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Gender gap closing in UK board rooms

More than a third (34.3%) of FTSE 350 board positions are now held by women, with the number of women on boards increasing by 50% over the last 5 years, data released today (Wednesday 24 February) shows, representing a dramatic shift in representation at the very highest levels of British business.

The data has been published in the final report from the government-backed Hampton-Alexander Review, which was launched in 2016 to encourage UK-listed companies to appoint more women to their boards and into senior leadership positions.

While men still dominate in the upper ranks of the UK’s top firms, in 5 years the Review has seen remarkable progress among FTSE companies. In total, 220 of the FTSE 350 companies now meet the Hampton-Alexander target of having at least 33% of their board positions held by women – with the figure having quadrupled from just 53 in 2015, and there are no longer any all-male boards in the FTSE 350.

The figures also show an increase in women in wider senior leadership roles, demonstrating that Hampton-Alexander’s top-down approach – with boardrooms setting the standards for women’s representation across the company – is providing pathways to success for women and ultimately supporting British business to strengthen leadership with new ideas and diverse perspectives that come from more women in senior positions.

Data

Oct 2015

Jan 2021

Number of women on boards in FTSE 350

682

1,026

Representation of women on boards in FTSE 350 (as a %)

21.9%

34.3%

Number of all-male boards in FTSE 350

15

0

Number of companies with 33% women on boards in FTSE 350

53

220

Number of boards with only one woman (One & Done)

116

16

Representation of women in leadership roles in FTSE 350 (as a %)

24.5% (in 2017,
when data collection began)

29.4%

The FTSE 250 reached the Hampton-Alexander Review’s final target of women making up 33% of boards in December 2020, following the FTSE 100 and FTSE 350, which achieved the milestone in February and September 2020 respectively, highlighting the success of the government’s voluntary, business-led approach in addressing the exclusion of women from the top of FTSE companies.

Challenges as we emerge from lockdown

There is no guarantee that the heady mix of vaccination and easing of lockdown will contain the spread of COVID-19. However, based on government predictions, they are willing to start the process of easing lockdown restrictions.

The relaxation of restrictions will depend on four tests. They are:

  1. The vaccine deployment programme continues successfully.
  2. Evidence shows vaccines are sufficiently effective in reducing hospitalisations and deaths in those vaccinated.
  3. Infection rates do not risk a surge in hospitalisations which would put unsustainable pressure on the NHS.
  4. Assessment of the risks is not fundamentally changed by new Variants of Concern.

The stepped approach published is:

Step 1: 8 March

  • Schools and colleges are open for all students. Practical Higher Education Courses.
  • Recreation or exercise outdoors with household or one other person. No household mixing indoors.
  • Wraparound childcare.
  • Stay at home.
  • Funerals (30), wakes and weddings (6)

29 March

  • Rule of 6 or two households outdoors. No household mixing indoors.
  • Outdoor sport and leisure facilities.
  • Organised outdoor sport allowed (children and adults).
  • Minimise travel. No holidays.
  • Outdoor parent & child groups (up to 15 parents).

Step 2
At least five weeks after Step 1, no earlier than 12 April.

  • Indoor leisure (including gyms) open for use individually or within household groups.
  • Rule of 6 or two households outdoors. No household mixing indoors.
  • Outdoor attractions such as zoos, theme parks and drive-in cinemas.
  • Libraries and community centres.
  • Personal care premises.
  • All retail.
  • Outdoor hospitality.
  • All children’s activities, indoor parent & child groups (up to 15 parents).
  • Domestic overnight stays (household only).
  • Self-contained accommodation (household only).
  • Funerals (30), wakes, weddings and receptions (15).
  • Minimise travel. No international holidays.
  • Event pilots begin.

Step 3
At least five weeks after Step 2, no earlier than 17 May.

