HMRC has been busy promoting the benefits of using its app. A new advertising campaign launched by HMRC is targeted at 18 to 34 year olds and showcases how the app can help them with their tax affairs and finances.

HMRC’s free tax app is available to download from the App Store for iOS and from the Google Play Store for Android. The latest version of the app includes updated functionality.

HMRC has recently reported that more than 1.7 million people are already using the HMRC app every month. Users of the app can access services such as making a Child Benefit claim, finding their National Insurance number and a tax calculator to estimate their take-home pay.

Between July and September 2024, 711,382 new users downloaded the app, and there was a 39% increase in app activity compared to the same period last year – up from 20.93 million sessions to 29.22 million. And nearly £300 million has been paid to HMRC via the app so far this financial year.

HMRC’s Director General for Customer Services, said:

‘One of the main priorities for HMRC is improving its customer services and this incredibly useful and user-friendly app is a great example of how tax can be made much easier for people.

Whether you’re a student looking for your National Insurance number or a new parent wanting to claim Child Benefit, the HMRC app has a range of tools for you, at your fingertips. I urge everyone to download it today.’

When evaluating the annual running costs of electric vehicles (EVs) compared to diesel cars, several key factors come into play: fuel (or electricity) expenses, maintenance, insurance, taxation, and depreciation. Here's a detailed comparison:

Fuel/Electricity Costs

• Diesel Cars: Assuming an average fuel efficiency of 50 miles per gallon (mpg) and a diesel price of £1.49 per litre, driving 10,000 miles annually would cost approximately £1,361.
• Electric Cars: With an average consumption of 17.5 kilowatt-hours (kWh) per 100 miles, the cost varies based on charging methods:
  • Home Charging: At a standard rate of 29p per kWh, the annual cost is about £508.
  • Public Charging: Using public chargers at an average of 59p per kWh, the cost rises to approximately £1,033.

Therefore, EVs can offer significant savings on energy costs, especially when primarily charged at home.

Maintenance Costs

• Diesel Cars: These vehicles have complex engines with numerous moving parts, leading to higher maintenance needs and costs over time.
• Electric Cars: EVs have fewer moving components, resulting in lower maintenance expenses. Estimates suggest servicing electric cars is about 23% cheaper than servicing diesel or petrol cars over a three-year/60,000-mile period.

Insurance Costs

• Diesel Cars: Insurance premiums are generally based on factors like vehicle value, performance, and repair costs.
• Electric Cars: Insurance for EVs can be higher due to their higher purchase price and specialised repair requirements. Some studies indicate that electric car insurance premiums are 14% higher than their petrol or diesel equivalents.

Taxation

• Diesel Cars: Subject to Vehicle Excise Duty (VED) based on CO₂ emissions, leading to higher annual tax charges.
• Electric Cars: Currently exempt from VED, offering annual savings. However, starting in April 2025, EVs will no longer be exempt from road tax.

Depreciation

• Diesel Cars: Tend to depreciate steadily over time.
• Electric Cars: Initially faced higher depreciation rates, but recent trends show EVs retaining value better, especially as the market grows and technology improves.

Overall Comparison

While EVs often have higher upfront costs, their lower fuel and maintenance expenses can lead to reduced annual running costs compared to diesel cars. However, factors like insurance premiums and future tax changes should be considered. Individual driving habits, charging options, and specific vehicle models will influence the total cost of ownership.

The Bank of England's recent decision to reduce the base rate to 4.75% brings several potential benefits to various sectors of the UK economy. Let's explore these advantages in detail.

Reduced Borrowing Costs

Lowering the base rate directly influences the interest rates offered by banks and financial institutions. This reduction can lead to decreased borrowing costs for individuals and businesses.

Mortgages: Homeowners with variable-rate mortgages may see a reduction in their monthly payments. For instance, a 0.25% decrease on a £200,000 mortgage could save approximately £28 per month. This reduction can ease financial pressures on households.

Stimulated Economic Growth

Lower interest rates can encourage spending and investment, which are vital components of economic growth.

• Consumer Spending: With reduced borrowing costs, consumers may be more inclined to make significant purchases, such as homes or cars, boosting demand in these markets.
• Business Investment: Affordable financing can lead businesses to invest in new projects, technology, or workforce expansion, contributing to economic development.

Enhanced Business Confidence

Lower borrowing costs can improve business sentiment.

