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Understanding the new Tax-Free Childcare plans

The new financial year is often an opportunity to get organised for the year ahead. For self-employed parents juggling the demands of running a business with caring for their family, it could also be a good time to review the family planner and take a fresh look at the household budget to ensure they’re getting all the support they’re entitled to.
We asked the experts at HM Revenue and Customs (HMRC) to outline the financial help available for our readers so they can access the childcare they need while keeping an eye on their bottom line.
What help is available for self-employed parents?
There are a number of schemes available that could be worth thousands of pounds a year including Tax-Free Childcare, free childcare hours, Universal Credit, tax credits and Child Benefit.
What is Tax-Free Childcare?
Tax-Free Childcare is a government funded top-up scheme for working parents, including the self-employed. It can save parents up to £2,000 a year per child – or £4,000 if their child is disabled – to put towards the cost of childcare. For every £8 paid into a Tax-Free Childcare account, the government tops it up with another £2.
 Who is it for specifically?
Working families including self-employed parents. Latest statistics show more than 63,000 families, with at least one self-employed parent, use it to help pay for their childcare.
Families should check out the full eligibility on GOV.UK but in summary it’s for working parents or guardians, including those who are self-employed, who:

have a child or children aged up to 11. They stop being eligible on 1 September after their 11th If their child has a disability, they can receive support until 1 September after their 16th birthday
earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
each earn up to £100,000 per annum
do not receive tax credits, Universal Credit or childcare vouchers.

 What can I use it for?
Tax-Free Childcare can be used flexibly to pay for any approved childcare that suits your family’s needs. You can use to pay for childminders, nurseries and nannies, before and after school clubs, holiday or activity clubs. If you find a provider you want to use and they’re not signed up, encourage them to do so by going to Childcare Choices for more details of how to sign up and what it means for them.
How do parents open an account?
It’s simple to open an account via GOV.UK and only takes about 20 minutes. Accounts can be opened at any time of the year and can be used straight away, money can be deposited at any time and used when needed. Any unused money can be simply withdrawn at any time.
Account holders will be reminded every three months to confirm their details are up to date to continue receiving the government top-up.
I have more than one child in different childcare settings – can I use it for both?
Yes! If families have more than one eligible child, they will need to register a Tax-Free Childcare account for each child. The government top-up is then applied to deposits made for each child, not household.
For more information about Tax-Free Childcare and how to register go to GOV.UK
Can Tax-Free Childcare be used with the free hours offer?
Yes! If you meet the eligibility criteria, you can receive both free childcare hours and Tax-Free Childcare.
In England, eligible working parents of 2 year-olds have been able to access 15 hours free childcare per week since 1 April This the first step in the rollout of the largest investment in childcare in England’s history.
The offer will expand to 15 hours free childcare for working parents from nine months old up to when their child starts school by September this year, and 30 hours by September 2025. This is set to save parents using the maximum allowance up to £6,900 per year.
Can I use Tax-Free Childcare with Child Benefit?
A.Yes! Child Benefit is worth £25.60 per week for the oldest or only child and £16.95 per week for each additional child. It can be claimed by parents or guardians once you have registered your child’s birth and can be claimed up to age of 16 or 20 if the child stays in approved education or training.
In addition to financial support for your family, Child Benefit ensures parents qualify for National Insurance credits which could help protect their state pension, and also helps children automatically receive a National Insurance number when they reach 16.
You can now claim Child Benefit online and manage your account via the HMRC app. To check eligibility and make a claim go to  GOV.UK .
Can I use Tax-Free Childcare while claiming Tax Credits or Universal Credit?
No, but tax credits offer alternative childcare support that could also be worth thousands.
If you already claim tax credits, you’ll receive a letter from HMRC by 19 June. There are two types of letters to look out for: if your renewal pack has a red stripe across the page then you will need to check the information, renew and report any changes by 31 July otherwise you risk your payments being stopped. If your renewal pack has a black stripe across the page, you need to check the information is correct, and only contact HMRC if you have any changes to report.
Tax credits are being replaced by Universal Credit by April 2025. Many customers who move from tax credits to Universal Credit could be financially better off and can use an independent benefits calculator to check. If customers choose to apply sooner, it is important to get independent advice beforehand as they will not be able to go back to tax credits or any other benefits that Universal Credit replaces.
You cannot claim Tax-Free Childcare and Universal Credit at the same time.
How do I know which offer is best for me?
Go to Childcare Choices to find the right childcare offer for your family.
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Understanding the new Tax-Free Childcare plans

