000a8646 4090 4619 8281 9448c178e977 800x380 - BOE advises government on inflation hike to 5.1%

BOE advises government on inflation hike to 5.1%

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 inflation to 5.1%.

The letter addresses the following:

  • the reasons why inflation has moved away from the 2% target, and the outlook for inflation;
  • the policy action that the MPC is taking in response;
  • the horizon over which the MPC judges it is appropriate to return inflation to the target;
  • the trade-off that has been made by the MPC with regard to inflation and output variability in determining the scale and duration of any expected deviation of inflation from the target; and
  • how this approach meets the Government’s monetary policy objectives.

CPI inflation is expected to remain around 5% through the majority of the winter period, and peak at around 6% in April 2022. 

Source: HM Treasury Tue, 21 Dec 2021 00:00:00 +0100
7002f221 33df 4444 8c32 127807bbc1aa 800x380 - The judgement in HMRC v Tooth

The judgement in HMRC v Tooth

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 year of assessment in which the further liability to tax arises where the loss of tax is not due to careless or deliberate behaviour
  • 6 years from the end of the year of assessment in which the further liability to tax arises where the loss of tax is due to careless behaviour of the relevant person.
  • 20 years from the end of the year of assessment in which the further liability to tax arises where the loss of tax is due to deliberate behaviour of the relevant person.

The case in question centred on two main issues. Firstly, whether there had been a deliberate inaccuracy in a 2007-8 tax return enabling HMRC to issue a discovery assessment within the extended 20-year limit and secondly, whether HMRC had made a valid discovery.

The First-tier Tribunal (FTT), the Upper Tribunal (UT) and the Court of Appeal all decided that HMRC could not assess the taxpayer. The Supreme Court held that the interpretation of the tax return by HMRC did not properly consider the whole document and that there was no inaccuracy. Commenting further, the Judges opined that even if there was, they would not have been satisfied that such an inaccuracy was deliberate. The Supreme Court also rejected the notion of 'staleness' in respect of the discovery assessments.

Source: Other Tue, 14 Dec 2021 00:00:00 +0100
53a24e8d 5ce8 4697 aa4c 2d11c4d678ba 800x380 - Plug-in grants for electric vehicles

Plug-in grants for electric vehicles

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 open to qualifying purchases by private individuals and businesses.

HMRC publishes a list of qualifying cars and only cars listed are eligible for the grant. There are also grants available for specified motorcycles, mopeds, small vans, large vans, taxis and trucks.

The grant is available for cars with CO2 emissions lower than 50g/km and a 'zero-emission' range of at least 112km. To qualify for the grant, the cars must have an 'on the road' price cap of less than £35,000. This means that many popular environmentally friendly electric cars are not available under the scheme as their sale price exceeds the price cap.

There are separate criteria for other vehicle classes. This includes motorcycles, mopeds, small vans, large vans, taxis, small trucks and large trucks. For example, for motorcycles that have no CO2 emissions and can travel at least 50km between charges.

Source: HM Revenue & Customs Tue, 07 Dec 2021 00:00:00 +0100
5645b682 b851 4923 a7dd 117eb0b9cc2d 800x380 - Government agrees OTS recommendations

Government agrees OTS recommendations

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 into Inheritance Tax (IHT) and Capital Gains Tax (CGT).

The letter confirms that after careful consideration, the government has decided not to make any changes to the IHT lifetime gifts rules at the current time. It was also confirmed that changes to the design and operation of CGT will be kept under review.

The government has accepted the following five recommendations from the OTS report on the technical and administrative issues with CGT:

  1. Integrate the different ways of reporting and paying CGT into the Single Customer Account. This is part of a long-term strategy.
  2. Extending the reporting and payment deadline for the UK Property return to 60 days. This has been completed.
  3. Extending the ‘no gain no loss’ window on separation and divorce. This will be subject to consultation over the course of the next year.
  4. Expanding the specific Rollover Relief rules which apply where land and buildings are acquired under Compulsory Purchase Orders (CPO). This will be subject to a final consultation. 
  5. Various improvements in CGT guidance on specific areas. HMRC has already completed a review and expansion of the guidance on the UK Property Tax Return and will proceed in other areas identified in the OTS report.

