Government funding for free childcare
Nurseries are set to receive £204 million as part of the Government’s promise to deliver the largest-ever investment in childcare.
The plans, which were announced in the Spring Budget, are designed to remove barriers to support parents to return to work and help grow the economy by making childcare more accessible.
Every area across the UK is getting a share of the government funding which childcare providers can use to ease cost pressures such as staffing costs, training, and bills. Funding rates per child paid from September will increase from an average of £5.29 to £5.62 for three and four-year-olds, and from an average of £6.00 to £7.95 for two-year-olds.
How will this childcare offer work?
From April 2024, eligible working parents of two-year-olds will get a new offer of 15 free hours per week of free childcare. From September 2024, eligible parents will get 15 free hours from nine months until their children start school, and from September 2025, they will get 30 free hours from nine months until the start of school.
With this being said, 16 local authorities from Barnsley to Wiltshire have been selected to work with the government to develop plans for this universal provision, with some of these areas expected to be the first to roll out the wraparound care as early as summer 2024.
When will parents see these changes?
All local authorities will start to receive their share of £289 million in funding from January 2024 to support their delivery of the programme, with parents expected to see an expansion in the availability of wraparound care from September 2024.
Digitaccs can help
Are you looking into childcare? Digitaccs can assist! Call us on 02033671108 or comment below!
Hybrid Working
You’ve probably heard of hybrid working before (if not, have you been living under a rock?!), or are part of a company that uses hybrid working.
The pandemic brought many changes to businesses, some good and some bad. One that has continued to be a topic of conversation is the desire for more people to be able to work from home.
If you need people onsite, for example, at a restaurant to serve guests or at a dental practice to keep those teeth nice and white, then your staff would have little choice in where they can work. But, for admin roles or the like, work can be flexible! It can be done at home, at a coffee shop, heck it could even be done in your car! (Don’t ask why that would be the case, we don’t know either.) All you really need is a laptop or a phone and a good internet connection to get you started.
Is Hybrid Working worth it?
Some employers are not so sure about the hybrid working era, maybe due to fear of less work being done, but there’s more evidence that showcases employees’ productivity actually increases when in a comfortable environment (like at home).
Fewer distractions occur when working from home compared to in an office, plus there would be no need to travel or work within a specific time frame!
A recent report from the ACCA – UK Talent Trends in Finance 2023 – found that the UK is leading the way in hybrid and remote working. Jamie Lyon, head of Skills, Sectors and Technology at ACCA, said: One-fifth of respondents in the UK identified as fully office based, with the remaining 80% either adopting a hybrid approach to work or being fully remote. However, globally, the picture is notably different, with over half of respondents being fully office based. And 77% of respondents in the UK feel they are more productive when working remotely.”
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What Can Hybrid Working do for your business?
Many companies are already letting staff use hybrid working conditions. But if your business isn’t one of them, you may want to consider adding this as an option. It can provide so many benefits, including:
- Being more inclusive for employees who find it difficult to juggle their home and work life around specific office hours.
- Greater productivity.
- Improved employee well-being because they have more control over their working and home life.
- Greater flexibility in allowing employees to change their approach based on what the business needs at a particular time.
- Reduces the amount of office space needed which lowers costs, plus, if you can let out that specific portion of the office building, you may even gain additional income from it.
Now, we know we said some employers are not so keen on the idea of hybrid working or working from home, but some employees feel the same. Some people just prefer office settings as they thrive in social environments. So, keep that in mind when creating your hybrid working policies!
The Digitaccs Working Policy
Really cool fact: Digitaccs are fully remote! We are a group from across the world!
So, with all this in mind, would you consider introducing hybrid working or working-from-home in your business?
ChatGPT
Heard of the new tech on the block?
ChatGPT is an ai-driven software that could revolutionise how businesses work! The language model uses machine learning to understand and respond more naturally. It has been trained on massive amounts of datasets, letting it generate many responses to a range of questions and tasks.
Two useful examples of what ChatGPT can do for your business includes answering customer queries and automating time-consuming tasks.
How can ChatGPT help your business?
There are many ways ChatGPT can boost your business to success! Here’s just a taste of what it can bring to the digital table.
Another advantage is its ability to perform data analysis and provide insights that can help businesses make informed decisions. By analysing large amounts of data, the system can identify patterns and trends that may not be apparent to humans. This can help businesses optimise their operations, improve efficiency and identify new growth opportunities.
Lastly,
The system can be trained and adapted to the specific needs of a business. This means both the business and chatGPT can evolve! ChatGPT is a great extension for any business, all thanks to its valuable insights and innovative solutions.
