Under UK law, the Proceeds of Crime Act 2002 (POCA) sets out the framework for tackling money laundering and the handling of criminal proceeds. Certain business sectors must register with supervisory bodies and comply with anti-money laundering (AML) regulations. These sectors are defined under the UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

The following sectors are required to register under UK law:

1. Financial Institutions:

�         Banks and Building Societies: Must comply with strict AML obligations, including customer due diligence, transaction monitoring, and reporting suspicious activities.

�         Credit Institutions: Non-bank financial institutions that offer credit services are also included.

�         Payment Institutions: Providers of payment services, including money transfer services, must register and comply with AML requirements.

2. Accountants, Auditors, and Tax Advisors:

�         Professionals providing accountancy or tax services are required to register and follow AML compliance rules, including identifying and reporting suspicious transactions.

3. Legal Professionals (Solicitors and Lawyers):

�         Legal professionals who engage in activities such as real estate transactions, managing client money, or creating companies are subject to AML regulations and must report suspicious activities to the UK’s National Crime Agency (NCA).

4. Estate Agents and Letting Agents:

�         Both residential and commercial estate agents are covered. Letting agents also need to register if they deal with monthly rents over �10,000.

5. Trust and Company Service Providers:

�         These include firms that create, manage, or advise on trusts, foundations, or companies. They must be registered with a supervisory body and adhere to AML laws to ensure they are not used for money laundering purposes.

6. High-Value Dealers:

�         Businesses that manage cash payments of €10,000 or more (or equivalent in any currency) must register as high-value dealers. This can include businesses dealing in luxury goods, such as:

                o    Precious metals or stones

                o    Art and antiques

                o    Cars and other high-value items

7. Gambling Businesses:

�         Casinos (both online and physical) are required to comply with AML regulations, given the risk of large sums of money being laundered through gambling. Other gambling businesses such as betting shops are subject to oversight, depending on their activities.

8. Cryptoasset Businesses:

�         From 2020, businesses involved in crypto assets, such as cryptocurrency exchanges and wallet providers, must register with the Financial Conduct Authority (FCA) and comply with AML regulations, including customer due diligence and transaction monitoring.

9. Money Service Businesses (MSBs):

�         These include currency exchange services, money remittance businesses, and cheque cashing businesses. They are regulated by HM Revenue & Customs (HMRC) and must register and comply with AML laws.

10. Insurance Intermediaries:

�         Those involved in life insurance and other investment-related insurance products must comply with AML rules, ensuring they do not facilitate money laundering.

In the UK, these sectors must register with their appropriate supervisory authority, such as the FCA, HMRC, or a relevant professional body. They are required to implement measures such as customer due diligence (CDD), enhanced due diligence (EDD) for high-risk customers, transaction monitoring, and suspicious activity reporting to prevent money laundering. Non-compliance can lead to significant penalties, including fines and potential criminal charges.

The primary supervisory bodies include:

�         Financial Conduct Authority (FCA): Supervises financial institutions and cryptoasset businesses.

�         HM Revenue & Customs (HMRC): Supervises money service businesses, high-value dealers, estate agents, and certain other sectors.

�         Legal and Accountancy Professional Bodies: Various bodies like the Law Society and Institute of Chartered Accountants in England and Wales (ICAEW) oversee legal and accounting professionals.

Penalties

 There are substantial penalties if organisations that should be registered do not register, or that observe the regulations and reporting requirements in a half-hearted manner.

In the UK, business owners are grappling with inflation, labour shortages, access to finance, and supply chain disruptions, all of which are affecting business operations, particularly for small and medium-sized enterprises (SMEs).

Inflation: Rising Costs

Costs of raw materials, energy, and labour have increased, squeezing margins for businesses, especially in manufacturing, hospitality, and retail. Energy costs, fuelled by the war in Ukraine, have soared, disproportionately affecting energy-intensive sectors like manufacturing and food production.

This inflation has also reduced consumer purchasing power, lowering demand in sectors like retail and services. Businesses face the dual challenge of rising operational costs and price-sensitive customers, putting pressure on profit margins.

Access to Finance: Increased Borrowing Costs

Higher interest rates have significantly raised borrowing costs, forcing a number of businesses to delay investments. SMEs are particularly affected, as many have reduced loan applications due to concerns about affording repayments.

This has hit small businesses hardest, especially those relying on short-term financing or overdrafts for cash flow management. The collapse of regional lenders has further restricted credit access. Without affordable loans, SMEs struggle to invest in growth or even maintain daily operations, causing further anxiety about future business prospects.

