Need to know

Spring Statement: An overview of tax measures from ICAEW’s Tax Faculty: Chancellor Rishi Sunak delivered his Spring Statement 2022 against a backdrop of war in Ukraine. Aside from the terrible human cost, the war is now also exacerbating a cost of living crisis. Frank Haskew, ICAEW’s Head of Taxation Strategy, summarises the Spring Statement announcements and their potential impact.

Tax treatment of employer-provided and reimbursed COVID tests: Income tax exemption and NIC disregard for employer-provided and employer-reimbursed COVID tests continues for tax year 2022/23.

ICAEW does not support proposals for earlier self assessment registration:

ICAEW has responded to HMRC’s call for evidence on income tax self assessment registration for the self-employed and landlords. ICAEW is calling for improvements to systems and processes as well as better education and communication rather than legislative change.

Postponed VAT accounting and businesses registered under the Flat Rate Scheme:

In its latest Brief, HMRC explains the correct treatment, which must be used for periods starting from 1 June 2022. Previous returns need not be resubmitted.

Deadline to claim marriage and other allowances is 5 April 2022: ICAEW’s Tax Faculty reminds members that 5 April is the deadline for claiming reliefs and allowances, such as marriage allowance, to avoid missing out on a year’s entitlement. Claims generally need to be made within four years of the end of the tax year.

HMRC to accept bulk appeals from agents: HMRC has confirmed that it will accept bulk appeals against late filing penalties where there is a COVID-19 related reasonable excuse. ICAEW’s Tax Faculty explains the process.

Finance Bill 2021-22 receives Royal Assent: Finance Act 2022 received Royal Assent on 24 February 2022, bringing into law various tax measures with effect from that date, including a package of measures designed to tackle promoters of tax avoidance schemes.

Companies House reform white paper published: A legal overhaul of the register will bolster Companies House’s powers so it can better tackle crime and fraud and provide a stronger foundation for boosting enterprise, the government says.

Companies House reform: the key changes and affected areas: The government’s final response to previous consultations on Corporate Transparency and Register Reform sets out 58 changes across nine areas.

OTS launches reviews into simplification and taxation of property: The Office of Tax Simplification has published scoping documents for two new pieces of work on priorities for tax simplification and opportunities to simplify the tax treatment of income from residential property.

OTS launches a review of property income: The Office for Tax Simplification has published further details of a review into how the taxation of income from property could be simplified. ICAEW’s Tax Faculty will be meeting the OTS and would welcome the views of members.

MTD: additional VAT revenue raised following its launch: HMRC publishes details of the estimated additional VAT raised on the back of the launch of Making Tax Digital. ICAEW’s Tax Faculty analyses the figures.

Podcast

Death and digital assets: The digital footprint of the average person is getting bigger. Some of that includes assets we really value, both from an emotional and financial perspective.

Member helpsheets and guidance:

HMRC to mandate the format of claims for employment expenses: From 6 May 2022 claims for income tax relief on employment expenses must be made on the standard P87 form which can be found on gov.uk. Robotics will accelerate the processing of the updated form, as long as claims don’t include attachments.

Online form for corporate de minimis extended loss carry back claims: Claims for losses of no more than £200,000 should be made by an online form to reduce repayment delays.

Online tax check service for licence renewals goes live: HMRC’s online tax check service went live on 7 March so that applicants who need to renew their licences on, or shortly after, 4 April can get their tax check code in good time.

VAT grouping registration: treat as provisionally accepted, says HMRC: HMRC has amended its guidance on how businesses should file their VAT returns while awaiting a decision on a VAT grouping application.

HMRC issues modified payroll reporting instructions for 2020/21: HMRC has issued instructions on how to submit Appendix 7A and Appendix 7B returns for employers of internationally mobile employees.

HMRC publishes review of powers to uphold its standard for agents: As part of HMRC’s work on raising standards in the tax advice market, HMRC announces four actions to strengthen its approach to upholding agent standards.

CIPFA/LASAAC support further deferral of IFRS 16: CIPFA/LASAAC do not intend to bring forward proposals to pause operational property valuation in local authority financial statements but recommend further deferral of the implementation of IFRS 16 until 2024/25.

Consultations:

Consultation highlights that SDLT needs major review, says ICAEW: HMRC’s consultation on reforming the stamp duty land tax rules for mixed-property transactions and claims for multiple dwellings relief highlights the complexity of the current rules.

ICAEW responds to consultation on modernising tax debt collection: HMRC proposed potential extensions to its powers to recover debts from businesses repeatedly failing to make tax payments. ICAEW responds to the consultation.

ICAEW welcomes Key Audit Partner eligibility guidance changes: Proposed changes to local audit statutory guidance to make Key Audit Partner eligibility criteria less restrictive have been welcomed by ICAEW, which also calls for a more radical approach to improve capacity in England’s local audit market.

CIPFA / LASAAC consultation on local authority accounting rules: ICAEW has expressed concerns about proposed time-limited changes to local authority accounting requirements to address audit delays. Its response to CIPFA / LASAAC’s consultation on the proposals calls for sustainable amendments to improve local authority financial statements.

ICAEW responds to Welsh Government’s consultation on local variation to land transaction tax rates: There are better ways to deliver affordable housing than local rates of land transaction tax rates, says ICAEW in response to the Welsh Government’s consultation on local variation to LTT for second homes, short-term holiday lets and other additional residential properties.

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