March Tax & Accountancy Newsletter

In our latest newsletter, we look at a government consultation on mandatory electronic invoicing for businesses. There is also news on HMRC’s late and repayment interest rates and the business response to the jump in the rate of inflation

We also look at warnings from businesses over the impact of April’s employers’ National Insurance contributions (NICs) increase. There is also news on HMRC’s tax guidance for employers and the latest advisory fuel rates to update you on.

Here is a summary of the key points covered this month!?

GOVERNMENT CONSULTS ON MANDATORY E-INVOICING

• The UK government has launched a 12-week consultation on making e-invoicing mandatory for businesses, aiming to reduce errors, improve VAT returns, and save time and money.
• E-invoicing can lead to faster payments, better cash flow, and reduced paperwork, helping businesses grow and improve productivity.

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HMRC CUTS LATE AND REPAYMENT INTEREST RATES

• HMRC will reduce late payment interest to 7.0% and repayment interest to 3.5% from 25 February, following a 0.25% cut in the Bank of England’s base rate to 4.5%.
• Corporation tax self-assessment interest rates on underpaid quarterly instalments dropped to 5.5% from 5.75% on 17 February, ahead of the main rate change.

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HIGHER THAN EXPECTED INFLATION UNDERLINES BUSINESS CHALLENGES

• Inflation in the UK rose to 3% in January, higher than the expected 2.8%, driven by increased prices in air fares, food, drinks, and private school fees, highlighting the challenges businesses face.
• The British Chambers of Commerce (BCC) warns that rising costs, along with upcoming hikes in national insurance and minimum wage, create significant pressures on businesses, hindering investment and economic growth.

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ADVISORY FUEL RATES FOR COMPANY CARS

• New company car advisory fuel rates took effect on 1 March 2025, applying to employees using a company car for business travel or reimbursed fuel costs.
• The new rates can be used for up to one month from the date they apply and only for business travel reimbursement or private fuel repayment, not for other purposes.

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BUSINESSES WARN OF NATIONAL INSURANCE ‘POWDER KEG’

• 82% of businesses say the rise in employers' NICs will force them to rethink their plans, with 58% citing impacts on recruitment and 54% on pricing. Over a third also expect impacts on investment and operations.
• The British Chambers of Commerce urges the government to publish a broader tax roadmap for businesses, highlighting the need for business rate reform and planning and skills reforms to support growth.

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LATEST GUIDANCE FOR EMPLOYERS

HMRC has published the latest issue of the Employer Bulletin. The February issue has information on various topics.

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