It’s such a simple piece of innovative tech, that we bet even your dog could use it!
Is Digitaccs embracing it?
We might! Currently, we’re in the works of discussing how ChatGPT can be incorporated into our business.
Is your company already acquainted with this powerful piece of technology? Let us know your experiences in the comments!
4-day work week
Could the UK embrace a 4-day work week?
In June 2022, 70 UK companies and over 3,000 workers began working 4 days a week, with no reduction in pay. Firms are trialling this for 6 months, basing it on the 100:80:100 model – 100% pay, for 80% of the time, with 100% productivity.
Our working patterns and the focus we all give to our work-life balance have shifted considerably since Covid-19. Sticking to a rigid, outdated, time-based system doesn’t make sense in most modern businesses, especially given that people have technology and tools that enable them to multitask more effectively than ever before.
Businesses are now adopting a more flexible approach to work with productivity rather than “presenteeism”. If the employees in the companies involved in this trial 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.
Could this be our future?
Lastly
It’s always good to plan for the future, if you found a 4-day work week to be interesting it would be best to consider it for your business!
Has your business embraced the 4-day work week? Let us know how it is going in the comments below!
Digital Tax
Companies and sole traders who have not yet finalised their plans to comply with Making Tax Digital need to board the last train departing this month!
The very latest you have to comply with Making Tax Digital (MTD) for paying VAT is August 7, so gather all your VAT and hurry on that train before it’s too late 🚄
Digital Tax Requirements
August 7th 2022 is the latest date on which you will need to make your first – if you are not already doing this – MTD VAT return. So, if you have not already done so, you have very little time left to make sure you comply with this legislation.
Whether you are required to pay VAT – because your business turnover is above the £85,000 threshold at which you are required to register – or because you have voluntarily registered, you now must keep your records and file your returns electronically.
What Happens If You Don’t conduct digital tax on time?
From April 1, you will need to have filed any VAT due through MTD-compatible software, which includes the likes of QuickBooks and Xero, among others (Something Digitaccs already does 😉).
If you are not able to file your return this way, then HMRC can issue a £400 fine. Plus, from January 2023, HMRC is will bring in a points system, which means you attain points each time you miss a deadline. Once you hit a certain number of points, you will face a £200. That’s not great for any organisation, so consider MTD asap!
Income Digital Tax
The next roll-out will be the introduction of MTD for income tax which is scheduled to start in April 2024.
The obligation to keep records in a digital format and report information quarterly will apply to unincorporated businesses and property landlords with gross income from all business activities over £10,000 a year.
Businesses operating digital tax for VAT may already have ‘functional compatible software’ for income tax purposes but will need to get into a new routine for income tax reporting.
The changes will be more significant for property landlord businesses, most of whom are not VAT registered and so have not already been through digital tax for VAT.
HMRC are currently consulting on the precise details of what needs to be reported each quarter. As expected, it seems the accounting software will need to record and report income and expenditure in the same categories currently used for self-assessment.
HMRC also propose that those businesses with turnover below the £85,000 VAT threshold will only need to report the totals of income and expenditure each quarter, which will be a welcome simplification for small businesses.
Lastly,
Do you need help getting into the nitty and gritty details of making tax digital? Give us a call on 020 3367 1106.
Digitaccs can work with you to ensure your accounting systems are MTD compliant. To find out how, please get in touch with us on 020 3367 1108.
Tax Return
Why Do Tax Return Calculations Early?
Early Tax Return Benefits?
Overall Early Tax Returns Calculations…
Need help with your tax returns or any other tax matters? Let us know! Here at Digitaccs, we’re professional accountants that care about your taxing taxes and are always willing to help.
Highlights from the Chancellor’s March Budget
Highlights from the Chancellor’s March Budget: UK Economy
Highlights from the Chancellor’s March Budget – In the Chancellor’s second real Budget on 3 March 2021 he announced that he had to level with people about the state of the UK economy. Prior to Budget day there were fewer leaks than normal about possible tax changes. There were however announcements prior to Budget day of grants for High Street businesses and the hospitality sector and the widely predicted extension of the furlough scheme.
