Getting prepared early on is something we always advise clients to do, and this proactive approach helps you to manage your financial obligations well before the January rush.

Do you need to file a Self Assessment tax return?

If you’re unsure whether you need to file a return, checking as soon as possible is essential to ensure you are prepared for the filing deadline.

As outlined by HMRC, you must file a tax return for the 2023/24 tax year by 31 January 2025 if you met any of the following criteria:

• You earned more than £1,000 through being self-employed
• You were a partner in a business partnership
• Your taxable income was above £150,000
• Capital Gains Tax was due on the sale of an asset
• You paid the High Income Child Benefit Charge

There are other situations where you may need to file a tax return, such as if you are a landlord or earned any untaxed income during the tax year.

If you are required to submit a tax return for the first time, you must register for Self Assessment by 5 October 2024.

In the case you are filing a paper return, it’s important to note you must do this before 31 October 2024. You should prepare for the shift to Making Tax Digital for Income Tax Self Assessment (ITSA), which will be implemented from April 2026.

This forms part of the move to digitise the tax system, with sole traders and landlords earning above £50,000 being required to file their tax returns using MTD-compliant software from April 2026. This will extend to those earning above £30,000 from April 2027.

You may be able to voluntarily register for MTD for ITSA early – you can check if you are eligible here.

Why should you file early?

The first day of the tax year, 6 April, saw a substantial number of filings, with nearly 70,000 people submitting their returns.

Filing early offers numerous advantages. It allows more time to ensure your return is accurate and complete, potentially avoiding common errors associated with rushed submissions.

If you’d rather take the pressure off yourself, our tax team can prepare and file your tax return for you, providing the peace of mind that you are fulfilling your tax obligations on time.

Preparing your tax return early with the support of an accountant can also help with budgeting, by providing early insight into any tax owed or refunds due.

To aid in managing finances, HMRC offers the option to set up a budget payment plan, allowing taxpayers to make incremental payments towards their next tax bill through direct debits.

Refunds on overpaid tax are processed sooner for early filers, and the status of these can be checked using the HMRC app.

As the year progresses, taxpayers are encouraged to take advantage of these options, ensuring a smoother and more efficient tax filing experience.

If you would like assistance with filing your Self Assessments or require specific advice, please contact us today.

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Those in this band do not automatically need to send a Self-Assessment tax return for the 2023/24 financial year if they meet the following criteria:

• They are taxed through Pay-As-You-Earn (PAYE)
• They submitted a 2022/23 tax return showing income within the stated band
• They have no other income
• They do not meet any other criteria for requiring Self-Assessment, such as being self-employed and earning over £1,000 from self-employment
• They do not pay the High Income Child Benefit Charge (HICBC)
• They are not a partner in a registered business partnership
• They do not receive any untaxed income over £2,500.

Net adjusted income refers to total taxable income before your Personal Allowance is applied, but after certain reliefs, such as charitable donations via Gift Aid.

Anyone earning between £100,000 and £150,000 annually who does not meet all these criteria will need to submit a Self-Assessment return for the previous financial year as normal.

If you need to send a return for the 2023/24 financial year, you must register by 5 October 2024 and submit it by 31 January 2025.

Are further changes coming?

2023/24 was a transition year towards completely removing the requirement for PAYE-only taxpayers to submit a Self-Assessment return.

In the most recent financial year, those earning over £150,000 per annum were still required to submit a return, despite paying tax through PAYE only.

For the 2024/25 financial year onward, this requirement has been removed entirely.

Those that need to submit a Self-Assessment return for 2023/24 should remember that the Personal Allowance decreases by £1 for every £2 that you earn over £100,000 – effectively removing the Personal Allowance for incomes of £125,140 or more.

For advice on Self-Assessment and optimising your personal taxes, please contact our team.

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Understanding the Salaried Member legislation

The Salaried Member legislation essentially treats LLP members as employees for tax purposes if they fail to satisfy certain conditions.

These conditions, known as Condition A, Condition B, and Condition C, serve as benchmarks to determine the tax status of LLP members.

The conditions

• Condition A – Disguised salary. This condition examines whether at least 80 per cent of a member’s profit share resembles a fixed salary rather than a variable share linked to the overall profits of the LLP.
• Condition B – Significant influence. This evaluates whether the member’s rights and duties within the LLP present significant influence over its affairs.
• Condition C – Capital contribution. This condition assesses whether the member’s capital contribution to the LLP falls below 25 per cent of their expected disguised salary.

