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Hundreds of thousands of young adults have an average of £2,000 sitting unclaimed in Child Trust Funds.

The long-term, tax-free savings accounts were set up for every child born between September 2002 and January 2011, with the Government contributing an initial deposit of at least £250.

Funds can be withdrawn once the account matures when the child turns 18; however, almost 430,000 young people aged 18 to 21 are yet to claim their cash.

Online tool to track down cash

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said: “Many 18 to 21-year-olds are starting out in first jobs or apprenticeships, starting university or moving into their first home and their Child Trust Fund is a pot of money with their name on.

“I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they’re aware of their Child Trust Fund. It could make a real difference to their future plans.”

There are currently 5.3 million open Child Trust Fund accounts. Families can continue to pay up to £9,000 a year tax-free into a Child Trust Fund until the account matures.

The money stays in the account until the child withdraws or reinvests it into another account once they turn 18.

‘Disproportionate’ amount of funds goes unclaimed by disadvantaged

A UCAS survey revealed that 74 per cent of respondents were aware of Child Trust Funds. Of the people who had not yet claimed their Child Trust Fund, 76 per cent were likely to take steps to learn more about the withdrawal process.

Sharon Davies, CEO of Young Enterprise, said: “We would encourage all young people to investigate if they have money which is unclaimed in a Child Trust Fund and to use it wisely.

“A disproportionate amount of the money is unclaimed by young people from disadvantaged backgrounds who are the very people who would benefit most from these funds. The investment could be placed into an adult ISA or put towards driving lessons, education or starting a business.

“The money in a Child Trust Fund has the potential to be life changing and the lack of knowledge about them shows the importance of financial education and financial planning from a young age.”

Visit www.gov.uk/child-trust-funds/find-a-child-trust-fund to learn more.

A raft of money changes comes into play this month which could affect your finances, and as we are approaching the winter season – dark nights and lower temperatures – these support payments to help with energy costs will be gratefully received.

These include adjustments to the Ofgem energy price caps, while the latest Cost of Living payment will land for those claiming certain DWP benefits.

On the subject of benefits, the Office for National Statistics will release the inflation rate for the 12 months to September, on October 18. This inflation rate usually dictates how much benefits will rise in April.

Winter Fuel Payments

Depending on living arrangements and circumstances, this payment can be worth up to £600. It includes a top-up pensioner Cost of Living payment from the Government.

Most people on state pension will automatically receive the payment; however, some will need to physically apply. From October 4, claims can be made over the phone.

£300 Cost of Living payment

The next Cost of Living payment – worth £300 – lands between October 31 and November 19 for those claiming certain benefits in the qualifying period.

HMRC Tax Credit claimants will be paid between November 10 and November 19.

Warm Home Discount scheme

The £150 discount scheme is due to reopen on October 16. It is a one-off discount on an electricity bill, although some may be able to claim the discount on their gas bill if the supplier provides both gas and electricity. You can check the gov.uk website to see if you are eligible.

The Chancellor, Jeremy Hunt, has announced that he will deliver his Autumn Statement to the House of Commons on Wednesday, 22 November 2023. This move would imply that the annual Budget will not take place until the spring of 2024.

The Autumn Statement is used to give an update on the state of the economy and will respond to the economic and fiscal forecast published by the independent Office for Budget Responsibility (OBR). The Autumn Statement also presents an opportunity for the government to publish consultations, including initiating early-stage calls for evidence and consultations on long-term tax policy issues.

The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.

The Chancellor has made it clear that the main focus of the Autumn Statement will be to continue with measures to bring down inflation. We are therefore unlikely to see any major tax cuts that could further fuel inflation.

There is a benefit-in-kind (BiK) trivial exemption that applies to small non-cash benefits like a bottle of wine, or a bouquet of flowers given occasionally to employees, or any other BiK classed as 'trivial' that falls within the exemption. By taking advantage of the exemption employers can simplify the treatment of BiKs whilst at the same time offering a tax efficient way to give small gifts to employees.

The trivial benefit rules provide a great opportunity to provide small rewards as an incentive to employees. The main caveat being that the gifts are not provided as a reward for services performed or as part of the employees’ duties. However, gifts to employees on milestone events such as the birth of a child or a marriage or other gestures of goodwill would usually qualify.

