Articles

How to make savings during the cost-of-living crisis.

Nobody wants one, but a recession in the UK is looming, with the Bank of England (BoE) and British Chambers of Commerce (BCC) predicting the UK will enter one by the end of 2022.

The monetary policy committee of the BoE wrote:

“The latest rise in gas prices has led to another significant deterioration in the outlook for activity in the United Kingdom, which is now projected to enter recession from the fourth quarter of this year.”

A key aspect of the slowing economy is the worryingly high rate of inflation as measured by the consumer price index, which hit 10.1% in July 2022 and could peak at 14% according to the BCC.

It predicts GDP growth to grow in 2023 at a very low 0.2%, but the BoE expects the economy to continue contracting throughout 2023.

“Growth thereafter is very weak by historical standards”, it said.

How do recessions impact businesses?

Recessions can hurt any business in the country, but smaller ones are more likely to suffer, because the majority enjoy less of a financial cushion, market power and leverage within their industry to weather through tough times.

The one the UK faces is being driven by high inflation, which itself is being driven primarily by an explosion in energy prices, which is biting into the budgets of businesses more than expected.

It’s especially bad for industries that spend a big portion of their budget on energy, such as road freight transport and removal services (31%).

Micro businesses, which are defined as businesses with fewer than ten employees, are also especially vulnerable as they spend 20% of their budget on energy on average.

At the same time, consumer confidence has hit an all time low since comparable records began, as the cost-of-living crisis constricts household budgets.

Energy suppliers might see more profits, but businesses selling non-essential goods and services might see less business – ultimately reducing activity and fueling a recession.

Businesses also need to bear interest rates in mind. At the time of writing, the Bank of England base rate of interest is 2.25%. It is not completely certain whether this figure will increase, especially when considering consecutive increases throughout the year in an attempt to curb inflation by making it more expensive to borrow money.

All of this is to say that business owners need to start preparing right away (if they haven’t done so already) for the tough times ahead. A recession is more than just a headline buzzword for journalists and economists.

Assess your finances honestly

Surgically trimming your business budget is the obvious place to start. The challenge is to be smart about where to cut spending.

Oddly enough, however, cutting back is easier to do during a downturn than during prosperous times, as tough times provide an imperative to change. When survival is the goal, it’s easier to make the tough choices. Managers can defy old mindsets and creatively search for solutions, not just the next lifeline.

The challenge is to make your decisions well-defended and evidenced. To make sure they are, review your budget with key members of your financial team, advisers and accountants to get the insight you need to make the right decisions. They may be able to pick up on something you missed if they have all your business information at hand, giving you the confidence to say you’re making the right choices, no matter how tough they may be.

This should be a triage of your brand, products and services. Determine which have poor survival prospects, which may suffer in declining sales. Then you can cut loose what isn’t working, improve what might and keep doing what does.

Energy costs

A lot of businesses are and will continue to struggle because of rising energy costs. The Government recently announced an ‘energy price guarantee’ for households, and an ‘energy bill relief scheme’ to support businesses.

The energy bill relief scheme caps prices to 7.5p per kWh for gas and 21.1p per kWh for electricity, for six months from 1 October 2022.

Businesses can also look to reduce costs in the ‘normal’ ways – use energy efficient lighting; turn down the heat; turn things off when not in use; be careful with kitchen etiquette (overfilling the kettle costs the UK £68 million a year in energy costs!); use energy efficient tech; avoid energy waste, go paperless and so on.

You’ve heard these solutions before, but really focussing on them and getting the whole team involved after an energy audit could save you up to 10% on your business bill, according to the UK wing of Électricité de France.

If you are still worried about paying your business energy bills, contact your supplier, as they may be able to work with you to agree on a payment you can more easily afford. It’s always worth asking if in doubt.

Employment costs

Employees are essential to getting work done. For a lot of business owners, nothing could be done without them.

Employment costs, which for a typical restaurant usually stand at around 30% of revenue, can be expensive. But the solution isn’t always to cancel your new hire.

