In the beginning…

We began our drive toward net zero in earnest in 2022, having had our efforts restricted in 2021 because of the pandemic.

We realised straight away that Net Zero is a mammoth task and we might not get there, but we were determined to try. In our efforts for success we would risk improvement and failure.

We knew little about the subject matter and we are still learning day by day.

But this is what we did, and it is also what we are still doing. It is a JOURNEY.

1) Found out more about Net Zero to understand the basics

To answer the question, “What does Net Zero mean and why does it matter?”, we:

• Read lots of articles.
• Participated in The Small Business Sustainability Basics Programm
• Attended a Net Zero c
• Increased our knowledge base and improved our understanding of the challenge.

2) Created a greenbac team and regularly reported back to our entire gbac team

We created a small dedicated team with enthusiasm for the issue and a desire to change our practices and improve our carbon footprint.

Our greenbac team then fed back to the entire gbac team through our whole team meetings so the entire office was looped in.

3) Engaged professional external support

As well as completing The Small Business Sustainability Basics Programme, we engaged a consultant through the Low Carbon Business Support Programme.

4) Measured our current carbon emissions and started planning to reduce them

We measured our first footprint in April 2022 with the help of our consultant.

It was a mixed picture, as it covered a 12-month period during which we had a few lockdowns and our team was taking a hybrid approach of working in the office and working from home.

5) Got involved with a movement

We refreshed our thoughts and got further support from the following using two different greenbac teams so that we felt assured and confident in what we could do.

• Low Carbon/Net Zero Barnsley Programme
• SYMCA Net Zero Programme

 

6) Re-calculated our carbon footprint

Time had passed. With the help of the team via the Low Carbon/Net Zero Barnsley Programme, we learned to calculate our own carbon impact.

We then extended our focus to include Scopes 1, 2, and 3.

7) Made a commitment to climate action and accessed tools to reduce emissions

Team gbac made a commitment to climate action by agreeing on small actions we can take as a firm so that we can reduce our carbon footprint.

We accessed tools to help us reduce emissions and disclosed our progress.

8) Found more support and some funding

The team at the Low Carbon/Net Zero Barnsley Programme helped us with our thinking on the next steps – what was impactful and what was possible.

They even assisted with signposting potential funding support.

9) Kept an eye on what others were doing

Throughout this journey, we have looked with interest at what others are doing to reduce their carbon emissions.

This is a global movement that will benefit everyone. Where we have been able to learn from others, we have done so.

10) Reduced electricity and gas usage

We had our carbon footprint from Scope 1 and Scope 2 emissions measured for the first time, but because we are a firm of accountants, the entirety of Scope 1 (direct) and Scope 2 (imported power and utilities) emissions result from our work in the office: running computers, heating, and lighting.

We immediately took action to reduce the use of electricity and gas as much as we could, which meant we:

• Adopted an “off and completely off” policy to ensure that we did not leave PCs and other office equipment on standby out of office hours.
• Changed our conventional lighting so that LEDs were used across the office.
• Reduced the use of our air conditioning systems.
• Made sure that the central heating system made the maximum use of thermostats and timers.
• Carried out regular operations and maintenance checks.
• Made sure our doors and windows are draught-
• Turned down our thermostats.
• Adjusted our office blinds to maximise sunlight wherever possible, fitted Electric Vehicle Charging points at the office, and
• Changed company cars to electric cars.

Ongoing considerations: Installation of solar panels on the roof.

The gbac charter: what we committed to do

• Reduce our use of paper with the aim of becoming “paperless”.
• Be flexible so that we can reduce commuting to work and increase productivity by implementing a 4-day week.
• Be efficient in our use of electricity, gas, and water, and reduce overall usage.
• Reduce all waste.
• Recycle more.
• Use sensor-activated lights where possible.
• Be “green smart” with our purchasing choices.

Sustainability Report 2023

Here are the highlights of our 2023 Sustainability Report:

	2023 tCO2	2022** tCO2	Impact tCO2	%
Scope 1	7.59	6.77	+0.82	+12.1
Scope 2	6.29	7.58	-1.29	-17.0
Sub-total	13.88	14.35	-0.47	-3.3
Scope 3	26.50	N/A	N/A	N/A
Water	40.38	N/A	N/A	N/A

 

** 2022 covered a 12-month period in which we had pandemic lockdowns and a hybrid approach to working in the office and working from home.

