HMRC has rolled out a new initiative enabling taxpayers to voluntarily disclose unpaid tax on cryptoassets covering exchange tokens, non-fungible tokens, and utility tokens.

The tax authority has initiated contact with selected taxpayers engaged in cryptoasset transactions who may not have fulfilled their tax obligations.

Taxpayers must report transactions incurring capital gains during the 2022/23 or 2023/24 tax years via self-assessment returns or HMRC’s ‘real-time’ capital gains tax service.

To access the facility, users require a government gateway user ID and password, along with specific information for a comprehensive report submission.

Taxpayers must determine the number of years for which they need to declare unpaid tax, contingent on their past adherence to tax obligations regarding cryptoasset income or gains. The disclosure period could potentially span up to 20 years.

In light of these developments, HMRC advises those uncertain about disclosure to seek specialist advice. Further guidance on paying taxes for cryptoassets has been issued separately.

This disclosure facility launch aligns with the UK’s commitment to joining the Cryptoasset Reporting Framework (CARF). The CARF facilitates the automatic exchange of information on crypto exchanges among financial authorities.

Talk to us about your investments.

How to reward your team in a tax-efficient way.

As 2023 draws to a close, many employers will be looking for ways to reward their teams’ hard work. But how can you do that in a tax-efficient way that benefits both you and your employees?

Thankfully, showing your appreciation doesn’t need to cost the earth. In most cases, work Christmas parties and gifts for staff members are tax-deductible.

However, it’s essential to understand the tax rules surrounding annual events and gift-giving. Overspending on festivities won’t just eat into your bottom line; it can also have tax implications for your employees.

In this guide, we’ll help demystify the tax treatment of your end-of-year celebrations.

The tax treatment of work Christmas parties
Limited companies can often claim the cost of staff Christmas parties as an allowable expense. That means you can celebrate with your employees, boost morale and minimise your corporation tax bill all at once.

However, some functions may be treated as a taxable benefit for employees who attend. To understand the tax treatment of your staff Christmas party, you’ll need to consider the following:

How much did it cost?
Ideally, your Christmas party should not cost more than £150 per head, including VAT. Exceeding this threshold may impact any attending employees (including yourself), as the entire cost of the event will be treated as a benefit-in-kind (BIK) for tax purposes. In many cases, they’ll need to pay more income tax as a result. If this happens, you must report the cost to HMRC and pay employers’ Class 1A National Insurance contributions (NICs) on the total.

Suppose you spend £7,000 on a Christmas party for 40 people, meaning the cost per head is £175. As this exceeds the £150 allowance, the event will count as a taxable benefit, which means all attending staff members must pay income tax on the total £175, not just the £25 excess. You’ll need to report this on each employee’s P11D form at the end of the tax year.

Closely monitoring your spending is therefore essential if you want to keep your employees happy.

Who did you invite?
Be careful when planning events exclusively for directors or a specific department in your company. Unless the party is made available for all employees, attendees must pay tax on the cost.

Entertaining non-employees
The £150-per-head rule applies to all attendees – not just staff members. That means if you invite your employees’ spouses or partners to the function, they’ll get their own £150 limit.

However, the exemption only applies to entertainment for employees and their partners or family members. That means any events you hold for clients will not qualify for corporation tax relief.

You should also be cautious when inviting contractors or subcontractors to your work Christmas party, as this could affect their employment status.

Is it a recurring event?
Most costs associated with entertaining staff will qualify as a business expense – but don’t get caught out. Unless your party is a recurring annual event, it will typically attract a taxable benefit on any employees attending.

In many cases, that means that if you take an employee out for lunch, they should technically pay tax on the cost of that meal.

How many annual events do you hold?
Many businesses have more than one recurring event each year. For example, if you hold both a summer party and a Christmas party, you’ll need to split the £150-per-head limit between the two functions. If the combined cost of these events exceeds £150, only one function will be exempt for tax purposes. As a result, any members of staff who attend the non-exempt event could face a higher income tax bill.

VAT
As mentioned above, you’ll need to include VAT when working out the cost-per-attendee. However, VAT-registered businesses may also be able to claim a VAT refund on goods and services purchased for the event.

