Need to know

Estimated tax gap falls to £32bn: HMRC figures released for the pandemic period of 2020/21 show the tax gap held steady at 5.1% in percentage terms, but fell by £2bn in real terms as theoretical tax liabilities fell. ICAEW’s Tax Faculty looks at the key data.

UK to delay implementation of global minimum tax rate: Rules will apply to accounting periods beginning on or after 31 December 2023, in response to concerns raised during the consultation process.

R&D tax credits: further clarification on compliance checks: HMRC confirms that additional checks are being applied to repayment cases in date order including when advance assurance has been given.

Employers: check flexible benefit packages are tax compliant: Flexible benefit packages can offer tax and NIC advantages. They can simplify administration, as well as making the benefit package more attractive to employees. However, ICAEW’s Tax Faculty warns that the underlying tax rules should not be overlooked.

Get ready to file plastic packaging tax returns: Businesses that manufacture plastic packaging in the UK, or import plastic packaging into the UK, may need to submit a plastic packaging tax return by 29 July 2022.

Move to the Customs Declaration Service to continue importing: The Customs Handling of Import and Export Freight system will be closed for import declarations after 30 September 2022 and for export declarations after 31 March 2023. As a result, HMRC is urging businesses that import and export to start preparing to use the Customs Declaration Service.

HMRC research indicates lack of awareness of MTD VAT: The requirement to keep digital accounting records and use MTD VAT compatible software to submit VAT returns was extended to all VAT registered businesses from 1 April 2022. Were those newly subject to MTD VAT requirements ready?

Adjudicator reports on HMRC complaints: Complaints about HMRC received by the independent Adjudicator fell in 2021/22, but remain above pre-pandemic levels. ICAEW’s Tax Faculty summarises the annual report.

ICAEW responds to the government’s Labour market enforcement strategy: ICAEW’s Tax Faculty makes suggestions for how to ameliorate non-compliance of businesses with their employment obligations.

Member helpsheets and guidance

Employees provided with electric cars should check they are taxed correctly: Issue with HMRC’s online forms P11D and P46(car) means that HMRC does not always correctly calculate electric car benefit in kind.

Employer Bulletin: NIC thresholds, student loan deductions, PAYE RTI penalties: ICAEW’s Tax Faculty summarises some essential reading for employers and payroll agents.

HMRC updates guidance on accounts for non-resident corporate landlords: Some uncertainty has arisen over the nature of accounts that need to be submitted with tax returns for non-UK resident companies with UK rental profits. HMRC has now updated its guidance to make the position clear.

What does the Northern Ireland Protocol Bill mean for trade with Northern Ireland? The government’s recently published Northern Ireland Protocol Bill could have a significant impact on trade between Great Britain and Northern Ireland. What specifically could change?

New guidance on MTD VAT penalties: HMRC has published a fact sheet on MTD VAT penalties, filling a gap in the information available on gov.uk.

VAT – business and non-business activities for VAT purposes: HMRC has published a policy paper to explain how it now determines whether an activity is a business activity for VAT purposes.

Consultations

ICAEW makes recommendations for ‘Future of work review’: The review into the future of work needs to consider tax/NIC, employment status and cover all four nations of the UK.

HMRC consults on measures to protect taxpayers claiming repayments: Consultation covering the information provided by repayment agents about their services, the use of assignments, and registration of repayment agents.

PAC report lambasts HMRC over IR35 implementation: HMRC needs to demonstrate that IR35/off-payroll working can operate effectively and fairly in the real world and investigate whether the costs and unintended consequences are proportionate to the additional tax revenue which the reforms raise.

HMRC breaks its silence on the MTD ITSA pilot: HMRC has started encouraging agents to sign clients up to the Making Tax Digital income tax self assessment pilot. ICAEW’s Tax Faculty explains the somewhat confusing communications.

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