The focus of the recent amendments revolves around Condition C, particularly concerning a member’s capital contribution and its implications for tax treatment.

What’s changed?

HMRC’s updated guidance sheds light on how they interpret the legislation, although the legislation itself remains unchanged.

Notably, HMRC has emphasised its stance on Condition C and its application, especially in light of the Targeted Anti Avoidance Rule (TAAR).

The TAAR aims to disregard any arrangements designed to avoid the application of the salaried members rules.

While the original guidance implied that HMRC would only invoke the TAAR in extreme cases, the recent changes suggest a more vigilant approach, particularly regarding Condition C.

Previously, HMRC had advised that a genuine, enduring capital contribution with real risk would not trigger the TAAR.

However, the advice now includes a clause specifying that financing arrangements aimed at avoiding the salaried members rules may indeed trigger the TAAR.

In light of these amendments, LLPs and their members must be wary when structuring capital contributions and arrangements.

It is important to ensure that capital contributions are genuine, enduring, and not solely aimed at avoiding tax obligations.

Are you affected by these changes?

If your LLP or its members are grappling with the implications of HMRC’s updated guidance, then we are here to help.

Our team of experienced accountants specialises in navigating complex tax regulations and can provide tailored solutions to ensure compliance and mitigate risks.

Don’t let uncertainty about tax regulations impact your business. Contact us today for expert advice and personalised assistance.

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While ‘growth’ refers to the revenue and resources increasing at the same rate, ‘scaling’ refers to the process of identifying ways to grow more quickly and efficiently. 

By taking the initiative and scaling your business, you can ensure that your business grows at a more sustainable rate. 

Pitfalls of scaling 

Whilst scaling can be an effective tool for ensuring the growth of your business, it is important to acknowledge issues you could run into before you start planning. 

Common errors that businesses experience include: 

• Scaling too fast 
• Prioritising short-term instead of long-term goals 
• Losing focus 
• Hiring for quantity over quality 
• Overlooking processes and systems 

These common pitfalls can be easily avoided with strategic planning and the help of an accountant. 

Planning for profit 

If your business is looking to scale, one of your top priorities will be to increase sales and profits. 

Your initial instinct may be to attract new customers, but it may often be more cost-effective to build relationships with your current client base. This can not only help to retain customers but also make them more receptive to any price increases you may need to implement. 

To ensure that you are scaling your business rather than growing, it is best to increase your profits without taking on extra resources. 

Some tactics include:  

• Targeting a narrow market 
• Gaining a better understanding of your customers
• Addressing feedback both positive and negative 
• Building a skilled but not necessarily large team 
• Develop a marketing plan 
• Refine your message 

Structuring your team 

When it comes to scaling up, ensuring that you have the best staff on hand is vital. Qualified and experienced staff may require more pay, but they will also be able to take on more job responsibilities than someone who would accept less pay. 

To ensure that your team are right for your business, you should identify key hard and soft skills that you are looking for. 

These can include their customer service skills and qualifications that they may have. 

You should also consider if employees will fit into your long-term business goals, and if they are capable of driving growth forward. 

Investing wisely 

Part of scaling is about limiting resources where possible. 

Putting your profits back into your business should be considered carefully and strategically, with investment only going into areas that will increase efficiency. 

One example of this could be to invest in technology that streamlines your processes. There is software available that can help you to onboard both staff and clients, even improving your relationships with both. 

Another key component you can lean on technology for is keeping on top of your finances. Accountancy software can simplify the way that you access your business accounts, as well as open opportunities to automate repetitive processes. 

An accountant can help you to set up and maintain your online accounts, and even help you to ensure that you are staying compliant. 

Accountants are also a great investment, as they can provide data-driven business advice that can help drive the scaling of your start-up. 

Get in touch with our team today to find out how we can help. 

The post Ready for growth? Tips for scaling your start-up appeared first on Grunberg & Co.

They contain key financial information about a business to show its performance.

Whilst these are not mandatory, using Management Accounts can allow for better-informed decision-making and closer monitoring of progress towards goals and targets.

What should a Management Account include?

For many businesses, Management Accounts will include the same things. However, depending on the size and complexity of your company, they can be customised to include the information that you need.

In general, Management Accounts should include:

• Profit and loss report detailing your company’s revenue, costs, and profits
• Balance sheet showing your company’s assets, liabilities, and equity
• Cashflow statement and forecast showing your company’s cashflow throughout the accounting period
• Key performance indicators (KPIs) measuring your company’s performance, including sales growth, profitability, and feedback
• Budget comparison that highlights your company’s performance against its budget
• Analysis and commentary that sums up the above information and highlights any trends and issues that need addressing.