Be aware that claiming a VAT refund may be more complicated if partners and family members of your employees also attend the event.

Giving gifts to your employees
It’s not just annual events that are tax deductible; small gifts to employees are usually exempt. That means you can deduct the cost from your taxable profits, and employees won’t usually incur an income tax charge – so long as the gifts meet certain conditions:

• The cost of the gift does not exceed £50. Small gifts to employees costing £50 or less are treated as a ‘trivial’ benefit. Spend any more than this, and the entire value of the gift will count as a taxable benefit – not just the excess over £50.
• The benefit is not cash or a cash voucher. While non-cash vouchers and store gift cards under £50 can be classed as trivial, employers should avoid giving cash or non-cash vouchers as gifts.
• Entitlement to the gift is not in the employee’s contract. This includes any salary sacrifice arrangements.
• The benefit is not rewarding a specific service. Certain gifts may not be tax-free if you provide them to an employee in recognition of a particular service. Different tax rules apply for long-service awards.

The rules will also vary for limited companies privately owned by five or fewer individuals (also known as ‘close’ companies). Any qualifying trivial benefits provided to directors of close companies, other office holders, and their families are subject to an annual £300 cap.

What happens if I overspend?
Don’t panic if you overspend on Christmas festivities or inadvertently provide a taxable benefit to your employees; you may be able to set up a PAYE settlement agreement (PSA) with HMRC.

A PSA allows employers to pay tax on certain benefits on an employee’s behalf, so they don’t need to foot the bill themselves. These arrangements can also significantly reduce your administrative burden.

If you don’t already have a PSA in place for the 2023/24 tax year, you must apply for an arrangement by 5 July 2024.

Helping you navigate the rules
As an employer, you’ll understand the importance of keeping your team’s spirits high. Rewarding the people who help move your business forward can contribute to a positive working environment, boosting morale and increasing productivity levels as a result. Employees who feel appreciated are also more likely to stay in your business longer.

If you’re planning to throw a staff Christmas party or surprise your team with gifts, a financial adviser can help you easily navigate the potential tax implications. With our support, you’ll be able to keep your celebrations as tax-efficient as possible.

Get in touch with us today to discuss your end-of-year festivities.

What to watch out for when navigating this important financial obligation.

The UK self-assessment system has its quirks and nuances, and understanding how to stay compliant is crucial to a smooth and stress-free income tax process.

From early paper deadlines to penalties for late-filers, self-assessment holds a few surprises. As always, a professional accountant can help you navigate the process successfully, make the most of available tax reliefs, and avoid potential pitfalls along the way.

Self-assessment: What is it?
Self-assessment is the system the UK Government uses to collect income tax. This requires many individuals and businesses to declare their untaxed income, capital gains and other relevant financial information to HMRC.

Over 11 million taxpayers filed a self-assessment return for the 2021/22 tax year, and this number is likely to rise for 2022/23. As such, it is essential to understand your reporting obligations. Here are some of the main aspects to be aware of this self-assessment season.

Who needs to send a tax return?
You will be required to send a tax return if, in the last tax year (6 April 2022 to 5 April 2023), any of the following applied:

• you were self-employed as a sole trader and earned more than £1,000 (before taking off anything you can claim tax relief on)
• you were a partner in a business partnership
• you had a total taxable income of more than £100,000
• you had to pay the high income child benefit charge.

You may also need to send a tax return if you have any untaxed income, such as:

• money from renting out a property
• tips and commission
• income from savings, investments, and dividends
• foreign income.

You can confirm whether you need to send a self-assessment tax return on the Government website or by getting in touch with your accountant.

Deadlines matter
One of the first aspects to watch out for is the importance of deadlines. Filing your self-assessment on time is crucial to avoid penalties.

The deadline for paper returns is 31 October following the end of the relevant tax year, while the deadline for online submissions is 31 January of the following year. That means that you must file your online self-assessment tax return for the 2022/23 tax year return by midnight, 31 January 2024. You’ll also need to pay the balance by this date.

