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In late May 2022, the Chancellor of the Exchequer announced a new set of measures to counter soaring living costs. With consumer prices hitting a 40-year high of 9.1% inflation and the already astronomical energy price increases expected to rocket to £3,000 a year this autumn, the previous package – based on estimates that were much lower than real-life price rises – was not enough.

For individuals, families, and businesses alike, the financial squeeze is getting tighter. So, what kind of support is now available, and what does it mean for the people of Britain and our economy?

We’ve covered the Making Tax Digital scheme before on the GBAC blog, but are you staying on top of the latest MTD updates that could affect your business?

Tax automation using digital accounting systems and cloud accounting software is revolutionising the way businesses are run in the UK, so you don’t want to be left behind.

While VAT-registered businesses have been keeping records and filing tax returns digitally since 2019, this became a requirement for all VAT returns in April 2022.

Now, a few months on, all liable businesses should be running MTD-compliant software and following the new rules – with the risk of financial penalties if they don’t.

What about other types of tax, though? Do self-employed people and landlords need to worry about MTD yet when it comes to filing self-assessment income tax returns?

Read on for the latest information about Making Tax Digital in 2022.

Disclosures are crucial for corporations who want to gain the trust of more business partners and customers. When companies aren’t transparent about their operations and responsibilities, the public is likely to lose confidence in them and takes their support elsewhere – as do investors.

In the world of corporate finance, disclosure means releasing all the relevant information about a business to the public, whether the data is positive or negative. This includes all the facts and figures, procedures, dates, and developments that can influence investor or consumer decisions.

Even smaller businesses may be legally required to publish certain details. After dozens of major companies collapsing has dented the trust of the British people in recent years, the UK government is planning to reinforce the UK disclosure regulations in an attempt to restore faith in the market.

This blog explores what this means for small companies, and how you can prepare for the changes.

Between July 2021 and March 2022, the government reduced VAT rates for tourism and hospitality businesses to help these industries recover from the impact of the COVID-19 pandemic.

However, as of 1st April 2022, the standard VAT rate is back to normal. This means that if you’re selling food and drinks that aren’t zero-rated, you’ll have to pay 20% VAT on those products.

Unfortunately, when it comes to baked goods and confectionery, it can be difficult to distinguish between zero-rated food and standard-rated food. Everyone knows the common argument over whether Jaffa Cakes count as a biscuit or a cake – which are both taxed differently.

Complying with arbitrary food VAT regulations can feel like navigating a minefield. So, how do you stay on HMRC’s good side while saving your business money and making your customers happy? Let’s investigate which foods can be zero-rated and when you have to pay standard-rated VAT.

In April, inflation in the UK rose to 9% – the highest it’s been since 1982. As the cost of goods and services continues to increase faster than wages and savings can keep up with, consumers have no choice but to limit their spending.

This means that owners of small businesses are hit twice over. Not only do rising prices limit their own spending power, but struggling customers buying less is also reducing their revenue.

The BBC reports that higher energy bills and surging fuel prices were the cause of around 75% of April’s inflation increase. Most other goods and services are also rising in price, with the Bank of England anticipating another recession this year if inflation passes 10%.

So, what does this mean for small businesses and consumers in 2022? This GBAC blog explores what’s happening with UK inflation and how to reduce its negative impact.

Paying more than basic rate tax in the UK was once like being part of a select club. Following the introduction of the additional higher rate tax band in 2010-2011, the percentage of taxpayers over the higher rate threshold was just 10.4%.
By 2015-2016, austerity measures were pushing this number up to 16%. After raising the threshold, the proportion of higher rate taxpayers dropped to 13.6% in 2019-2020. However, it began to rise again, and is continually increasing.
The Office for Budget Responsibility (OBR) estimates that the Personal Allowance freeze will not only make more earners liable for Income Tax, but also push more people from the basic rate band into the higher rate band.
As Income Tax allowances will be frozen until 2025-2026, while wages gradually increase in an attempt to catch up with inflation, up to 19% of taxpayers could find themselves paying double the tax they previously owed.