• Investment in Growth: Companies may feel more confident in investing in growth opportunities, leading to innovation and expansion.
• Job Creation: Business expansion can result in job creation, reducing unemployment rates and stimulating economic activity.

Impact on Savings

While lower interest rates can benefit borrowers, they may affect savers.

• Reduced Savings Returns: Interest earned on savings accounts may decrease, potentially discouraging saving.
• Shift to Investments: Savers might seek higher returns through investments in stocks or bonds, influencing financial markets.

Broader Economic Implications

The rate cut can have wider economic effects.

• Stock Market Reaction: Lower rates can lead to higher stock prices as investors seek better returns than those offered by savings accounts.
• Bond Yields: Government and corporate bond yields may decrease, affecting investment strategies.

In summary, the Bank of England's decision to cut the base rate to 4.75% is designed to stimulate economic activity by reducing borrowing costs, encouraging spending and investment, and supporting various sectors of the economy. While there are potential downsides, such as reduced returns for savers, the overall aim is to foster a stable and growing economic environment.

Will there be further rate cuts?

The recent elections in the United States may have an impact on the speed of further rate cuts as the markets anticipate protectionist tariffs and other factors that may dampen economic growth. Business owners and households would be advised to budget for rates between 4% and 5% for some time.

1 December 2024 – Due date for Corporation Tax payable for the year ended 28 February 2024.

19 December 2024 – PAYE and NIC deductions due for month ended 5 December 2024. (If you pay your tax electronically the due date is 22 December 2024).

19 December 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2024. 

19 December 2024 – CIS tax deducted for the month ended 5 December 2024 is payable by today.

30 December 2024 – Deadline for filing 2023-24 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2025-26.

1 January 2025 – Due date for Corporation Tax due for the year ended 31 March 2024.

19 January 2025 – PAYE and NIC deductions due for month ended 5 January 2025. (If you pay your tax electronically the due date is 22 January 2025).

19 January 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2025. 

19 January 2025 – CIS tax deducted for the month ended 5 January 2025 is payable by today.

31 January 2025 – Last day to file 2022-23 self-assessment tax returns online.

31 January 2024 – Balance of self-assessment tax owing for 2023-24 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2024-25.

It was announced as part of the Autumn Budget measures that the government will not now proceed with the reform to base the High Income Child Benefit Charge (HICBC) on household incomes.

To make it easier for all taxpayers to get their HICBC right, the government will allow employed individuals to report Child Benefit payments through their tax code from 2025 and pre-prepopulate self-assessment tax returns with Child Benefit data for those not using this service.

The income threshold at which HICBC starts to be charged has been set at £60,000 since 6 April 2024. The charge is calculated at 1% of the full Child Benefit award for every £200 of income between £60,000 and £80,000. For taxpayers with income above £80,000 the amount of the charge is the same as the amount of Child Benefit received. The HICBC therefore either reduces or removes the financial benefit of receiving Child Benefit.

Claims can be easily made through the HMRC app or online, and new claims are automatically backdated for up to 3 months or to the child’s birth date if later.

Taxpayers can choose whether to continue receiving Child Benefit and pay the tax charge or opt to stop receiving it and avoid the charge. It is usually beneficial to claim Child Benefit as doing so can safeguard certain benefits and ensure your child receives a National Insurance number.

As part of the recent Budget measures, it has been confirmed that the Help to Save scheme is to be extended by a further 2 years, until April 2027. The last date an account can be opened under the current scheme will be 5 April 2027. Around 517,000 Help to Save accounts have been opened since its launch in 2018.

The Help to Save scheme is intended to help those on low incomes to boost their savings. Eligible users of the scheme can save between £1 and £50 every calendar month and receive a 50% government bonus. The 50% bonus is payable at the end of the second and fourth years and is based on how much account holders have saved. The bonus is paid directly into the account holder’s chosen bank account.

This means that account holders on low incomes can receive a maximum bonus of up to £1,200 on savings of £2,400 for 4 years from the date the account is opened.

The eligibility rules for the scheme will also be widened from April 2025 with the scheme opening to all working Universal Credit claimants earning at least £1 a month. The government has also launched a consultation on the most effective way to deliver the new wider scheme. The consultation is open for comment until 22 January 2025.