Missing these deadlines can result in financial penalties, so you should mark these dates in your calendar. These late-filing; penalties can vary depending on the degree of lateness and the amount of tax owed. HMRC will also charge interest on late payments.

If you are filing a self-assessment for the first time, you’ll need to first register with HMRC. Often, people assume that the deadline for registering is the same as the deadline for submitting, and thus end up registering late. In fact, you will need to register by 5 October; for instance, if you need to file for the 2023/24 tax year, you should register by 5 October 2024.

What should self-assessment taxpayers look out for?

Accurate recordkeeping
One critical element of self-assessment is the need to maintain accurate financial records. Keeping well-organised records of your income, expenses and other financial transactions will significantly ease the self-assessment process.

Effective record-keeping ensures you are not overpaying or underpaying your taxes and provides an accurate snapshot of your financial health. Recording all your business transactions can also make it easier to maximise expense claims and reduce your tax bill.

Providing accurate information is crucial when filling out your self-assessment form. Collaborate closely with your accountant and be thorough in providing all necessary financial information.

HMRC enquiries
You should be aware that HMRC can conduct an enquiry into your self-assessment. In such cases, your accountant plays a crucial role by providing the necessary records and explanations to HMRC. Again, accurate record-keeping is essential for these situations.

Mistakes can lead to penalties
HMRC has the authority to impose penalties for inaccuracies in your self-assessment, whether they are intentional or not. Failing to take reasonable care when completing your return or providing inaccurate information can lead to more severe fines. Your accountant’s role is vital in ensuring the accuracy of your submission.

If you do spot an historic mistake in your self-assessment, it is worth amending this yourself, rather than waiting for HMRC to raise the issue. This will typically result in significantly lower penalties (if any).

Tax planning opportunities
Self-assessment season also presents opportunities for tax planning. Working with your accountant, you can identify legitimate deductions, reliefs and allowances that can reduce your overall tax liability.

As a result, it’s vital to start your self-assessment return earlier rather than later. This can give you more time to explore different tax reliefs and maximise your expense claims, making it easier to save money and helping you stay compliant with the law.

Allowable expenses
When filing your self-assessment, allowable expenses play a crucial role in determining your taxable income. These include costs directly related to business operations or those incurred while earning income.

Common allowable expenses span office rent, utilities, and office supplies for the self-employed. Travel expenses, both local and business-related, are eligible, as are costs associated with professional development. Additionally, allowable expenses cover financial and professional fees, such as accountant charges. However, it’s essential to meticulously document and justify each expense, ensuring compliance with HMRC guidelines.

Marriage allowance
Marriage allowance can be a valuable tax-saving opportunity for married couples and civil partners. In certain circumstances, this tax break allows you to transfer a portion of your personal allowance to your spouse or civil partner.

Take advantage of tax-saving opportunities
Always be on the lookout for tax-saving opportunities. The UK tax system is complex, and tax regulations are constantly changing. As income tax experts, we can keep you informed about new opportunities and help you adapt your financial strategies accordingly.

Paying your income tax bill
Understanding how to make your income tax payments is another aspect to watch out for.

Repeat self-assessment customers often need to pay their bills in two instalments. This process is known as payments on account.

The first payment is due by 31 July following the end of the relevant tax year, with your final ‘balancing’ payment due by 31 January. If you cannot pay your tax bill in full, you may be able to set up ‘a payment plan to pay it in monthly instalments — generally over a 12-month period. This is called a ‘Time to Pay’ arrangement.

Depending on your circumstances, some arrangements can be made over longer periods.

Navigate the self-assessment

Process with confidence
Self-assessment is a significant financial obligation that should not be taken lightly. Working closely with a professional accountant who is well-versed in the latest tax regulations can help ensure that the process is as efficient, accurate and stress-free as possible.

As income tax experts and professional bookkeepers, we can help you understand the intricacies of self-assessment. With our support, you’ll be able to keep accurate records, meet deadlines and make the most of available tax-saving opportunities.

By watching out for the aspects mentioned here, you can navigate the self-assessment process with confidence, ensuring you comply with tax regulations and make the most of your financial resources.

Need assistance with your self-assessment? Get in touch today.