  • Indoor entertainment and attractions.
  • 30 persons limit outdoors. Rule of 6 or two households (subject to review).
  • Domestic overnight stays.
  • Organised indoor adult sport.
  • Most significant life events (30).
  • Remaining outdoor entertainment (including performances).
  • Remaining accommodation.
  • Some large events (expect for pilots) – capacity limits apply.
    • Indoor events: 1,000 or 50%.
    • Outdoor other events: 4,000 or 50%.
    • Outdoor seated events: 10,000 or 25%.
  • International travel – subject to review.

Step 4
At least five weeks after Step 3, no earlier than 21 June. By Step 4, the Government hopes to be able to introduce the following (subject to review):

  • No legal limits on social contact
  • Nightclubs.
  • Larger events.
  • No legal limit on life events.

Based on these published intentions it would be wise for UK’s raft of small businesses that have been adversely affected by lockdown to plan for resumption of trade. Depending on how badly their finances have been affected by the events of the last year they will need plans in place to finance expansion. It is likely that once consumers can scent the freedom to step out and spend there will be a significant push to economic activity.

Supreme Court determines Uber drivers are workers

In a landmark decision handed out by the Supreme Court last week, the respondents, Yaseen Aslam, James Farrer, Robert Dawson and others have had their claim upheld that they are “workers” and not self-employed drivers for Uber; as such they qualify for rights under the Employment Rights Act, the Minimum Wage Act and Working Time Regulations.

This will have significant repercussions for firms like Uber who engage persons to work for them under contracts that aim to deny them “workers” rights by treating them as self-employed.

 

A summary of the main points that will flow from this judgement are set out below:

  • In future, Tribunals (lower courts) should look at the reality of the relationship between parties rather than simply accept any documentation (contracts) between the parties.
  • Drivers should be considered “workers” as soon as they switch on their apps until apps are switched off.

This is likely to mean that:

  • Drivers will be able to claim minimum wage based on their entire working day not just when they had customers in their cabs.
  • Drivers should be able to claim back-pay.
  • They should also be able to claim 5.6 weeks paid annual leave.

This outcome will affect the rulings of lower courts for many years to come if asked to consider the rights of individuals retained in the so-called “gig” economy.

Do you qualify for the fourth SEISS grant?

To qualify for the Self-Employed Support Scheme HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits as well as meeting financial considerations based on previously submitted tax returns.

The closing date for the third grant – 1 November 2020 to 29 January 2021 – has now passed and details of the fourth grant for the next quarter will be published 3 March 2021.

The notes below set out HMRC’s interpretation of two of the criteria it has set in the past that have affected eligibility for this grant.

Impacted by reduced demand

This applies to your business if it has been impacted by reduced activity, capacity or demand due to coronavirus.

For example, you:

  • have fewer customers or clients than you’d normally expect, resulting in reduced activity due to social distancing or government restrictions
  • have one or more contracts that have been cancelled and not replaced
  • carried out less work due to supply chain disruptions

You must not claim if the only impact on your business is increased costs. For example, if you have had to purchase face masks and cleaning supplies. This would not be considered as reduced activity, capacity or demand.

Previously trading but you are temporarily unable to do so

This applies to you if you’re temporarily unable to carry out your business activities due to coronavirus, because for example:

  • your business has had to close due to government restrictions
  • you’ve been instructed to shield or self-isolate in-line with NHS guidelines and are unable to work from home (if you’ve been abroad and have to self-isolate, this does not count)
  • you’ve tested positive for coronavirus and are unable to work
  • you cannot work due to caring responsibilities, for example as a result of school or childcare facility closures

If you are unsure if you should consider making a claim for the fourth grant under SEISS please contact us after 3 March 2021 when the full details of qualifying conditions will be published.

Tax claims if working from home

Many employed persons will have spent a large chunk of the current tax year, 2020-21, working from home due to COVID restrictions. HMRC will accept a claim to cover any additional costs you may have incurred.

Must be required to work from home

You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19).

You cannot claim tax relief if you choose to work from home.

Costs you can recover

 

Additional costs you can reclaim include heating, metered water bills, home contents insurance, business calls or a new broadband connection. They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax.