Other metrics we have been tracking include:

Stationery and paper usage

	31st March 2024	31st March 2023	Impact
Office stationery	£1,195	£1,594	25% reduction
Postage	£435	£1,454	70% reduction

 

Employee travel to work

• 4-day working week – reduces travel to work by 1 day every week.
• As of 31st March 2024, 75% of employees now do a 4-day week (71% in 2023).
• This has resulted in a 6% reduction in travel time, travel costs, and emissions from car travel.

What does 2024 hold?

It seemed clear to us that we needed further help. Having taken part in the Low Carbon/Net Zero Barnsley Programme, we were assisted in identifying the next big push.

Solar power is our way forward to further positive change.

Further electricity use reduction will therefore be achieved through the installation of solar power.

We are now B Corp accredited!

B Corp companies are companies verified by B Lab to meet high standards of social and environmental performance, transparency, and accountability.

Being a B Corp certified company as of July 2024:

• Demonstrates and verifies our desire to use gbac as a force for good.
• Rewards our sustainability drive (ESG – Environmental, Social, and Governance).
• Rewards and complements our investment in people (IIP).
• Complements and underpins our investment in the planet and our journey to Net Zero.

Get in touch

At gbac, we are approaching our commitment to Net Zero with as much dedication as our commitment to delivering the best financial services to our clients.

To learn more about what we can do for you, browse our website or get in touch with our helpful team.

 

Given HMRC’s increasing concerns about electronic sales suppression (ESS), the tax agency is launching a campaign of one-to-many letters, targeting businesses that may have outstanding taxes to pay after misusing their till systems to reduce their recorded sales.

ESS tools allow till systems to alter or hide individual transactions while creating a credible audit trail. This enables businesses to reduce their reported turnover and pay less tax – including Income Tax, Corporation Tax, and VAT – while appearing to be tax-compliant.

Using ESS software or hardware to adjust the value of transactions or only record a portion of sales, for example, is a form of tax evasion. HMRC is therefore sending informal warning letters to discourage this deception and ensure that any guilty parties make things right.

One-to-many ESS letter

Also known as ‘nudge letters’, HMRC sends one-to-many letters with the same information to taxpayers whose data suggests their tax affairs are incorrect. These letters prompt recipients to double-check their tax returns and rectify any issues as soon as possible.

Receiving a letter about electronic sales suppression gives the business the opportunity to voluntarily disclose under-reported sales, and explains what could happen if they don’t.

This can include progressive financial penalties, which may be reduced after full disclosure.

HMRC is expected to run this campaign of one-to-many ESS letters for at least the next year – but if your business is sent one of these letters, you must confirm your sales reports to HMRC within 30 days of receiving it, even if you believe your sales information to be correct.

Sales suppression penalties

Along with general penalties for providing inaccurate information, HMRC can also charge a penalty for being in possession of an ESS tool. This may be any type of software or hardware that a business can use to reduce or hide transaction values on electronic records, thereby suppressing sales.

Even if the business hasn’t used the ESS tool to suppress their sales, simply possessing it is enough to incur an initial penalty of £1,000. HMRC will then charge a £75 daily penalty from this point until the business proves they are no longer in possession of the ESS tool.

‘Possession’ in this case includes a business owning an ESS tool, having access to one, or trying to access one. Again, even if the business doesn’t proceed to use the tool, simply owning, accessing, or attempting to access an ESS tool means HMRC can take action against them.

How to avoid ESS penalties

To avoid receiving a penalty or scrutiny from HMRC, the best thing to do is to simply avoid ESS tools completely. This means that all businesses carrying out electronic sales should not:

• install an ESS tool to any device you own
• configure electronic point of sale (EPOS) system settings to activate an ESS tool
• access an ESS tool on a device owned by anyone else

You can find more information about electronic sales suppression on the government website.

Another way to ensure that HMRC has no reason to penalise your business is to keep comprehensive and accurate financial records to help you prove your compliance quickly.

