There are late filing penalties which are designed to encourage companies to file their accounts and reports on time. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. A penalty is automatically imposed by Companies House if the accounts are late.

The table of penalties for late submission is as follows:

Failure to file confirmation statements or accounts is a criminal offence which could result in the directors being personally fined in the criminal courts. Late penalties which are unpaid will be referred to collection agents and could result in a County Court judgement or a Sheriff Court decree against the company.

It is possible to appeal against a penalty, but it will only be successful if the appellant is able to demonstrate that the circumstances of the late filing were exceptional, for example, a fire destroying records a few days before the filing deadline.

According to Companies House guidance, an appeal is unlikely to be successful if it’s based on the following examples:

• your company is dormant
• you cannot afford to pay
• your accountant was ill
• you relied on your accountant
• these are your first accounts
• you are not familiar with the filing requirements
• your company or its directors have financial difficulties (including bankruptcy)
• your accounts were delayed or lost in the post
• the directors or LLP members live (or were travelling) overseas
• another director or LLP member is responsible for preparing the accounts.

There are late filing penalties which are designed to encourage companies to file their accounts and reports on time. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. A penalty is automatically imposed by Companies House if the accounts are late.

The table of penalties for late submission is as follows:

Failure to file confirmation statements or accounts is a criminal offence which could result in the directors being personally fined in the criminal courts. Late penalties which are unpaid will be referred to collection agents and could result in a County Court judgement or a Sheriff Court decree against the company.

It is possible to appeal against a penalty, but it will only be successful if the appellant is able to demonstrate that the circumstances of the late filing were exceptional, for example, a fire destroying records a few days before the filing deadline.

According to Companies House guidance, an appeal is unlikely to be successful if it’s based on the following examples:

• your company is dormant
• you cannot afford to pay
• your accountant was ill
• you relied on your accountant
• these are your first accounts
• you are not familiar with the filing requirements
• your company or its directors have financial difficulties (including bankruptcy)
• your accounts were delayed or lost in the post
• the directors or LLP members live (or were travelling) overseas
• another director or LLP member is responsible for preparing the accounts.

If you have taxable income of less than £17,570 in 2024-25 you will have no tax to pay on interest received. This figure is calculated by adding the £5,000 starting rate limit for savings (where 0% of the interest is taxable) to the current £12,570 personal allowance. In addition, there is a Personal Savings Allowance (PSA). This allowance ensures that for basic-rate taxpayers the first £1,000 interest on savings income is tax-free (effectively allowing qualifying basic-rate taxpayers to receive up to £18,570 in tax-free interest per year). For higher-rate taxpayers the tax-free personal savings allowance is £500. Taxpayers paying the additional rate of tax on taxable income over £125,140 cannot benefit from the PSA.

It is important to note that if your total non-savings income exceeds £17,570 then the starting rate limit for savings is unavailable. There is a tapered relief available if your non-savings income is between £12,570 and £17,570 whereby every £1 of non-savings income above a taxpayer's personal allowance reduces their starting rate for savings by £1.

Interest from savings products such as ISA's and premium bond wins do not count towards the limit. Taxpayers with tax-free accounts and higher savings can still continue to benefit from the relevant PSA limits.

Banks and building societies no longer deduct tax from bank account interest as a matter of course. Taxpayers who need to pay tax on savings income are required to declare this as part of their annual self-assessment tax return.

Taxpayers that have overpaid tax on savings interest can submit a claim to have the tax repaid. Claims can be backdated for up to four years from the end of the current tax year. This means that claims can still be made for overpaid interest dating back as far as the 2020-21 tax year. The deadline for making claims for the 2020-21 tax year is 5 April 2025.

The marriage allowance applies to married couples and those in a civil partnership where a spouse or civil partner does not pay tax or does not pay tax above the basic rate threshold for Income Tax (i.e., one of the couples must currently earn less than the £12,570 personal allowance for 2024-25).