How much can you claim

You have two choices:

  • Claim £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) – you will not need to keep evidence of your extra costs.
  • Or claim the exact amount of extra costs you have incurred above the weekly amount – you will need evidence such as receipts, bills or contracts.

You will get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

Buying equipment

You can only claim tax relief for equipment expenses if you need it to do your job and you use the equipment for work and there is no significant private use – this includes using the equipment according to your organisation’s policy.

If your employer gives you money to compensate

Reduce the amount you claim tax relief on by the amount of money your employer gives you as an allowance to cover working from home or to buy equipment.

To make a claim

We can help you make a claim if and when we complete your tax return for 2020-21.

If you don’t submit a tax return you may need to call HMRC to discuss how to claim.

UK Pensions Bill receives Royal Assent

The UK Pensions Act will bolster protections for savers and further the government’s green agenda by supporting progress towards net zero.

New powers to penalise errant bosses

The Act will strengthen protections for pension savers by extending the powers of the Pensions Regulator, introducing the power to issue civil penalties of up to £1 million, alongside three new criminal offences.

A tough new sentence has been created – with a maximum penalty of seven years in prison – for bosses who run pension schemes into the ground, or plunder pots to line their own pockets. This will deter employers from making reckless decisions with their defined benefit schemes and strengthen the regulators’ powers to take efficient and timely actions to protect members’ hard-earned savings.

Online access for pension savers

The introduction of pensions dashboards will hail a digital revolution for savers, creating one single platform to more easily access and review pension pots. Savers will be able to see how much they can expect each month in retirement and find out how they can improve their retirement prospects.

Other changes

The Act ensures pensions play their part in our transition to a net zero future through climate risk reporting, and changes to requirements around pension scheme funding to improve financial sustainability.

The Act also legislates for the creation of a new style of pension scheme – Collective Defined Contributions (CDCs). Developed in cooperation with trade unions, CDCs have the potential to increase returns for millions, whilst being more sustainable for both workers and employers.

Prospects for 2021

The short-term outlook for UK businesses operating in sectors badly affected by the present COVID lock-down directives is not good.

Many cannot trade, many others are facing reduced turnover. Both will be struggling to maintain reserves – stay solvent – and cash-flow.

There are strategies that affected businesses can use to reduce fixed costs and minimise demands on their hard-won cash and reserves, but there is a limit to what can be achieved if the present demands to reduce infection continue.

A silver lining?

The present success in rolling out vaccines to counter COVID provide evidence that there may be a silver lining.

The issue is when will lock-down be eased, when will businesses be able to trade, and freely?

A summer return to normality would be most welcome and even the most pessimistic observers would agree that a relaxation is likely to be on the cards before autumn 2021.

What will happen when normality returns?

The UK economy is driven by consumer expenditure. For the last year most of us, apart from the occasional foray online to spend, have saved more than we used to if income levels have remained fairly steady.

It is likely that when restrictions ease apart from heading for the High Street or the local pub we will want to relax and spend. It is that pent-up need to socialise and spend that will drive recovery.

Businesses that manage to weather the present depressed conditions need to batten down the hatches, ready to emerge when lock-down eases to win their share of the released consumer largesse.

How to survive?

We can help. If you would like to brainstorm ideas to keep your business afloat during these exceptional times pleas call so we can consider your options.

Whilst the short-term outlook may be grim, there is every chance that 2021 may see out the worst that COVID has to disrupt our normal economic activity. Hang in there…

New UK subsidies to replace EU State Aid

The following announcement provides encouragement that a replacement for the EU State Aid process is in development. Details from a recent Government press release are set out below.

A new UK-wide system for providing more flexible and tailored financial support to businesses has been set out under plans by the Business Secretary, taking advantage of the UK’s newfound freedoms as an independent trading nation.

The new subsidy control system, which will be the long-term replacement for the EU’s prescriptive state aid regime, will allow the UK to be more dynamic in providing support to businesses, including in innovative, R&D-focused industries, to encourage job creation and growth across all parts of the UK.