A recent survey from the Association of Chartered Certified Accountants (ACCA) has shed light on the challenges UK accountants face when dealing with HMRC services.

Over 90% of respondents expressed the urgent need for HMRC to improve its service across several key areas.

The survey, which involved 207 ACCA members, uncovered significant concerns within the accounting profession. More than half of respondents (52%) reported that HMRC’s service levels were negatively affecting productivity and efficiency, impacting both accountants and their clients.

The areas identified for drastic improvement included:
• Reduced call waiting times: Accountants called for shorter waiting times when seeking assistance from HMRC.
• Enhanced call handling systems: They urged HMRC to provide better call handling systems, including queue information and call-back options.
• Improved communications: Respondents emphasised the need for more efficient communication methods, with a preference for greater use of email.

The challenges accountants face in their interactions with HMRC have increased in recent months, leading to growing frustration. Some professionals have resorted to raising formal complaints to prompt a response from HMRC.

Glenn Collins, head of technical and strategic engagement at ACCA, said:

“Many of our members have raised with us, over a number of years, their struggles and difficulties in working effectively with HMRC services.”

Talk to us about your accounting.

Small business confidence in the UK improved slightly in Q3 2023, although challenges persist, according to the latest Small Business Index from the Federation of Small Businesses (FSB).

The headline confidence reading in Q3 stood at -8.0 points, an improvement from the -14.2 points recorded in the previous quarter but still below the -2.8 points measured in Q1.

The decline in confidence over the past six quarters can be attributed to factors such as rising inflation and the energy crisis.

The hospitality sector exhibited the lowest confidence level, recording -31.1 points for accommodation and food services. Retail and wholesale followed closely with -22.8 points, while the construction, manufacturing, and information and communication sectors also reported negative confidence.

The only sector with a positive confidence reading was professional, scientific and technical services, at 6.9 points.

According to the FSB, the low business confidence in the hospitality and retail sectors underscores the need for additional support.

Martin McTague, FSB’s national chair, said:

“After the economic turmoil wrought by the cost of doing business crisis over the past year and a half, our latest Small Business Index shows signs of stabilisation in small firms’ performance.

“The improvement in the overall confidence measure since Q2 is a good start, but we really want to see it firmly back in positive territory, rather than eight points below zero, as it is currently.”

Talk to us about your small business.

The Bank of England (BoE) announced it would maintain its interest rate at 5.25% for the second consecutive time, following a series of 14 rate hikes.

The Monetary Policy Committee (MPC) voted by a majority of 6–3 to maintain the bank rate on 2 November, with three members preferring to increase the Bank Rate by 0.25 percentage points to 5.5%.

The BoE’s decision to keep interest rates unchanged is driven by inflationary pressures affecting UK businesses. It also aligns with recent moves by other central banks worldwide, including the US Federal Reserve and the European Central Bank, which have also opted to maintain their interest rates.

While the BoE has relied on interest rates as its primary tool to combat inflation, the central bank still faces challenges in reaching its 2% target by the end of 2025.

The MPC anticipates that inflation will eventually fall below the target as reduced domestic inflationary pressures follow a period of economic slack.

The decision highlights the ongoing struggle to manage inflationary pressures and their impact on the UK economy. This is evident in Q3 insolvency figures, which contributed to the highest corporate insolvency levels in over two decades.

BoE governor, Andrew Bailey, said:

“Inflation is falling, and we expect it to keep falling this year and next. Our increases in interest rates are working to bring inflation back to the 2% target.”

Get in touch about your finances.

Corporate insolvencies in England and Wales are at their highest level since 2009, according to new data from the Insolvency Service.

In Q3 2023, 6,208 companies registered as insolvent in England and Wales, down 2% from the previous quarter but up by 10% compared to Q3 2022.

This rise in insolvencies can be partially attributed to firms struggling with rising borrowing costs, high inflation and post-pandemic debt.

The number of creditors’ voluntary liquidations (CVLs) hit 4,965 between July and September 2023. According to the Insolvency Service, the last two quarters saw CVLs rise to their highest levels since the series began in 1960.

During the same period, there were 735 compulsory liquidations, 466 administrations and 41 company voluntary arrangements (CVAs).

