UK government make £1bn rail budget cut

UK government make £1bn rail budget cut

After the Chancellors’ recent spending review the rail infrastructure budget has been cut by £1bn from £10.4bn to £9.4bn in the current control period 6 (April 2019-March 2024). This announcement has caused concern over planned improvements to rail infrastructure. The cut is likely to leave some projects without funding or severely reduced resources. In addition, due to the pandemic, the rail industry was unable to use all of its budget for the year. Therefore, if the government decides to take this funding back it could reduce the budget by as much as 10%. However, the day-to-day operating budget which includes everyday repairs, maintenance, and renewal work will be unaffected.

 

How will the rail budget cut affect the rail industry?

Some experts believe that a well-funded rail budget is essential for maintaining and improving our rail network for the future and reducing carbon emissions so that travelling by rail is more environmentally friendly. It is also essential for improving reliability, connectivity, and customer experience. With the day-to-day budget being unaffected and with the government prioritising projects such as HS2 and Northern Powerhouse Rail, this cut will most likely affect smaller local schemes the most. The Railway Industry Association were told that there are more than 80 projects in the pipeline, but it is currently unclear which projects this announcement will affect, and whether they will have to be cancelled or postponed.

The government has responded saying that even though they have cut public investment in the network, they have spent an additional £3.5 billion subsidising the rail network in order to keep trains running during the lockdown. Furthermore, emergency measure agreements have been extended by 18 months enabling trains to run even with fewer passengers.

 

Transport Partner at Hawsons, Paul Wormald commented: ‘The whole area of funding rail infrastructure improvements during and after the current pandemic was always going to be a political hot potato.

Reduced passenger numbers has meant that the public purse has had to fund Train Operating Companies via Emergency Measures Agreements, and with fewer passengers using the network currently, the questions over the viability of some major infrastructure projects scheduled for CP6 were inevitable.

The chancellor told the Commons that the Government would deliver on its “record investment plans in infrastructure” in his recent Spending Review and this announcement seems to have been slid under the radar in the hope that it would not get noticed. The announcement also seems to go against the grain of the Government’s “Green Industrial Revolution” plans that were published last month as the Treasury coffers still have £27bn earmarked for arguably less environmentally friendly road-building schemes.

 

With this announcement and continuing scrutiny of the HS2 project, it is clear that the businesses involved in the rail infrastructure supply chain are going to have to plan very carefully over the remaining years of CP6.’

 

How can we help?

At Hawsons we have a dedicated team of transport accountants at our offices in Sheffield, Doncaster, and Northampton. We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces.

More from our transport and logistics experts

You can find all of our latest transport and logistics sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

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Paul Wormald, Partner

Paul Wormald

Partner, Doncaster

01302 367 262
Chancellor Announces Budget for 2021

Chancellor Announces Budget for 2021

Chancellor Rishi Sunak Announces Budget for 3 March 2021

The Budget is an annual announcement from the Chancellor of the Exchequer about the Government’s plans for spending and taxation for the upcoming tax year. Next year’s Budget will outline plans for the 2021/22 tax year. This will be Rishi Sunak’s second Budget announcement after he took over the role from Sajid Javid on 13 February 2020.

This is a crucially important Budget as we wait to see how the Chancellor is proposing to deal with the massive deficit which has arisen due to the Covid 19 pandemic. There has been much speculation that tax rates could increase to help reduce the deficit, particularly around Capital Gains Tax and some commentators are suggesting a wealth tax could be introduced.

With an increase in Capital Gains Tax rates possible, it is a sensible time to review property and investment portfolios and consider whether this is an appropriate time to crystallise gains. This would have the effect of locking in the current relatively attractive Capital Gains Tax rate of 28% for residential property and 20% for most other assets (18% and 10% respectively for gains falling into the basic rate tax band).

 

Our tax specialists will be watching the Budget and will provide relevant announcements on our website and social media shortly after the Budget is announced, to make sure you are fully up to date.

If you wish to discuss your Capital Gains Tax position then please don’t hesitate to get in touch.

If you would like to receive an update via email please sign up to our mailing list here and select tax

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Stephen Charles

Tax Partner, Sheffield

0114 266 7141
Problems paying your deferred VAT due to COVID-19?

Problems paying your deferred VAT due to COVID-19?

Like many businesses in the UK, you may have deferred VAT payments between 20 March and 30 June 2020. If this is your situation and you still have payments to make, then you may be interested to know that there are some options available to you. You can:

 

New VAT Payment Scheme

 

Businesses cannot yet opt into the new payment scheme as this won’t be made available until early 2021. Businesses will have to opt them themselves representatives, such as Hawsons, cannot do this for you.

 

It is expected that the payment scheme will enable businesses to make 11 monthly instalments, interest-free. All instalments must be paid by March 2022. This scheme will allow you to select the number of instalments from 2 to 11 equal monthly payments.

 

Eligibility

 

To be eligible for the scheme you must:

 

  • Still have deferred VAT to pay
  • Be up to date with your VAT returns
  • Opt-in before the end of March 2021
  • Pay the first instalment before the of March 2021
  • Be able to pay the deferred VAT by Direct Debit

 

For more information please visit the HMRC website here.

 

So, it is very important that you keep up to date with your VAT returns.

 

How our VAT experts can help?