Previously, public authorities had to follow a bureaucratic, detailed set of EU controls – and may have needed prior approval from the European Commission before providing vital funds to viable businesses or pursuing key domestic policy objectives.

Under the proposed UK system, local authorities, public bodies and the devolved administrations in Edinburgh, Cardiff and Belfast will be empowered to decide if they can issue taxpayer subsidies by following a set of UK-wide principles. These principles will ensure subsidies are designed in such a way that they deliver strong benefits and good value for money for the UK taxpayer, while being awarded in a timely and effective way.

The new system will be designed to be more flexible, agile and tailored to support business growth and innovation as well as maintain a competitive market economy and protect the UK internal market. At the same time, it will help protect against wasteful spending.

The system would also better enable the government to deliver on key priorities such as levelling up economic growth in the regions, tackling climate change, as well as supporting our economic recovery as we build back better from the COVID-19 pandemic.

Current tax year will still end 5 April 2021

It is doubtful that HMRC will change the tax year end date. The current tax year will therefore come to an end on 5 April 2021.

Which means that tax-payers still have two months (February and March 2021) to take advantage of any tax planning strategies that may advantage their tax liabilities for 2020-21.

As COVID disruption is likely to take most of 2021 to unwind – and may spill over to 2022 – any action you can take to reduce a drain on cash flow by saving tax should be considered.

For example:

  • If your self-employed business income has dropped significantly during 2020-21, any tax losses created may be available to carry back to previous tax years when you paid tax. As a result, it may be possible to boost your cash flow with a tax repayment.
  • You still have time to fully utilise any capital gains tax exemptions for 2020-21.
  • Have you considered the annual gifts allowances that are basically tax-free for 2020-21?

If your finances allow, have you considered:

  • Topping up your pension contributions?
  • Making further charitable donations to reduce higher rate tax?
  • Strategies to reduce your income below £100,000 and thus avoid losing all or part of your personal tax allowance.
  • If you or your spouse has increased their taxable income to more than £50,000 during 2020-21, and you claim child benefits, this may trigger an additional tax charge to recover all or part of the child benefits you have received.

To check out these and numerous other tax-saving opportunities please call so that we can discuss your options. Your chance to take advantage of tax planning ideas for 2020-21 will end for individuals on 5 April 2021.

Tax office moves the penalty spot

During the last week of January, HMRC finally accepted that many tax-payers would not make the filing deadline – 31 January 2021 – for their 2019-20 self-assessment tax return; due, in the main, to continuing COVID disruption.

As a gesture, they have confirmed that:

Self-Assessment tax-payers who cannot file their tax return by the 31 January 2021 deadline will not receive a late filing penalty if they file online by 28 February.

Whilst this a welcome recognition of the difficulties many tax-payers face as they struggle with lock-down or are actually infected by the virus, the filing deadline has not changed, only the date from which late filing penalties will apply.

Accordingly, any tax or NIC due on 31 January 2021 – determined when 2019-20 returns are finally filed – will still be payable by 31 January 2021. Payments made after this date will be subject to interest charges.

If COVID has depleted your cash reserves and you are struggling to pay any tax due on 31 January, you can apply to HMRC to spread the payments up to twelve months. In their press release issued 25 January 2021, HMRC said:

Tax-payers are still obliged to pay their bill by 31 January. Interest will be charged from 1 February on any outstanding liabilities. They can pay online, or via their bank, or by post before they file. More information on how to pay is at GOV.UK.

Tax-payers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. But they will need to file their 2019-20 tax return before setting up a time to pay arrangement, so HMRC is encouraging everyone to do this as soon as possible.

In other words, to make a formal agreement to spread the cost of any tax payments, tax-payers will need to file their 2019-20 return.

The late filing penalty deferred is the automatic £100 fine. This will now be applied if your tax return is still outstanding after 28 February 2021.