July Newsletter 2022

Jul 10, 2022 | Newsletters | 0 comments

Four-day working week?

In June of this year, 70 UK companies and over 3,000 workers began working a four-day week, with no reduction in pay. This is the biggest four-day working week pilot ever undertaken. The participating firms are trialling a four-day working week for a period of 6 months. The pilot is based on what is called the 100:80:100 model – 100% pay, for 80% of the time, in exchange for employees committing to maintain 100% productivity.

The organisers of the pilot are working alongside researchers from leading universities in order to measure the impact on productivity and the wellbeing of staff. The basis of the four-day working week pilot is that there is a lot of activity, particularly in office environments, that is not productive. The key is to equip staff members with the training and tools to work in a more focused and effective manner.

Our working patterns and the focus that we all give to our work-life balance has shifted quite considerably since the start of the Covid-19 pandemic. Sticking to a rigid, outdated, time-based system is not always practical, particularly when businesses have the technology and tools required to enable them to multi-task more effectively than ever before.

Many businesses have recently adopted a more flexible approach to work with a focus on productivity rather than “presenteeism”. If the employees in the companies involved in this huge pilot become healthier, happier, and more productive, then perhaps the UK could be on the cusp of a significant change in the way most people work.

The concept may not suit everyone and every type of business, but it could help firms to attract new recruits in the current hyper-competitive market for talent. There are benefits for businesses too – after all, more productive team members are more profitable. In addition, costs could be cut if the office only has to open 4 days per week.

MTD for VAT – New guidance on penalties for non-compliance

HMRC have issued much needed guidance on the penalties set to be imposed for non- compliance with the Making Tax Digital (MTD) for VAT rules. In particular, there is a penalty of up to £400 for every VAT return a business files without using ‘functional compatible software’. Functional compatible software means a software program, or set of software programs, products or applications that can:

· Record and store digital records

· Provide HMRC with information and VAT returns from the data held in those digital records

· Receive information from HMRC

There are additional penalties if the business does not keep their records digitally. HMRC may charge a penalty of between £5 – £15 for every day that the business does not meet the MTD requirements.

Childcare accounts can subsidise summer camp costs

If you have children under twelve who have a childminder or who attend either a nursery, afterschool clubs, playschemes, or you are considering sending your children to a summer camp, you should think about setting up a tax-free childcare account. The government adds 25% to the amounts that you save in the account, contributing to £2,000 for each child, each year. For example, if you save £8,000 this would be topped up to £10,000 (A higher amount applies for disabled children).

The account is then used to pay approved childcare providers. It is worth noting that it does not need to be the child’s parents paying into the account. Uncles, aunts, grandparents, and others can also make payments. The government have noticed that many families who are eligible for this scheme are yet to set up their accounts. Various factors affect eligibility, but those with annual net income in excess of £100,000 are notably excluded.

The tax-free childcare account scheme will gradually replace childcare vouchers, which many employers continue to provide to employees. Childcare vouchers are free from tax and national insurance (within specified limits) and can be used to pay for childcare until the child is 16. Childcare voucher schemes can no longer be set up but employees already eligible can continue to benefit.

Annual Charity Cricket Fixture

If you are in the Suffolk area this weekend, Newmarket Cricket Club will be playing their annual charity fixture against the Newmarket Racing & Trainers XI at their Severals home ground, with money raised from the event going to Racing Welfare. Racing Welfare is a registered charity supporting the workforce of British horseracing, including current and retired racing staff, and their families.

Gates open at noon with the game starting at 2:00 p.m. Aside from cricket, there will also be a silent auction, a barbeque, cake stall, beer tent and much more!

DIARY OF MAIN TAX EVENTS JULY / AUGUST 2022

DateWhat’s Due
19/07PAYE & NIC deductions, and CIS return and tax, for month to 5/7/22 (due 22/07 if you pay electronically)
31/0750% payment on account of 2022/23 self-assessment tax liability due.
1/08Corporation tax for year to 31/10/21 (unless pay quarterly)
19/08PAYE & NIC deductions, and CIS return and tax, for month to 5/8/22 (due 22/08 if you pay electronically)