intelligence PROFESSIONAL EXPERTISE


Are you ready for VAT shake-up?


New analysis from audit, tax and consulting firm RSM suggests there could be as many as 76,000 VAT-registered businesses in the South West that are unprepared for new digital taxation rules which come into force from April next year. Statistics from the Office of


National Statistics show that in March 2018, there were 231,745 VAT-registered businesses in the South West. However, the latest RSM research


carried out by YouGov suggests that up to one third of businesses are unprepared for the new Making Tax Digital rules, which are effective from 1 April 2019. Making Tax Digital (MTD) is the


Government's ambitious plan to bring the UK's tax system into the 21st Century by transforming the way taxpayers interact with HMRC. With only a few exemptions, VAT-


registered businesses trading over the VAT threshold of £85,000 will be required to keep records in a digital format, ensure that the


transfer or exchange of VAT information is digitally linked and submit their VAT return information to HMRC using MTD compatible software. Any business


affected by these changes must ensure that they are using MTD compatible software by April 2019. To be ‘compatible’ the software must include an Application Programme Interface (API). The API will create a link between


the business’s accounting software and HMRC's systems. The API will enable the business to submit their VAT return figures to HMRC directly from their accounting software. HMRC has indicated that there


will be a ‘soft landing’ period between April 2019 and April 2020 during which there will be no financial penalties for record keeping failures, nor will there be a mandatory requirement for there to


‘Making Tax Digital is one of the biggest shake-ups in tax administration for over 20 years’


Philip Munn


be a digital links between the accounting software which make up the VAT Return records. However, there must be an API from the outset creating a link between the accounting software of the business and HMRC. Philip Munn, VAT partner at RSM,


said: “Making Tax Digital is one of the biggest shake-ups in tax administration for over 20 years. But with just six months to go


before the rules come into force, there’s a worrying number of VAT- registered business that are completely unaware of the changes. And many of those that are aware have an awful lot of work to do to get ready. “VAT-registered businesses really


need to make the next six months count, to ensure that their software, systems and people are all ready for the change.”


FINANCE


Record number of people saving for retirement, but it isn’t enough


Analysis by the Office for National Statistics (ONS) and the Department for Work and Pensions (DWP) has revealed that around 40 million people now have a private pension - a huge increase from previous studies. While this sounds like positive news for the pension industry, in reality the amount being saved is not nearly as impressive.


Stuart Price, Partner and Actuary at Quantum Advisory in Bristol, says: “The huge upsurge in pension members is largely a result of the auto enrolment regime established by the government in 2012. The current system sees those aged between 22 and state retirement age and earning more than £10,000 pay a minimum 3% of their earnings into a pension scheme, while their employer also contributes 2%. From April 2019 this will increase to 5% from the employee and 3% from the employer.


Stuart Price


“Although the latest ONS figures have shown a significant increase in those now signed up to an occupational pension scheme, the obvious worry is that when the minimum contribution levels increase further next year, so too will the number of people opting out. Another critical concern, is the amount being saved. Many think that because they are in a pension scheme, regardless of the amount being saved, they will be able to enjoy a comfortable retirement, but this is far from the case, and the government need to make people aware of this.


“The planned introduction of the Pension Dashboard in 2019 will provide an indication of the overall income individuals could expect in retirement, which may, in a good way, frighten them into saving more. The next set of ONS figures will be interesting reading.”


Stuart Price is Partner and Actuary at Quantum Advisory, which has offices in Amersham, Birmingham, Bristol, Cardiff, and London.


Quantum provides pension and employee benefits services to employers, scheme trustees and members.


For more information about Quantum Advisory, please visit: www.quantumadvisory.co.uk


32 insight NOVEMBER/DECEMBER 2018


HSBC UK’s Jamie Lait with Refuse Vehicles Solutions’ Spencer Law


Investment aids growth


A Gloucestershire refuse vehicle supplier has secured a £1.5m finance package from HSBC UK to expand its business and meet growing demand from customers. Refuse Vehicle Solutions, which supplies refuse trucks, municipal vehicles and dustcarts to waste collection businesses across the UK, has used the funding to double its workshop capacity at the firm’s national hub in Dursley, Gloucestershire. Five new service bays have been constructed, enabling the firm to repair and maintain an increasing number of refuse fleets as its client base continues to grow. HSBC UK’s latest cash injection follows a £1m finance package


secured in 2017 to add a fleet of brand new trucks, which customers can either buy or hire. The company now supplies new, used and remanufactured refuse vehicles across depots in Birmingham, London, Oxfordshire, Devon and Cornwall. Spencer Law, managing director of Refuse Vehicles Solutions, said:


“We’re very excited to be expanding our service provision in Gloucestershire and we’re incredibly grateful to HSBC UK and our relationship manager, Jamie Lait, who have supported our ambitious business plans.”


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