Tackling late payment by getting back to basics

Philip King FCICM, former Small Business Commissioner and advisor to PKF Littlejohn Advisory, believes a ‘back to basics’ approach would help many businesses overcome the late-payment challenge.
It is an established fact that companies often become insolvent not because they are inherently bad businesses, but simply because they run out of cash. Poor cashflow management, compounded by bad debts and slow paying customers, are typically to blame.
But while it is tempting to lay the blame wholly on late payment, businesses must shoulder some of the responsibility for their own poor credit management practices. Put another way, best practice credit management can limit the amount to which a business finds itself financially vulnerable.
So how can bad debts be avoided, and payments accelerated? Much can be achieved by getting back to basics and doing the basics well.
Know your customer
First and foremost, even the most basic checks can avoid potential embarrassment later. Know your customer (KYC) should be the mantra of every director, every sales executive, and every individual in your credit team. How well do you know the company you are dealing with? What is their Company Registration Number? Do they even have one? What is their legal status? Are they a limited company? A Partnership? A PLC? LLP? All such information is important, not least to ensure you invoice the correct legal entity at the point your product/service has been delivered.
Using data from reputable credit reference agencies is always advised to supplement the information stored at Companies House. This enables you to dig deeper and get beneath the company itself. It will help you determine the amount of credit you want to extend, especially since their success and survival may depend on the stability of their customers and other suppliers.
As well as published sources, there are also other tactics you can use to discover more about the company you keep. Looking through their social media accounts (LinkedIn, Facebook etc) and any comments around them can give you hints about their reputation and how they treat their supply chain. Traditional media coverage through google searches can also give you a better steer on their financial viability. Google Search can also show if the warehouse they say they own, even exists!
Documented rules of engagement
Once a new customer is being onboarded, the terms and conditions you agree are absolutely critical. They should be documented with explicit payment terms.
The concept of ‘30 days’ – a particular favourite among politicians and the media for denoting best practice – can still mean different things to different people. Is that 30-days from date of invoice, receipt of invoice, or end of month, for example? This needs to be crystal clear or else 30 can so easily become 50 or more.
When you are invoicing, make sure you understand their payment and invoice approval process and whether, for example, a purchase order is required and what other specific information may be needed. Make sure the amount you are invoicing is also correct in terms of what has been agreed; even a penny difference can cause the payment process to grind to a halt!
Customer interaction
In terms of how you interact with your customers, build a strong relationship with key people in the company; they could be invaluable when you need to chase payment ahead of other suppliers. At your end, keep the ledger clean and have absolute clarity about what invoices are outstanding. Confusion is a great obstacle to payment and can easily be exploited by those who are seeking to delay paying what they owe.
Making contact in advance of the due date to ensure the invoice has been received and is correct will also reduce the likelihood of a payment subsequently being held in dispute. Keep large totals separate from smaller ones; there is nothing to be gained for having a £10,000 invoice comprising £9,800 for the product and £200 for the delivery held up because the delivery charge is being disputed.
Even if you have clear lines of communication with the customers, always follow up on the day the invoice is due; never wait and hope for the best. Hope is not a strategy and someone else will be being paid while you’re left waiting. To that end, never be afraid to escalate a late payment to your collections team and/or a third-party activity sooner rather than later. A customer that doesn’t pay you isn’t a customer worth having.
Seek advice early
Such advice should not come as a surprise, but in my 40 years in credit management, it still amazes me how businesses are quick to blame everyone else when they’ve ignored many of the fundamentals themselves.
Getting back to basics may not always be successful, but like winning the lottery, you first have to buy a ticket. And if despite all your best efforts, an insolvency may still be looming, talk to the experts at PKF Littlejohn Advisory. They might be able to help the business avoid failure and, if the worst happens, they can work with you for the best outcome from the unfolding insolvency process.
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Tackling late payment by getting back to basics

