our blog

Published on 21st March ahead of the new tax year starting on 6th April, the Spring Budget 2023 introduced a range of reforms for pension tax allowances. With more scope for pension savings, these new measures mean it’s a good time to review your retirement planning strategy.

The pension tax change making the biggest splash is the scrapping of the Lifetime Allowance (LTA) for pensions. This tax-free cap has been the cornerstone of pension tax planning since 2006, but rather than increasing the allowance to help pension savers, Chancellor Jeremy Hunt made the surprise move of abolishing the Pension LTA altogether.

The Spring Budget announcement also included several other significant adjustments to pension rules for the 2023–2024 tax year and beyond. Let’s take a look at the new measures to explore how they might affect you and your financial plans for retirement.

The UK government provides state benefits for parents with dependent children whose partners have passed away, in the form of Bereavement Support Payments.

Previously, bereaved parents were only eligible for these benefits if they were married to or in a civil partnership with their cohabiting partner at the time of their death.

However, the law is now changing to provide financial support for more grieving parents raising children after losing their partner, regardless of the legal status of their relationship.

This means parents who were cohabiting with their partner, whom they have at least one child with, can now apply for Bereavement Support Payments (BSP).

Does this change in the bereavement benefit law affect you? Here’s what you should know about the new rules and who is now eligible to apply.

During the COVID-19 pandemic, the government provided millions of pounds in support to struggling businesses, which would eventually have to be paid back. Meanwhile, the closures of courts created a backlog in insolvency cases, along with restrictions on cases against debtors whose inability to pay resulted from the pandemic.

Since the temporary restrictions were lifted and the courts are catching up, HMRC is now ramping back up when it comes to chasing debt.

With a tax gap of up to £32 billion, the tax agency is under increasing pressure to collect the missing money. As a result, HMRC is filing more and more winding-up petitions against companies in serious tax debt to recover the tax from their liquidated assets.

These debt enforcement measures come at an especially bad time for most UK businesses, who are already struggling with the strain of inflation, high interest, and decreased consumer spending.

The last quarter of 2022 saw a 36% increase in companies in financial distress compared to the previous year, with winding-up petitions increasing by 131% compared to 2021. This January, compulsory liquidations resulting from winding-up petitions were up by 52% year-on-year.

With so many businesses in financial crisis, what happens if a winding-up petition is filed against you? Read on to learn more about how you could avoid this by communicating with HMRC.

The new points-based penalty system for late VAT return submissions began on 1st January 2023, meaning the first monthly returns to be affected were due by 7th March. The first quarterly returns affected are due by 7th May.

This new regime replaces the old default surcharge system, along with a separate penalty regime for late VAT payments and a new system for charging interest.

From the start of 2023, the late submission penalties will apply for all accounting periods if a VAT return is submitted late – including nil VAT returns and repayment returns.

This means that if you keep missing VAT return deadlines and accrue too many late submission penalty points, you could be hit with a £200 fine. Keep reading to learn how the points system works and how to avoid getting a financial penalty.

Tax codes for the 2023–2024 tax year, which begins on 6th April 2023, have already been issued for most employees and directors.

Employers will use these codes to collect Income Tax and National Insurance Contributions through PAYE – but what if you’ve been assigned the wrong tax code?

This could result in you paying too much tax, which can affect your monthly budgeting, or paying too little tax, which could lead to an unexpected Income Tax bill.

The last thing anyone wants is to overpay tax and have to fight for a refund, or to underpay tax and suddenly owe significant back payments.

Here’s what you should know to make sure you’re on the right tax code and paying the appropriate amount of Income Tax in 2023.

HMRC used to focus on cash sales when looking at businesses declaring suspiciously low turnovers. Now, thanks to the decline of cash – exacerbated by COVID-19 – there has been a rise in businesses using electronic sales suppression (ESS) tools to falsify their sales records.

Electronic sales suppression involves hiding the true amount of sales or the true value of sales with ESS software, hardware, or computer code scripts. This is done at or after the point of sale, with the electronic records appearing to be credible and compliant, while really reducing the amount of tax that the business should be paying.

This counts as tax evasion, so HMRC is cracking down on individuals and businesses who use ESS tools to commit tax fraud. Criminal investigations into ESS can result in financial penalties and even prison sentences – so time is running out for anyone who has used ESS tools to reduce tax to come clean to HMRC.