Instead, you can keep your number of full-time hires down by outsourcing certain tasks to third parties. A popular function to outsource is payroll – you need to get it done, but you’ll probably find you can save more by outsourcing it than hiring a payroll specialist.

Not only does outsourcing provide better value for money, but it also reduces the need for a large office with large rent fees and expensive energy bills. You might then be able to move somewhere less expensive, or get rid of the office altogether and move to remote working.

To save on employment costs, start with employee expenses, not employees themselves. You can make savings by ending or reducing the frequency of any free lunches you provide, for instance, or toning down this year’s Christmas party.

Embrace remote working

After the pandemic, a lot of employers were probably happy to see their staff return to the office, but that fondness doesn’t make it any less expensive than remote working.

When there are employees in the office, all those energy costs we’ve talked about are out in force, so you might want to reconsider your policy.

We’re not suggesting you go back to remote working completely, but re-evaluate how your working week goes. For instance, is there a day where only one or two employees come into the office, unnecessarily racking up your lighting costs? If so, consider closing the office permanently for that day.

When it comes to remote working, always remember that employees have been proven to be happier and more productive without the watchful eye of their employer.

Negotiate with suppliers and your landlord

Like your energy costs, what or how you pay your suppliers doesn’t have to be set in stone forever. Ultimately, they want to stay in business too and might be struggling. Furthermore, your payments are their income, and they want to keep that coming in, if you’re reasonable.

A great way to get a better deal is to buy in bulk. Suppliers, eager to move their stock and keep a positive cashflow, might just agree to a discount for a particularly big order of supplies.

Likewise, if you’ve been in a building for a while, you may be able to negotiate a better deal with your landlord, particularly if you’ve been a good tenant and have paid on time every month.

You might be surprised as to what you get and you certainly won’t lose anything by trying.

Talk to us about your business budget.

MTD non-compliance penalties also published.

After much anticipation from accountancy bodies and businesses, HMRC has finally updated its guidance on Making Tax Digital (MTD), filling in several blanks.

HMRC updated some of its informational pages on GOV.UK in late August, including fresh information on how to meet the requirements for MTD for income tax self-assessment (ITSA) and how to sign up for the scheme.

The new guidance follows a prolonged silence from HMRC and comes ahead of the commencement for MTD ITSA in April 2024.

What is MTD?

MTD is the Government’s policy to digitise the UK tax system in an attempt to simplify the process for taxpayers and improve their experience.

It also stems from the fact that the Treasury believes it lost £8.5 billion between 2018 and 2019 due to avoidable mistakes from taxpayers – mistakes that the Government believes technology and technological knowledge could have prevented.

The scheme first burst onto the scene in April 2019, applying to VAT-registered businesses above the £85,000 threshold at which registering for VAT is mandatory. Every VAT-registered business was expected to comply from 1 April 2022 onwards.

The scheme requires eligible businesses to keep records in software that can connect to HMRC to file the VAT return.

After the scheduled introduction of MTD ITSA in 2024, you can expect MTD for corporation tax to follow by 2026 at the very earliest.

Qualifying income

MTD ITSA must be complied with if an individual or sole trader has ‘qualifying income’ above £10,000 a year.

All of the following is considered as qualifying income:

• rents received from UK or overseas property (there is no deferral for landlords)
• self-employed sales from UK or overseas businesses
• income-based carried interest
• disguised investment management fees
• property or trading income received by a trust, which is taxed on the beneficiary.

However, there were some types of income that HMRC had omitted from this information, which it has now clarified.

First, non-domiciled individuals should know they do not need to include their foreign income in the threshold calculation or follow the MTD requirements for that foreign income.

HMRC also confirmed that income from a partnership is not included unless the income is in the form of “disguised investment management fees or income-based carried interest”.

The Revenue will use this approach until partnerships are fully mandated into MTD ITSA, which will be from April 2025 – from that point onwards, you can expect HMRC to view partnership income as qualifying income.

Please note, taxpayers with qualifying income above £10,000 but below the allowance for income tax will have to comply with MTD rules, even when there’s no tax to pay.

