March Newsletter

March Newsletter

National Minimum Wage and National Living Wage major boost

The National Minimum Wage and National Living Wage rates change on 1 April every year. The hourly rate depends on your age and whether you are an apprentice. National Living Wage applies to those aged 23 and over. National Minimum Wage applies to those who are of at least school leaving age.

The rate will of course depend on which age category you fall into but for anyone aged 23 and over, the 59p hourly boost will mean that full-time workers could get a pay rise of more than £1,000 a year. Critics have already begun questioning how much better off workers will realistically be, given the National Insurance hikes and soaring inflation rates. 

Current Rates:

23 and over

21 to 22

18 to 20

Under 18

Apprentice

April 2021 (current rate)

£8.91

£8.36

£6.56

£4.62

£4.30

April 2022

£9.50

£9.18

£6.83

£4.81

£4.81

 

VAT rates for hospitality sector due to increase from 1 April

Early in the pandemic, the Chancellor reduced the rates of VAT for the leisure and hospitality sector to just 5%. The reduced rate applied from 15 July 2020 until 30 September 2021. After this date, the VAT rate was increased to its current rate of 12.5%.

From 1 April 2022, the VAT rate is scheduled to revert back to the normal 20%.

The businesses affected by the temporary rate reduction are those:

  • supplying catering services including restaurants and takeaways
  • operating hotels and providing holiday accommodation and
  • operating leisure attractions such as zoos and theme parks

Businesses should listen to the Chancellor’s Spring Statement on 23 March in case he announces an extension of the 12.5% rate. If there is a change announced on 23 March, there will only be a limited amount of time to implement changes to prices and VAT accounting.

For any businesses using the VAT Flat Rate Scheme, the flat rate percentages will revert to the pre 15 July 2020 amounts - if the VAT rate reverts to 20% from 1 April 2022.

 

How to respond effectively to customer complaints

In today’s hyper-connected world, it has never been easier for customers to complain. No matter how good your business is, there will always be a small number of people who aren’t happy with what you do.

Good customer service is a key factor in the success of any business so it’s important to deal with customer complaints in an effective manner.

If a customer takes the time to complain, you should view it as an opportunity to take some feedback and learn how to improve certain aspects of your business.

As with anything in business, it is best to be proactive. Make it easy for your customers to find email addresses and phone numbers so that they can reach you if they have a complaint. You can also prompt your customers for feedback by sending them a post purchase feedback survey.

When responding to a customer complaint, you should try to respond quickly and efficiently. This sends the message that you care and are taking their complaint seriously.

Many customer complaints cannot be solved immediately, but they can be acknowledged. If you receive a complaint, try to respond on the same day confirming that you have received their complaint and that you are looking into the situation. This will help your customer feel that their voice is being heard.

Regardless of the nature of the complaint, focus on listening to the customer and try to understand the situation from their perspective. Then apologise. You may not be sorry that they didn’t like your product or service, but you can apologise that their expectations were not met or that they had a disappointing experience. The customer doesn’t always have to be right but they should always be heard. The simple act of listening and apologising can often be enough to resolve the situation.

You can then shift the conversation towards a solution. Avoid making any false promises but agree to take feedback from the customer and share it with others in the business so that you can consider how to improve elements of your product or service offering. This shows the customer that you value their feedback.

Customer complaints can be stressful and difficult to deal with. However, they are also a source of feedback and should be viewed as an opportunity to learn more about the customer experience and to find ways to improve.

 

Last chance for pre-April tax planning?

The new tax year starts 6 April 2022, so there is less than one month to consider your options, once we pass this date, the majority of the tax planning options for Income Tax and Capital Gains Tax purposes will cease, unless actioned before the 6 April.

There are different options you can take if you fall into any of the below categories:

  • You have or are thinking about a change in your personal status (single, married, separating, joining, or dissolving a civil partnership).
  • You claim Child Benefit and the income of either parent is likely to exceed £50,000 for the first time during tax year 2021-22.
  • Your annual income is approaching or above £100,000.
  • You have not yet topped up your pension contributions for tax year 2021-22.
  • You are self-employed with a 31 March 2022 year-end.
  • You are self-employed and are thinking about the purchase of equipment or vehicles; and
  • You are the director and/or shareholder of a limited company and have not yet considered voting final dividends or bonuses for 2021-22.

The above list is not comprehensive, but the deadline is fast approaching so if you can, do as much planning as possible before 6 April.

 

Advisory fuel rate for company cars

HMRC have updated the advisory fuel rates for employees reimbursing their employer for private mileage to eliminate a private fuel benefit. There appears not to have been a significant increase in petrol and diesel prices in the period under review and as such the reimbursement rates have remained the same. The only change is to one of the LPG rates. However, we expect a change when the 1 June 2022 rates are published.

Note that where employers do not pay for fuel for company cars these same rates can be claimed by employees in respect of business mileage.

These are the HMRC suggested reimbursement rates for employees' private mileage using their company car from 1 March 2022. Where there has been a change the previous rate is shown in brackets.

Engine Size

Petrol

Diesel

LPG

1400cc or less

13p

 

  8p (9p)

1600cc or less

 

11p

 

1401cc to 2000cc

15p

 

10p

1601 to 2000cc

 

13p

 

 

Over 2000cc

22p

16p

15p


 
Note that for hybrid cars you must use the petrol or diesel rate. You can continue to use the previous rates for up to 1 month from the date the new rates apply.

 

DIARY OF MAIN TAX EVENTS MARCH / APRIL 2022

Date

What’s Due

19/03

PAYE & NIC deductions, and CIS return and tax, for month to 5/03/22 (due 22/03 if you pay electronically)

01/04

Corporation tax payment for year to 30/6/22 (unless quarterly instalments apply)

05/04

End of 2021/22 and start of the 2022/23 tax year.

19/04

PAYE & NIC deductions, and CIS return and tax, for month to 5/04/22 (due 22/04 if you pay electronically)