HAPPY NEW TAX YEAR!
6th April marks the start of the 2022/23 tax year, and is the day on which tax rates, allowances and thresholds change.
What an opening to the new tax year with tax all over the news on 6th April!
Early in the day, the 1.25% increase in National Insurance and dividend tax rates, known as the health & social care levy was debated together with other financial pressures impacting households. Then towards the end of the day the news broke that the Chancellor’s spouse was claiming non-UK domiciled status, having been born in India, and now living in the UK, meaning for 15 years she does not have to pay UK tax on offshore income and capital gains provided she does not intend to remain permanently UK resident. This compares to UK domiciles (the majority of us) who pay tax on their worldwide income and capital gains. Non-domiciled tax status is a relic of British colonial-era tax law, having been introduced in 1799 by William Pitt the Younger. So, despite all the political noise, there has been plenty of opportunity to abolish the tax rule, but instead Governments have just “tinkered.” The most recent changes coming into effect in April 2017, that the tax status can only be claimed for 15 years and after the first seven years have to pay a fee of £30,000 (£60,000 from year 12) per annum for the privilege.
At team Harbour Key we just got over the busiest three months of the year for us with self-assessment filing, 31 March company year-end planning and the personal tax year end. We are now on catch up but have a major project ongoing to update our engagement letters. The changes in the main relate to legislation updates, in particular anti-money laundering requirements, and changes as a result of the UK leaving the EU. The last time we issued an updated engagement letter to all clients was in 2017 for the introduction of The General Data Protection Regulation (GDPR), which has also been updated in part in this latest version. Our engagement pack is provided by our professional institute who have recommended an update be issued by its members. In general, there are no major changes, but should you have any queries once you have received the updated version, please do not hesitate to contact the office.
In respect of fees, despite the current economic climate, there is no fee increase. As ever, our fees are fixed for all but the most complex of assignments, and we advise in advance if a fee increase is required in respect of your work due to an increase in level of work required due to, say, an unforeseen complication or an exceptional increase in the level of transactions.
The new engagement pack will be coming via our new client portal Onvio and you will receive a link on how to use and access Onvio, which we will use going forward for secure delivery of client information. To make sure we set up the system correctly for everyone, you may receive a call from Megan requesting/checking email addresses.
Links to ONVIO Client centre guide
ONVIO LOGIN PAGE
CHARITY WING WALK!
Emma, Deborah, James and Megan are taking to the skies on 14th May to raise money for Hope for Tomorrow.
Hope for Tomorrow is a charity which gives cancer patients the gift of time, enabling them to continue their normal day to day routine, life and be able to spend time with those that they love, whilst receiving lifesaving treatment.
We’d really appreciate if you support the team in their fund-raising efforts on our Just Giving page. Your donations will help towards the charity funding Mobile Cancer Care Units ‘MCCUs’ which enable patients to fit their treatments into everyday life, not the other way round.
HMRC TAKES THE GLOVES OFF
With the end of the Government’s Covid-19 support measures, HMRC staff are being deployed back to their usual teams, although as previously reported a team has been created to root out Covid fraud.
HMRC data shows that the tax gap (the amount of tax lost in Britain through non-payment, avoidance and fraud) has increased to £35bn (this is without losses due to Covid crime). The group TaxWatch (independent of HMRC) has, put the tax lost to fraud at a minimum of £15bn.
The Treasury is applying pressure to HMRC to close the tax gap and collect the outstanding debts which have arisen over the Covid-19 pandemic. MPs on the Public Accounts Committee (PAC) are ‘not confident’ in HMRC’s ability to recover the current ‘mountain’ of tax debt.
We are therefore seeing a total change in HMRC’s behaviour from the soft approach over the period of the Covid pandemic, for example agreeing payment plans now is more difficult, tax determinations are being issued much more quickly than previously. Further actions/steps HMRC have introduced and are taking can be found on our BLOG.
Annual Tax Enveloped Dwellings Tax
Commonly known as ATED, this is an annual tax charge payable by onshore and offshore corporate entities, including companies, partnerships with corporate members, or other collective investment vehicles that own, wholly or partly, UK residential properties (“dwellings”) valued above £500,000. Any corporate entity within the regime is required to file an ATED return and make a payment by 30th April each year. There are reliefs from the annual tax, for example letting a property on a commercial basis or holding property for development. However, to claim the relief a return must be filed, which can only be filed online. Penalties are incurred for late filing. If you believe you are caught within the ATED regime or wish to enquire, please call our office.
HMRC late payment Interest
HMRC for third time since the start of the year, has raised the interest rate that applies to overdue taxes to 3.25%. The higher rates take effect on April 5 and will hit those taxpayers with time to pay plans or owe tax with no agreed payment plan. The interest rate HMRC pays on tax refunds, however, will stay frozen at 0.5% and has not risen for more than a decade.
Further to our March newsletter, we remind our business clients of the continued importance of complying with the Russian sanctions and to ensure they are not trading with sanctioned Russian companies.
New measures have been introduced to make it easier for the Office of Financial Sanctions Implementation (OFSI) to impose significant fines on those who do not comply with the sanctions. OFSI will also be able to publicly name organisations that have breached financial sanctions, even if they have not received a fine. This underlines the importance of checking the sanctions list and complying with the sanctions obligations including reporting to OFSI as soon as practicable if they know or have reasonable cause to suspect, in the course of carrying out their business, that they have encountered a person subject to a financial sanction or who has committed a financial sanctions offence.
DATES FOR YOUR DIARY
- 30 April 2022- ATED return and payment for the year 1 April 2022 to 31 March 2023 due;
- 31 May - Last day for giving any employees who were employed on the final day of the previous tax year (05 April) their form P60 for the year.
- 5 July- Last day for agreeing the operation of a PAYE Settlement Agreement (PSA) for the previous tax year with HMRC.
- 06 July - Deadline for submitting forms 42, Forms EMI40 and other relevant forms to HMRC to report share-related benefits provided to employees in the previous tax year. Return can only be submitted via HMRC’s online system
- 06 July - Last day for giving any relevant employees their copy of form P11D for the previous tax year.
Should you wish to speak with us about a specific matter, or just to be a sounding board or for a chat, please do not hesitate to give us a call.
Please do not hesitate to give us a call us on 01452 713277