Highlights from the Chancellor’s March Budget: CJRS Furlough Scheme and Self-Employed Income Support Grants Extended
Highlights from the Chancellor’s March Budget: The current version of the furlough scheme that started on 1 November 2020 was scheduled to end on 30 April 2021. In order to avoid a “cliff-edge” with resulting widespread redundancies the chancellor has announced a further extension of the scheme and also a phased reduction in support to employers. The CJRS furlough grant for May and June will remain at 80% of the employees’ usual pay for hours not working but it will then be limited to 70% for July and then 60% for August and September. In line with the further extension of the CJRS furlough scheme for employees the chancellor has also set out further support for the self-employed. We had been waiting for the details of the calculation of the fourth SEISS grant covering the period to 30 April and we now know that the support will continue to be 80% of average profits for the reference period capped at £2,500 a month and can be claimed from late April. There will then be a fifth SEISS grant covering the 5 months to 30 September.
Corporation Tax
The UK corporation tax rate is currently one of the lowest rates of the G20 countries and the government states it is committed to keeping the rate competitive. That should have the effect of encouraging companies to remain in the UK and companies to set up here. With other countries considering raising corporate tax rates the chancellor has announced that the UK will follow suit and consequently the rate will increase to 25% from 1 April 2023 where profits exceed £250,000. However, where a company’s profits do not exceed £50,000 the rate will remain at the current 19% rate and there will be a taper above £50,000. Businesses will however be able to take advantage of new tax breaks to encourage investment in equipment and an enhanced carry back of losses.
Super Deduction for Investment in New Equipment
In order to encourage companies to invest in new capital equipment the chancellor announced a radical new “super-deduction” of 130% where they invest in new plant. This would mean that when a company buys plant costing £10,000 they would qualify for a £13,000 deduction in arriving at business profits. The new deduction, which will run for two years from 1 April 2021, will not be available for motor cars. Certain assets such as fixtures in buildings will only qualify for 50% relief in the first year instead of the normal 6% writing down allowance.
Other Highlights
• Three year carry back of trading losses
• 5% VAT rate for food, attractions and accommodation extended
• VAT registration limit frozen at £85,000 until 1 April 2024
• Making Tax Digital extended to all VAT registered businesses from 1 April 2022
• New grants for high street businesses and hospitality sector
• SDLT thresholds extended
• 5% mortgage schemes extended
• Apprenticeship schemes extended
CONTACT US
Please contact us if you would like to discuss further. As you develop your 2021 business strategy, you will most likely identify some actions that you can undertake with certainty, which will help you to manage some of the risks that are inherent in operating in uncertain economic times. Perhaps you can bolster your firm’s cash reserves, reduce fixed costs, or negotiate better terms with suppliers. By proactively focusing on delivering against these actions, you will keep moving your business forward, which will help to make your firm more resilient in the medium to long term.
Please click our link to see the video of our blog here.
Digitaccs can work with you to make sure your accounting systems are MTD compliant. To find out how, please contact us on 020 3367 1108.
Domestic VAT Reverse Charge 2021
Domestic VAT Reverse Charge 2021: Domestic VAT Reverse Charge for Building and Construction Services
Domestic VAT Reverse Charge 2021 – The domestic VAT reverse charge for building and construction services finally comes into effect on 1 March 2021. The start date was originally 1 October 2019, but it was postponed by one year until 1 October 2020 to allow those affected more time to prepare. The start date was further delayed – until 1 March 2021 — as a result of the COVID-19 pandemic. Detailed guidance on the charge can be found on the Gov.uk website. Under the domestic VAT reverse charge, the customer receiving the service must pay the associated VAT to HMRC rather than paying it to the supplier. The charge will be relevant to you if you are an individual or a business that is registered for VAT in the UK, and you supply or receive specified services that are reported under the Construction Industry Scheme (CIS). If you are a customer, you will pay the supplier the amount net of VAT and pay the VAT to HMRC. If you are a supplier, you will receive payment net of VAT and will no longer need to pay the VAT to HMRC.
Preparing for the Charge
Domestic VAT Reverse Charge 2021 – If you are an individual or business that falls within the scope of the charge, you will need to ensure that you are ready to apply it from 1 March 2021. In preparation, you will need to check that your accounting systems and software can cope with the reverse VAT charge, and upgrade them if necessary. You should also ensure that any staff who deal with VAT understand the changes and what they need to do to comply. It is also prudent to assess how the charge will impact on your cash flow, particular if you supply services that fall within the scope of the charge as you will no longer receive the associated VAT.
Completing the VAT Return – Suppliers
If you are a supplier, you must not enter any output tax on any sales that fall within the domestic VAT reverse charge on building and construction services on your VAT return. Instead, you only need to enter the net sales value.
Completing the VAT Return – Customers
If you are a customer purchasing services within the scope of the charge, you must account for the associated VAT to HMRC by including it as output tax on your VAT return. You should not enter the net value of the purchase as a net sale. You can reclaim the input tax on your reverse charge purchases in accordance with normal VAT rules.