Exemptions from MTD ITSA

HMRC has confirmed all the following categories of taxpayers will not have to worry about the MTD ITSA reporting regime:

• Lloyds members, but only in respect of their underwriting businesses
• non-resident companies (these don’t pay income tax anyway as their property income is now subject to corporation tax)
• estates of deceased persons
• trusts
• trustees of non-registered pension schemes.

Charities are not automatically exempt from MTD ITSA. Instead, this will depend on their trading structure.

Authorise your agent to meet the requirements

HMRC has also updated its guidance to give clarification on the role of agents – such as accountants – in MTD ITSA.

Taxpayers can authorise HMRC to exchange data with their agent for any MTD service, the Revenue has confirmed.

Once authorised, your agent can:

• sign up your business
• use software to create and store digital records on your behalf
• use software to view, edit and send your data to HMRC.

Taxpayers who have previously authorised an agent to act on their behalf will not need to reauthorise them for MTD ITSA.

An agent may not have access to all your source data, however. If an agent cannot make corrections to your digital records, they will need to tell you about any corrections needed, according to HMRC.

Check if you can voluntarily sign up now

HMRC is currently running an MTD ITSA pilot programme to investigate the efficacy of the proposed new system and highlight any flaws.

Unfortunately, however, relatively few businesses and individuals have signed up – perhaps partly because they did not realise they were eligible. HMRC has now published full details of who can and cannot sign up for the MTD ITSA pilot.

Taxpayers can voluntarily sign up now if they are a UK resident, are registered for self-assessment and their accounting period aligns with the tax year – for example 6 April 2021 to 5 April 2022.

Volunteers must also have submitted at least one self-assessment tax return, keep digital records of the income and expenditure, and be up to date with their tax records (have no outstanding tax liabilities, for example).

Lastly, one or more of the following must have been included in a taxpayer’s last return:

• existing self-employment income
• a UK or foreign property source.

You cannot sign up yet if you need to report income from other sources, have a payment arrangement or have an income tax charge – for example, high income child benefit charges or certain pension tax charges.

You must also have an up to date address with HMRC, cannot join if you are a partner in a partnership, are currently or going to be bankrupt or are a Minister of religion. Lloyds underwriters and foster carers are also not allowed to join.

If you have a third capacity, you are likewise unable to sign up right now, including:

• trusted helpers
• insolvency practitioners
• nominees
• solicitors.

MTD penalties confirmed

HMRC also announced in mid-August how penalties for non-compliance with MTD will work, which will kick in from 1 November 2022 for VAT.

Anyone who files a VAT return through a non-electronic submission, contrary to MTD mandates, will face penalties of up to £400.

What we don’t know

The recently published guidance from HMRC on MTD is welcome, but it still needs to provide details on certain procedures.

HMRC has not yet published information on how to apply for exemption, or when we can expect such information.

Furthermore, taxpayers do not yet know how they can elect to use the calendar quarter as the period to report, rather than the tax year quarters ending (5 April, 5 July, 5 October, 5 January), which is how HMRC wants businesses to do things.

We will be keeping an eye on all developments and let you know of what we learn as soon as possible.

Talk to us about MTD.

The Government is joining forces with lenders and agencies to tackle the high level of bounce-back scheme fraud cases.

A new report shows that £1.1 billion worth of loans provided through the Government’s bounce-back loan scheme (BBLS) have been marked as suspected fraud.

The Department for Business, Energy and Industrial Strategy (BEIS) released a document on 5 September on the scheme’s performance, with data covering up to 31 July 2022.

Data released by the BEIS has confirmed that since September 2020, investigations have only been launched into £160m worth of claims out of the £1.1bn total.

The BBLS provided rapid financial aid to small businesses affected by the Covid-19 pandemic.

Applicants were required to self-declare their eligibility criteria for the loans to encourage banks to lend quickly.

The large amount of fraud committed against BBLS is thought to have occurred due to the speed and urgency of the scheme’s rollout, with some businesses giving false information when filling out their applications.

To date, the scheme has paid out £46.6bn worth of loans, and the Government estimates 500,000 businesses could have permanently ceased trading had the scheme not been in place.

Protections were introduced from the start of the scheme to reduce the number of fraudulent claims, and lenders were required to make or maintain various checks to screen applicants.