It was announced as part of the Budget measures that the government will reform these reliefs from 6 April 2026. The existing 100% rates of relief will be maintained for the first £1 million of combined agricultural and business property. The rate of relief will be 50% for the value of any qualifying assets over £1 million.

The government will also reduce the rate of business property relief available from 100% to 50% in all circumstances for shares designated as “not listed” on the markets of recognised stock exchanges, such as AIM. The existing rate of relief will continue at 50% where it is currently this rate and will also not be affected by the new allowance.

This new allowance will apply to the combined value of property in an estate qualifying for 100% business property relief and 100% agricultural property relief.

HM Treasury has provided the following example, the allowance will cover £1 million of property qualifying for business property relief, or a combined £400,000 of agricultural property relief and £600,000 business property relief qualifying for 100% relief.

If the total value of the qualifying property to which 100% relief applies is more than £1 million, the allowance will be applied proportionately across the qualifying property. For example, if there was agricultural property of £3 million and business property of £2 million, the allowance for the agricultural property and the business property will be £600,000 and £400,000, respectively.

The tax treatment of double cab pick-up vehicles (DCPUs) has been clarified as part of the recent Budget announcements. This follows a chequered history of the tax treatment of DCPUs after a 2020 Court of Appeal judgment and after the previous government reversed its plans to overhaul the tax treatment of these vehicles.

DCPUs with a payload of one tonne or more will be treated as cars rather than goods vehicles for the purposes of capital allowances, benefits in kind, and some deductions from business profits. These changes will take effect from 1‌‌‌ April‌‌‌ 2025 for Corporation Tax, and 6‌‌‌ April‌‌‌ 2025 for Income Tax. This means that going forward the vast majority of DCPUs equally capable of transporting passengers or goods will be categorised as cars. This shift could lead to higher tax liabilities for many businesses, including increased Benefit in Kind and National Insurance costs. Additionally, the change in vehicle classification could also impact the tax obligations of employees.

For expenditure incurred before 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax the existing capital allowances treatment will apply to those who purchase double cab pick-ups before April 2025. Transitional benefit in kind arrangements will apply for employers that have purchased, leased, or ordered a DCPU before 6‌‌‌ April 2025. They will be able to use the previous treatment, until the earlier of disposal, lease expiry, or 5‌‌‌ April‌‌‌ 2029.

The definition of DCPUs with a payload of less than one tonne has not changed and these vehicles will continue to be classed as cars as has historically been the case.

At Autumn Budget 2024, the government confirmed that it will go ahead with a simplification measure first announced in January 2024. This new measure will mandate the reporting of Income Tax and Class 1A National Insurance Contributions (NICs) for most benefits in kind (BiKs) in real time from April 2026. This measure is known as mandatory payrolling of BiKs.

Following the announcement in January 2024, the government consulted with a number of stakeholder groups including the Institute of Chartered Accountants in England and Wales (ICAEW) and the Chartered Institute of Tax (CIOT).

Based on the feedback received from stakeholders, a number of changes have been made to the rules for the mandatory payrolling of BiKs.

The main changes are: 

• the delivery of the work to mandate the real time reporting of and payment of tax on BiKs will be phased in from April 2026 – this will mean that all BiKs, with the exception of employment related loans and accommodation, will be mandated to be reported via payroll from April 2026;
• voluntary payrolling will be introduced for employment related loans and accommodation from April 2026. The P11D and P11D(b) process will still be available for those that do not want to payroll these BiKs. The government intends to mandate these BiKs and will set out a timeline in due course;
• an end of year process will be introduced to amend the taxable values of any BiKs that cannot be determined during the tax year. However, it is expected that the taxable values of most BiKs will be reported as accurately as possible during the tax year; and
• HMRC will continue to monitor the penalty position, from April 2026 to April 2027, whilst taxpayers get used to the new process of reporting BiKs. HMRC accepts that there will inevitably be a period of adjustment in the first year.

It was confirmed as part of the Autumn Budget measures that changes announced by the previous government at the Spring Budget earlier this year will proceed almost entirely as initially announced. From April 2025, the government will abolish the remittance basis of taxation for non-UK domiciled individuals and replace it with a simpler residence-based regime.

The government will also introduce a 4-year foreign income and gains (FIG) regime. New arrivals to the UK who opt into the regime will benefit from 100% relief on FIG in their first four years of tax residence, provided they have not been UK tax resident in any of the 10 consecutive years prior to their arrival.