Hundreds of British bosses fear AI could steal their jobs

Hundreds of UK chief executives believe that artificial intelligence (AI) could steal their job, underlining widespread fears over the technology’s potential to shake up traditional working models.
Nearly half of CEOs said they felt that their job could be at risk due to AI technology, according to a major new study from AND Digital.
Additionally, three quarters of CEOs have launched Artificial Intelligence (AI) training bootcamps this year, to help themselves and their staff stay on top of the latest tech trends.
The findings were revealed in The CEO Digital Divide: are you accelerating enterprise value or slowing it down? report, which surveyed 600 global CEOs and was conducted by independent research company Censuswide.
A worrying 44 percent of CEOs polled said they feel their staff aren’t ready to handle AI adoption amid rapid global developments.
AI amplifies the dilemma confronting CEOs, with one-third opting to ban AI tools like ChatGPT within their organisations. However, 45 percent admitted to secretly utilising AI tools, such as OpenAI’s ChatGPT, to fulfil their job responsibilities, often passing off the work as their own.
Ironically, given the widespread secret use of AI technology, ethical considerations in AI adoption also emerged as a critical concern, with 68 per cent prioritising it as a top issue.
Stephen Paterson, Chief for Technology and People at AND Digital commented: “CEOs cannot afford to be complacent when it comes to AI. Neither can they allow a culture of fear and distrust surrounding new technologies to gain a foothold, so reskilling people and teams across all departments to the highest standards should be an absolute top priority.
“It is important for business leaders to establish a well-designed framework around AI in order to maximise value and mitigate risks, empowering people with the guidance and resources to innovate safely. Failure to do so will leave them falling behind the competition and falling behind peers who do possess the AI skills to lead the new wave of tech innovation.”
“Ultimately, CEOs must embrace the ‘AND’ mindset, rather than the ‘OR’, when it comes to embracing new technology. This involves adopting juxtaposed concepts of speed AND security, small AND scale, as well as legacy AND innovation in order to unlock the full potential of technology investments.”
The news comes amid the UK and US forming a new partnership to ensure the safety of AI amid concerns about its future versions. The collaboration aims to jointly develop advanced testing for AI models and share information on AI capabilities and risks.
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Hundreds of British bosses fear AI could steal their jobs

Jaguar joins rivals by delaying full electric transition with continue …

Despite previous commitments to transition to an all-electric marque by 2025, Jaguar has announced plans to prolong the production of internal combustion vehicles well into next year.
The decision comes amidst slow demand for zero-emission vehicles and the recognition that maintaining profitable conventional lines is essential for funding the electrification transition.
While Jaguar had initially positioned itself as the “Tesla of the West Midlands” with its ambitious electric-only pledge, the reality is different. Although five petrol and diesel models will be retired this year, the production of the popular £50,000 Jaguar F-Pace will continue into 2025.
This strategic shift mirrors recent moves by other British luxury carmakers. Bentley, previously committed to full electrification by 2030, will continue producing plug-in hybrids for a couple of years longer. Aston Martin has also postponed the launch of its electric cars by two years, with its executive chairman Lawrence Stroll acknowledging the ongoing relevance of hybrids until at least the mid-2030s.
The decision to extend the production of the F-Pace highlights its significance within Jaguar’s lineup, representing over a third of the brand’s annual sales. Despite the industry’s increasing focus on electric vehicles, sales of the F-Pace have seen a notable 22 per cent increase this year.
As part of Jaguar Land Rover, the company remains committed to launching three all-electric cars starting next year, although specific details are scarce. It’s anticipated that the initial vehicle will be a luxury four-door GT or grand tourer-style model, competing in the same segment as the Audi e-tron GT quattro and the upcoming BMW i4, with a price tag exceeding £100,000.
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Jaguar joins rivals by delaying full electric transition with continued production of F-Pace

Britishvolt Site Acquired by Blackstone for £110m, Set to House Data …

The former site of Britishvolt, a failed battery startup in northeast England, has been acquired by US private equity firm Blackstone Group for £110 million.
Blackstone intends to transform the 95-hectare site near Cambois, Northumberland, into one of Europe’s largest data centres, capitalising on its connectivity to renewable energy sources.
Initially heralded in 2019 for its ambition to produce batteries for electric vehicles, Britishvolt garnered substantial government support and promised thousands of jobs. However, the company collapsed in early 2023, leaving its vision unfulfilled.
The acquisition by Blackstone marks a significant shift in the site’s trajectory. Formerly home to Blyth power station, the site will now host a state-of-the-art data centre facility, catering to the escalating demand for digital content and cloud internet services across households and businesses.
While the deal secures the future of a substantial brownfield site and leverages local renewable energy resources, it also signals the end of hopes for significant job creation in the region. The local council’s ambition to establish a gigafactory and generate thousands of jobs is no longer viable.
Britishvolt’s demise stemmed from financial challenges, despite securing substantial investments from prominent entities. The company’s focus on developing proprietary battery technology and its inability to secure necessary orders hindered its progress, leading to its eventual collapse.
Bob Maxwell of Begbies Traynor Group, the receivers overseeing the sale, expressed optimism about the site’s future under Blackstone’s ownership. He highlighted the potential for the site to catalyze a tech industry cluster in the northeast, fostering economic growth and employment opportunities in the region.
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Britishvolt Site Acquired by Blackstone for £110m, Set to House Data Centre

