fd429106 1fe6 4d79 85f8 c3f89a038750 800x380 - Delay in implementing late payment penalties

Delay in implementing late payment penalties

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 midnight on 1 April 2022.

Under the normal rules a 5% late payment penalty would have been charged if tax remained outstanding or a payment plan has not been set up before 3 March 2022. This extension gives taxpayers an extra 4 weeks to sort out their affairs before the 5% late payment penalty is levied.

It is important to note that it is only the 5% penalty that is being waived. Interest will still be applied to any balance that was outstanding from 1 February 2022. The current rate of interest is 2.75%. The only way to stop further interest amassing is to pay any tax due in full.

Further late payment penalties will apply, with no extensions, if tax remains outstanding (and no payment plan has been set up) for more than 6 months after the 31 January filing deadline. From 1 August 2022 you will be charged a penalty of the greater of £300 or 5% of the tax due. If your return remains outstanding one year after the filing deadline, then further penalties will be charged from 1 February 2023.

Source: HM Revenue & Customs Tue, 11 Jan 2022 00:00:00 +0100
423c28bc 48c7 4a1c 84d6 26d409a99472 800x380 - HMRC agree delay in tax return deadline

HMRC agree delay in tax return deadline

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 accrue from 1 February 2022 on any outstanding liabilities.

There had been concerns from Self-Assessment taxpayers and their agents for the government to soften its stance on late filing penalties in view of the continuing pandemic. The confirmation that no late filing penalty will be issued, giving one month’s grace has been broadly welcomed. 

HMRC expects more than 12.2 million people to complete a Self-Assessment tax return for the 2020-21 and almost 6.5 million returns have already been submitted. 

HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:

'We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19. Our decision to waive penalties for one month for Self-Assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.'

There are also a number of options for taxpayers to defer payments due on 31 January 2022 and pay by instalments over 12 months. This includes using the self-serve Time to Pay facility online for debts up to £30,000 or by making an arrangement with HMRC.

Source: HM Revenue & Customs Tue, 11 Jan 2022 00:00:00 +0100
f16efbd3 da17 4cea a2ef d7ca599e11c5 800x380 - Reminder of Statutory Sick Pay pay-back scheme

Reminder of Statutory Sick Pay pay-back scheme

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 reintroduced from mid-January. The government announced before the Christmas break that firms will be re-eligible for the scheme from 21 December 2021 and will be able to make claims retrospectively once the claims service is relaunched.

The scheme covers up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19. Employers are eligible for the scheme if their business is UK based, small or medium-sized and employs fewer than 250 employees. Under the scheme, the Government will cover the cost of SSP for Covid-related absences qualifying employers across the UK.

Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online or a ‘shielding note’ / letter from their doctor or health authority advising them to shield because they’re at high risk of severe illness from coronavirus.

Source: HM Revenue & Customs Tue, 04 Jan 2022 00:00:00 +0100
48906666 bb14 40b7 9e32 0ed27221a109 800x380 - Points to consider when valuing goodwill

Points to consider when valuing goodwill

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 between the purchase price of a business and the net value of the assets acquired.

HMRC’s approach to valuation of goodwill suggests that there should be no expectation of a synergy-based value on an open market value basis unless synergy in a particular market is common place.

HMRC’s manuals state that when valuing the goodwill of a business the valuer should have regard to the following:

  • the full sale and purchase documentation relating to the transfer of both tangible and intangible assets
  • succession arrangements
  • the valuation approach used – e.g., capitalisation of profits, super profits or a trade specific method
  • the activities of the business and role of the owners within it
  • the financial statements/accounts (including the detailed trading and profit and loss account) for the 3 years before valuation
  • any other relevant financial information
  • appropriate yield and multiples of comparable companies and sectors
  • the commercial and economic background at valuation date
  • how the personal goodwill of the owner has been reflected in the valuation
  • any other relevant factors.
Source: HM Revenue & Customs Tue, 04 Jan 2022 00:00:00 +0100
00995e58 f995 418b 8349 a32264ff1ac0 800x380 - New powers for Insolvency Service

New powers for Insolvency Service

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 directors who abuse the company dissolution process. This extends investigatory powers to directors of dissolved companies and if misconduct is found, directors can face sanctions including being disqualified as a company director for up to 15 years or, in the most serious of cases, prosecution. The measures have been introduced under a new Act that received Royal Assent on 15 December 2021.

The Act will also mean the Business Secretary is able to apply to the court for an order to require a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to their fraudulent behaviour.

Source: Other Tue, 04 Jan 2022 00:00:00 +0100
4b8d0170 7bf4 4961 bda4 829803def3e2 800x380 - Will you need to pay-back Child Benefits?

Will you need to pay-back Child Benefits?

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 time during the last tax year (2020-21) then you must act. Where both partners have an income that exceeds £50,000, the charge applies to the partner with the highest income.