As a transitional measure for Capital Gains Tax purposes, current and past remittance basis users will be able to rebase personally held foreign assets they held on 5 April 2017 to that date where certain conditions are met.

Overseas Workday Relief will be extended to a 4 year period to align with the new 4-year FIG regime. This will remove the need for users of this relief to keep their employment income offshore. The amount of Overseas Workday Relief that can be claimed annually will be limited to the lower of £300,000 or 30% of the employee’s net employment income from 6 April 2025.

A new Temporary Repatriation Facility (TRF) for individuals who have been taxed on the remittance basis will also be introduced from April 2025 for 3 years. This will allow individuals to designate and remit at a reduced rate foreign income and gains that arose prior to the changes. This includes unattributed foreign income and gains held within trust structures. The TRF rate will be 12% for the first 2 years and 15% in the final tax year of operation.

As part of the October Budget the Chancellor announced the highest ever level of government investment of £20.4 billion in research and development for next year, reinforcing the government’s commitment to back the UK’s R&D ecosystem to drive economic growth and achieve its five national missions.

The Budget will fully fund the UK’s association with Horizon Europe, providing scientists and innovators access to the world’s largest collaborative funding scheme, with over £80 billion available for cutting-edge projects under the EU scheme. The Department for Science, Innovation and Technology (DSIT) R&D budget has increased to £13.9 billion, and core research funding has also been increased to a record £6.1 billion, bolstering the UK’s leading research base.

A significant part of this Budget is dedicated to the UK’s life sciences sector, a cornerstone for positioning the UK as a leader in science and innovation, through a £520 million commitment to the Life Sciences Innovative Manufacturing Fund.

Additionally, the Chancellor announced funding for several other programmes to be led by DSIT. Together, these investments underscore the importance of science and technology in driving economic growth essential to raising living standards and funding public services, positioning the UK at the forefront of global innovation and progress.

Keeping an eye on competitors offers crucial advantages, especially in a dynamic market. Here’s why it pays off:

Improving Market Positioning
By observing competitor pricing, branding, and marketing strategies, you can position yourself better in the market. Adapting your approach based on competitors' moves allows you to highlight your unique strengths, stand out, or fill market needs they might overlook.

Sparking Innovation
Competitors often inspire new ideas. Observing their innovations can lead to enhancements for your own products or services. This isn’t about copying; it’s about learning from what’s working in your field and adapting those ideas to fit your brand and customer needs.

Benchmarking Performance
Tracking competitor performance can establish benchmarks for your own success. By comparing aspects like customer satisfaction or market share, you can identify areas where you need improvement or areas where you already excel.

Identifying Market Gaps
Studying competitors’ services and customer feedback can reveal gaps—opportunities for you to step in with solutions or offerings that meet overlooked needs. This is a great way to differentiate your brand and address unmet demands.

Spotting Industry Trends Early
Competitors often indicate broader industry trends. Tracking their shifts helps you prepare for changes in regulations, customer preferences, or new technologies. Getting a head start on trends ensures you are proactive rather than reactive.

Managing Competitive Threats
Regularly monitoring competitors can alert you to potential threats. If a competitor is targeting your customer base or launching a similar product, you can plan countermeasures, ensuring you’re not caught off guard by sudden shifts.

Understanding Customer Preferences
Reviewing competitor feedback and testimonials offers insights into customer priorities and expectations. Knowing what clients value can inform your service improvements, helping you attract and retain customers who may feel underserved elsewhere.

Boosting SEO and Content Strategy
Competitor analysis, especially online, can refine your digital presence. Observing their SEO tactics or popular content can inspire similar strategies that boost your own web traffic and customer engagement.

Opportunities for Collaboration
Competitor analysis isn’t always about rivalry; sometimes, it reveals partnership potential. If a competitor has a complementary service, a collaboration might benefit both businesses, offering customers a more comprehensive experience.

Fostering Continuous Improvement
Monitoring competitors encourages you to maintain a proactive improvement mindset. When you’re aware of their advancements, it keeps you from becoming complacent, promoting ongoing growth and evolution in your own business.

In essence, competitor monitoring is about staying informed, proactive, and adaptive. By observing what works (or doesn’t) for others, you can make smarter strategic decisions, find opportunities, and stay competitive.