The employer also benefits as the trivial benefits do not have to be included on PAYE settlement agreements or disclosed on P11D forms. There is also a matching exemption from Class 1A National Insurance contributions.

The tax exemption applies to trivial BiKs where the BiK:

• is not cash or a cash-voucher; and
• costs £50 or less; and
• is not provided as part of a salary sacrifice or other contractual arrangement; and
• is not provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.

The rules also allow directors or other office-holders of close companies and their families to benefit from this relief but with an annual cap of £300. The £50 limit remains for each gift but could allow for up to £300 of non-cash benefits to be withdrawn per person per year. The £300 cap does not apply to employees. If the £50 limit is exceeded for any gift, the value of the benefit will be taxable.

HMRC offers an online service to check your National Insurance Contributions (NIC) record online. In order to use the service, you will need to have a Government Gateway account. If you don't have an account, you can apply to set one up online.

By signing in to the 'Check your National Insurance record' service you will also activate your personal tax account if you have not previously done so. HMRC’s personal tax account can be used to complete a variety of tasks in real time, such as claiming a tax refund, updating your address and completing your Self-Assessment return.

Your National Insurance record online will let you see:

• What you have paid, up to the start of the current tax year (6 April 2023).
• Any National Insurance credits you’ve received.
• If gaps in contributions or credits mean some years don’t count towards your State Pension (they aren't 'qualifying years').
• If you can pay voluntary contributions to fill any gaps and how much this will cost.

In some circumstances it may be beneficial, after reviewing your records, to make voluntary NIC contributions to fill gaps in your contributions record to increase your entitlement to benefits, including the State or New State Pension.

The Economic Crime and Corporate Transparency Bill has completed its initial journey through the House of Commons and the House of Lords and is now at the stage known as, consideration of amendments. This is where the second House’s amendments are considered, and the Bill may go back and forth until both Houses agree on the Bill. The Bill is expected to receive full Royal Assent over the coming months. The new Act will be aimed at reducing the abuse of corporate structures and at the same time tackling economic crime.

As part of the measures that will be introduced, Companies House will be streamlining the accounts filing options available to small and micro companies. At present, small businesses are able to file what are known as filleted accounts with Companies House. This means that these small or micro companies can choose not to submit a profit & loss account and/or director’s report to Companies House. In this way, this information will not be made public. Filleted accounts can be submitted whether or not a company has prepared full or abridged accounts.

Companies House has now acted on various concerns that this minimal level of disclosure has the potential to appeal to fraudsters wishing to present a false image of the company.

Companies House will therefore introduce a new framework under which all small companies, including micro-entities, will be required to file their profit and loss accounts. The option for abridged accounts will also be removed.

A small company is defined as a business with two of the following:

• a turnover of £10.2 million or less
• £5.1 million or less on its balance sheet
• 50 employees or less

A micro-entity is defined as a business with two of the following:

• a turnover under £632,000
• £316,000 or less on its balance sheet
• 10 employees or fewer.

No date has yet been announced for the implementation of these changes. However, it is important that those who currently submit filleted or abridged accounts familiarise themselves with the upcoming changes and how best to prepare for them. This represents a significant change for these businesses.

1 October 2023 – Due date for Corporation Tax due for the year ended 31 December 2022.

19 October 2023 – PAYE and NIC deductions due for month ended 5 October 2023. (If you pay your tax electronically the due date is 22 October 2023.)

19 October 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2023.

19 October 2023 – CIS tax deducted for the month ended 5 October 2023 is payable by today.

31 October 2023 – Latest date you can file a paper version of your 2022-23 self-assessment tax return.

1 November 2023 – Due date for Corporation Tax due for the year ended 31 January 2023.

19 November 2023 – PAYE and NIC deductions due for month ended 5 November 2023. (If you pay your tax electronically the due date is 22 November 2023.)

19 November 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2023.

19 November 2023 – CIS tax deducted for the month ended 5 November 2023 is payable by today.

The UK paid a whopping £788.8 billion in taxes in 2022 to 2023, an increase of 10.2 per cent from the year before.

As well as income tax, that figure also includes inheritance tax, dividend tax and capital gains tax.