Labour Shortages: Post-Brexit Strains

Labour shortages remain a significant issue, particularly in hospitality, construction, and healthcare. Brexit has limited the flow of EU workers, exacerbating recruitment challenges. According to the Confederation of British Industry (CBI), around 75% of UK businesses are struggling to fill vacancies. This shortage has forced wages up, adding another layer of cost for businesses already dealing with inflationary pressures.

SMEs, with smaller margins than larger firms, are struggling to balance rising wage demands and the need to attract talent. For industries like construction, labour shortages are causing delays, increasing project costs and affecting service levels.

Supply Chain Disruptions: Lingering Challenges

Supply chain issues persist for UK businesses, despite easing since the pandemic. Ongoing geopolitical tensions, such as the war in Ukraine and strained relations with China, continue to impact the availability and cost of materials. Brexit has added further complications, with new customs checks and increased paperwork causing delays for businesses relying on EU imports.

Manufacturers have been particularly affected by these disruptions, with delays in receiving materials leading to production slowdowns, missed deadlines, and cash flow issues. Businesses are still waiting for orders placed months ago, making it harder to manage inventory and customer expectations.

Economic Uncertainty: Cautious Optimism

Despite these challenges, UK business owners remain cautiously optimistic. Many are delaying major investments, focusing on short-term strategies to navigate economic uncertainty. Concerns about a potential recession, slow growth, and persistent inflation continue to weigh on business decisions.

Government schemes, such as energy relief and apprenticeship programmes, have provided some support, but many SMEs feel that more targeted assistance is necessary. Business leaders are urging the government to reconsider post-Brexit immigration policies to ease labour shortages and invest in upskilling the domestic workforce to meet long-term demands.

Conclusion

UK businesses are navigating a tough environment shaped by inflation, labour shortages, access to finance, and supply chain disruptions. SMEs are vulnerable to these economic pressures. While optimism remains, the overall outlook is cautious, and businesses are calling for more government support to help mitigate the impact of these challenges and foster a stable environment for future growth.

In the UK, bank deposit protections are provided through the Financial Services Compensation Scheme (FSCS). The FSCS offers a safety net for consumers in the event that a bank or financial institution fails. Key points about deposit protection in the UK include:

1.    Protection Limit:

The FSCS protects up to �85,000 per person, per financial institution. For joint accounts, the protection is doubled to �170,000.This protection covers deposits with UK-regulated banks, building societies, and credit unions.

2.    Temporary High Balances:

 For certain life events, such as selling a house or receiving a large inheritance or insurance payout, the FSCS provides protection for temporary high balances of up to �1 million for up to six months. This gives additional protection for larger sums that may be temporarily held in accounts.

3.    Coverage:

The FSCS covers various types of accounts, including savings, current accounts, ISAs, and other deposit-based accounts.FSCS protection is only available for institutions authorised by the UK’s Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and PRA.

4.    What’s Covered:

The scheme covers cash deposits if a bank or building society fails, meaning customers are reimbursed their protected amounts without needing to take legal action.

5.    Exclusions:

 Not all financial products are covered by FSCS. Investments, insurance, and certain complex financial products may not fall under the same guarantees.

This scheme provides significant protection and is designed to maintain confidence in the UK’s financial system.

Parliament has agreed that the Winter Fuel Allowance payable 2024 will be limited to pensioners in receipt of Pensions Credits and certain other means-tested benefits.

Pensioners who are eligible to claim Pensions Credits and have not done so need to be entitled to Pension Credits for at least one day in the week September 16th to 22nd.

Pensioners are being urged to apply for Pension Credits, a benefit that could be worth on average �3,900 per year as well as providing access to the Winter Fuel payments.

Applications for Pension Credit can be made:  

On the How to Claim page  Over the phone by calling 0800 99 1234 (Monday to Friday 8am to 6pm)  By printing out and filling in a paper application form  For more information visit the Pension Credit GOV.UK page. 

Recent estimates confirm that 880,000 pensioners who are eligible to make a claim have not yet done so.

The simplest way to apply is to call the claims line 0800 99 1234.

Families, friends and neighbours are being encouraged to reach out to retired family members to encourage them to check their eligibility and apply. 21 December is the last possible date to make a successful backdated claim in order to receive the Winter Fuel Payment.

Eligibility

You can get a Winter Fuel Payment for Winter 2024-25 if you were born before 23 September 1958.

You must also live in England or Wales and get one of the following:

Pension CreditUniversal Creditincome-related Employment and Support Allowance (ESA)income-based Jobseeker’s Allowance (JSA)Income SupportChild Tax CreditWorking Tax Credit

In some circumstances, you might be eligible if you live abroad.