Lenders reported preventing over £2.2bn worth of fraud from being committed against the scheme as a result of these checks.

The Government says it is working with the British Business Bank, lenders and law enforcement agencies to tackle fraud in BBLS and penalise fraudsters.

In the new report, the department for BEIS said:

“It is unfortunate that some have taken the decision to take advantage of this vital intervention by defrauding the scheme for their own financial gain.

“The Government has always been clear that anyone who sought to do so is at risk of prosecution.”

Get in touch to talk about your business.

The Bank of England (BoE) has predicted that the UK will enter a recession before the end of the year.

The prediction, backed up by the British Chambers of Commerce (BCC), follows consecutive rises in interest rates, with inflation reaching a 40-year high of 10.1% in July.

Although the BoE expects the economy to contract over 2023, the BCC predicts that it will grow slowly over the next year at 0.2%.

Both agree that inflation, as measured by the consumer price index rate, will hit a peak of around 14% in the last quarter of 2022.

The sharp rise in inflation is due to increasing energy costs and supply chain issues following the Covid-19 pandemic and the war in Ukraine.

Alex Veitch, director of policy at the BCC, said:

“We have revised our projected inflation rate upwards by four percentage points to a new high of 14%.

“Inflation is running rampant, and it is not only impacting the cost of doing business but also the ability of some firms to keep their doors open.

“Time is fast running out. The Government must step up to the plate and do what is needed to protect businesses, livelihoods and jobs.”

Talk to us about your budget during the fiscal squeeze.

The additional tax rate has been scrapped completely by the new Chancellor.

Kwasi Kwarteng has announced the biggest bundle of tax cuts since 1972 in his first fiscal statement as Chancellor.

Income tax, corporation tax and stamp duty make up the majority of the most significant cuts in a bid to promote growth within the economy.

The basic rate of income tax will decrease by 1% to 19% from April 2023, and the 45% additional rate for top earners will be scrapped altogether.

The stamp duty threshold for house-buyers in England and Northern Ireland will be doubled from £125,000 to £250,000, and first-time buyers will not pay stamp duty on homes worth £425,000.

The Chancellor estimated that the energy bill relief scheme, announced earlier in September, would be worth more than £60bn over the next six months from October.

As anticipated, the Government is reversing the 1.25% percentage point increase in National Insurance, effective immediately. The planned rise in corporation tax will also be scrapped, along with the cap on bankers’ bonuses.

The Government will also introduce low-tax investment zones, VAT-free shopping for overseas visitors and tighter rules for people receiving Universal Credit.

Contact us about your taxes.

The Government has announced a £400 energy bill grant will be paid to customers over six payments to help households cope with the cost of living crisis.

As part of an £11.7 billion energy support package, some 29 million households will receive grants to help pay for their energy bills this winter, starting in October.

The money will be credited to bills by energy providers in six payments of £66 for October and November, then £67 from December to March.

Business Secretary Kwasi Kwarteng said:

“While no Government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families in the colder months.”

The grants will also apply to tenants renting properties with domestic electricity contracts from landlords, where energy costs are included in their rent.

However, charities and campaigners expressed concern that more than two million prepayment meter customers may have difficulty accessing the support.

Customers who use ‘non-smart’ prepayment meters will not receive the support automatically but will instead have to redeem a discount voucher.

It’s said that 1% of households will not be eligible for the grant, mainly those without an electricity meter or a direct relationship with an energy supplier.

Contact us for advice on your finances.

Make use of these allowances while they last.

When a business incurs costs, such as salary payments or stationary procurement, it can usually fully deduct them as expenses from its taxable profits, reducing the tax due. However, when it buys assets for operational purposes, things are not quite so straightforward.

There are HMRC incentives to help you pay less tax on the assets you buy: these are called capital allowances. But there are a myriad of rules for which this tax relief can be applied to get your head around.

Here is a rundown of the main capital allowance tax reliefs.

The super deduction

The super deduction is the most generous of the capital allowances. It gives you 130% first-year relief on qualifying plant and machinery – significantly better than even a fully deductible expense. In fact, it saves you up to £247 in corporation tax for every £1,000 you invest.