 

At Hawsons our VAT consultant Tony Nickson can provide expert VAT advice. Tony spent 20 years working in the VAT office, Tony has gained a wealth of knowledge of VAT processes, including VAT visits to customers, client education, VAT repayments, and error corrections.

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Stephen Charles

Tax Partner, Sheffield

0114 266 7141
How can Small Local Retailers have a Successful Christmas?

How can Small Local Retailers have a Successful Christmas?

Perhaps unsurprisingly, recent figures have shown that retail footfall declined in November and was expected to fall by 62% over the six-week period leading up to 22 December.  This is clearly a very challenging period for the retail sector, especially for those small local retailers who do not have the budget to move online, and complete with larger retailers in their area. How can local, independent retailers have a successful Christmas period without exploring expensive digital avenues?

 

Use Local to your Advantage 

In 2020 consumers’ shopping habits have changed as consumers are now shopping at small local shops more than ever before. During the pandemic, consumers decided to shop in smaller local stores because they felt it was a ‘safer’ shopping experience. Furthermore, during challenging times consumers wanted to support small businesses in their local community.

If you are an independent local business make sure everyone in your community knows about it! There are multiple ways of doing this:

  • Create social media pages (Facebook, Twitter, etc) This is much quicker and less expensive than setting up a website.
  • Get involved in community events. This is a great way of spreading the word about your business.
  • Create a small leaflet and post it to houses in your local area.
  • In addition, if your products are locally sourced you should highlight this, locally made products can be more appealing to consumers than those that are sourced nationally or internationally.

 

Personalisation

One of the main reasons why consumers prefer independent local retailers is because of their personal experience. Make sure you go the extra mile to make your consumers happy, if they have a bad experience they will not return to your store. Customer loyalty is essential for the success of any small retailer and can lead to more word-of-mouth promotion.

There are a number of ways that you can make your business more personal.

  • Hire friendly staff that live in the local area. These staff members are likely to have more to talk about with your potential customers.
  • Offer a local delivery service
  • Offer one to one customer service, having one to one customer service in your store makes the customer journey more personalised.

 

Focus on What You Can do that those Large Retailers Cannot

Small local retailers should consider what they can offer that large retailers cannot. Nothing can beat the sensation of a physical shopping experience. This is because consumers can see the products first hand. Small local retailers should look at improving this experience so the customer is drawn to the product and is more likely to purchase it. Don’t just let them touch and look at the products allow them to try them out. If your store sells sports equipment, for example, tennis rackets allow your consumers to try them out.  These types of customer demos are key in persuading them to purchase the product and something that cannot be replicated on a screen. Secondly, they will remember the customer experience and will return to your store when they want to purchase another product.

 

How can we Help?

At Hawsons we have a dedicated team of retail accountants at our offices in Sheffield, Doncaster, and Northampton. We offer a specialist service to retailers of all types and sizes. We can assist you with all your accountancy and taxation needs, utilising our in-depth knowledge and experience in the sector from single sites to multi-channel retailers.

 

 

Free initial meeting

Pete Wilmer, Corporate Finance Partner

Pete Wilmer

Corporate Finance Partner

0114 266 7141
Get prepared for the end of the Brexit transitional period

Get prepared for the end of the Brexit transitional period

It is time to prepare for the end of the Brexit transitional period.

Whilst the United Kingdom officially left the European Union (EU) on 31 January 2020, this prompted the start of an 11-month transitional period during which time the UK remains part of the Single Market, the EU Customs Union and the VAT Territory. The UK will leave the EU VAT Territory on 31 December 2020. After this date, Great Britain (England, Wales and Scotland) will not be subject to EU VAT legislation. Northern Ireland will remain subject to EU VAT legislation in respect of transactions involving goods, but not for services.

Acquisitions (purchases of goods from EU member states) will be treated as imports. A new system, Postponed Accounting, will be introduced and will apply to imports received from all over the world, with some exceptions such as low-value consignments. The system is intended to mitigate the cashflow disadvantage posed by paying import VAT upfront and waiting to reclaim it in a later VAT return. Under the new system, import VAT can be deferred and declared to HMRC in the VAT return for the period of importation. The VAT can be reclaimed in the same return subject to the normal rules for reclaiming input tax.

Dispatches (zero-rated sales of goods to business customers in EU member states) will be treated as exports. Exports are zero-rated, provided certain conditions are met.

Distance sales (sales of goods to non-business persons in the EU) will also be treated as exports. The EU distance-selling regime and thresholds will no longer apply to UK suppliers.

 

Customs changes

When the UK leaves the EU Customs Union on 1 January 2021 the UK will operate a full, external border with the EU. New border controls on imports from the EU to Great Britain will be introduced in stages, with customs declarations for goods which are not controlled being delayed until 30 June 2021.

 

Customs Duty

From 1 January 2021, there will be new rates of Customs Duty for imports – called the UK Global Tariff. To check the tariffs that will apply to different categories of imported goods, please see https://www.gov.uk/guidance/uk-tariffs-from-1-january-2021.

It is important to be ready for these changes. Some practical actions to take now include:

If you require more information please contact us to discuss how we can help you move smoothly into 2021.

Internet link: GOV.UK transition campaign

 

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Tony Nickson

VAT Consultant, Sheffield

01604 645 600