Maintaining correct business records will also help to prevent genuine accidents in under-reporting turnover figures. If you have concerns about managing your accounts and filing accurate tax returns, you may be better off outsourcing your accounts to specialists.

At gbac, we have a skilled team of accountants in Barnsley who can provide a range of financial services to support business accounts. For more information about our digital accounting services, please call 01226 298 298, or send an email to info@gbac.co.uk and we’ll be in touch soon.

Without a digital invoice processing system, companies leave themselves vulnerable to invoice fraud – a scam that almost a third of businesses have been targeted by in the last year.

Employees can easily process fake invoices if they appear genuine and the amount is below the company’s payment threshold, paying money into the bank accounts of fraudsters.

Though fraud against UK businesses has reduced in the last few years, over £1.2 billion was lost to invoice fraud in 2022, and developing technologies ensure that it remains a growing threat.

It’s vital for all businesses to learn how to recognise potential invoice fraud and avoid falling for this common scam – so here’s what you should know about how to prevent invoice fraud.

Types of invoice fraud to look out for

The most common kinds of invoice fraud include false invoices for non-existent goods or services, where scammers claim to be a supplier or tradesperson the company has previously worked with, or duplicate invoices for legitimate bills that have already been processed.

It’s also common for existing invoices to be altered as a result of criminals hacking into a genuine business email account and changing invoice payment details so they receive the money instead.

Unfortunately, it can be difficult for employees to identify a fake invoice if it appears to be from a legitimate business that the company has worked with and paid before.

Additionally, there’s also the possibility of internal invoice fraud, where senior employees with access swap payment details on invoices to divert the money to their own bank accounts. In a recent case, an employee at a public limited company stole £660,000 through 29 fake invoices in a single month.

Invoice fraud doesn’t only result in financial loss, though – it can also damage a company’s business relationships and brand reputation, and have a negative impact on staff morale.

Invoice fraud prevention tips

There are several things a company can do to avoid falling for false invoices, including:

• Confirming with a trusted person if you receive emails about changing payment details
• Reconciling every invoice by checking against previous records to verify information
• Not sharing supplier names online, as fraudsters can use this to falsify invoices
• Training employees to recognise fraud and implementing an invoice approval system

One of the most effective ways to prevent invoice fraud is to update your accounts with a digital processing system, which will automatically compare invoice details against order and payment information, flagging errors and thereby preventing most types of fraud.

Managing an onboarding process where all suppliers have to use your digital system prevents fraudulent traders from joining your network, reducing the potential for fake invoices.

On top of fraud prevention, digital invoicing comes with many other benefits, as it can also prevent missing due dates, reduce errors, and improve cashflow forecasting for the business!

Update your accounting system

Digital accounting systems make it much easier to keep accurate and accessible records of financial information and process approved payments on time – so, if you haven’t yet, it could drastically help your business to update your accounting with efficient digital services.

Of course, businesses should already be planning to switch to up-to-date digital accounting software if they haven’t already, as the UK government is rolling out its Making Tax Digital plan to improve the process of reporting financial information to HMRC and paying taxes.

Here at gbac, our accountants in Barnsley can help businesses of all sizes with payroll services and bookkeeping and VAT management. If you need assistance with digital or cloud accounting, don’t hesitate to get in touch with our team and discuss our financial services.

Every year, HM Revenue & Customs (HMRC) publishes the latest tax gap figures – revealing the difference between the amount of tax due and the amount that they actually collect.

Compared with a tax gap of 7.4% in 2005–2006, the first year of taking these records, the most recent revised figures for the 2022–2023 tax year put the current tax gap at 4.8%.

While this percentage has stayed the same since 2020–2021, in monetary terms, the tax gap has been increasing along with tax liabilities – rising from £31 billion the previous year to £35.8 billion in 2021–2022, then reaching a record high of £39.8 billion in 2022–2023.

This is the largest the tax gap has ever been in cash terms, and while some of the increase will be a result of non-payment due to the rise in company insolvencies affected by the pandemic, small businesses are now taking the blame for up to 60% of all uncollected taxes.