£243,000 IR35 case to be reheard 14 years after contract concluded

Five years after HMRC appealed an IR35 case defeat carrying £243,324 in tax liability, judges have instructed this long-running saga to be reheard despite the work having taken place 14 years ago.
IR35 specialist, Qdos, said the situation “smacks of unfairness” and highlights the “nuances and complexities of the IR35 legislation”.
In 2019, IT contractor, Richard Alcock, successfully appealed HMRC’s view that he belonged inside IR35 when contracting via his limited company (RALC Consulting Ltd) for Accenture and the Department for Work and Pensions, between 2010 and 2015. The tax liability in question amounted to £243,324, before interest and possible penalties.
The case hinged on Mr Alcock being viewed as in business on his own account, in addition to Mutuality of Obligation (MoO) not being present and his clients not controlling the working relationship in a manner that reflected employment. However, HMRC appealed this verdict, largely on the grounds that the First Tier Tribunal did not consider the reality of how the services were provided by Alcock, in contrast to the contract itself.
Five years on, this appeal has been granted. As a result, the Upper Tier Tribunal hearing, held in December 2023, instructed for the case to be reheard – this is despite RALC Consulting Ltd having stopped trading.
Qdos CEO, Seb Maley, commented:“This smacks of unfairness. Five years on from having successfully won this case and fourteen years since the work was carried out, this contractor faces the prospect of being dragged through the tribunal system once more.
“Not for the first time, the nuances and complexities of the IR35 legislation run so deep that Judges can’t seem to interpret it. But as is the case far too often, it’s contractors who pay the price.
“This contractor in particular, whose business no longer trades, is expected to head back to court and prove his innocence again – all while having a tax bill of well over £200,000 hanging over him for the foreseeable future.”
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£243,000 IR35 case to be reheard 14 years after contract concluded

Barclays Leads Complaints List for Small Business Account Closures

Barclays has emerged as the most complained-about bank for small business account closures.
Out of the 413 complaints lodged with the Financial Ombudsman Service between April 2022 and September 2023 regarding small business banking, Barclays accounted for nearly half, with 205 complaints.
Following Barclays, HSBC recorded 67 complaints, Lloyds with 57, NatWest with 53, and Santander with 31. This compilation by the ombudsman sheds light on the top five banks receiving complaints about business account closures.
Jean-Martin Louw from legal firm Collyer Bristow emphasized the significant repercussions of unexpected account closures for small businesses. Such closures can disrupt financial operations, hampering payment of invoices and staff salaries, and impeding access to necessary funds.
The Financial Ombudsman Service offers recourse to businesses with an annual turnover of less than £6.5 million facing difficulties with financial services firms. Of the 85 complaints made against Barclays between April 2023 and September 2023, 26 per cent were upheld, compared to 9 per cent of the 76 resolved cases in 2022-23.
Consumer rights expert Martyn James stressed the importance of close monitoring of banks to ensure fair treatment of customers, particularly in instances of account closures without explanation.
The closure of customer accounts has attracted heightened scrutiny, exemplified by Nigel Farage’s account closure with Coutts last June. Martin McTague from the Federation of Small Businesses highlighted the devastating impact of such closures on small businesses, underscoring the power disparity between small firms and large banks.
While banks are not legally obligated to provide reasons for account closures, they must issue a two-month notice. The government is exploring measures to strengthen regulations, including mandating a 90-day notice period before closure and requiring explanations except in exceptional circumstances.
Barclays attributed most closures to the need for updated customer information to combat financial crime and comply with regulatory requirements. The bank reiterated efforts to minimize account closures and urged customers to maintain updated information. HSBC, Lloyds Bank, and Santander stated that account closures align with legal and regulatory obligations, while NatWest was unavailable for comment.
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Barclays Leads Complaints List for Small Business Account Closures

