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News

HMRC agree delay in tax return deadline

13/01/2022

HMRC has announced that late filing penalties will be waived for taxpayers that file their 2020-21 Self-Assessment returns by 28 February 2022. The due date of 31 January 2022 remains and HMRC is still encouraging taxpayers to try and meet this deadline. Taxpayers should try and pay their tax bill by 31 January 2022 as interest will

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Delay in implementing late payment penalties

13/01/2022

In tandem with the announcement that no late filing penalties will be issued for 2020-21 Self-Assessment returns submitted by 28 February 2022, HMRC has also confirmed a delay in implementing late payment penalties. This means that taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by

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Are you registered for Making Tax Digital for VAT?

13/01/2022

Making Tax Digital (MTD) for VAT is to be extended to cover businesses with a turnover below the VAT threshold from April 2022. The MTD for VAT regime started in April 2019 when businesses with a turnover above the VAT threshold of £85,000 became mandated to keep their records digitally and provide their VAT return information to HMRC

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HMRC fraud squad net £1bn from criminals

13/01/2022

HMRC’s Fraud Investigation Service (FIS) was launched in April 2016. The FIS is responsible for HMRC’s civil and criminal investigations into the most serious fraud and wrongdoing. It has been estimated that tax evasion and fraud cost the exchequer up to £10bn per annum. The formation of the FIS brought together HMRC’s criminal and civil

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Omicron funding delivered to local authorities

13/01/2022

Just before the Christmas break, the Chancellor announced a new support package for some businesses most affected by the Omicron variant. The biggest single measure was the re-introduction of one-off grants of up to £6,000 for businesses in the hospitality and leisure sectors many of whom have seen their seasonal trade hugely impacted by

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Customs controls from 1 January 2022

13/01/2022

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all other international destinations. A number of easements to help ensure a smooth transition for goods coming from the EU

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Beware online sales scams

06/01/2022

A new government press release has been issued reminding the public that online sales scams continue to be a major issue. In fact, 2021 saw a record number of cyber-attacks and online scams. Action Fraud, the national reporting centre for fraud and cyber-crime, has revealed that almost 100,000 people in the UK have fallen victim to

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Self-certified sick notes

06/01/2022

The statutory sick pay rules were temporarily amended on 17 December 2021. The amendment allows employees to self-certify for a period of 28 days, in place of the normal 7 days. This measure has been put in place to help free up capacity in the NHS and allow GPs to spend more time focusing on the coronavirus booster rollout as well as

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Will you need to pay-back Child Benefits?

06/01/2022

The High Income Child Benefit charge applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of child benefit. The charge claws back the financial benefit of receiving child benefit either by reducing or removing the benefit entirely. If you or your partner have exceeded the £50,000 threshold for the first

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New powers for Insolvency Service

06/01/2022

The Insolvency Service is a government agency that provides services to those affected by financial distress or failure. The Insolvency Service operates as an executive agency of the Department of Business, Energy and Industrial Strategy (BEIS). The Insolvency Service has been granted new powers to investigate and disqualify company

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Points to consider when valuing goodwill

06/01/2022

Valuing goodwill is a complex process and there are many different methods which can be used and that vary from industry to industry. Goodwill is a way of placing a monetary value on the business's reputation and customer relationships. Or as HMRC say in their guidance, in accounting terms, purchased goodwill is the balancing figure

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Reminder of Statutory Sick Pay pay-back scheme

06/01/2022

The Coronavirus Statutory Sick Pay Rebate Scheme for small and medium-sized businesses and employers, enables them to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The online service closed for new claims after 30 September 2021. However, following the new Omicron wave, the online claims service is to be

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Plug-in grants for electric vehicles

23/12/2021

The government has announced significant changes to the low-emission vehicles plug-in grant scheme. The changes became effective on 15 December 2021. The changes have been introduced in response to soaring demand for electric vehicles and to help target those buying the most affordable zero emission cars. More than 10% of cars sold in

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Pay your tax bill by instalments

23/12/2021

Businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. An online payment plan for Self-Assessment tax bills can be used to set up instalment arrangements for paying tax liabilities up to £30,000.

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BOE advises government on inflation hike to 5.1%

23/12/2021

The current Governor of the Bank of England, Andrew Bailey, has written to the Chancellor of the Exchequer, Rishi Sunak. The letter was dated 16 December 2021 and has been uploaded to GOV.UK. The correspondence related to the recently published figures from the Office for National Statistics (ONS) showing a significant increase in

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A reminder – HMRC’s badges of trade

23/12/2021

The 'badges of trade' tests whilst not conclusive are used by HMRC to help determine whether an activity is a proper economic trade / business activity or merely a money-making by-product of a hobby. The approach by the courts in using the badges of trade has been to decide questions of trade on the basis of the overall impression gained

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Further changes to customs issues from 1 July 2022

23/12/2021

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all other international destinations. A number of easements had been put in place to help ensure a smooth transition for goods