The allowance works by permitting the lower earning partner to transfer up to £1,260 of their personal tax-free allowance to their spouse or civil partner. The marriage allowance can only be used when the recipient of the transfer (the higher earning partner) does not pay more than the basic 20% rate of income tax. This would usually mean that their income is between £12,571 and £50,270 during 2024-25.

For those living in Scotland this would usually mean income currently between £12,571 and £43,662.

Using the allowance, the lower earning partner can transfer up to £1,260 of their unused personal tax-free allowance to a spouse or civil partner. This could result in a saving of up to £252 for the recipient (20% of £1,260), or £21 a month for the current tax year.

If you meet the eligibility requirements and have not yet claimed the allowance, then you can backdate your claim as far back as 6 April 2020. This could result in a total tax break of up to £1,256 if you can claim for 2020-21, 2021-22, 2022-23, 2023-24 as well as the current 2024-25 tax year. If you claim now, you can backdate your claim for four years (if eligible) as well as for the current tax year.

HMRC’s online Marriage Allowance calculator can be used by couples to find out if they are eligible for the relief. An application can then be made online at GOV.UK.

There is an online service available on HMRC to check your National Insurance Contributions (NIC) record online. The service is available at https://www.gov.uk/check-national-insurance-record

In order to use this service, you will need to have a Government Gateway account. If you do not have an account, you can apply to set one up online.

By signing in to the 'Check your National Insurance record' service you will also activate your personal tax account if you have not already done so. HMRC’s personal tax account can also be used to complete a variety of tasks in real time such as claiming a tax refund, updating your address and completing your self-assessment return.

Your National Insurance record online will let you see:

• What you have paid, up to the start of the current tax year (6 April 2023).
• Any National Insurance credits you have received.
• If gaps in contributions or credits mean some years do not count towards your State Pension (they are not 'qualifying years')
• If you can pay voluntary contributions to fill any gaps and how much this will cost

In some circumstances it may be beneficial, after reviewing your records, to make voluntary NIC contributions to fill gaps in your contributions record to increase your entitlement to benefits, including the State or New State Pension. If you would like to discuss this further, please do not hesitate to be in touch.

It may surprise many smaller employers with staff working from home that they still have health and safety responsibilities. The following notes published by ACAS should be considered:

Employers should:

• talk to their employees and workers about how they might improve working from home arrangements
• continue to consider which roles and tasks can be done from home – this might involve doing things differently and not assuming a role cannot be based at home
• support employees to adjust to remote working
• consider individual employees' needs, for example anyone with childcare responsibilities, a long-term health condition or a disability
• write down the arrangements that have been agreed so everyone's clear

Health and Safety concerns

By law, employers are responsible for the health and safety of all employees, including those working from home.

Employer responsibilities:

During the coronavirus pandemic, it's very unlikely that employers can carry out usual health and safety risk assessments at an employee's home. However, an employer should still check that:

• each employee feels the work they're being asked to do at home can be done safely
• employees have the right equipment to work safely
• managers keep in regular contact with their employees, including making sure they do not feel isolated
• reasonable adjustments are made for an employee who has a disability

If changes are needed, employers are responsible for making sure they happen.

Employee responsibilities:

Employees also have a responsibility to take reasonable care of their own health and safety.

Anyone working from home should keep in regular contact with their manager. They should also tell their manager about:

• any health and safety risks
• any homeworking arrangements that need to change

Clearly, there is more to consider than simply agreeing that an employee can work from home. The concerns discussed in this article are focused on health and safety issues. Employers and employees will also need to consider tax, internet security and other resourcing issues. We may well consider these additional matters in further posts to this blog.

There has been the usual political speculation that taxes will be increased in the forthcoming budget to pay for COVID grants and support.

Leaving aside the economic arguments for and against, what planning adjustments can we make now assuming that business taxes will increase?

Corporation tax

It has been rumoured that corporation tax (CT) will be increased from the present 19% to 24%. If implemented this will be a significant increase.

An increase in CT is usually effective from the beginning of the next fiscal year, accordingly, any announcement in the Autumn Budget 2020 is unlikely to apply until 1 April 2021, at the earliest.