Who are Management Accounts for?

There are no specific recipients for your Management Accounts. They are designed to be seen by those who need financial information about your business, but this will vary depending on the size and structure of your business.

In short, Management Accounts can be seen by anyone who has a stake or interest in the finances of your business. This includes but is not limited to:

• Owners
• Shareholders
• Board members
• Senior management
• Accountants
• Tax advisors
• Investors

These people will then be able to make decisions based on the information that they are presented with.

Why are Management Accounts so important?

Regularly collating and analysing financial data in these reports is an excellent tool for ensuring the right decisions are being made for your business.

Without Management Accounts, issues and trends within your company may go unnoticed for long periods. This could lead to a lack of growth and poor decision-making.

Having up-to-date and correct information on hand can help promote the growth of your business. Good, data-driven decisions can help skyrocket your business above your competitors.

Preparing Management Accounts

When it comes to preparing Management Accounts, having an accountant on hand can help you to simplify the process.

They can help you to gather the relevant information and help you to prepare your:

• Balance sheet
• Profit and loss report
• A cashflow statement
• An analysis of financial data

From here, you can take your Management Accounts to the relevant parties and relay the information.

An accountant will also be able to offer practical business advice and support, identifying your market trends and influencing key decisions.

Get in touch today to find out how we can help you prepare Management Accounts.

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However, keeping track of these amid the busy new financial year isn’t easy. We’ve put together a handy overview of the most recent changes to get you off on the right track:

National Insurance Contributions (NICs) changes

Whilst the Personal Allowance remains unchanged, remaining at £12,570, and the tax rate bands remain the same, NICs have been in the spotlight.

As announced in the Spring Budget, Class 1 employee NICs have decreased to eight per cent, which must be reflected if you employ staff on a Pay-As-You-Earn (PAYE) basis.

Employer NICs remain at 13.8 per cent.

National Minimum Wage increases

The National Minimum Wage (NMW) and National Living Wage (NLW) have increased significantly, with the NLW being extended to include 21 and 22-year-olds.

As of 6 April 2024, NMW and NLW rates are set at:

• Over 21 years old – £11.44
• 18-20 years old – £8.60
• Under 18 years old and apprentices – £6.40

With the considerable rise, this may present cash flow challenges so we would also advise taking the opportunity to review other costs and adapt your financial plan if necessary.

Changes to holiday pay

For holiday years starting on or after 1 April 2024, if you employ part-year or irregular-hours workers you must calculate holiday entitlement and pay at a rate of 12.07 per cent of hours worked in a pay period.

This can be paid through one of two methods:

• Accrual – Employees can receive holiday pay at the time they take their leave, which is the more traditional method.
• Rolling up – Employees can receive holiday pay for the year split equally across all pay periods, effectively including holiday pay in regular payroll payments.

If an employee has had statutory, parental or sick leave in the current month, then the average pay should be calculated using gross pay taken over the previous 52 weeks.

Statutory payment increases

Statutory payments, covering parental pay and sick pay, increased slightly from 6 April 2024.

The new Statutory Sick Pay (SSP) rate for this financial year is £116.75 per week.

A new parental pay rate of £184.03 has also been introduced and applies to:

• Statutory Maternity Pay (SMP)
• Statutory Adoption Pay (SAP)
• Statutory Paternity Pay (SPP)
• Statutory Shared Parental Pay (ShPP)
• Statutory Parental Bereavement Pay (SPBP)

You must ensure you review your payroll in detail to ensure you are paying your employees correctly and all tax obligations are fulfilled.

If you need advice on updating your payroll, contact our team today.

The post Key payroll changes to look out for appeared first on Grunberg & Co.

As well as providing up-to-date information, the app can help you manage your tax payments, find out benefits you may be entitled to, and get in contact with HMRC.

It is a great alternative to accessing HMRC services online.

Accessing the app

You can download the app from either the App Store or Google Play for free. Once you have downloaded the app to your device, you will need to sign in for the first time using your Government Gateway Credentials.

Once you have signed in for the first time, you can access the app using either:

• A six-digit pin
• Your fingerprint
• Facial recognition

When this has all been set up, you are free to access the app as and when you need.