There is a catch, though: it is time-limited and expires at the end of March 2023.

It is time-limited because of its generosity. It was introduced in April 2021 as part of the Government’s economic response to the COVID-19 pandemic, a sweetener to encourage apprehensive businesses to invest and boost productivity.

At the time, already low levels of business investment had dropped another 11.6% between Q3 2019 and Q3 2020 – as you will recall, this spanned some of the darkest days of the pandemic.

The Government’s generosity is genuine; the positive effect on capital allowances makes now an excellent time to invest in qualifying assets.

If a business were to invest £50,000 in plant and machinery which qualified for the super deduction, it would be treated as £65,000 expenditure in its capital allowances computation (130% of £50,000). This would lead to a corporation tax saving of £12,350 as opposed to £9,500 if the deduction had been 100%.

More about the super deduction

Only a limited company can benefit from the super deduction and it can only be claimed on new plant and machinery, as opposed to second-hand assets. Moreover, your purchases must be for direct use within your business, not for leasing or renting out to customers.

There is not an exhaustive list of qualifying plant and machinery which can be referred to, but suffice it to say that HMRC considers most tangible assets that would normally qualify for the main rate pool to be acceptable for the super deduction. So, computer equipment; office furniture; vans, tractors and lorries; ladders, cranes and drills; and electric vehicle charge points, to name a few, are likely to fall into scope of the super deduction.

One notable exception is cars, even if they are solely for business use.

It is important to plan ahead if you wish to take advantage of the super deduction, particularly in relation to the timing of the purchase and when your accounting year ends. But with only a matter of months remaining until the super deduction is due to expire, you ought to start your planning process as soon as possible.

Don’t forget, though, that there are other capital allowances available, even if you miss the deadline for the super deduction or your purchases don’t qualify.

Annual investment allowance

The annual investment allowance (AIA) is another capital allowance tax relief which allows you to gain first year relief on plant and machinery purchases in full.

In principle, the AIA is a permanent relief. However, while it normally has a £200,000 qualifying expenditure cap, this has been temporarily boosted to £1 million. The expiry date of the temporary boost, like that of the super deduction, is 31 March 2023.

The general kinds of qualifying purchases are the same as for the super deduction but, significantly, the AIA is available for second-hand purchases and assets purchased for leasing.

The rate of relief is 100% which is generous compared to most capital allowances, but not as good as the super deduction. Therefore, if you qualified for both, it would be better to choose the super deduction over the AIA.

Remember, though, that the super deduction is only available to limited companies, so the AIA is an excellent choice for sole traders or partnerships.

It is always wise to seek the advice of an accountant to ensure your tax position is optimised.

Other capital allowances

If you are unable to claim the super deduction or AIA, you should still be able to claim what are called writing-down allowances.

The disadvantage of these is that you are unable to get the full tax benefit against the first year: something which is generally good for cashflow. Instead, you deduct a percentage of the value of the asset from your taxable profits every year.

The value is normally deemed as what you paid for the asset originally, unless it was a gift or you owned it before it had a business use. In these cases, you go with its current market value.

There are two rates which apply to writing down allowances. These are an 18% main rate and a 6% special rate. You group assets into pools based upon these rates.

Most things go into the more generous main rate pool, but a select few must go into the special rate pool. These include: items with a long life, integral parts of a building (this has a specific meaning which includes lifts, air conditioning systems and external solar shading among other things), thermal insulation of buildings and cars with high CO2 emissions.

As you might imagine, there is a bit more to the detail of working out writing down allowances. We will not go into this here as it gets rather complex, but it is good to know that this less generous relief is there as a safety net for when the super deduction or AIA is not available.

Beat the AIA and super deduction deadlines?

With 31 March rapidly coming over the horizon, you may feel the pressure to act to benefit from the super deduction or AIA. If your accounting period straddles the deadline, the enhanced tax benefits will be applied pro rata, based on the timing of your purchase within your accounting period as well as the deadline.

This really does make it essential to plan well with an accountant to ensure you choose the correct relief and get your budgets right.