The government will also consider five other recommendations by the OTS including the treatment of separate share pools, the practical operation of Private Residence Relief nominations and a review of the rules for enterprise investment schemes.

Source: HM Treasury Tue, 07 Dec 2021 00:00:00 +0100
02367c34 4695 44dd 8ad6 2855ea3101da 800x380 - Steps to modernise UK tax system

Steps to modernise UK tax system

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 documents were published including:

  • An update on reforms to Small Brewers Relief.
  • A technical consultation setting out further detail on the conclusions to the government’s review of business rates.
  • A report on Research and Development (R&D) tax reliefs, providing further details on announcements made at the Budget which included refocusing relief in the UK, targeting abuse, and supporting innovation by expanding qualifying expenditure to capture cloud and data costs. 
  • A Call for Evidence on reforming registration for Income Tax Self-Assessment (ITSA) to give taxpayers a better understanding of their tax obligations and support available to them.
  • Publishing a summary of responses to the Call for Evidence on the Tax Administration Framework Review (TAFR), including plans to reform several areas of the tax administrations system to simplify and modernise it.
  • A Call for Evidence on the role umbrella companies play in the labour market to improve our understanding of the sector.
  • Publishing the first five-year review of the Office of Tax Simplification (OTS) launched in March 2021 to examine the effectiveness of the OTS.
  • A consultation on potential changes to the Stamp Duty Land Tax reliefs for mixed-property and multiple dwellings to ensure they operate fairly and to reduce the scope for misuse.
Source: HM Treasury Tue, 07 Dec 2021 00:00:00 +0100
b78ff857 eb9b 4f34 bedf 2a5293d79c58 800x380 - New warnings from HMRC re tax fraudsters

New warnings from HMRC re tax fraudsters

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 from HMRC and ask for bank or credit card details in order to send the fake tax refund. The fraudsters use various means to try and scam people including making contact by phone calls, texts or emails. Fraudsters have also been known to threaten victims with arrest or imprisonment if a bogus tax bill is not paid immediately.

HMRC operates a dedicated Customer Protection team to identify and close down scams but continues to advise taxpayers to identify fraud and avoid becoming victims themselves. For example, HMRC will only contact taxpayers due a refund by post and never use emails, text messages or external companies for this activity. Genuine organisations like HMRC and banks will not contact customers asking for their PIN, password or bank details.

If you think you have received a suspicious call or email claiming to be from HMRC you are asked to forward the details to phishing@hmrc.gov.uk and text to 60599. If you have suffered financial loss, you should contact Action Fraud on 0300 123 2040 or use their online fraud reporting tool.

Source: HM Revenue & Customs Tue, 23 Nov 2021 00:00:00 +0100
a4464d8f d108 4a9a a8d8 ad8098b7928f 800x380 - If clients ask – trading hours for retailers

If clients ask – trading hours for retailers

There are special rules that govern the trading hours that certain retailers must follow on a Sunday. These rules are defined in the Sunday Trading Act 1994 and apply to shops in England and Wales. The Act restricts the trading hours for retailers with a sales area that exceeds 280 square meters. Small shops in England and Wales are free to open on whatever days and hours they choose. There are no trading hours restrictions in Scotland.

Shops over 280 square metres:

  • Can open on Sundays but only for 6 consecutive hours between 10am and 6pm.
  • Must close on Easter Sunday.
  • Must close on Christmas Day.

Any shop affected by these rules must clearly display their opening hours both inside and outside their shop. There are also certain large shops that are exempt from these rules, including airport and railway station outlets, service station outlets and registered pharmacies.

There are similar rules in Northern Ireland, but large shops can only open between the fixed hours of 1pm and 6pm on a Sunday.

