Following the Bank of England’s decision to reduce the base rate from 5% to 4.75%, HM Revenue and Customs (HMRC) have announced a reduction in their late payment interest rates. HMRC interest rates track the base rate. Late payment interest (payable if you pay tax late) is set at base rate plus 2.5%. Repayment interest (which HMRC pay you on refunds or overpayments) is set at base rate minus 1%, with a minimum rate of 0.5%.

The government published the Employment Rights Bill in October, which is intended to help deliver economic security and growth to businesses, workers and communities across the UK. The bill will bring forward 28 individual employment reforms, from ending exploitative zero hours contracts and fire and rehire practices to establishing day one rights for paternity, parental and bereavement leave for millions of workers.

As of 1st October, the Employment (Allocation of Tips) Act came into force that ensures workers keep 100% of the tips, gratuities, and service charges they earn. While many employers already pass on tips to staff, this new legislation will close loopholes so that all tips go directly to workers.

As part of a series of announcements made in recent weeks by the Chancellor, the government is making a push for greater use of electronic invoicing (e-invoicing). HM Revenue and Customs (HMRC) will soon launch a consultation on encouraging the wider use of e-invoicing, with the goal of simplifying business transactions and reducing administrative burdens but perhaps especially, reducing errors in tax returns so that HMRC can ‘close the tax gap’.

As had been widely expected, the Bank of England reduced the interest base rate to 4.75% last week. This was due to inflationary pressures easing in recent weeks. The Bank expects inflation to increase slightly again over the next year to around 2.75% and then fall back to the 2% target after that. In their quarterly report, the Bank outlined that they will be taking a cautious approach and so will not be cutting rates too quickly or too much. It seems unlikely there will be a further cut when the Bank next meet on December 19th.

HM Revenue and Customs (HMRC) have begun reminding taxpayers that time is ticking for getting self-assessment tax returns filed in time for the 31 January 2025 deadline. More than 3.5 million tax returns have already been submitted, however HMRC are anticipating more than 12 million in total needing to be filed by the end of January. So, HMRC are encouraging people to submit their return as early as possible.

Marking the second event of its kind, the UK-Caribbean Trade and Investment Summit was held in London last week. Organised by UK Export Finance (UKEF), the UK’s export credit agency, the summit brought together UK and Caribbean government officials, as well as senior investors, to discuss business partnerships and financing for projects across the Caribbean.

Immediately following the US election results and Donald Trump’s win, the dollar made gains against other currencies. The FTSE 100 index also went up on Wednesday afternoon by 1%. The positive moves appear to be based on Trump’s plan to cut taxes and raise tariffs, as these will cause inflation to increase and reduce the speed at which interest rates are cut. US interest rates staying higher for longer will mean that investors get a better rate of return on savings and investments they hold in dollars.