Notably, over the 12 months to Q3 2023, the construction sector had the highest number of new underlying company insolvencies (4,272), with the wholesale and retail trade (3,777) and accommodation and food services (3,477) sectors following closely.

Meanwhile, individual insolvencies hit 24,418 in Q3 2023 – down by 6% from the previous quarter and 15% lower compared to the same period last year.

Commenting on the insolvency statistics, past president of R3, Christina Fitzgerald, said:

“A perfect storm of economic issues has led to the highest Q3 corporate insolvency figures in more than two decades. A combination of rising costs, director fatigue and increased creditor pressure mean more firms are turning to a corporate insolvency process to resolve their financial issues.

“Our message to anyone who is worried about their personal or business finances is to seek advice as soon possible – as soon as you become concerned.”

Contact us for expert financial advice.

How will technology impact your business’s financial future?

Constant developments in technologies like AI and cloud accounting are changing the way we do business and manage our finances. It’s a rapidly advancing field that has already changed the way most businesses think about their processes. So what are the benefits of using technology in

business accounting?

Embracing technology can empower you to move your business forward, whether you’re looking for innovative solutions to common accounting problems or you want to dive deeper into your financial reports. But if you want to make the most of tech, you need to know how to use it effectively.

With a wealth of information out there, cutting through the noise and finding exactly what you need can be hard. Having expertise from an accountant, like us, will make all the difference.

In this guide, we’ll discuss how you can use technology to boost productivity, streamline time-consuming processes and future-proof your business finances.

How can I use technology to strengthen my business finances?

Let’s take a look at some of the most common accounting challenges businesses face and how tech can help you overcome them.

The challenge: your clients are paying late

Cashflow is the lifeblood of any business. So if your clients don’t pay their invoices on time, this can have a knock-on effect on your business operations and overall financial health.

Last year, analysis from cloud accounting provider Xero showed that around half of the invoices issued by small businesses were paid late. Over one in ten (12%) of these invoices were still outstanding a month after they were first issued.

If you’re facing this problem in your business, you may struggle to pay your own bills. This can lead to strained relationships with suppliers – and you could even incur costly late-filing penalties from HMRC. So how can

tech help?

The solution: automated invoicing

While there’s no quick fix for late payment culture, using tools like automated invoicing can help minimise the impact on your business.

Automated invoicing allows businesses to schedule client invoices in advance at a specific date and time. This not only saves you time manually issuing invoices yourself, but also encourages prompt payment by getting invoices to your clients as early as possible, and chasing them for payment so you don’t have to.

Depending on your chosen cloud accounting platform, you can also set up automations to chase late-paying clients.

With more invoices paid on time, you’ll find it easier to manage your cashflow and stay on top of your business costs.

An alternative solution could be to set up a direct debit through an online payment processing provider and cut out the chasing time altogether.

The challenge: You spend too much time on accounting tasks

Good financial management calls for accurate, up-to-date business records — but staying on top of your books can be time-consuming. If you and your team spend hours on routine recordkeeping tasks, you may not have time to focus on bigger-picture strategies.

Entering your financial data doesn’t just take up a lot of time — it can also increase the risk of human error in

your accounts.

The solution: Track business transactions automatically

Instead of entering your transactions manually, you could link your business bank account with your accounting software. This allows your software to automatically download your bank transactions so you can easily track your income and expenses.

While this feature has been available on most platforms for some time, it’s still evolving. Thanks to recent developments in AI and machine learning, software can often categorise your business transactions automatically, winning back more time for you to spend on

your business.

Other software solutions can help to automate the record-keeping process by importing bills and receipts, automatically recording the description, tax rate and amount on digital or physical documents.

The challenge: You want to make better business decisions

Effective decision-making requires an in-depth understanding of your firm’s fiscal health. If you want to implement a solid business strategy, you’ll need to do much more than balance your books and meet your obligations.

The solution: Combine technology with accounting expertise

AI-powered accounting tools can take what they learn from your accounts to give you valuable insights about your business’s past, present and future. With technology analysing your real-time data, you can draw up forecasts, budgets and other financial statements to help you make well-informed business decisions.