Source: HM Government Tue, 16 Nov 2021 00:00:00 +0100
7bf4873e def7 4261 8143 18b0debddb50 800x380 - Vehicles exempt from Vehicle Excise Duty

Vehicles exempt from Vehicle Excise Duty

Vehicle Excise Duty (VED), also commonly referred to as vehicle tax, is an annual tax levied on owners of most cars, vans, motorcycles, and holders of motorcycle trade licences.

There are certain VED exemptions and discounts for people who suffer from various mobility impairments. In addition, alternative fuel vehicles receive a £10 reduction on vehicle tax rates.

The full list of vehicles exempt from vehicle tax are as follows:

  • Vehicles used by a disabled person – an application should be made by eligible users for a disability exemption when they apply for vehicle tax. The exemption is removed if the disabled person no longer uses the vehicle.
  • Disabled passenger vehicles – Vehicles (apart from ambulances) used by organisations providing transport for disabled people are exempt.
  • Mobility scooters and powered wheelchairs – The law calls these ‘invalid carriages’. They must have a maximum speed of 8mph on the road and be fitted with a device limiting them to 4mph on footways, to be exempt.
  • Historic vehicles made before 1 January 1981.
  • Electric vehicles – The electricity must come from an external source, or an electric storage battery not connected to any source of power when the vehicle is moving to be exempt.
  • Mowing machines
  • Steam vehicles
  • Vehicles used for agriculture, horticulture and forestry – This includes tractors, agricultural engines and light agricultural vehicles used off-road. It also includes ‘limited use’ vehicles used for short journeys (not more than 1.5 kilometres) on the public road between land that’s occupied by the same person.
Source: HM Government Tue, 09 Nov 2021 00:00:00 +0100
130d067b 0c44 463f 8ff2 a8bb52daa59c 800x380 - Vehicles eligible for a plug-in grant

Vehicles eligible for a plug-in grant

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 you purchase your car from. The scheme is open to qualifying purchases by private individuals and businesses.

HMRC publishes a list of qualifying cars and only cars listed are eligible for the grant. There are also grants available for specified motorcycles, mopeds, small vans, large vans, taxis and trucks.

The grant is available for cars with CO2 emissions lower than 50g/km and a 'zero-emission' range of at least 112km. To qualify for the grant, the cars must have an 'on the road' price cap of less than £35,000. This means that many popular environmentally friendly electric cars are not available under the scheme as they sell for more than the price cap.

There are separate criteria for the other vehicle classes. For example, for motorcycles that have no CO2 emissions and can travel at least 50km (31 miles) between charges.

Source: HM Government Tue, 09 Nov 2021 00:00:00 +0100
8a2c0520 a341 4d0b afd9 72abe038042e 800x380 - Transport restrictions eased

Transport restrictions eased

The government has announced plans to introduce a temporary extension to road haulage cabotage rules to alleviate pressures with the supply chain due to lorry driver shortages and other global supply issues. The term cabotage in this context refers to specific restrictions on foreign lorry drivers on the amount of work they can do within the UK over a set period.

Under the current rights, the UK allows EU heavy goods vehicle (HGV) drivers to undertake 2 cabotage journeys within 7 days of entry into the UK. The government is proposing allowing unlimited cabotage movements of HGV’s for up to 14 days after arriving on a laden international journey into the UK before returning home. The proposal is that this extension will apply for 3 or 6 months, subject to ongoing review. The proposals are also looking at extending these changes to hauliers from Norway and Switzerland (who do not currently enjoy these rights), as well as to non-EU countries more widely.

The measures are subject to a short consultation but are not expected to come into effect until towards the end of the year as further work will be required to legislate for this change.

Announcing the move, Transport Secretary Grant Shapps said:

‘The temporary changes we’re consulting on to cabotage rules will also make sure foreign hauliers in the UK can use their time effectively and get more goods moving in the supply chain at a time of high demand.’

Source: HM Revenue & Customs Mon, 18 Oct 2021 00:00:00 +0100