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24 May 2024
Inflation Rate Falls to 2.3%


Primark Clothing Supplier Fined for Tax Evasion


Electric Vehicles to Be Subject to Vehicle Excise Duty from Next Year


Britain’s general election will be held on July 4th



Inflation Rate Falls to 2.3%

This week, the Office for National Statistics announced that the inflation rate for April has fallen to 2.3%.


This is the first time it has reached such a low level since July 2021.


The National Bureau of Statistics stated that the main reason for this decline is the slowdown in the price increases of a range of items, including energy prices.


In response, Rishi Sunak said, “This is an important moment for the economy, as inflation has now returned to normal.”



Primark Clothing Supplier Fined for Tax Evasion

A Leicester-based clothing factory supplies garments to chains such as Primark and New Look.


The factory established a complex network of shell companies to shift VAT liabilities and evade taxes without the knowledge of these brands.


An investigation following a surprise visit by HMRC found that the factory had evaded £1.3 million in VAT.


Ultimately, the two main culprits were sentenced to 3-5 years in prison, and an accomplice was sentenced to 2 years in prison and required to complete 300 hours of community service.



Electric Vehicles to Be Subject to Vehicle Excise Duty from Next Year

The UK Spring Budget has announced changes to Vehicle Excise Duty (VED).


From 1st April 2025, newly registered electric vehicles and low-emission vehicles will need to pay £10 in their first year.


From the second year onwards, this will increase to the standard VED rate (currently £190).


If you are unsure whether your vehicle qualifies as low-emission, you can check using the GOV.UK website tool.



Britain’s general election will be held on July 4

This week Rishi Sunak called a general election for July 4th and will then start campaigning against Keir Starmer.


Starmer said Britain had been waiting for this moment and said it was time to turn the page.


The outcome of the election will affect tax, pension, child care and other programs.



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23 May 2024
The Chancellor recently hinted at the possibility of further National Insurance cuts, as preparations for the general election continue.


This crucial information will impact everyone working and living in the UK, with expectations of reducing the tax burden.


The UK Parliament stated that further cuts to National Insurance would save taxpayers hundreds of pounds.



Plan Details

In a recent speech, the Chancellor indicated that if feasible, there will be further reductions in the dual tax on work this autumn.


The previous two cuts only adjusted National Insurance.


There were no changes to the income tax threshold, meaning that as wages rise, people have to pay more income tax.


Dual tax implies that the income tax threshold may be included in the Conservative Party’s tax reduction plans.



Current Tax Levels

The UK is facing its highest tax levels in 70 years, which is expected to have a suppressive effect on citizens’ lives and business activities.


High taxes mean more money goes to government rather than into the pockets of the public.


Different political parties have their own views on tax issues, which will be a hot topic in the upcoming election.



Why Pay National Insurance?

Firstly, National Insurance is a legal requirement, and all eligible citizens must pay it.


National Insurance provides protection in cases of unemployment, illness, child-rearing, and retirement.


It also entitles individuals to receive a state pension upon reaching retirement age, ensuring a stable income during retirement.



Do You Have to Pay National Insurance?

Employees aged 16 and over must pay National Insurance once they earn more than £242 a week.


For the self-employed, National Insurance is mandatory if annual profits exceed £12,570.


If you plan to live in the UK long-term and wish to receive a pension, you can also make voluntary contributions.


You need to continue contributing until you reach the state pension age.



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17 May 2024
– Bournemouth to introduce “tourism tax” from July.

– Gang set up 90 “companies” to gain £800,000 through VAT and financial fraud.

– NAO says taxpayers collectively spent 798 years waiting to speak to HMRC.

– Thousands of drivers facing “sunset tax” .


Bournemouth to introduce “tourism tax” from July

Bournemouth has become the first seaside resort to introduce a “tourism tax.”


From July 1st, 73 large hotels will charge £2.40 per room per night for all overnight guests.


For an average family of four, this will add nearly £34 to the cost of a week’s holiday.


The committee claims the fee will be used to create a clean, green, and safe local environment.



Gang set up 90 “companies” to gain £800,000 through VAT and financial fraud

Recently, HMRC reported a case of VAT fraud and warned taxpayers to beware of new scams.


The gang set up a “recruitment company” and stole job applicant information.


They then listed themselves as directors of fake car dealerships without people’s knowledge and applied for VAT refunds.


The gang has all been convicted and sentenced to over 10 years in prison.