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New £1bn support package announced

23/12/2021

The Chancellor, Rishi Sunak announced a new £1bn support package for businesses most impacted by the highly transmissible Omicron variant that is sweeping across the UK. The biggest single measure is the re-introduction of one-off grants of up to £6,000 for businesses in the hospitality and leisure sectors (in England) many of whom have

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Tax Diary January/February 2022

16/12/2021

1 January 2022 - Due date for Corporation Tax due for the year ended 31 March 2021. 19 January 2022 - PAYE and NIC deductions due for month ended 5 January 2022. (If you pay your tax electronically the due date is 22 January 2022). 19 January 2022 - Filing deadline for the CIS300 monthly return for the month ended 5 January 2022. 19

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Changes to customs declarations 1 January 2022

16/12/2021

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all non-EU international destinations. However, a number of easements had been in place to help ensure a smooth transition for

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Postponed VAT accounting

16/12/2021

Since 1 January 2021, businesses registered for VAT have been able to account for import VAT on their VAT return, often referred to as postponed VAT accounting. For most businesses, this means that they can declare and recover import VAT on the same VAT return. The normal VAT recovery rules regarding any VAT that can be reclaimed apply.

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Rent-a-room relief

16/12/2021

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. If you are using this scheme, you should ensure that rents received from lodgers during the current tax year do no exceed £7,500. The tax exemption is automatic if you earn less than £7,500 and there are no specific tax reporting

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The judgement in HMRC v Tooth

16/12/2021

A recent Supreme Court decision examined in some detail HMRC’s powers in relation to issuing a discovery assessment. HMRC generally use discovery assessments where the statutory time limit for looking into a return has expired. If certain conditions are satisfied, then HMRC can make a discovery assessment: 4 years from the end of the

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Gifts to spouse or charity

16/12/2021

In most cases, there is no Capital Gains Tax (CGT) to be paid on the transfer of assets to a spouse or civil partner. There is, however, still a disposal that has taken place for CGT purposes effectively at no gain or loss on the date of the transfer. When the asset ultimately comes to be sold, the gain or loss will be calculated from

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BADR associated disposals

16/12/2021

Business Asset Rollover Relief (BADR) is the renamed Entrepreneurs’ Relief. The name change does not affect the operation of the relief. BADR applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available CGT of 10% is payable in place of the standard

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Claiming tax relief for working from home

09/12/2021

Employees working from home may be able to claim tax relief for certain home-related bills they pay that are related to your work. Employers may reimburse employees for the additional household expenses incurred through regularly working at home. The relief covers expenses such as business telephone calls or heating and lighting costs

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Plug-in grants for electric vehicles

09/12/2021

The low-emission vehicles plug-in grant can help you save up to £2,500 on the purchase price of new low-emission vehicles. The scheme was first launched in 2011 and is available across the UK with dealers using the grant towards the price of eligible new cars. The paperwork for the grant application is handled by the dealer. The scheme is

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60 days is better than 30 days

09/12/2021

The deadline for paying any Capital Gains Tax (CGT) due on the sale of a residential property is now 60 days. The previous 30-day limit was replaced as part of the Autumn Budget measures in October and the change came into effect on the day of the announcement (27 October 2021). This means that a CGT return needs to be completed and a

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Government agrees OTS recommendations

09/12/2021

The Office of Tax Simplification (OTS) was established in July 2010, to provide advice to the Chancellor of the Exchequer on simplifying the UK tax system. The Financial Secretary to the Treasury has recently written an extensive letter to the OTS regarding the conclusions of the first five-year review and to respond to the OTS reviews

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Steps to modernise UK tax system

09/12/2021

At the Autumn Budget 2021, it was announced that there would be a dedicated day this Autumn where the government would set out further plans to continue building a modern, simple and effective tax system. This 'day' was on 30 November 2021, and referred to by HMRC as the aptly named, Tax Administration and Maintenance Day. A number of

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VAT group registration

09/12/2021

There are special VAT rules that allow two or more corporate bodies to be treated as a single taxable person for VAT purposes. This is known as a VAT group. Eligible persons are bodies corporate, individuals, partnerships and Scottish partnerships, provided certain conditions are satisfied. Bodies corporate includes companies of all types

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Who needs to register for Self-Assessment

02/12/2021

There are a number of reasons why you might need to complete a Self-Assessment return. This includes if you are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or property. Taxpayers that need to complete a Self-Assessment return for the first time should inform HMRC as

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Carry-back charitable donations

02/12/2021

The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take your donation and, providing all the qualifying conditions are met, reclaim the basic rate tax. This increases the value of your donation by 25p for every pound donated. If you are a higher rate or additional rate

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Can you claim the Marriage Allowance?

02/12/2021

The marriage allowance came into force in 2015 and applies to married couples and those in a civil partnership where a spouse or civil partner doesn’t pay tax or doesn’t pay tax above the basic rate threshold for Income Tax (i.e., one of the couples must currently earn less than the £12,570 personal allowance for 2020-21). The allowance

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VAT – driving schools who supplies services?