Squeezed Homeowners Opt for Longer Mortgage Terms

As interest rates soar, homeowners facing the end of their mortgage deals are seeking relief through extended loan terms.
The trade association UK Finance reports that 24 per cent of remortgages, approximately 5,400 loans, were structured with terms of 30 years or more in December, a significant increase from 11 per cent in December 2021.
The surge in demand for longer mortgage terms comes as millions of homeowners grapple with the aftermath of interest rate hikes. Since the Bank of England base rate surged from 0.1 per cent in 2021 to 5.25 per cent today, borrowers who once enjoyed rates of 2.5 per cent or lower are now facing substantially higher payments. According to financial data firm Moneyfacts, the average two-year fixed-rate deal now stands at 5.81 per cent, with the average five-year fix at 5.39 per cent.
With approximately half of mortgaged homeowners witnessing the end of their deals amidst the base rate fluctuations, the financial strain is palpable. Santander customers, for instance, are grappling with an average monthly increase of £220 post-remortgaging, as highlighted by its chief executive Mike Regnier during recent parliamentary discussions.
Illustrating the impact of rate hikes, consider a scenario where a homeowner took out a £200,000 25-year mortgage at a rate of 2.5 per cent two years ago. Despite reducing the loan balance to £188,187 over two years, the rise in rates translates to increased monthly payments. For instance, with a rate of 5.81 per cent, monthly repayments over the remaining 23-year term would soar to £1,238.
In response, homeowners are turning to extending their mortgage terms as a means of mitigating the blow of higher rates. Extending the term to 30 years would lower monthly payments to £1,106, while a 35-year term would see them reduced to £1,049. Mortgage broker Katy Eatenton notes that term extension has become a primary strategy for borrowers navigating the current rate environment.
However, while extending the term provides short-term relief, it comes at a long-term cost. Comparing a 23-year term to a 35-year term, total repayments skyrocket from £342,601 to £441,764, despite the interest rate increase.
Despite these challenges, the proportion of loans in arrears only saw a slight uptick to 1.1 per cent at the end of last year, according to the Bank of England, signaling a resilient market amidst the economic turbulence.
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Squeezed Homeowners Opt for Longer Mortgage Terms

Hunt Slams Thames Water’s Bid for Higher Bills Amid Failures

Jeremy Hunt has condemned Thames Water’s plea for increased household bills in the face of potential insolvency as “utterly outrageous.”
Amidst growing concerns over the utility company’s financial woes, the Chancellor emphasized shareholders’ responsibility to rectify the situation rather than burdening consumers.
Addressing constituents at a public meeting in his South West Surrey constituency, Hunt expressed strong opposition to the notion of households bearing the brunt of poor management and financial missteps by Thames Water shareholders. He asserted, “It would be utterly outrageous and totally unfair if we were made to pick up the tab.”
Hunt addressing constituents at a public meeting in his South West Surrey constituency
Hunt’s remarks come amidst mounting pressure on the Government to intervene as Thames Water’s parent company, Kemble, missed an interest payment on a £400 million loan. With the utility giant serving 16 million households across the UK, concerns over potential insolvency have escalated.
David Black, CEO of Ofwat, assured on Friday that customers would not be held accountable for Thames Water’s management failures, although he did not rule out the possibility of increased bills.
Speaking on the sidelines, Hunt reiterated his stance, emphasizing that constituents should not be obligated to bail out shareholders for their poor decisions. He stressed the importance of Thames Water taking responsibility and resolving the crisis internally.
Chris Weston, Thames Water’s CEO, echoed a commitment to salvaging the business amid ongoing discussions with Ofwat regarding the company’s financial outlook.
The water company’s challenges are multifaceted, with soaring interest payments, credit rating downgrades, and hefty fines from the Environment Agency for environmental violations. Thames Water’s liquidity, while substantial at £2.4 billion, faces depletion due to mounting debt finance costs and impending fines.
The recent water outage in the Godalming and Guildford areas following Storm Ciarán prompted further scrutiny, with constituents expressing frustration over the lack of access to water and inadequate compensation for affected parties.

Jane Austin, local councillor for the most affected ward Bramley and Wonersh, told Mr Weston: “We have water anxiety where we live.”

Hunt’s condemnation underscores the urgency for Thames Water to address its financial predicament responsibly, sparing consumers from bearing the burden of its failures.
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Hunt Slams Thames Water’s Bid for Higher Bills Amid Failures