December 2021

Welcome to our monthly email to keep you informed of the latest business and tax issues. Please do contact us if you have any questions.

Trusts that do not pay tax now need to register with HMRC

HMRC rules have been introduced requiring most trusts, even if they do not submit annual tax returns, to be registered with HMRC using their online service, even if the trustees believe HMRC was told of the trust's existence when it was formed.

These rules mean that trustees of all trusts should carefully consider whether their trust needs to register.

HMRC rules are being regularly updated and it is recommended that trustees keep up to date with the changes in case their trust is affected as it will be possible for HMRC to charge penalties if a trust is not correctly registered.

The rules apply to trusts that existed on 6 October 2020, including some that have been subsequently closed.

We provide a trust registration service for clients, so if you are concerned about a trust you are involved with, please do contact us to discuss this.

Making Tax Digital for Income Tax Self Assessment start date announced with accounting year end date change

The government has delayed the introduction of Making Tax Digital (MTD) for Income Tax Self Assessment (MTD for ITSA) for a year, HMRC recently announced.

The government says it has made the move in recognition of the challenges faced by many UK businesses as the country emerges from the pandemic.

It will now introduce MTD for ITSA in the tax year beginning in April 2024, a year later than planned.

As part of the change, all sole traders and partnerships will need to change their accounting year end to 31 March or 5 April under HMRC rules. Details are still being considered but it is understood that where an additional tax charge arising to catch up to that date, that charge will be spread over 5 years. 

Company car advisory fuel rates

New company car advisory fuel rates have been published and took effect from 1 December 2021.

The guidance states: 'you can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 December 2021 are:

HMRC guidance states that the rates only apply when you either:

• reimburse employees for business travel in their company cars
• require employees to repay the cost of fuel used for private travel.

You must not use these rates in any other circumstances.

The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.

If you would like to discuss your car policy, please contact us.

Payment period on residential CGT is doubled

The government has doubled the period for filing and payment of capital gains tax (CGT) on residential property from 30 days to 60 days.

The change applies from 27 October 2021. It sees the deadline for residents to report and pay CGT after selling UK residential property increase from 30 days after the completion date to 60 days.

For non-UK residents disposing of property in the UK, this deadline will also increase from 30 days to 60 days. When mixed-use property is disposed of by UK residents, legislation will also clarify that the 60-day payment window will only apply to the residential element of the property gain.

Heat pump grants worth £5,000 will help replace gas boilers

Homeowners in England and Wales will be offered subsidies of £5,000 from next April to help them to replace old gas boilers with low carbon heat pumps.

The grants are part of the government's £3.9 billion plan to reduce carbon emissions caused by heating homes and other buildings.

It is hoped no new gas boilers will be sold after 2035. The funding also aims to make social housing and public buildings more energy efficient.