Nichola's SME Tax Spring update 24 March 2022

Hello,

This week we take a closer look at measures announced in Chancellor Rishi Sunak's 2022 Spring Statement, we have a new Agent update, late payment interest rises and list of targets in the sanctions list is expanded even further.

The Spring Statement is not a budget but no chancellor can ever resist a chance to use the occasion to tweak the tax system in a timely fashion. Changes to National Insurance Contributions (NICs) thresholds will be welcomed by many workers. Other announcements made by the chancellor are something of a mixed bag. With headline inflation now running at 7.4%, according to the Office of Budget Responsibility (OBR) rising interest rates may soon present problems for those with mortgages and those who are already struggling to pay bills in general. 

On a much brighter note, the clocks change this weekend and I hope that you can all Spring forward in readiness for the next tax year. Don't forget to claim Gift Aid on your charitable donations and to check the rules for income tax claims on your forthcoming 2022 tax return.

More news, views and CPD updates below, read on!

Back soon, 

Nichola Ross Martin FCA CTA (Fellow)
Tax Director

www.rossmartin.co.uk

Your Virtual Tax Partner® online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick News (Freeview) 

Spring Statement 2022: At a glance
Chancellor Rishi Sunak made his 2022 Spring Statement on 23 March 2023. Headline grabbers were a cut in the National Insurance threshold for employees, a future cut in Income Tax and another freeze on fuel duty.

Agent update: March 2022
HMRC have issued their Agent Update for March 2022. We have summarised the key content for you with links to our detailed guidance on the topics covered. 

Sanctions against Russia & Belarus
UPDATE: new targets are listed by the government, the CIOT update their guidance.

Late payment interest rate rises to 3.25% 
Following the Bank of England’s recent announcement increasing the base rate, HMRC have announced that their late payment interest rate will also increase by 0.25%, to 3.25%, from 5 April 2022.

Guides & Updates (subscribers)  

Self Assessment   

Private client: What’s on? 2021-22
It's a year of two Finance Acts: Finance Act 2021 received Royal Assent on 10 June 2021. Finance Act 2022 received Royal Asset on 23 Feburary 2022. This update includes measures from both documents as well as considering other topical private client issues for advisers and their clients.

Annual Expenses for employees: How to claim   
The way in which employees can claim expenses is changing from May 2022.  This freeview guide explains the way in which employees can claim expenses.

Directors & Companies 

Discovery Assessments
UPDATE: When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences? 

Employers

P11Ds: Employers' top tips tool kit
Top Tips for employers on preparing form P11D together with a checklist.

Private Client & Estate Planning 

Trust Registration Service
UPDATE: Up to 1 million non-tax paying UK trusts could be required to file with the Trust Registration Service under rules coming into effect on 1 September 2022.

National Insurance: What's the maximum payable?
UPDATE: How are National Insurance Contributions (NICs) limited? What is the maximum payable? What different rules apply to employment and self-employment income? 

Family Investment Companies
UPDATE: What is a Family Investment Company?  Why use a Family Investment Company?  What is the tax treatment of a Family Investment Company?

Pensions: Tax charge for excess contributions
UPDATE: When does a tax charge arise for excess pension contributions? What are taxpayers' responsibilities under Self Assessment? 

Tax Cases 

DIY homeowner suffers heavy penalties for failing to declare gains
In Mark Campbell v HMRC [2022] TC08398, the First Tier Tribunal (FTT) concluded that the purchase, modification and sale of four properties in five years was not trading and was subject to Capital Gains Tax. No Principle Private Residence (PRR) relief was available on the disposals as the properties did not have sufficient quality of occupation.

Serious Schedule 36 failures lead to tax-geared penalties
In HMRC v AML Tax UK Ltd [2022] UKUT 00081, the Upper Tribunal granted HMRC's request for a higher than usual penalty to be applied to the taxpayer for failure to provide information under a Schedule 36 notice. This was despite the fact that the penalty was tax based and HMRC were unable to assess the liability due to a lack of information.

Tax Toolkits 

Tax Tools
Be a winner with our game-changing tax diagnostics tools for Business Asset Disposal Relief, SDLT & annexes/subsidiary properties, Company reorganisations, R & D Zone and TAAR on winding up. Sign up now!

Tax Queries?

Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a very wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more. 

CPD for lunch 

Byte-sized chunks of CPD for subscribers

• CPD: Business Asset Disposal Relief
• CPD: Appeals: How to Appeal a Tax Penalty
• CPD: VAT: Land and Property

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 17 March 2022

• Avoid penalties: pay your tax or arrange time to pay by 1 April 2022 
• Employment-related securities: What’s New? March 2022
• Report a discrepancy about a beneficial owner on the PSC register
• Wasteful: costly findings of MTD research
• Companies House: What's New?
• UT: CIS Gross Payment Status removed eight years after compliance failures
• No reasonable excuse for DIY taxpayer  
• Court of Appeal: Gas storage caves are not plant
• Closure Notice defects: no reasonable excuse
• Freedom of Establishment infringement was justified but disproportionate
• Revenue and Customs Brief 6 (2022): Lennartz mechanism and VAT accounting 
• Business Rates: What's new?
• Dividends & distributions
• National Insurance
• Year-end top tips for OMB's 2021/22 
• Freeports: Tax breaks
• SRT: Statutory Residence Test ...More 

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