Taxpayers who continue to receive child benefit (and earn over the relevant limits) must pay any tax owed for 2020-21 on or before 31 January 2022. The child benefit charge is charged at the rate of 1% of the full child benefit award for each £100 of income between £50,000 and £60,000. For taxpayers with income above £60,000, the amount of the charge will equal the amount of child benefit received.

If the High Income Child Benefit charge applies to you or your partner it is usually worthwhile to claim Child Benefit for your child, as it can help to protect your State Pension and will make sure your child receives a National Insurance number. However, you still have the choice:

  • to keep receiving child benefit and pay the tax charge or
  • elect to stop receiving child benefit and not pay the charge.
Source: HM Revenue & Customs Tue, 04 Jan 2022 00:00:00 +0100
eb738741 78dc 4ff3 8457 6568c5980e2e 800x380 - Self-certified sick notes

Self-certified sick notes

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 other impacts brought on by the latest Omicron fuelled coronavirus wave.

The arrangements will remain in place for all absences that begin on or before 26 January 2022. The arrangements also apply retrospectively for any continuing periods of absence which started between 10 and 17 December 2021.  The self-certification period is set to return to seven days for any absences beginning on or after 27 January 2022. GPs will continue to be required to supply medical evidence known as, fit notes, for periods of absence exceeding 28 days.

The current rate of Statutory Sick Pay (SSP) is £96.35 per week for up to 28 weeks. To qualify for SSP, an employee must meet the necessary eligibility requirements. Employers cannot pay less than the SSP but may pay more if they have a sick pay scheme.

Source: HM Government Tue, 04 Jan 2022 00:00:00 +0100
bcbf93d7 df0f 49e1 859d 2e42aa800f5a 800x380 - Beware online sales scams

Beware online sales scams

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 online shopping fraud in the past 13 months. This has seen over £60 million being reported lost.

The National Cyber Security Centre (NCSC) is encouraging people to shop online securely by following five actionable steps:

  1. Keeping accounts secure – strong and separate passwords should be used for the most important online accounts, including email, banking or payment accounts (such as PayPal). The NCSC recommends using three random words to create a password. Turning on two-step verification can add an extra layer of protection.
  2. Be aware of emails, text messages or websites that look too good to be true or suspicious – many scammers set up fake messages designed to steal financial and personal information. Members of the public can report suspicious messages to the NCSC via text to 7726 and email to report@phishing.gov.uk.
  3. Choose online retailers carefully – research stores before buying to confirm they are legitimate – check via trustworthy consumer websites. Certain emails or texts regarding "too good to be true" offers may contain links to fake websites. If unsure, don’t use the link.
  4. Use a credit card for online payments if possible – most major credit card providers protect online purchases and are obliged to refund individuals in certain circumstances.
  5. Only provide enough details to complete a purchase – only fill in the mandatory details on a website when shopping online (often marked with an asterisk).
Source: Cabinet Office Tue, 04 Jan 2022 00:00:00 +0100
64641b20 0821 4d92 b10f f9a65cd8d1bb 800x380 - New £1bn support package announced

New £1bn support package announced

The Chancellor, Rishi Sunak has 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 seen their seasonal trade hugely impacted by this latest COVID-19 variant. It is thought that some 200,000 businesses will be eligible for these new grants.

The main support measures announced on 21 December 2021 are as follows:

  • Businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000 per premises.
  • £102 million top-up for discretionary funding will be made available for local authorities to support other businesses outside the hospitality and leisure sectors.
  • Government will also cover the cost of Statutory Sick Pay for COVID-related absences for small and medium-sized employers across the UK. This applies to businesses with less than 250 employees for up to 2 weeks per employee. Firms will be eligible for the scheme from 21 December and will be able to make claims retrospectively from mid-January.
  • £30 million further funding will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter.

The devolved administrations in Scotland, Wales and Northern Ireland will receive an additional £150m through the Barnett formula to help offer similar measures. This will be allocated with around £80 million going to the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

Source: HM Treasury Tue, 21 Dec 2021 00:00:00 +0100
112df10e 3003 4abb bc31 6d352a39bdb3 800x380 - Further changes to customs issues from 1 July 2022

Further changes to customs issues from 1 July 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 had been put in place to help ensure a smooth transition for goods coming from the EU. This included a delay in the requirement for full customs declarations and controls until the end of this year.

From 1 January 2022, businesses will no longer be able to delay making import customs declarations under the Staged Customs Controls rules that have applied during 2021. This will mean that most businesses will have to make declarations and pay relevant tariffs at the point of import.

However, the introduction of some declarations has been deferred until 1 July 2022. These include:

  • requirements for full safety and security declarations for all imports
  • new requirements for Export Health Certificates
  • requirements for Phytosanitary Certificates
  • physical checks on sanitary and phytosanitary goods at Border Control Posts
Source: HM Revenue & Customs Tue, 21 Dec 2021 00:00:00 +0100