New rules mean late VAT filings and payments now trigger points, fines and interest charges.

The VAT late filing penalties regime changed for accounting periods beginning on or after 1 January 2023. Under the new system, there are now distinct and separate penalties for late filing of VAT returns and for the late payment of VAT liabilities.

The revised system operates on a points-based approach. A taxpayer receives one penalty point for each VAT return that is submitted late. Once a specific threshold of points is reached, a financial penalty of £200 is charged and the taxpayer is notified.

The penalty thresholds based on VAT return frequency are as follows:

• For monthly VAT returns, the threshold is five penalty points.
• For quarterly VAT returns, the threshold is four penalty points.
• For annual VAT returns, the threshold is two penalty points.

For example, a business that files VAT returns on a quarterly basis will receive a £200 penalty once it accumulates four late submission points. To remove the penalty points and return to a clean compliance record, the taxpayer must submit all VAT returns on time for a continuous period of twelve months. There are also statutory time limits after which a penalty point cannot be issued for a particular late return.

Late payment penalties are applied separately. If VAT remains unpaid between 16 and 30 days after the due date, a first penalty of 2% of the outstanding tax is charged. If the VAT is still unpaid 31 days or more after the due date, a second penalty of 4% of the outstanding amount applies.

In addition, late payment interest is charged from the day payment becomes overdue until it is paid in full.

An extended civil restraint order (ECRO) was issued against a prolific Employment Tribunal (ET) litigant for presenting repeated and baseless claims.

A Mr. Khan has been described as a prolific litigant, having issued no fewer than 42 largely unsuccessful tribunal claims since 2017. These various failed claims have typically involved allegations of disability discrimination and a failure to make reasonable adjustments in recruitment processes. Many claims were struck out for having no reasonable prospect of success or simply as an abuse of process. Only two claims, levelled against solicitors' firms, were settled for "nuisance value payments" of £700 and £1,000. Mr. Khan has also made many unsuccessful applications to adjourn hearings, often on medical grounds, alongside numerous failed attempts to challenge ET decisions.

The High Court granted the claimants’ application for an ECRO, restraining the defendant from issuing or presenting claims or appeals related to job applications in the tribunal system without prior court permission for a period of three years. 

This decision strengthens the mechanisms available to safeguard judicial processes from abuse. It reaffirms that higher courts can step in to protect tribunals from those individuals who repeatedly file baseless claims or appeals without legal merit. This is crucial for preventing the system from being overwhelmed by vexatious litigation, ensuring that resources are available for legitimate disputes.

For individuals who represent themselves in court, while the judiciary strives to ensure fairness and assist unrepresented parties, the case firmly reiterates that procedural rules and the fundamental principles of legal merit still apply. It demonstrates that courts will not tolerate the deliberate misuse of legal processes. Thus, employers and their legal counsel should be wary of disgruntled employees with histories of spurious claims and seek to have baseless claims struck out on such grounds.  

Running a small business often feels like walking a financial tightrope. Cash can be flowing in nicely one month, only to dry up the next. With interest rates higher than they were for years and lenders tightening their checks, access to money has become a bigger challenge. That is why focusing on cash flow resilience is so important right now.

Cash flow is not just about survival; it is about giving your business room to grow. If you are waiting too long for customers to pay, your money is tied up when you need it most. A simple review of credit terms, clearer payment reminders, or offering small discounts for early settlement can make a real difference. On the other side, talking to suppliers about extending your payment period may also ease the pressure.

When it comes to funding, traditional bank loans are no longer the only option. Small firms are making use of alternative routes such as peer-to-peer lending, invoice financing, and short-term credit lines. These options can be quicker to arrange, but you need to check the costs carefully so that repayments do not become a burden.

One tip is to keep your financial information in good order. Banks and alternative lenders want to see clear, accurate figures before approving funds. Regular management accounts, cash flow forecasts, and evidence of good record keeping all build confidence. In practice, a well-presented finance pack can be the difference between a “yes” and a “no.”

The message is clear: do not wait until cash is tight to act. Regularly review your inflows and outflows and know what funding options are open to you. A resilient approach to cash flow can protect your business in tough times and put you in a strong position to seize opportunities when they come along.

For many small business owners, finding and keeping good staff is one of the biggest headaches. Recruitment is costly, time-consuming and uncertain. That is why focusing on staff retention is one of the smartest moves you can make.

People stay where they feel valued. Pay matters, of course, but many small businesses cannot simply compete with bigger firms on salary. The good news is that today’s workforce values other things just as highly, such as flexibility, wellbeing and opportunities to grow.

Flexible working is top of the list. Offering staff the chance to adjust hours, work some days from home or fit work around family life can make your business stand out as an attractive employer. It costs very little to implement but makes a huge difference to loyalty and morale.

Wellbeing is another area where small firms can excel. Simple steps such as promoting regular breaks, encouraging a healthy work-life balance or creating a supportive team culture go a long way. Staff who feel cared for are more likely to give their best and stay longer.

Training is also key. Investing in low-cost learning opportunities, whether through online courses, mentoring, or in-house skill sharing, shows employees that you are committed to their development. People who see a future in your business are less likely to look elsewhere.

Remember, retaining staff is not just about avoiding the cost of hiring replacements, it is about protecting relationships with customers and maintaining business know-how. Every time you lose a team member, you also lose some of the experience and trust they have built.

At a time when skilled workers are in short supply, small businesses that look after their people will gain a real competitive edge. A little flexibility, support and encouragement can turn staff into long-term partners in your success.

Employers must report pay and deductions correctly to HMRC, but errors can usually be fixed in your next FPS.

Employers need to use payroll software or other payroll services to record employees pay, deductions and national insurance contributions on or before each payday. They also need to consider other deductions such as pension contributions and student loan payments.

These payments are reported to HMRC in real time using a Full Payment Submission (FPS). This submission contains all relevant information for each employee.

If you have made a mistake with an employee’s pay or deductions this can usually be corrected by updating the year-to-date figures in your next regular FPS.

HMRC’s guidance also states that you can correct mistakes by submitting an additional FPS before your next regular FPS is due. You would need to:

• update the ‘this pay period’ figures with the difference between what you originally reported and the correct figures
• correct the year-to-date figures
• put the same payment date as the original FPS
• put the same pay frequency as the original FPS
• put ‘H – Correction to earlier submission’ in the ‘Late reporting reason’ field

If you need to correct an employee’s National Insurance deductions, the action required will depend on whether the mistake occurred in this tax year or earlier tax years. There are also different actions that may be required to fix a mistake with an employee’s student loan repayments, again depending what tax year the mistake relates to.