You will not be eligible if you

live in Scotland;have been in hospital getting free treatment for more than a year;were in prison for the whole of the week of 16 to 22 September 2024; orwere living in a care home for the whole time from 24 June to 22 September 2024.

As the October 2024 Budget approaches, several key tax measures are anticipated based on Labour’s manifesto and previous policy announcements. Here’s what we might expect:

Capital Gains Tax (CGT): It is likely that the CGT rates may be increased, potentially aligning with income tax rates, which could push them up to 45% for property and other assets like shares. This would significantly impact investors including owners of let property and second homes.Inheritance Tax (IHT): Changes to IHT could include reducing exemptions for agricultural and business property, and there is speculation about the introduction of a “double death tax” where both IHT and CGT might be applied to inherited assets.Private School VAT: As announced, from January 2025, Labour is to impose VAT on private school fees, which will increase private education costs by 20%. Additionally, charitable business rates relief for private schools is expected to be removed starting in April 2025. Non-Domiciled Status: The non-domicile tax regime will be abolished by April 2025, affecting those who previously used this status to reduce their tax liabilities. A new residence-based regime will replace it. State Pension and Triple Lock: Labour has committed to maintaining the triple lock, ensuring pensions rise with inflation, earnings, or 2.5%, whichever is higher. However, there is concern that frozen tax bands could mean more pensioners paying income tax as their state pensions increase. Energy Profits Levy: The Energy Profits Levy on oil and gas companies is set to increase from 35% to 38%, continuing efforts to generate revenue from high-profit sectors.

In the October 2024 Budget, public expenditure cuts are expected alongside tax increases, as the government seeks to manage the fiscal deficit. Here are some anticipated areas for public spending reductions:

 Welfare and Social Benefits: While the state pension triple lock is set to remain, other welfare spending could face reductions. Means-tested benefits, such as Universal Credit and support for lower-income households, might experience tighter eligibility requirements or reductions in spending. And the Chancellor has announced that the Winter Fuel Allowances will be restricted to pensioners who receive pension credits. Local Government Funding: Local authorities might see reduced funding, potentially leading to cuts in public services such as libraries, waste management, and social care programs. These cuts could prompt councils to raise local taxes or fees to make up for the shortfall.Education: Although Labour is focusing on improving state education by introducing VAT on private school fees, broader cuts to education funding could still be possible. Non-essential programs and administrative overheads may be targeted to reduce costs.Health and Social Care: While the NHS is a political priority, there could be attempts to make the healthcare system more efficient by reducing administrative costs. However, direct cuts to healthcare services are unlikely given the political sensitivity surrounding the NHS.Defence and Policing: Defence spending may be constrained or redirected to focus on specific areas, such as cybersecurity, while traditional sectors like infrastructure investment could face reductions. Similarly, police forces may experience budget cuts, impacting non-frontline services.

At present, the Labour Party’s fixation with plugging the apparent �22bn ‘black hole’ in government finances will likely preclude any uplifting announcements in the coming budget.

To comply with the new digital platform regulations effective from 1 January 2024, platform operators must register with HMRC. Here are the key details regarding registration and reporting:

Who Needs to Register: Any platform operator facilitating the sale of goods, services, accommodation, or transportation within the scope of the new regulations must register with HMRC if they are subject to UK laws. This includes platforms that are UK tax residents, incorporated in the UK, or have their place of management in the UK .
Registration Process:

Platform operators must notify HMRC that they are subject to the reporting obligations by 31 January 2025 for the 2024 calendar year.
HMRC will provide an online reporting service, and platform operators must register to use this service before submitting reports. This registration will enable them to upload seller information in a digital format (usually XML files).

Due Diligence and Data Collection: After registration, operators are responsible for collecting and verifying information about sellers (such as name, address, and tax identification number) and transaction data for reporting. Sellers must also receive a copy of the data submitted to HMRC .
Penalties for Non-Registration: Failure to register or comply with these obligations may result in penalties. Initial fines can reach £5,000 and continuing daily fines of up to £600 may apply if operators do not fulfil their reporting duties .

Platform operators should begin preparations to ensure timely registration with HMRC and compliance with the new data reporting requirements to avoid penalties.

1 September 2024 – Due date for corporation tax due for the year ended 30 November 2022.

19 September 2024 – PAYE and NIC deductions due for month ended 5 September 2024. (If you pay your tax electronically the due date is 22 September 2024)

19 September 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2024.

19 September 2024 – CIS tax deducted for the month ended 5 September 2024 is payable by today.

1 October 2024 – Due date for Corporation Tax due for the year ended 31 December 2023.

19 October 2024 – PAYE and NIC deductions due for month ended 5 October 2024. (If you pay your tax electronically the due date is 22 October 2024.)