Guidance
Please talk to us about your business planning.
CONTACT US
Please contact us if you would like to discuss further. We can help you to prepare for the introduction of the charge, and comply with your obligations in relation to it.
Please click our link to see the video of our blog here.
Digitaccs can work with you to make sure your accounting systems are MTD compliant. To find out how, please contact us on 020 3367 1108.
Building your 2021 Flexible Business Strategy
Building your 2021 Flexible Business Strategy – Facing Uncertainty
Building your 2021 Flexible Business Strategy – We live in uncertain times and planning for the future is challenging. Rather than paying attention to what you can’t do, focus on what you can do. For example, when restaurants couldn’t serve customers indoors, they transitioned to delivery, take-away and outdoor dining. Regardless of the type of business that you manage, this is the mindset to develop and use for your 2021 business strategy.
Building your 2021 Business Strategy – Can-Do
Building your 2021 Flexible Business Strategy – Your “can-do” business strategy should start with a list of what is possible. Perhaps you can transition to doing business online, research new markets, or utilise the shift to video conferencing to create a new and more personal experience for your customers while they are in the comfort of their home. Once you have considered what you can do, you can then create some strategic objectives for the year ahead.
Consumer Centricity
Building your 2021 Flexible Business Strategy – Consider how you can shift your business strategy to one that is more customer centric. The best businesses are those that deliver added value to their customers. For example, you could provide new payment options to customers in order to encourage them to make a purchasing decision. Your customers will be more focused on cash flow due to the prevailing economic uncertainty, so offering structured payment plans, 12 months interest free credit and so on, could make your firm more attractive than your competitors.
Business Planning: Practical Tips
If you are considering launching new products or services in 2021, you may need to extend the timeline. The world is not back to normal (whatever the “new normal” will be) and supply chains are struggling with issues related to transportation, production backlogs, availability of materials, etc. As such, it would be prudent to allow some extra lead time in your plan for any new product or service launch.
Guidance
Please talk to us about your business planning. With an uncertain operating environment anticipated to continue for some time yet, it makes sense to have a backup plan. As you develop your strategy, take some time to consider what potential contingencies you can put in place in order to be ready to move in a different direction, should you run into some headwinds. If you are unsure where to start, it can be helpful to research some of the tactics that worked for other businesses, even those that may be operating in a completely different sector. You can then apply the best bits of those tactics to your own strategic plan.
CONTACT US
Please contact us if you would like to discuss further. As you develop your 2021 business strategy, you will most likely identify some actions that you can undertake with certainty, which will help you to manage some of the risks that are inherent in operating in uncertain economic times. Perhaps you can bolster your firm’s cash reserves, reduce fixed costs, or negotiate better terms with suppliers. By proactively focusing on delivering against these actions, you will keep moving your business forward, which will help to make your firm more resilient in the medium to long term.
Please click our link to see the video of our blog here.
Digitaccs can work with you to make sure your accounting systems are MTD compliant. To find out how, please contact us on 020 3367 1108.
New Year’s Resolutions to Save Tax
New Year’s Resolutions 2021 to Save Tax – Planning
New Year’s Resolutions 2021 to Save Tax – At this time of year we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April. An obvious tax planning point would be to maximise your ISA allowances for the 2020/21 tax year (currently £20,000 each). You might also want to consider increasing your pension savings before 5 April 2021 as the unused annual pension allowance is lost after three years. For those looking to do some inheritance tax planning, it would be a good time to review (or make) your Will.
New Year’s Resolutions 2021 to Save Tax: Pension Planning
For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and by their employer. Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the current, but then lapses if unused. Hence the unused pension allowance for 2017/18 will lapse on 5 April 2021 if unused.
Review your Will
Top of the to do list for many individuals is to make or update their will. Many think this is something to leave until later in life but it is important to get things in place once property is acquired or when children come along.
Passing on the Family Home
One recent change that should be taken into consideration when drafting your Will is the additional Inheritance Tax (IHT) nil rate band for passing on the family home to direct descendants on death. We can work with your solicitor to make sure your Will is tax efficient.
Guidance
Please talk to us about of the above or how to build your 2021 business strategy in the face of uncertainty. We live in uncertain times and planning for the future is challenging.
CONTACT US
Please contact us here.
Please click our link to see the video of our blog here.
Digitaccs can work with you to make sure your accounting systems are MTD compliant. To find out how, please contact us on 020 3367 1108.
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