Sandison Lang news Issue 30
Winter 2023
THE DETAILS BEHIND THE AUTUMN STATEMENT Jeremy Hunt presented his second Autumn Statement in a markedly less dramatic economic landscape than the first last year. Back then, the unfunded tax cuts announced in the now infamous ‘Mini Budget’ of the Trussonomics era saw increased volatility in financial markets. The Chancellor said it was an ‘Autumn Statement for growth’ which included 110 measures to ‘reduce debt, cut taxes and reward work’. Mr Hunt said: “We cut taxes to help bigger businesses invest, we cut taxes to help smaller businesses grow. We cut taxes for the selfemployed and keep our country running.” The headline announcements focussed on changes to National Insurance policy for employed and self-employed workers, although no good news on this front for employers. For the self-employed, he abolished Class 2 NICs
and reduced the rate of Class 4 NICs from 9 per cent to 8 per cent in April 2024. Employed workers will also see a decrease in their National Insurance, down from 12 per cent to 10 per cent from January 2024. The Office for Budget Responsibility (OBR), the watchdog which oversees the Treasury and its spending, predicts these cuts to cost around £27billion. It is also highly unusual for this last fiscal change to occur during the tax year rather than at the start – a point some took to signal a looming general election. Indeed the speech was critiqued as being ‘vote focussed’ – small changes being presented to give some good news without offering too much in the way of real tax cuts for individuals. While the National Insurance cuts announced might be beneficial, the freeze on income tax thresholds is still dragging more people into
higher tax bands. With inflation still high, wages might be increasing and more of people’s income will be charged at the higher rate of tax. According to the OBR, this fiscal drag will raise an estimated £45 billion in additional revenue between this tax year and 2028 when the freeze is scheduled to end. It will also bring 3 million more people in to the higher rate of tax and 400,000 into the additional rate in the next five years. Previously, the additional rate threshold was £150,000 but was reduced to £125,140 in the last Budget. There was some good news for ISA savers. There will no longer be a limit on the number of ISAs that investors can support from April – although the contribution limit will remain at £20,000 per year. New rules will allow transfers between ISAs and the inclusion of ‘illiquid assets’ such as property and private equity.
Season’s greetings from the full team at Sandison Lang Sandison Lang News Issue 30 Winter 2023
Accountants to the medical profession
Autumn Statement continued As is the case with every major economic announcement, there was much speculation beforehand which this time centred on changes to the punitive rates of inheritance tax. Sadly, these forecasts proved unfounded with the nil rate band still due to be frozen at £325,000 until 2028, despite being in place since 2008. However, if ever there was a ballot-friendly policy
to revise just before an election next Spring, IHT might just be it. Practice costs Businesses buying assets under the measure known as ‘full expensing’ will be relieved to know this policy is no longer finishing in 2026. This allows companies to deduct capital spending on
plant and machinery from taxable profits. The policy, which is set to cost the Treasury around £9 billion a year can even include IT equipment. The government also confirmed that both startup investment programmes, the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT), are to be extended to 2035.
NHS update: it’s finally time for McCloud Dr Mark Martin: We have been talking about the McCloud remedy for several years now but it has finally reached implementation. The McCloud remedy aims to recompense NHS pension scheme members deemed to have suffered age discrimination when the 2015 pension scheme was introduced. Those members will now be able to receive their original benefits from the 1995 or 2008 scheme for the seven years of the ‘remedy period’ which runs from 2015 when the new pension scheme began to 2022. A new digital service has been launched by HMRC to allow scheme members to correct their previous tax payments and to apply for
repayments where they have paid too much tax during the remedy period. Normally, scheme members would receive an annual pensions savings statement every Autumn but those affected by McCloud will not receive it this year. This is to give the NHS Pensions Agency time to recalculate the figures for the remedial years. Instead, statements will be issued by 6 October 2024. Importantly, members will also not need to include an annual allowance charge on their tax return for tax year 2022/23. If you have any queries regarding your own position, please do speak to your accountant in the first instance who can advise on the best course of action.