19 October 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2024.

19 October 2024 – CIS tax deducted for the month ended 5 October 2024 is payable by today.

31 October 2024 – Latest date you can file a paper version of your 2023-24 self-assessment tax return.

Pension Credits can provide extra income to those over State Pension age and on a low income. The credits were first introduced back in 2003 to help keep retired people out of poverty.

The Department for Work and Pensions has launched a Pension Credit awareness drive, urging pensioners to check their eligibility for Pension Credit in order to secure this year’s Winter Fuel Payment. This follows the Chancellor’s recent announcement that the Winter Fuel Payment will be means tested in future.

Approximately 1.3 million households in England and Wales are expected to continue receiving Winter Fuel Payments. The government is eager to increase the uptake of Pension Credit to ensure that low-income pensioners who qualify for these payments continue to receive the Winter Fuel Payment. Pensioners must apply by 21 December 2024 in order to make a backdated claim for Pension Credit and be eligible for the Winter Fuel Payment.

Pensioners whose weekly income is below £218.15 for a single person or £332.95 for a couple should check to see if they are eligible. If your income is higher, you might still be eligible for Pension Credit if you have a disability, you care for someone, you have savings or you have housing costs. Not all benefits are counted as income.

Claimants entitled to the Pension Credit could be entitled to a support package worth an average of £3,900 per year. Details of how to make an application for Pension Credit can be found on GOV.UK at https://www.gov.uk/pension-credit/how-to-claim

The Chancellor of the Exchequer, Rachel Reeves commented that:

“The dire state of the public finances we inherited from the previous government means we’ve had to make some very difficult decisions.

Our commitment to supporting pensioners remains, which is why we are maintaining the triple lock.

We want pensioners to get the support they are entitled to. That’s why I urge all pensioners to check whether they are eligible for the Pension Credit.”

Employees who are working from home may be eligible to claim a tax deduction on certain work-related bills. If their employer does not cover these expenses or allowances, they can claim tax relief directly from HMRC.

You can claim tax relief if you are required to work from home, such as if your job requires you to live far from your office or if your employer does not have an office. However, tax relief is typically not available if you choose to work from home, even if your employment contract allows it or if your office is occasionally full.

Employees can claim tax relief of £6 per week (or £26 per month for those paid monthly) to cover additional costs of working from home without needing to keep specific records. The amount of tax relief you receive depends on your highest tax rate. For instance, if you pay the 20% basic rate of tax, you will receive £1.20 per week in tax relief (20% of £6). Alternatively, you can claim the exact amount of additional costs incurred, but you must provide evidence to HMRC. HMRC accepts backdated claims for up to four previous tax years.

You may also be eligible to claim tax relief for using your own vehicle, whether it’s a car, van, motorcycle, or bike. Generally, there is no tax relief for regular commuting to and from your usual workplace. However, the rules differ for temporary workplaces, where such expenses are typically allowable, or if you use your own vehicle for other business-related mileage. Additionally, you may be able to claim tax relief on equipment purchased for work, such as a laptop, chair, or mobile phone.

If you are an employee who is working from home, you may be able to claim tax relief for some of your bills that are related to your work. If your expenses or allowances are not paid by your employer, then you can claim tax relief directly from HMRC.

Changes to the High Income Child Benefit Charge (HICBC) came into effect on 6 April 2024. The income threshold at which HICBC starts to be charged increased to £60,000 (from £50,000).

The charge is calculated at 1% of the full Child Benefit award for every £200 (2023-24: £100) of income between £60,000 and £80,000. (2023-24: between £50,000 and £60,000). For taxpayers with income above £80,000 (2023-24: £60,000) the amount of the charge is the same as the amount of Child Benefit received. The HICBC therefore either reduces or removes the financial benefit of receiving Child Benefit.

For new Child Benefit claims made after 6 April 2024, any backdated payment will be treated for HICBC purposes as if the entitlement fell in the 2024-25 tax year if backdating would otherwise create a HICBC liability in the 2023-24 tax year.

Even if HICBC applies to you or your partner, it’s generally still beneficial to claim Child Benefit as doing so can safeguard certain benefits and ensure your child receives a National Insurance number. Claims can be made by using the HMRC app or online resources. New claims are automatically backdated for up to 3 months or to the child’s birth date if later.

Taxpayers can choose to continue receiving Child Benefit – and pay the tax charge – or opt to stop receiving benefits and avoid the charge.