Business and Tax Round-up – October 2019

TPR warns changing name of a business ‘doesn’t change pensions duties’

The Pensions Regulator (TPR) has warned businesses that they cannot dodge their workplace pension responsibilities by changing their company name.

According to the TPR, some employers are committing offences by creating new businesses, transferring their workforce and liquidating the ‘old’ business. Other employers claim that they have no workers. However, the TPR can see from its data that they are paying wages.

The Regulator is working in conjunction with the Insolvency Service to tackle the issue.

Regarding rebranding, the TPR stated that there is ‘nothing wrong with genuine rebranding’, and that rebranding has no impact on an employer’s automatic enrolment duties. A business carrying out a rebrand is ‘still the same entity’ and the TPR will ‘take action if employees are denied the pensions they are entitled to’.

Commenting on the issue, Darren Ryder, Director of Automatic Enrolment at the TPR, said: ‘Some bosses might think that by changing the name of their company they can avoid their duties, but they should know they are on our radar.

‘We will not tolerate any attempt to deny employees the workplace pensions they are entitled to – and will take action against those who try to dodge their duties.’

Fraud ‘costing UK businesses £130 billion each year’, report suggests

A report published by the Centre for Counter Fraud Studies at the University of Portsmouth has suggested that fraud costs UK businesses £130 billion each year.

According to the data, the number of losses incurred as a result of fraud has risen by 56.5% since 2009. Reducing fraud losses by 40% would ‘free up more than £76 billion each year’, the report stated.

It also found that 80% of global fraud losses are ‘larger than the UK’s entire GDP’.

Commenting on the findings, Jim Gee, Chair of the Advisory Board at the Centre for Counter Fraud Studies, said: ‘Sadly, too many organisations adopt a reactive approach to fraud and only look to tackle it once it has taken place, and losses have already occurred. A change of perspective is needed. Fraud is an ever present, high volume, low value problem and only a small proportion is detected.

‘We need to view fraud as a business cost – by understanding the nature and scale of the cost, we can reduce its extent – enhancing the profitability of companies and ensuring better funded public sector and charitable organisations.’

CIOT, IFS and IfG urge Chancellor to ‘take a new approach to making tax policy’

The Chartered Institute of Taxation (CIOT), the Institute for Fiscal Studies (IFS) and the Institute for Government (IfG) have urged Chancellor Sajid Javid to ‘take a new approach to making tax policy’.

The groups have co-signed a letter to the Chancellor, in which they urge him to outline the principles and objectives that will inform his tax policy.

In the letter, the groups called for the Chancellor to ‘consult on tax policies at an earlier stage in policy development’, and to ‘professionalise tax policy-making in the Treasury’. They also urged the Chancellor to confirm that there will be ‘no going back’ to the ‘old days of multiple fiscal events’.

Additionally, the groups have called for the Chancellor to ‘consult earlier with a wide group of stakeholders’ on tax matters, and to carry out a ‘more systematic evaluation of tax measures’, including tax reliefs. Tax measures must be effectively reviewed to ensure they are ‘achieving their objectives at acceptable cost’, the groups added.

New OTS project aims to explore simplifying tax reporting for the self-employed

The Office of Tax Simplification (OTS) has launched a new project, which aims to explore how tax reporting and payment arrangements for self-employed people can be simplified.

Introducing the project, the OTS stated: ‘The OTS has heard that some, including some of those working freelance or in the gig economy, would welcome the option to report information and pay tax to HMRC periodically or on the completion of work assignments, rather than only through self-assessment.’

The OTS intends to explore options concerning information reporting and paying tax in or closer to real-time, which could ‘make it simpler for people who are self-employed or receive private residential property income to meet their tax obligations in a practical and streamlined way’.

In the report, the OTS said that it understands that self-employed individuals ‘work in diverse ways and contexts’. As a result, it is ‘quite possible’ that there will not be one single approach to simplifying tax reporting. The OTS intends to give consideration to the merits of having different approaches for different groups, or creating one overall system with sub-options.

The OTS will publish an initial paper on the matter in the autumn.

Web Watch

Essential sites for business owners. 

www.theaccountant-online.com
Provides coverage of international accountancy news.

www.oecd.org/unitedkingdom
Keeps individuals up-to-date on the latest economic forecasts.

www.re-work.co
Analyses the latest technological innovations and developments.

www.iod.com
Outlines businesses’ opinions on tax and business matters.