One point to consider is, will these most generous of capital allowances end up being extended beyond March 2023? The AIA in its current guise has already seen extensions, and if they were introduced as a measure against economic headwinds, it can hardly be said that the UK is experiencing plain sailing in the economy yet.

The Institute of Directors is one voice calling for an extension, citing their own research, which shows that the super deduction has had a positive and measurable impact on business investment. Time will tell, but in these uncertain times, don’t rule anything out.

We can help you plan your capital allowances strategy.

An overview of the Government’s seven steps.

Hiring an employee for the first time is an exciting moment for any business owner. Suddenly, you’ve got another pair of hands to help out with jobs that used to fall entirely on you – and with that extra support, new opportunities for growth are possible.

There’s a vast amount of preparation and administration to do beforehand, however, and a lot of things you need to know depending on who and how you are hiring.

The Government advises there are seven main steps a business owner needs to take when they first become an employer. In this article, we go through each of these steps in detail so you know exactly what you need to do.

1) Decide how much to pay someone

How much you’re going to pay someone needs to be the first thing you decide and must, as you’ll be well aware, be equivalent to at least  the National Minimum Wage, which changes regularly and varies by the employee’s age.

If a worker is over the age of 23, you must pay them the National Living Wage, which is £9.50 an hour as of the 2022/23 tax year. It doesn’t matter how small your business is – you must always stay within this rule.

There is a calculator for employers on the GOV.UK website that you can use to accurately check that you’re correctly paying a worker the National Minimum Wage and National Living Wage. This also shows you whether you owe your employee payments from the previous year because you underpaid them.

Just make sure that you check the National Minimum Wage and National Living Wage rates, as they are subject to change.

2) Check if someone has the legal right to work in the UK

The exact documents someone needs to give will change depending on certain characteristics, namely their nationality.

For instance, a British citizen with a valid passport must provide you with a clear copy of the passport, including some of their personal details (nationality, date of birth, photograph, etc).

Other applicants may have to have immigration status documents or a Government letter showing their name and National Insurance number.

The recruiting and hiring service tool on GOV.UK will help you understand exactly what you need to ask your applicants to provide you.

3) Check if you need to apply for a disclosure and barring service (DBS) check

Formerly known as a criminal records bureau check, this is a criminal background check that is compulsory for new staff in certain fields.

These checks can tell an employer if their employees have unspent criminal convictions, cautions or an employment history that’s seen them barred from a particular role.

Any employer can request that a potential employee go through a DBS check, but other jobs (mostly professional roles) require one.

You can request:

• a basic check, which shows unspent convictions and conditional cautions
• a standard check, which shows spent and unspent convictions and cautions
• an enhanced check, which shows the same as a standard check, as well as any information held by local police that’s considered relevant to the role
• an enhanced check with barred lists, which is the same as an enhanced list, plus whether the applicant is on the list of people barred from doing the role.

DBS checks have no official expiry date, meaning that it’s up to you when a new check is needed.

Alternatively, if the applicant has signed up for the DBS update service, you can check whether their certificate is up to date online.

There are different rules for getting a criminal record check in Scotland and Northern Ireland.

4) Get employment insurance

You need employers’ liability insurance as soon as you become an employer, which must cover you for at least £5 million and come from an authorised insurer.

Employers’ liability will help you pay compensation if an employee is injured or becomes ill because of the work they do for you. However, you may not need to take a policy out if you only employ a family member or someone who is based abroad.

You can be fined £2,500 each day that you are not properly insured, as well as £1,000 if you do not display your employers’ liability certificate or refuse to make this available to inspectors when they ask.

We recommend that you look into using an insurance broker to help you buy employers’ liability insurance.

5) Send details of the job to your employee

 Details of the job, including contract terms and conditions, must be sent in full to your new employee.

Terms can be in a written contract, verbally agreed, in an offer letter or in collective agreements between employers and trade unions or staff associations.

If you are hiring someone for more than one month, you must also send them a written statement of employment.

The written statement is made up of the ‘principal statement’, which includes everything from the employee’s name and probation period to holiday entitlement and job description.