However, computer-generated reports do have their constraints. Even the more sophisticated accounting tools don’t include external factors like current industry trends and economic conditions in their predictions.

To get a truly accurate picture of your business finances, you’ll need to harness the power of technology and expert accounting insight.

Most cloud accounting providers have an app store with solutions that plug into their software, so it’s easy to find a platform that integrates with the tools you’re already using.

How to make the most of technology

With technology advancing at such a rapid pace, it can be difficult to keep up. The business landscape has shifted significantly in the last few years alone, and it’s likely to change even more as we learn more about AI capabilities.

If you want to future-proof your business, you should embrace technology — but you also need to understand its limitations. As your accountants, we can help you use different financial management tools as effectively as possible.

Easy collaboration

Giving us access to your cloud accounting can make collaboration easier than ever. With us working on your real-time data at the same time, it’ll feel like we’re an extension of your team.

In-depth insights

Automating many of your financial processes can free up more time for us to focus on longer-term strategies. We’ll combine technology with our accounting expertise to give you a deeper understanding of your business finances and help you meet your ambitions.

Tailor-made solutions

No two businesses are the same, so you need to find tech solutions that work for you. Whatever challenges you have, we can give you the support you need to face them with confidence.

Seamless integration

Are you looking for an inventory management system to help you monitor stock levels? Do you want to start using time-tracking software so you can keep an eye on the costs of different projects? We can help you integrate new tools into your existing business processes.

Accounting support

It’s our job to provide support and answer any questions you have – whether you want to know more about your tax liabilities or how to make the most of new accounting tools.

We can help you navigate accounting software with ease. And if we find something that could improve your financial processes or boost your productivity, we’ll let you know.

Get in touch with our team to find out how we can use cloud technology to move your business forward.

Talk to us about cloud technology and your business.

How to plan your finances ahead of retirement.

For many savers, retirement can seem like a far-off or even unattainable goal. But to maximise your chances of retiring comfortably, early planning is essential.

Recent research from Canada Life shows that a worrying number of UK adults are not planning for this key milestone, with 45% of over-55s saying their retirement plans are not detailed, and 19% saying they have no plans in place at all.

One in ten respondents said they’d never thought about planning for retirement – and didn’t intend to do so. But more than a third (35%) of retirees wished they’d planned for their retirement more thoroughly in advance.

As the cost-of-living crisis puts pressure on day-to-day finances, it’s a difficult time to think about saving for the future. But these challenges make it all the more important to carefully consider your finances and plan for the long term.

Here are some tips on how to plan for retirement.

Assess your saving goals

At its most basic, retirement planning from a financial perspective comes down to two key questions: how much do you need to save, and how will you save it? The answers to these can be down to various factors.

What kind of lifestyle do you want?

To start working out how much money you’ll need in retirement, you’ll need to consider your various expenses and the lifestyle you’d like to achieve.

Give careful consideration to factors like holidays and leisure, transport, home maintenance, food and drink, shopping and gifts.

The Pensions and Lifetime Savings Association estimates that a single person would need at least £12,800 a year to afford at least a minimum level across these expenses in retirement.

For a ‘moderate’ lifestyle that offers more financial security and flexibility, you’d need at least £23,300, while a more comfortable lifestyle with some luxuries would require £37,300 a year.

These estimates could vary for couples and different locations in the UK, and you’ll also need to factor in additional costs like medical and social care.

They also assume that you own a home and are no longer renting or paying a mortgage. But with these points in mind, they can provide a useful starting point for your calculations.

When did you start saving?

Another major factor in your retirement plans is how early you start. The sooner you start, the more you can save over time – plus, compounding interest means the money you put in earlier can go further.

For instance, let’s say your investments see returns at 3% above inflation each year. If you put £10,000 into your pension at the age of 21, your investment would be worth £35,000 by the time you turn 65. If you made the same investment at 40, it would be worth around £20,000 instead.

One rule of thumb suggested by some experts is to halve your age, and use that number as a percentage of your annual salary you should save.

So if you start saving into a pension at 20, you might aim to save 10% of your income. If you start at age 30, you’d need to save 15%.