Small companies defaulting on tax

The tax gap share attributed to small limited companies – with an annual turnover of less than £10 million and fewer than 50 employees – has escalated significantly in the last 5 years.

Accounting for 44% of the overall tax gap back in 2018–2019, small businesses are now responsible for 60% of the gap in expected tax takings in 2022–2023. While the pandemic was the probable cause of the uptick around 2020, the same effect didn’t happen for other business sizes – and the increase in unpaid taxes for small businesses hasn’t slowed down since.

Small companies are the worst offenders when it comes to not paying Corporation Tax, in particular.

Not only has the total of unpaid Corporation Tax bills almost tripled from £3.7 billion in 2018–2019 to £10.9 billion in 2022–2023, but small businesses are responsible for 32.3% of this tax gap – with 45% of small companies submitting incorrect returns and under-declaring liability.

In comparison, mid-sized businesses account for 11% of the overall tax gap and 6.7% of the Corporation Tax gap, while large businesses are responsible for 11% and 2.9% respectively.

Increased liabilities and high tax take

The recent figures also illustrate how much HMRC’s tax take has increased – with the theoretical total growing by about 15% each year, and almost doubling since 2005–2006.

Between the 2020–2021 to 2022–2023 tax years alone, the agency’s tax take rose from £640.1 billion to £823.8 billion, which is a high record of 95.2% of all tax due that year.

As a portion of the GDP (gross domestic product – the market value of goods and services), tax receipts have maintained a steady 28% over the last 20 years, but now represent just over 30%.

However, HMRC clearly has a lot of work to do to address the remaining tax gap, especially where small businesses are concerned. After all, if the Corporation Tax gap hadn’t increased, or had shrunk in line with other business sizes, HMRC could have collected a further £7.5–£9.5 billion in tax.

Non-compliant tax behaviour

The two behaviours that contribute to the tax gap the most are failure to take reasonable care and criminal action. Even if it isn’t done intentionally, like criminal action such as tax avoidance, filing errors resulting from a lack of care are responsible for almost half of unpaid tax bills.

HMRC expects small business owners and limited company directors to take a higher level of care compared to sole traders to ensure they understand and fulfil their tax obligations.

If you own a small company and fail to report accurate financial information to HMRC or neglect to pay outstanding tax without a ‘reasonable excuse’, the agency can also issue tax penalties.

It’s essential for businesses of all sizes to stay on top of their accounts and legal obligations, especially with the roll-out of Making Tax Digital creeping up on previously exempt earners.

So, if you need help managing your tax liabilities and ensuring that your small business is tax compliant, it’s likely you would benefit from contacting our accountants in Barnsley.

Here at gbac, we provide a range of professional financial services for all kinds of businesses and individuals – so why not call 01226 298 298 or email info@gbac.co.uk to speak to our team?

On top of the 1p cut to the National Insurance rate that was announced in last year’s Autumn Statement, the Spring Budget announced in March 2024 introduced a further 2p cut.

This means that for self-employed workers paying Class 4 National Insurance contributions (NICs), the rate will drop from 9% to 6% for the tax year from April 2024 to April 2025.

Maximum NIC savings

Class 4 contributions are paid on annual profits from £12,570 to £50,270 – so the 3% rate reduction represents potential savings of up to £1,131 in the current tax year.

The abolition of Class 2 NIC requirements also means that self-employed people making more than £6,725 a year in profits will no longer have to pay the weekly rate of £3.45, saving £179.40 a year.

For the average self-employed worker earning £28,000 a year, the Class 4 reductions and Class 2 abolition combined could save them up to £650 a year.

However, for profits exceeding £50,270, the additional rate for Class 4 NICs will remain at 2%.

NIC liability for lower profits

Those in self-employment earning less than £50,270 a year can expect the following reductions in their liability for National Insurance contributions this year:

Profit	2024–2025 NICs	Reduction
£15,000	£146	£232
£25,000	£746	£552
£35,000	£1,346	£852
£45,000	£1,946	£1,152

 

However, we can’t consider NICs in isolation – as other tax threshold freezes mean that the savings from NIC reductions are unlikely to be enough to offset fiscal drag.

