,500. You can also read about a crackdown on insurance fraud - an activity that amounts to over £1bn in the UK alone in 2023. And lastly, we have our usual roundup of financial deadlines that take us up to the end of the year.

Government crack-down on late payers

The government has unveiled new measures to support small businesses and the self-employed by tackling the scourge of late payments, which according to the Smart Data Foundry is costing SMEs £22,000 a year on average and according to FSB research, leads to 50,000 business closures a year. 

The government will consult on tough new laws which will hold larger firms to account and get cash flowing back into businesses - helping deliver our mission to grow the economy. 

In addition, new legislation being brought in the coming weeks will require all large businesses to include payment reporting in their annual reports - putting the onus on them to provide clarity in their annual reports about how they treat small firms. This will mean company boards and international investors will be able to see how firms are operating. 

Enforcement will also be stepped up on the existing late payment performance reporting regulations which require large companies to report their payment performance twice yearly on GOV.UK. 

Under current laws, responsible directors at non-compliant companies who don't report their payment practices could face criminal prosecutions including potentially unlimited fines and criminal records. 

The consultation which will be launched in the coming months, will also consider a range of further policy measures that could help address poor payment practices. 

Research shows that every quarter in 2022, 52% of SMEs small firms in the UK suffer from late payments, meaning roughly 2.8 million small firms face this issue, with the Federation of Small Businesses describing it as one of the biggest problems facing SMEs. 

Late payments are just one element of the problem, with some SMEs forced to wait months for contracts to be fulfilled and some are even forced to take out loans against their own homes to manage cash flow. 

Cracking down on late payments will unlock growth for 5.5 million small firms by enabling them to invest their time hiring more employees, boosting wages, and exporting around the world, rather than chasing down late payments. 

The Business Secretary will hold a joint call with the Federation of Small Businesses later today to outline to SME leaders the work the Department will undertake to put in place tough new laws to end bad payment culture. New proposals, subject to consultation, will be bought forward on audit and audit committees, in order to help rebuild small businesses' trust that they will be paid on time.

Service tipping law now in force

New regulations that prohibit employers from withholding tips for employees in the hospitality, leisure, and services sectors took effect on 1 October 2024. This change follows the enactment of The Employment (Allocation of Tips) Act 2023, commonly referred to as the Tipping Act, along with the statutory Code of Practice on the fair and transparent distribution of tips, which also took effect on 1 October 2024. 

This means that more than 2 million workers will have their tips protected. HMRC has estimated that this new law will mean an estimated £200 million a year will go back into the pockets of hard-working staff by retaining tips that would have otherwise been deducted. These new measures apply in England, Scotland and Wales. Employment policy is devolved to Northern Ireland. 

Employers who violate these rules could face fines or be required to compensate their staff. Workers will have the ability to hold their employers fully accountable through employment tribunals. 

The statutory Code of Practice provides businesses with advice on how tips should be distributed among staff. The Code of Practice is statutory and has legal effect, meaning it can be introduced as evidence in an employment tribunal.

Take goods with you to sell abroad

There are specific customs requirements for commercial goods that you take with you to sell abroad. You must declare any goods intended for sale outside the UK, whether they are in your baggage or a private vehicle. 

The regulations for commercial goods or samples carried by passengers in their accompanied baggage are known as Merchandise in Baggage (MIB). As of January 2024, the threshold for simplified declarations of MIB increased to £2,500 (increased from £1,500). If your goods fall below this threshold, you can make a simple online declaration within five days before your departure. 

A full export declaration is necessary if the goods exceed £2,500 in value or if they are subject to excise duty or import/export restrictions. 

For Northern Ireland, different rules apply. If you are taking commercial goods from Northern Ireland to Great Britain or the EU in your accompanied baggage, no declaration is required. 

There are separate procedures for temporarily taking goods abroad (such as samples for a trade fair) or when using a courier or freight forwarder.

Crackdown on insurance fraud

Insurance companies have united to step up efforts to crack down on fraudsters seeking to manipulate the UK insurance market with bogus claims and duping innocent people into buying fake insurance policies. 

In 2023 alone, 84,400 fraudulent claims worth £1.1 billion were detected by the Association of British Insurers (ABI), a 16% increase in the number of detected claims compared to the previous year. 

 

Crash for cash scams are becoming a significant issue. This sees fraudsters recklessly orchestrate accidents to put forward an insurance claim, putting innocent lives at risk. Fraudsters may also make claims for accidents that never happened. 

The Insurance Fraud Bureau is currently investigating over 6,000 suspected fraudulent motor insurance claims, which could be linked to crash for cash scams. In total, this is estimated to be worth over £70 million in potential fraud. 

The new voluntary charter is designed to identify loopholes in the insurance market, enhance collaboration and criminal justice outcomes, better understand the scale of the problem and improve victim support. 

Pledges include: 

  • the National Crime Agency's National Assessment Centre conducting a review into the role of professional enablers in the insurance sector - where someone provides false evidence to support a bogus insurance claim; 
  • identifying policies being exploited by 'illegal insurance intermediaries' - someone pretending to be a broker or selling completely fake insurance to customers; 
  • strengthening data security measures to stop insurance fraudsters using customer details to target people; and 
  • reviewing the tactics and websites being used by fraudsters to promote bogus insurance offers - this includes looking at the vulnerable victims' notifications process, which has proven successful in the banking sector, to better identify and support victims of insurance fraud. 

Tax Diary November/December 2024

1 November 2024 - Due date for Corporation Tax due for the year ended 31 January 2024. 

19 November 2024 - PAYE and NIC deductions due for month ended 5 November 2024. (If you pay your tax electronically the due date is 22 November 2024.) 

19 November 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 November 20244.  

19 November 2024 - CIS tax deducted for the month ended 5 November 2024 is payable by today. 

1 December 2024 - Due date for Corporation Tax payable for the year ended 28 February 2024. 

19 December 2024 - PAYE and NIC deductions due for month ended 5 December 2024. (If you pay your tax electronically the due date is 22 December 2024). 

19 December 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 December 2024.  

19 December 2024 - CIS tax deducted for the month ended 5 December 2024 is payable by today. 

30 December 2024 - Deadline for filing 2023-24 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2025-26.




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