Q&A accounting will become the default process for all self-employed traders and partnerships, rather than ‘accruals’. Previously, this option was only available to those with an annual turnover of less than £150,000. Cash basis accounting recognises income and expenses only when money is actually exchanged. Accruals accounting considers this when invoices are raised or expenses incurred.
Q: What are the changes to the ‘cash basis’ threshold announced by the Chancellor? Michelle Trivett writes: The Chancellor has announced that from April 2024, ‘cash basis’ Sandison Lang News Issue 30 Winter 2023
Businesses currently using cash basis are only allowed to deduct up to £500 in interest costs from their taxable profits each year but this restriction will be removed at the same time. This means businesses can deduct any amount of interest as long as it is incurred wholly and exclusively for the purposes of that business. The rules surrounding loss relief have also been relaxed. Taxpayers who choose to switch to cash basis next year (they will need to opt out on their selfassessment submission), will need to transition to
the new process – which could be on top of ‘Basis Period Reform’. This is the new regulation meaning all selfemployed individuals and partnerships will have to report their business tax information to HMRC on a tax-year basis. So regardless of their accounting period, their business profits, expenses and subsequent tax calculations will run from 6 April in one year to 5 April in the following year. This transition could be complicated. Another downside is that cash basis recording may not provide an accurate picture of what is happening in the business and could give a skewed view of cash flow, for example. This policy change is being put in place to make it easier for small businesses to implement Making Tax Digital. Taxpayers will now be able to use simplified figures to complete their online reporting. Nevertheless, this may not be useful for the businesses themselves. Accountants to the medical profession
Sandison Lang interview with Mr Maxim Horwitz mainstream yet and still in development stages. But this X-ray recognition technology has potential to become part of day-to-day care. What is the most rewarding part of your career? There are two sides to this question. I treat a lot of professional athletes, and there's nothing better than seeing one of your athletes getting back to their physical peak and doing well because they've gone through their rehabilitation and they're able to do their sport and excel in their job. I work directly with many professional clubs and teams and though it’s demanding, it is very fulfilling. Maxim Horwitz is a Consultant Orthopaedic Hand and Wrist Surgeon in the Hand Unit at Chelsea and Westminster Hospital where he leads the paediatric hand surgery service. He is also an Honorary Consultant for the Major Trauma Unit at St Mary's Hospital and the Royal National Orthopaedic Hospital (RNOH) Stanmore. He is also the founder of www.thehanddoctorpractice.co.uk a group of hand surgeons who work together in private practice in central London. Why did you choose medicine? I always enjoyed the trauma and emergency side of things, and even as a teenager I used to do some paramedic work and I enjoyed the action. Even at that stage, I enjoyed helping people on the rugby pitch and sports fields. When it came to choosing orthopaedics, I believe you get driven towards your sort of crowd who you enjoy spending time with. I found orthopods were often sporty and outgoing. They used to have their conferences in places where you had safaris (because I trained in South Africa) and this seemed like a great place to start. As I started training in orthopaedic surgery, I moved into hand surgery. The joy is the variety. You can care for broken wrists, cut off fingertips or damaged nerves. It could be people with arthritis or lumps or bumps, or children born with missing fingers or joined up fingers. If you look at something like hip or knee surgery, they probably do the same five operations, whereas we have probably about 35 regular operations and 100 irregular operations.