Available information

On the app, you will be able to access information about your taxes both past and present. This will include:

• Your Unique Taxpayer Number (UTR) for Self Assessment
• Your National Insurance number
• Your employment income for the current and previous five tax years
• Your income and benefits
• Your Child Benefit
• Your State Pension

From here, you will be able to store your National Insurance number in your digital wallet, so you can more easily access it when you need to.

Making payments

The app can help you to stay on top of your tax payments.

From the app, you will be able to see how much Self-Assessment tax you owe. You can also make payments for this using open banking.

As well as making payments, you will be able to calculate your take-home pay and apply for any tax refunds.

HMRC communications

You can access letters and communications from HMRC in the app if you opt to communicate digitally. This allows you easy access to important information and makes you less likely to miss important messages.

Any forms that you have submitted can also have their progress tracked via the app so that you can be sure that everything is running smoothly.

Any updates to your personal or financial details can be updated through the app. This includes any changes to your name, address, and bank details.

New services

A recent update has expanded what the HMRC app allows you to do. As well as the above, you are now able to:

• Manage your Child Benefit
• View your National Insurance history
• Check your State Pension forecast

This allows you to have a better idea of your financial past, present, and future.

Moving towards Making Tax Digital (MTD)

As the future of HMRC moves towards digital-only services, getting onboard early is the best practice.

The app is a step towards this digitisation of the tax system, with more updates to come, including the requirement to be more accessible to individual taxpayers.

MTD will be compulsory for the self-employed and landlords earning over £50,000 from April 2026. For those with an income above £30,000 but below £50,000, this will be from April 2027.

After these dates, you will be required to:

• Maintain digital tax records
• Use MTD-compliant software
• Submit quarterly updates

If you are struggling to adapt to HMRC’s digital services, one of our experts can help.

Contact us today for help and advice with managing and accessing HMRC’s digital services.

The post Could the HMRC app help you manage your taxes? appeared first on Grunberg & Co.

If you a business owner and are contemplating redundancies as a strategy for cost-cutting and restructuring, then you will need to understand the implications of these regulatory changes on your redundancy procedures.

What is the current legal framework?

Up until 5 April 2024, employees on maternity, adoption, or shared parental leave benefit from a ‘protected period’.

During this time, should they face redundancy, they have the right to receive offers of alternative employment ahead of other employees also at risk.

This alternative position must be suitable and must not be inferior in regards to their current role.

If you fail to offer such priority to your employees, the dismissal can be deemed automatically unfair.

You need to offer these priority positions even if you consider other candidates as more fitting for the role.

However, if the prioritised employee declines your offer, or if more than one vacancy exists, you may then extend the offer to other staff, provided you have reached an agreement with those in the priority group.

Are there any upcoming changes?

The extent of these regulations will widen from 6 April to include pregnant employees from the moment they inform their employer of their pregnancy.

Additionally, the protection period for individuals on maternity, shared parental, or adoption leave will extend to 18 months after the expected birth or adoption of the child.

It is important to note that this extended protection applies only if at least six weeks of the shared parental leave is taken.

How to implement redundancies under the new legislation

When you implement redundancies, it is crucial you prioritise those eligible for alternative positions correctly.

Redundancy consultation representatives must be aware of employees who have recently returned from maternity, shared parental, or adoption leave – this included the dates these leaves were taken, as well as any pregnant employees facing redundancy.

Once prioritised individuals have been considered for alternative roles, any remaining positions can be offered to other employees.

Is statutory redundancy pay changing?

You, as an employer, must ensure your employees who are not offered or refuse suitable alternative roles without just cause receive redundancy payments – this is provided they have been employed for a minimum of two years.

According to Government guidelines, redundancy payments should be calculated as follows:

• Half a week’s salary for each full year of service below 22 years of age
• A full week’s salary for each full year of service at 22 years of age or older
• One and a half week’s salary for each full year of service at 41 years of age or older, with a service cap of 20 years

Employees who decline these offered suitable positions, without a legitimate reason, forfeit their right to statutory redundancy pay.

If you would like guidance on business restructuring, reduction of cost, or the redundancy process, please get in touch with a member of our team today.

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It is essential you understand maternity pay and how to successfully incorporate it into your payroll to benefit both you and your employees.

You might feel uncertain about maternity pay and what your obligations are, but we are here to help you navigate the process and ensure you payroll successfully.

Statutory maternity pay

Statutory maternity pay (SMP) is paid to an employee by an employer and is payable for up to 39 weeks.

Your employee, however, is entitled to a maximum of 52 weeks leave.

By using the Payroll Manager software (recognised by HMRC), your employee will quickly know if they are entitled to SMP based on automatic calculations.