02/12/2021

The VAT liability of the supply of driving lessons is an interesting issue that can be of relevance to other supply scenarios such as hairdressers and other workers in the beauty industry. In HMRC’s internal manuals the guidance identifies three possible scenarios that can apply to someone providing driving lessons to the public: The

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TOGC overview

02/12/2021

The transfer of a business as a going concern (TOGC) rules cover the VAT liability on the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate. Where the sale of a business includes assets and meets certain conditions, the sale will be

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Income excluded from a property business

02/12/2021

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in your own home, extra services to tenants and letting surplus trade accommodation. In most cases the income from these activities will be

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SMP, SAP, SPP, ShPP, SPBP and SSP to rise from April 2022

02/12/2021

According to proposals set out in a government policy paper, the revised rates for statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP), statutory shared parental pay (ShPP), statutory parental bereavement pay (SPBP) and statutory sick pay (SSP) for tax year 2022/23 are to be as follows: the

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New warnings from HMRC re tax fraudsters

25/11/2021

Fraudsters are continuing to target taxpayers with scam emails in advance of the 31 January 2022 deadline for submission of Self-Assessment returns. In fact, over the last year, HMRC received nearly 360,000 reports about bogus tax rebate referrals. A number of these scams purport to tell taxpayers they are due a rebate / refund of tax

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Teesside Freeport open for business

25/11/2021

The first of the English Freeports, Teesside, opened operations on 19 November 2021, and is expected to be followed shortly by Thames and Humber. The Teesside Freeport will be at the forefront of local low carbon sector creating thousands of jobs in green energy. Businesses in Freeport tax sites are able to benefit from tax reliefs

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What is a tax calculation?

25/11/2021

A tax calculation is created by HMRC if you have not paid the right amount of tax. HMRC’s annual reconciliation of PAYE for the tax year 2020-21 is now almost complete. HMRC use salary and pension information to calculate if you have paid the correct amount of tax. The tax calculation is usually generated automatically by HMRC’s computer

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Structures and Buildings Allowance qualifying expenditure

25/11/2021

The Structures and Buildings Allowances (SBA) facilitates tax relief for qualifying capital expenditure on new non-residential structures and buildings. The relief applies to the qualifying costs of building and renovating commercial structures. The relief was introduced in October 2018 at an annual capital allowance rate of 2% on a

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CGT Roll-over Relief

25/11/2021

Business Asset Roll-over Relief is a valuable relief that allows the deferral of Capital Gains Tax (CGT) on gains made when taxpayers sell or dispose of certain assets and use all or part of the proceeds to buy new business assets. The relief means that the tax on the gain of the old asset is postponed. The amount of the gain is

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IHT and domicile

25/11/2021

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong but actually determining domicile status can be complex. HMRC guidance states that domicile cannot be defined precisely, but the concept rests on various basic principles. Although domicile can change, there is generally a

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Tax Diary December 2021/January 2022

21/11/2021

1 December 2021 - Due date for Corporation Tax payable for the year ended 28 February 2021. 19 December 2021 - PAYE and NIC deductions due for month ended 5 December 2021. (If you pay your tax electronically the due date is 22 December 2021). 19 December 2021 - Filing deadline for the CIS300 monthly return for the month ended 5 December

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Mandatory vaccination for frontline health and social care worker

18/11/2021

The government has published its response to its consultation on making COVID-19 vaccination a condition of deployment for frontline workers in health and social care settings in England and has confirmed that it will now bring forward regulations to implement a mandatory COVID-19 vaccination requirement. The regulations will cover all

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A reminder of trivial benefit rules

18/11/2021

We wanted to remind readers of the trivial benefits in kind (BiK) rules. The BiK exemption applies to small non-cash benefits like a bottle of wine, a bouquet of flowers given occasionally to employees, or any other benefit in kind classed as 'trivial' that falls within the exemption. By taking advantage of the exemption employers can

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Business gifts

18/11/2021

The rules for deciding whether a gift given in the course of business is deductible are complex. The rules for business gifts generally follow those for business entertaining expenditure. This means that HMRC take the view that in general business gifts are not an allowable deduction from profit for tax purposes. However, there are

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Self-Assessment countdown

18/11/2021

There are now less than two months to file your 2020-21 Self-Assessment tax return. Last year over 12.5 million taxpayers were required to complete a Self-Assessment tax return but over 1.8 million taxpayers missed the 31 January deadline. The deadline for submitting your 2020-21 Self-Assessment tax returns online is 31 January 2022. You

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Appealing to the First-tier Tribunal (Tax)

18/11/2021

There are a number of different options open to taxpayers that disagree with a tax decision issued by HMRC. Usually, the first step is to make an appeal to HMRC against the tax decision. The case worker who made the decision will look at your case again and consider your appeal. If they do not change their decision, you can request what

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