Sandison Lang News Issue 30 Winter 2023
What are some of the most interesting advances in technology in your field? You are asking the converted. I wrote three articles for the ‘Journal of Hand Surgery’ this year all with the theme of technology running through them. From the most basic things in the clinic such as voice recognition software to type our letters in the NHS. Instead of having them typed, proofread and then sent out, letters are being sent automatically to the GP using voice recognition. This is a big improvement. Another example is the use of 3D modelling to plan surgery. In the past if you had an operation on a very broken wrist which healed wrongly or out of line, we used to have to rebreak the bones and then work out angles to make it perfect. Now, we will do a CT scan of both wrists and the computer can use 3D modelling to work out how the correctly modelled wrist should look like based on the other wrist. We can make guides to cut the bone and change the shape and even print a 3D-plate to fit the wrist and bone. There are also simple things like using a fitness tracker such as an Apple watch to track patients’ rehabilitation exercise. Five or ten years ago, they would have been given a piece of paper in my clinic with a list of exercises. Now, they get an app with a link to exercises designed for them, with videos of how to do the exercises. We're also starting to use computers to diagnose fractures or at least double check if fractures are missed by the X-ray department. There are lots of ethics to work through to ensure that patients are aware that AI is being used for things like X-ray recognition, so this is not
The other side, which is probably the most rewarding, is working with children. I help children who may have birth abnormalities and may have missing fingers or joined up fingers, or thumbs which don't move. You then give them the part that they're missing or improve their function. The parents are happy and the child’s function improves. Ten years later, the parent may send you a picture showing the child playing tennis or writing or playing a violin. What would you still like to achieve? I've just published a paper about “preventable hand injuries” which I believe is a really important topic. So much of what we see is preventable and I would like national involvement in taking this forwards. I would like the Royal Society for the Prevention of Accidents (ROSPA) to buy into the fact that when people are using their drills etc, they should be careful. Fireworks are also a big problem. I think fireworks sales to the general public should be banned because people injure themselves really severely. Every year or two, I see someone who has lost a thumb, a finger or changed their appearance or function forever. Our scientific paper (going to be published in December 2023) shows the evidence that from 2000 injuries, 50% were preventable. Do you have a mentor in your career? I've had several mentors in the past and still have mentors today, because this is not a sport which you want to play solo or make decisions on your own, especially if you do some of the more challenging things. Accountants to the medical profession
Interview continued I've got a mentor at my own hospital who's been fantastic; he's helped me since the day I joined. I've got another mentor who's responsible for treating a lot of sports injuries and who is someone whose advice I always appreciate.
Social media has really helped too; obviously with patient consent, trusted colleagues can share anonymous photos, X-rays, and the specialist hand surgery community can share thoughts and advice. I don’t believe any surgeon should work in a silo.
What is the best piece of advice you have received or given? Do the basic things right and the more complex things will always follow. Always listen to your patients and read the things in the room that they’re feeling rather than just saying.
Viewpoint: William Myatt, partner
It is fair to say that not every accountant loves the festive season. The holidays punctuate our busiest time with mounting tax deadlines and
increased work pressures trying to spoil the Christmas spirit.
to work out their profits for the new period and not pay tax on the same figures twice.
This year, the Treasury is adding a further thoughtful gift, particularly for payroll managers who will be making the necessary changes to National Insurance for employees mid-cycle after the Chancellor’s surprise reduction in the Autumn Statement. The other changes to NI for the self-employed will not be implemented until the usual April tax year kick-off.
To make matters more fun, HMRC just announced it will significantly reduce access to the selfassessment helpline over Christmas. Giving only four days’ notice of the impending restrictions, it said callers should go online instead. This follows the three-month closure in summer. Unsurprisingly, a recent survey by the Chartered Institute of Taxation found widespread ‘dissatisfaction’ with HMRC’s service. Over 94 per cent of respondents were ‘somewhat’ or ‘extremely’ dissatisfied and 96 per cent were ‘not very’ or ‘not at all’ confident that matters would improve in the next 12 months. We can only hope for a Christmas miracle.
In the new year, we will be looking forward to getting to grips with another policy – the Basis Period Reform. This measure will oblige sole traders and partnerships to report their financial accounts in line with the tax year, no matter the accounting date of their business. As you can imagine, calculating the transitional element of this move will be complex, as businesses attempt
Wishing you a peaceful end to the year and a prosperous 2024.
Company update New team members We are delighted to welcome our new accountant Mwansa Bennett, as well as accounts assistants Richard French and Nafisa Ullah to join our growing team.
Thanking you for thinking of us Congratulations to Dr Nasirul Ekbal who wins £1,000 in our latest refer-a-friend prize draw. Do you have a friend or colleague who could
benefit from our specialist services? Simply email their contact details to us to be entered into our bi-annual draw. (Please do mention that we might be in touch.) You will also receive an entry into the draw if a friend or colleague mentions your name
when they first enquire to Sandison Lang. You may refer as many people as you wish – for every person that you suggest, you will receive another entry into the competition which will be drawn in April 2024. Many thanks for supporting our business.
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