How long will your retirement be?

Generally speaking, the length of your retirement depends on how soon you retire and how long you expect to live.

Remember, life expectancy has increased drastically in the last 50 years, and according to the Office for National Statistics, it’s expected to increase again in the next 50, by approximately 6.6 years for males and 5.5 years for females in England and Wales.

People potentially living longer than before is great news, but it does make it more important to check that your finances will cover that period of time.

Understand your pension

Most people in the UK are entitled to income from the state pension, as well as any workplace or personal pension savings they’ve built up over time.

State pension

The new state pension, which applies to people reaching retirement age (currently 66) on or after 6 April 2016, offers a full amount of £203.85 per week (£10,600.20 per year). But the amount you receive will depend on your National Insurance record.

You can check how much state pension you’re entitled to, when you should get it, and how you might be able to increase it using the Government’s ‘Check your state pension forecast’ tool.

Workplace pension

In the last few years, more people have been saving into a workplace pension scheme following the introduction of auto-enrolment laws.

These require employers to automatically enrol qualifying employees into a workplace pension scheme and make contributions as a percentage of the employee’s salary.

Currently, the minimum total contribution for auto-enrolment pensions is 8% of pensionable earnings.

Employers must pay a minimum of 3%, with employees covering the remaining 5% – although employers can choose to contribute a higher amount.

As an employee, it’s possible to opt out of an auto-enrolment pension scheme, but because you receive a contribution from your employer and benefit from tax relief on those contributions, it’s often a good idea to remain enrolled.

Personal pension

You also have the option to arrange a pension yourself. This can be particularly useful if you’re self-employed and therefore unable to benefit from an employer’s pension scheme.

There are a few different types of pension you could choose from, including stakeholder pensions, which must meet specific Government requirements, or self-invested personal pensions (SIPPs), which allow you to choose your investments.

Whichever you choose, check that your provider is registered with the Financial Conduct Authority, or the Pensions Regulator for stakeholder pensions.

Assess your savings options

Many people choose other methods to save for retirement,  such as individual savings accounts (ISAs). You can make contributions to an ISA up to an annual limit without incurring tax on the growth of your savings – for 2023/24, the limit stands at £20,000.

You can also invest, either in stocks and shares or assets like property. The seed enterprise investment scheme (SEIS) and enterprise investment scheme (EIS) are two very tax-efficient ways to invest, for example – talk to us for more information on these.

Holding investments over a longer period generally gives you a better chance of returns, but as ever, the value of investments can go down as well as up. Before making investment decisions, it’s best to seek out expert advice.

Withdrawing from your pension

When the time comes to access your savings, it’s important to be aware of the tax implications.

From the age of 55, you can usually take up to 25% of your total pension pot as a tax-free lump sum. Withdrawals after this are subject to income tax. You’ll still receive your tax-free personal allowance in retirement, which currently stands at £12,570.

Tax on pension income can be very complicated, and while you have various flexible options for withdrawing your funds, it’s essential to get professional advice to avoid unexpected tax charges.

We can help you to understand the tax implications of retirement and create an effective plan to achieve your savings goals.

Get in touch to talk about retirement planning.

Britain’s economy partially recovered in August, with a marginal growth of 0.2% following a sharp fall in July.

This slow growth has fuelled expectations that the Bank of England’s (BoE) Monetary Policy Committee will vote to maintain its base interest rate at 5.25% next month.

The BoE halted its run of interest rate increases in September following signs of a slowdown.

Earlier this week, the International Monetary Fund predicted that Britain would be the slowest-growing G7 nation in 2024.

While the UK is not currently in recession, weak growth has been a concern, and the economy is likely to be a key issue in next year’s election.

The Office for National Statistics said the economy needed to grow 0.2% in September to avoid reducing in the third quarter of 2023.

Commenting on August’s GDP figures, David Bharier, head of research at the British Chambers of Commerce, said:

“The UK economy is holding up but remains in a precarious state.

“Our research is clear about the issues UK firms are facing — three years of economic shocks, high inflation and interest rates, skills shortages, and trade barriers with the European Union.”

Get in touch about your finances