Frozen tax thresholds

As the Personal Allowance and Income Tax thresholds have been frozen at 2021 levels, and will stay frozen for several more years, this is likely to push more people over the thresholds as their earnings increase, resulting in a changing tax status with greater tax liability.

That said, freezing the Class 4 NIC main rate threshold at £50,270 is still beneficial for self-employed earners. For example, if this was increased to £60,000, a self-employed individual would have to pay 6% instead of the 2% additional rate on an extra £9,730 in profits.

Learn more by reading the 2024 Budget fact sheet and the fiscal drag research briefing from the House of Commons. We can expect the next Budget between September and November.

If you need help managing your self-employed accounts and taxes, why not enlist professional help from our accountants in Barnsley? You can reach the gbac team by calling 01226 298 298 or emailing info@gbac.co.uk to find out how to optimise your self-employed tax liabilities.

Following the UK general election on 4th July 2024, the Labour Party returned to power after 14 years of Conservative governance, led by the new Prime Minister, Sir Keir Starmer.

After quickly assembling his Cabinet, there is a heavy weight of expectation on Starmer’s Labour government – but what can we expect to happen within its first 100 days?

Here’s what we know so far about the Labour government’s plans for the next few months.

The King’s Speech

The King’s Speech marks the State Opening of Parliament, or the formal beginning of Parliament’s calendar, and took place on 17th July. Though delivered by King Charles, the speech is written by the government, and sets out Labour’s plans or ‘missions’.

These include multiple bills focusing on economic stability and growth, British energy and clean energy, secure borders and safe streets, health, and breaking down social, financial, and regulatory barriers to give children, workers, and renters better opportunities.

As bills introduced under the previous government are not carried over, the Labour Party has the flexibility to start over and make changes before submitting them again.

Summer Recess

During the summer recess, which typically takes place from late July to early September, the House of Commons and House of Lords take a break and MPs do not meet for business.

This recess was due to start on 23rd July before former Prime Minister Rishi Sunak announced the general election, but this is only 6 days after the King’s Speech, which won’t be enough time for the House of Commons to debate the Speech and approve an agenda.

The start of summer recess has therefore been pushed back to 30th July, ending on 2nd September.

Party Conference

As usual, party conferences will commence in September, where the main political parties host events to set out their strategies and engage with party members, politicians, journalists, and representatives from various organisations, unions, and think tanks.

The Labour conference will take place from 22nd to 25th September in Liverpool, where the party is likely to emphasise what they have achieved before the end of their first 100 days in government (12th October), and announce more details on their plans for ‘rebuilding Britain’.

Autumn Budget

While Labour already published its manifesto pledges, after the party’s election victory, people will be keen to understand how the new government’s plans will affect their finances. Unfortunately, we won’t know more until the Labour government delivers its first Budget, due in autumn.

If the Office for Budget Responsibility (OBR) was advised to begin preparing its Economic and Fiscal Outlook on 5th July, this will take 10 weeks to prepare – meaning the Chancellor of the Exchequer, Rachel Reeves, can’t deliver the Autumn Budget any sooner than 13th September.

However, it seems likely that the Chancellor may wait until after the party conference season ends to deliver Labour’s first Budget in late October or early November.

The Chancellor is expected to announce the Budget date before the start of the summer recess.

What might Labour’s first Budget include?

The Autumn Budget 2024 should contain more information about the party’s manifesto pledges, which include the following:

• Adding VAT to private school fees (removal of VAT exemption)
• Cracking down on tax avoidance (abolishing non-dom status)
• Tightening energy market regulations (expanding windfall tax)
• Reducing the Stamp Duty exemption threshold for first-time buyers
• Reviewing pensions (maintaining the State Pension Triple Lock)

Labour also has not ruled out potential changes to Inheritance Tax (IHT) or Capital Gains Tax (CGT), though the party has stated that they won’t be increasing taxes for working people – likely maintaining most frozen tax thresholds until 2028.

This reinforces the importance of keeping up with tax announcements from the new Labour government over the next several months and getting your finances in order now to prepare.

If you need help with auditing or managing your accounts and tax planning, our accountants in Barnsley can help – give the gbac team a call on 01226 298 298 or email info@gbac.co.uk to find out more about our extensive financial services.