If you do not have this software, you should seek expert advice using our friendly team by getting in touch today.

The amount of SMP your employee will get is based on how long they have worked for you and how much they are paid.

Roughly, their average weekly pay should be above £123 (for 2023/24) and they should have worked for you 26 weeks prior to the qualifying week (the qualifying week is 15 weeks prior to the expected birth date).

SMP is payable at 90 per cent of the employee’s average weekly pay for six weeks and then at a rate of £172.48 (for 2023/24) or 90 per cent of the average weekly wage (whichever figure is lower).

It is important your employee informs you of the date they wish their leave to begin and how many weeks maternity leave they wish to take.

They should also provide you with a MAT B1 form; this is medical evidence of their pregnancy and helps you to payroll their maternity pay properly.

Enhanced maternity pay

As well as offering SMP, you might also offer your employees ‘enhanced’ or ‘contractual’ maternity pay.

For example, your employee might get 26 weeks of full pay followed by 13 weeks of SMP.

As their employer, you need to ensure your employees’ contract reflects the conditions of enhanced maternity pay.

These include:

• If your employee is entitled to enhanced maternity pay
• The amount of pay they will get
• How long they get it for

If you choose, you can pay more to your employees but you need to make sure your payroll reflects this.

Offering your employee enhanced maternity pay might mean they have to repay some or all of the enhanced amount (which is anything more than SMP).

Reasons might include:

• If they do not return to work
• If they leave shortly after maternity leave

It is important you set out these regulations to your employee as this could have a significant impact on your payroll if you don’t.

Employer pension contributions whilst on maternity leave

Your employee could be a member of a workplace pension scheme, which can add challenges to your payroll.

As their employer, you should still pay pension contributions based on their pensionable earnings before they go on their maternity leave.

Make sure you seek advice to pay your obligations successfully as this could impact both your payroll and your employee.

You must gain a clear understanding of how to correctly payroll maternity pay to ensure a period of rest and development is available for your employees.

Every situation is unique and so you must seek tailored financial advice to ensure there is specialised financial support for your employees.

If you would like to discuss maternity pay with an expert, contact us now.

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They include the Climate Change Levy (CCL), Aggregates Levy, and Landfill Tax.  

The CCL, for instance, is a tax on energy used by businesses – the Government is therefore incentivising you to focus on your energy efficiency.  

Similarly, the Aggregates Levy applies to businesses involved in producing commercial aggregates like sand, gravel, or rock, and the Landfill Tax is imposed on businesses disposing of waste in landfills. 

What are green investment schemes? 

To help offset environmental taxes the Government runs schemes that actively promote a more environmentally friendly business operation. 

To support eco-friendly business improvements, the Government offers initiatives like the Annual Investment Allowance (AIA), which allows businesses to deduct the full value of qualifying green equipment from profits before tax.  

Enhanced Capital Allowances (ECAs) also provide a 100 per cent first-year allowance for investments in energy-saving equipment.  

These incentives should encourage you to invest in environmentally friendly equipment, and, in fact, we often recommend that our clients look into these schemes. 

Should you invest in electric vehicles? 

We’ve had a lot of questions about electric vehicles recently, and clearly, they are becoming more and more popular. 

If you decide you’d like to go down that route, we fully support you – they are a great way to go green.  

They’re exempt from road tax, which is calculated based on emissions, so before you’ve even considered the long-term gain on fuel you are making a difference to your bottom line.  

You can also claim a first-year capital allowance of 100 per cent on the cost of new and unused cars with zero emissions.  

Additionally, lower rates of Benefit in Kind apply for electric vehicles provided as company cars, compared to petrol, hybrid, or diesel cars. 

Specialist equipment and energy conservation 

If you are investing in specialist equipment for energy conservation you may qualify for tax relief under schemes like the Environmentally Beneficial Plant and Machinery (EBPM).  

You could also be eligible for CCL relief by entering into a Climate Change Agreement (CCA) with the Environment Agency, which involves meeting specific energy efficiency targets. 

How to claim these tax reliefs 

While taking advantage of these reliefs and schemes can significantly offset costs and contribute to a greener business model, working out your liabilities, obligations and options for mitigation can be a real challenge.  

As such, we always advise that you seek guidance from qualified accountants to maximise the financial and eco-friendly benefits of these tax relief opportunities. 

We are happy to discuss your environmental relief options and any other tax mitigation strategies you’d like to explore. Please get in touch with one of our team for more information.  

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