NAO says taxpayers collectively spent 798 years waiting to speak to HMRC

A report from the UK’s National Audit Office shows that HMRC’s telephone communication service is below expected standards.


In the last financial year (2022/23), taxpayers waited an average of 23 minutes, compared to 5 minutes five years ago.


In reality, it’s even more difficult to communicate with HMRC advisers, with calls being automatically disconnected.


NAO hopes for a more practical service plan from HMRC to alleviate taxpayer dissatisfaction.



Thousands of drivers facing “sunset tax”

Denbighshire County Council in North Wales has scrapped its free parking policy.


The council plans to introduce a new “sunset tax,” requiring payment for seaside parking after 5 pm.


For residents and visitors to the town, winter parking will cost £1.50 for two hours and £2 for the rest of the time.


Locals claim this is an absurd charging system and refuse to pay the “sunset fee.”



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15 May 2024
Previously, we mentioned that HMRC has started investigating sellers’ income information on major online selling platforms this year to combat tax evasion.


All online sellers and part-time workers must declare and pay taxes to HMRC once they exceed the tax-free threshold.


Given that the new regulations are now in effect, any behaviour identified by HMRC as tax evasion will be severely punished.



Platforms and Sellers Affected

Currently, HMRC has access to sellers’ information on online platforms and collects their sales data.


This includes platforms such as Etsy, Vinted, eBay, as well as media platforms like Instagram and OnlyFans, which need to collect sales and income information from sellers and influencers to share with HMRC.


Additionally, platforms providing services such as Uber, Deliveroo, and Airbnb must also share data for any services receiving payments.


So far, online sellers have faced strict internal scrutiny by HMRC and entered into tax investigations.



Submitting Tax Returns

Since HMRC requested all sellers’ sales records from online e-commerce platforms, income from online sales will be fully exposed.


This means that all sales data becomes extremely transparent, and you need to understand everything about income tax reporting to avoid triggering a tax investigation.


For individual online sellers, if annual sales exceed £90,000, additional VAT registration is required.


If you are an online media person and receive “gifts” from fans or brands, it counts as income, with the same registration threshold applying.



When to File Tax Returns

Under existing rules, you need to file a return if you meet one of the following conditions:


– You sell 30 or more items per year;

– Your income exceeds the £1,000 threshold for taxable income.


If any of these conditions apply and you are trading, not just selling your second-hand clothes, you must submit a tax return.



Penalties

Firstly, once HMRC initiates a tax investigation into the store, it requests all online sales data and tax evidence. HMRC has the authority to request that the platform close the store until evidence is provided.


Secondly, during the tax investigation, online selling platforms have “joint responsibility” and are required to cooperate in providing all seller information.


When HMRC confirms tax evasion by the store, it will face a penalty of 100% of the tax owed.


Serious cases will also face prosecution and unlimited fines.



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10 May 2024

HMRC has revealed that a highly rated restaurant in Manchester owes hundreds of thousands of pounds in taxes

HMRC said one of Manchester’s highly rated restaurants owes hundreds of thousands of pounds in taxes.


Moreover, businesses and individuals in Greater Manchester will be listed as “deliberate tax defaulters” once their tax debts exceed £25,000.


This includes nearly ten businesses or individuals such as soft drink wholesalers and real estate companies.


Currently, HMRC has made this public and is awaiting further leads to recover the debts as much as possible.



UK company registration fees have been increased across the board

Recently, Companies House announced an overall increase in fees affecting all existing and new UK companies.


A range of fees, including those for registering companies by post, changing names, and filing confirmation statements, have been raised.


Before May 1, 2024, the fee for online company registration was £12, but now it’s £50.


Officials pointed out that despite the increase, the UK still has the lowest fees in the world.



Free childcare applications for a new age group will open this Sunday

Starting this Sunday, working parents in England with children aged nine months can apply for up to 15 hours of free childcare per week.


Applications for this age group will be granted from September.


Starting September 2025, once eligible, all working parents with children under five will be able to apply for up to 30 hours of free childcare per week.


This scheme currently only applies to the England region, while other regions can check local tax policies.



The Bank of England has announced that the benchmark interest rate will remain unchanged at 5.25%

This Thursday noon, the Bank of England announced its latest decision on the benchmark interest rate, continuing to maintain it at 5.25%.


So far, UK inflation rates have not fallen below 2%, which is one of the important factors for keeping the rate unchanged.


More experts predict that interest rate cuts won’t be seen until at least after August, assuming market conditions improve.