August 2022

Please do contact us if you have any questions.  

MTD for income tax
HMRC has confirmed MTD for income tax will start April 2024 for individuals whose gross income from self-employment and property exceeds £10,000 a year.  Partnerships are expected to join from April 2025.

The year-end date for businesses will be moved to 31 March or 5 April if they are not already using that year end date for their accounts.

We are waiting to review software options as they become available and can then advise on how you can meet the MTD obligations most effectively.  For many clients, this will either involve implementing new accounts software that can be used to make the submissions to HMRC and for others, an Excel spreadsheet based solution will be enough and should not be too time-consuming.  You will need to have a Government Gateway account set up for the submissions but will be able to authorise us to act for you if you prefer for us to submit the returns.

We expect to be able to submit the quarterly MTD for income tax returns for clients the same as we currently do for MTD for VAT. There will then be a final return needed for the year to confirm the figures and add in any annual adjustments needed.

Tax Investigation Protection
If you have not received a letter from us regarding Markel Tax Investigation Protection and would like to know more about this, please do contact us.

We offer an annual policy that covers accountancy fees in the event of an HMRC enquiry.  This means that if HMRC was to enquire into any tax return we have submitted for you, our fees for acting on your behalf to resolve the matter would be covered by the policy.

Recovery Loan Scheme to be relaunched
The Recovery Loan Scheme (RLS) will be relaunched during August 2022 as the government aims to continue supporting recovering small businesses.

The RLS launched in April 2021 and was originally scheduled to run until 31 December 2021.

At Autumn Budget 2021, the government extended the scheme by six months to 30 June 2022 and made some adjustments to its terms. The government provided a guarantee of 80% for loans made before 1 January 2022 and 70% for loans after that date. The borrower remains 100% liable for the debt.

According to the British Business Bank, accredited lenders have offered over £4.5 billion, through the RLS, to smaller UK businesses as they steer a path towards a sustainable recovery.

The relaunched RLS will support facility sizes of up to £2 million for borrowers outside the scope of the Northern Ireland Protocol, and up to £1 million for those in scope of the Northern Ireland Protocol.

The scheme will be open to smaller businesses with a turnover of up to £45 million.

National insurance threshold rises
The level at which people start paying national insurance rose from £9,880 to £12,570 from 6 July.

According to the government, 30 million people across the UK will benefit from this tax cut. It says the increase will lift 2.2 million people out of paying any personal tax.

New homeowners warned over tax refund claims
New homeowners are being warned about cold calls from rogue tax repayment agents advising them to make speculative Stamp Duty Land Tax (SDLT) refund claims, which could leave them with large tax bills.

The warning comes after a recent spate of Stamp Duty refund claims to HMRC failed to meet specific criteria.

The agents have been known to call new property owners after finding them through Land Registry records and property search websites, promising money back on 'unknowingly overpaid' SDLT.

Recent analysis undertaken by HMRC suggests that up to a third of claims for 'multiple dwelling relief' refunds were incorrect.

HMRC raises enquiries on these claims, but sometimes that is after the agent has taken their fee, leaving the homeowner to pick up the difference. Incorrect refund claims must be repaid with interest, with some potentially facing penalties as well.

There are still lots of other tax scams circulating so if you do receive anything that may be fraudulent, for example a message promising a tax refund, please contact us first and do not click on any links or provide personal information to the message sender.

Bank of England raises UK interest rates to 13-year high
The Bank of England (BoE) has raised UK interest rates to a 13-year high of 1.25% and is now predicting inflation will hit 11% this autumn, when energy bills are set to rise again.

It is the first time since January 2009 that the rate has been higher than 1%. Three members of the MPC voted to raise interest rates to 1.5%, which would have been the biggest rise since 1995.

Manufacturers call for support package
Manufacturing trade body Make UK is calling for an emergency, pre-recess package of business support measures.

The call comes after a Make UK survey showed growth and orders slowing significantly with exports close to a standstill.

Make UK has made recommendations for measures the government can introduce now to address rising business costs, including:

• waiving or reducing business rates for the next 12 months
• implementing VAT deferrals for larger businesses and waiving completely for SMEs
• temporarily freezing the Climate Change Levy
• reviewing the efficacy of the business interruption loan schemes introduced during the pandemic and deploying a successor scheme
• extending the 130% super-deduction tax break, due to end in March 2023
• making the increase in the Annual Investment Allowance (AIA) permanent.