Author Archives: accounts

Cut in interest rates

The Bank of England’s Monetary Policy Committee (MPC) met on 5 February and in a 7-2 vote decided to reduce interest rates by 25 basis points to 4.5%. The two remaining members voted to reduce the rate further to 4.25%. This was the third interest rate cut since August 2024.

This means that the late payment interest rate applied to the main taxes and duties that HMRC charges interest will be reduced to from 7.25% to 7%.

These changes will come into effect on:

17 February 2025 for quarterly instalment payments
25 February 2025 for non-quarterly instalments payments

The repayment interest rates applied to the main taxes and duties that HMRC pays interest on will also decrease by 0.25% to 3.50% from 25 February 2025. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.

Source:HM Treasury | 10-02-2025

Health services exempt from VAT

Health professionals providing medical services may be exempt from VAT if their work falls within their registered profession and primarily protects, maintains, or restores health. HMRC outlines specific exempt services, including diagnosis and treatment.

The VAT liability of goods and services provided by registered health, medical, and paramedical professionals, can be a complex area of tax law. HMRC’s guidance provides clarification on the definition of medical services and outlines the specific health services performed by registered professionals that are exempt from VAT.

If a health professional, as defined by HMRC, provides services, those services are generally exempt from VAT, provided that both of the following conditions are satisfied:

The services fall within the profession in which you are registered to practice.
The primary purpose of the services is the protection, maintenance, or restoration of the health of the individual concerned.

For VAT purposes, the definition of medical services (including medical care and treatment) is limited to those that meet the second condition outlined above. This includes services such as the diagnosis of illnesses, the provision of analyses of scans or samples, and assisting a health professional, hospital, or similar institution in making a diagnosis.

HMRC provides examples of services that are considered to meet the primary purpose of protecting, maintaining, or restoring a person’s health. These include:

Health services provided under General Medical Services (GMS), Personal Medical Services, Alternative Provider Medical Services, General Dental Services, and Personal Dental Services contracts
Sight testing and prescribing by opticians (limited to England, Wales, and Northern Ireland)
Primary and secondary eye examinations (limited to Scotland)
Enhanced eye health services
Laser eye surgery
Hearing tests
Treatment provided by osteopaths and chiropractors
Nursing care provided in a patient’s own home
Pharmaceutical advice
Services involving the diagnosis of an illness or the provision of analyses of samples that are a key part of a diagnosis

Additionally, certain insurance or education-related services may also be exempt from VAT, regardless of their primary purpose, as they could qualify under other independent exemptions.

Source:HM Revenue & Customs | 10-02-2025

How to Check the Creditworthiness of New Customers

Before extending credit to new customers, it’s essential to assess their financial reliability. Checking their creditworthiness helps protect your business from potential losses and late payments. Here’s how to do it:

Start by requesting basic financial information from the customer, including company details, trading history, and references from suppliers. Established businesses should be able to provide trade references that confirm their payment behaviour.
Conduct a credit check using a business credit reference agency such as Experian, Equifax, or Credit safe. These agencies provide credit scores and reports on a company’s financial health, outstanding debts, and payment history. For individual customers, you may need their consent to run a personal credit check.
Review the customer’s filed accounts at Companies House if they are a UK-registered business. Financial statements, including balance sheets and profit and loss accounts, offer insight into their financial stability. A company with poor liquidity or persistent losses may pose a credit risk.
Check for County Court Judgments (CCJs) or insolvency records. If a business or individual has a history of unpaid debts or legal action, this could indicate a higher risk of non-payment.
Set appropriate credit limits and payment terms based on the information gathered. If necessary, request upfront payments or guarantees to minimise risks.

Finally, monitor ongoing customer creditworthiness. Even reliable customers can experience financial difficulties, so it’s important to review accounts periodically and adjust credit terms when necessary.

Source:Other | 10-02-2025

How to Stop Future Payments on Your Debit or Credit Card

Stopping future payments from being made on your debit or credit card is crucial for avoiding unwanted charges and managing your finances effectively. Here’s how you can do it:

The first step is to contact the company taking the payments. Request that they cancel the recurring charge and provide confirmation in writing or via email.

If the merchant refuses to stop the payments, you can contact your bank or card provider. Under UK law, you have the right to cancel recurring payments (also known as Continuous Payment Authorities, CPAs) at any time. Banks are legally required to stop the payment when requested.

Many banks allow you to manage subscriptions and regular payments through their online or mobile banking services. Look for options under “Manage Payments” or “Recurring Transactions” to cancel them yourself.

If all else fails, cancelling your debit or credit card and requesting a new one can be an effective way to stop unauthorised charges. However, this should be a last resort, as it can cause disruption to other legitimate payments.

Regularly checking your bank statements ensures that no unauthorised payments slip through. If you spot an issue, report it immediately to your bank.

Taking these steps will help you stay in control of your finances and prevent unwanted payments from continuing.

Source:Other | 10-02-2025

Not all hurt feelings are uncapped & costly

The Employment Appeal Tribunal slashed a £10,000 award for injury to feeling by 80% after an original tribunal ruling was deemed not to be Meek compliant as it failed to provide adequate reasons for the quantum awarded. A Miss Graham was employed by Eddie Stobart Ltd. for just over ten months as a planner when she became pregnant and immediately notified her line manager. Miss Graham asserted her right to be offered suitable alternative employment during her maternity leave under the MAPLE Regulations. She was interviewed for a new role but was unsuccessful and was terminated by reason of redundancy although her grievance Email to HR was blocked by the firewall.

Miss Graham complained that she had been "automatically" and unfairly dismissed as per Section 99 of the Employment Rights Act 1996 on the basis that the new role should have been given to her in priority to others who were not on maternity leave. The first Tribunal found that Miss Graham had not been unfairly dismissed but upheld her claim of detrimental treatment and pregnancy/maternity discrimination and awarded £10,000 for injury to her feelings. Eddie Stobart Ltd. appealed and the second tribunal found the award excessive given that she had soon found alternative employment and had not endured prolonged suffering.

This case underscores the importance of presenting evidence supporting any claim for injury to feelings in the form of a ‘checklist’, although HR departments should note that those who are forced to chase up their grievances during allocated maternity or paternity leave may have grounds for such claims, however excessive or seemingly irrational.

Source:Other | 10-02-2025