No-one wants to pay more tax than necessary. But with busy lives and hectic schedules, there are rarely enough hours in the day to navigate the complexities of the UK tax system.

Ensuring assets are structured in a tax-efficient manner is the best way to avoid paying more than the fair share of tax.

Some potential moves to consider include:

ISA allowances

There’s no UK income tax or capital gains tax on investments inside an ISA so they’re one of the most tax-efficient ways to save. Options include Cash ISA, Stocks and Shares ISA and Innovative Finance ISA.

Adults living in the UK can invest up to £20,000 in ISAs in the 2023/24 tax year. Those with children can invest up to £9,000 on their behalf in a Junior ISA (JISA) which has the same tax benefits as an adult ISA.

Consider putting more into a pension

Adding money to a pension is one of the most tax-efficient ways to bolster long-term financial security and can also reduce the amount of income tax paid.

This is because personal pension contributions lower ‘adjusted net income’ which HMRC uses to work out tax bills.

Don’t forget, that the money will be locked away in a pension until the age of 55, or 57 from April 2028.

Divide assets

A higher-rate taxpayer may be well-advised to transfer taxable savings and investments into their spouse’s name if they earn less.

Tax allowances effectively double for those who are married or in a civil partnership. If both open an ISA, that is a potential combined £40,000 protected from income tax and capital gains tax each year.

Speak to an expert

Remember that tax laws can change and what works best for each individual situation may vary.

Regularly reviewing your financial situation with a tax professional can ensure tax savings are tailored to specific circumstances.

Get in touch to find out how we can help.

Businesses need to be prepared for changes to the way Companies House operates when the Economic Crime and Corporate Transparency Bill comes into force.

As part of the package of reform, all small companies, including micro-entities, will be required to file their profit and loss accounts.

The Government expects the changes to “improve transparency” and help tackle economic crime by making more financial information available to the public and enforcement agencies.

‘Change not expected to be overly burdensome’

A Government spokesman said: “Having key information such as turnover and profit or loss available on the public register will help creditors and consumers make better-informed decisions.

“It will also improve the value of the information on the register for users.

“The lack of detail in small and micro-accounts has made it impossible to confirm eligibility to file under a specific regime and claim audit exemptions.

“It has also made it difficult for lenders and creditors to determine the creditworthiness of small businesses. This can deter them from offering finance which hinders small business growth.

“As small and micro-entity companies are already required to file a copy of their annual accounts to HMRC, we do not anticipate this change to be overly burdensome.”

Other accounts-related changes

Other changes to filing accounts will include the removal of a paper-filing option for most companies and the requirement for a company relying on an audit exemption to provide an additional statement by the directors on the balance sheet and limiting the number of times a company can shorten its annual reporting period.

The detail and format of the profit and loss account filings will be set out in secondary legislation. This is currently being developed in consultation with business and accountancy groups.

Companies House is expected to charge higher fees when it is granted new powers.

The Economic Crime and Corporate Transparency (ECCT) Bill is already making its way through Parliament.

This legislation will change the role and purpose of Companies House to make it a more active gatekeeper over company creation. This would include new powers to check, remove or decline information submitted to, or already on, the register.

Other measures include:

• Providing Companies House with more effective investigation and enforcement powers;
• Introducing better cross-checking of data with other public and private sector bodies; and
• Enhancing the protection of personal information provided to Companies House to protect individuals from fraud and other harms.

Companies House is “ready to take action”, the Government says, and is looking at different workstreams to make sure it is ready to implement many of the measures.

Fees currently ‘much lower than global average’

There’s a clear expectation that the fees will increase after the Bill achieves royal assent.

The Government statement said: “Companies House fees are much lower than the global average and have not changed since 2016. Many believe our fees are too low.

“Our new powers will help improve the reliability of the data on our registers and tackle economic crime, which will drive confidence in the UK economy and benefit companies and society as a whole.

“We’ll be operating in a completely different way in the future with major changes needed for our systems, processes and the skillsets of our people.

“Increasing our fees will enable us to operate effectively within our new powers and deliver outcomes, making sure we continue to recover the costs of the services we deliver.”

What this means for companies

Nothing will change until the ECCT Bill receives royal assent.

Changes to fee values need to go through a robust process, including final sign-off from HM Treasury and ministers.