If an increase is announced, what sensible planning opportunities could we undertake now to mitigate this rise in company taxation?

The following strategies might be considered:

1. Advance income streams. If you can organise work-flow to advance the billing and completion of billable projects and supplies before 31 March 2021 – assuming CT rates do not increase until 1 April 2021 – then any profits created by these supplies will be taxed at the lower rate.
2. Defer revenue expenditure. If you can defer expenditure that you would normally treat as a business cost - without prejudicing your overall business plans – then it makes sense to incur these costs after 1 April 2021, if and when CT rates increase.
3. Defer capital expenditure. As with the previous tactic, if you can defer capital expenditure on new plant, vehicles or other equipment then it makes sense to incur these costs after 1 April 2021, when you can write off up to 100% of allowable costs and reduce CT liabilities at the higher rate.

Income tax

Increasing income tax (IT) rates is less likely and if this turns out to be the case self-employed and employed persons may have to accommodate minor changes to National Insurance and tax allowances, but no significant changes – if at all – in IT rates.

Taxpayers may experience variations across the UK as IT rates are now set on a regional basis.

Capital Gains Tax (CGT)

It has been suggested in the national press the Chancellor is considering alignment of CGT rates with income tax rates. If this change did occur it would have a significant impact on the amount of CGT payable.

As with corporation tax changes, there may be an argument to bring forward disposals subject to CGT to anticipate these changes.

Planning is imperative

However, basing tax planning decisions on speculative announcements, especially as these may be motivated by political considerations, is clearly unwise unless there are compelling reasons for doing so.

We all have unique business and personal financial circumstances, and these must considered before undertaking any tax saving strategy. We therefore advise readers to seek professional advice before acting on any matters discussed in this article.

Government is to implement a new payment for people on low incomes in areas with high rates of COVID-19, who need to self-isolate and can’t work from home. Payments of up to £182 to be made to people who have tested positive for COVID-19 and their contacts.

The scheme will start in Blackburn, Darwen, Pendle, and Oldham.

People on low incomes who need to self-isolate and are unable to work from home in areas with high incidence of COVID-19 will benefit from this scheme from Tuesday, 1 September.

The initial trial in Blackburn, Darwen, Pendle and Oldham will be undertaken to ensure the process works.

Eligible individuals who test positive with the virus will receive £130 for their 10-day period of self-isolation. Other members of their household, who have to self-isolate for 14 days, will be entitled to a payment of £182.

Non-household contacts advised to self-isolate through NHS Test and Trace will also be entitled to a payment of up to £182, tailored to the individual length of their isolation period.

The new benefit is designed to support people who are unable to work from home while self-isolating, either after testing positive, or after being identified by NHS Test and Trace as living in the same household as – or coming into contact with – someone who has tested positive.

It will be available to people currently receiving either Universal Credit or Working Tax Credit.

If the initial approach is successful, the scheme will be applied in other areas of high COVID-19 incidence.

This will not reduce any other benefits claimants receive. Further payment details published confirm:

• £130 if an individual has tested positive for coronavirus and has to self-isolate for 10 days (from the point they first developed symptoms).
• £182 if a member of an individual’s household has tested positive for coronavirus and they are asked to self-isolate for 14 days (from the point the member of their household first developed symptoms).
• £13 per day (up to a maximum of £182) if an individual is identified as a non-household contact of another person who has tested positive for coronavirus and is asked to self-isolate up until 14 days after they were most recently in contact with the person who tested positive.

To be eligible for the funding, individuals must meet the following criteria:

• Have tested positive for Covid-19 or received a notification from NHS Test and Trace asking them to self-isolate
• Have agreed to comply with the notification from NHS Test and Trace and provided contact details to the local authority.
• Be employed or self-employed. Employed people will be asked to show proof of employment. Self-employed will be required to show evidence of trading income and that their business delivers services which the local authority reasonably judges they are unable to carry out without social contact
• Be unable to work from home (checks will be undertaken on all applicants) and will lose income a result
• Be currently receiving Universal Credit or Working Tax Credit