There must also be a ‘wider written statement’, which must include information about pensions and pension schemes, collective agreements, and disciplinary and grievance procedures.

6) Tell HMRC by registering as an employer

You need to register as an employer with HMRC when you begin employing staff or using subcontractors for construction work. In fact, you have to register even if you’re only employing yourself, for example as the sole director of a limited company.

You must register with HMRC before the very first payday, so make sure you do it as early as possible – it doesn’t help that it can take up to five working days to get your employer PAYE reference number and 10 days to get an activation code for PAYE online.

If you want to run payroll yourself, you’ll need to get a login for PAYE online by registering with HMRC. After that, choose which payroll software you’re going to use to record employee details, calculate pay and deductions, and report to HMRC.

You then need to record pay, make deductions and report to HMRC on or before the first payday.

If you need to pay an employee before you get your employer PAYE reference number, you should run payroll, store your full payment submission and send a late full payment submission to HMRC.

7) Set up and manage a workplace pension scheme

Employers are required to provide a workplace pension scheme for eligible staff as soon as your first member of staff starts working for you. This is known as your ‘duties start date’.

You must enrol and make an employer’s contribution for all staff who:

• are aged between 22 and the State Pension age
• earn at least £10,000 a year
• normally work in the UK (this includes people who are based in the UK but travel abroad for work).

If staff later become eligible because of a change in their age or earnings, you must put them into your pension scheme and write to them within six weeks of the day they meet the criteria that you are doing so.

Get in touch for advice on employing staff.

The Government’s ‘help to grow: digital’ scheme has now expanded to include businesses with fewer than five employees.

Over a million more businesses will now be eligible for the scheme, which has also been expanded to include one-to-one advice and additional software.

Launched in January this year, the scheme was established to help small to medium-sized businesses purchase software and digital technologies to help them grow.

Eligible businesses can get up to 50% off approved technologies, worth up to £5,000 in related costs under the scheme.

Previously, only businesses with more than five employees were eligible, but businesses with 1 to 249 employees can now access the discounts.

The scheme now also covers eCommerce software for the first time.

Alan Mak, exchequer secretary to the Treasury, said:

“Extending our help to grow: digital scheme will enable thousands more SMEs to become more innovative, competitive, and profitable.”

The Federation of Small Businesses (FSB) said lowering the threshold will help SMEs grow and build the economy.

The national chair for the FSB, Martin McTague, said:

“Reducing the threshold to one employee makes a difference in this space.

“Together with ecommerce software and one-to-one advice for SMEs on technology adoption, this will enable more small businesses to fulfil their growth ambitions.”

Help to grow: digital includes advice on the latest digital technologies, how to use them and how to decide on which may best serve a business.

People who register also have access to case studies on businesses that have adopted new software and how it has worked for them.

Businesses that wish to apply for the help to grow scheme can do so via the Government website.

After a business decides on the software they wish to use, it will have 30 days to apply for a Government discount from the date of issue. Anything after 30 days requires re-registering.

Talk to us about your business.

The Bank of England (BoE) has increased interest rates to 1.75%, the first rise of half a per cent in over 20 years.

The latest increase is the fifth rise since December 2021, with the BoE arguing that rate rises are needed to tackle soaring inflation.

Inflation as measured by the consumer price index (CPI) is expected to rise more than previously predicted, from 9.4% in June to just over 13% in Q4 2022. The Bank still hopes CPI will fall to its 2% target in 2024.

The Bank’s monetary policy council (MPC) voted eight to one in favour of the rise. Andrew Bailey, governor of the BoE, said:

“The real risk we’re responding to is that inflation becomes embedded, and it doesn’t come down in the way that we would otherwise expect.

“We’ve had a domestic shock. We’ve had shrinkage in the labour force over the last two years or so.”

Chairman of the Federation of Small Businesses, Martin McTague, said:

“Many commercial, personal and professional loans that small businesses and sole traders hold are not protected by fixed rates and will move in line with the increase.”

The BoE’s deputy governor, Dave Ramsden, said the Bank will decide whether rates will be increased as the year progresses.

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