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New £1bn support package announced

The Chancellor, Rishi Sunak has announced a new £1bn support package for businesses most impacted by the highly transmissible Omicron variant that is sweeping across the UK. The biggest single measure is the re-introduction of one-off grants of up to £6,000 for businesses in the hospitality and leisure sectors (in England) many of whom have seen their seasonal trade hugely impacted by this latest COVID-19 variant. It is thought that some 200,000 businesses will be eligible for these new grants.

The main support measures announced on 21 December 2021 are as follows:

– Businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000 per premise.
– £102 million top-ups for discretionary funding will be made available for local authorities to support other businesses outside the hospitality and leisure sectors.
– The government will also cover the cost of Statutory Sick Pay for COVID-related absences for small and medium-sized employers across the UK. This applies to businesses with less than 250 employees for up to 2 weeks per employee. – -Firms will be eligible for the scheme from 21 December and will be able to make claims retrospectively from mid-January.
– £30 million further funding will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter.


The devolved administrations in Scotland, Wales and Northern Ireland will receive an additional £150m through the Barnett formula to help offer similar measures. This will be allocated with around £80 million going to the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

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Pay your tax bill by instalments

Businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

An online payment plan for Self-Assessment tax bills can be used to set up instalment arrangements for paying tax liabilities up to £30,000. Taxpayers that qualify for a Time to Pay arrangement using the self-serve Time to Pay facility online, can do so without speaking to an HMRC adviser. The service will create a bespoke monthly payment plan based on how much tax is owed and the length of time needed to pay. The service was used by over 123,000 taxpayers for the 2019-20 tax year to spread the cost of over £460m in tax.

Taxpayers that want to use the online option for their 2020-21 tax return must meet the following requirements:

– have filed their tax return for the 2020-21 tax year
= owe less than £30,000
– be within 60 days of the payment deadline of 31 January 2022
= plan to pay their debt off within the next 12 months or less


Taxpayers with Self-Assessment tax payments that do not meet the above requirements need to contact HMRC to request a Time To Pay arrangement. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

HMRC will usually offer taxpayers the option of extra time to pay if they think they genuinely cannot pay in full but will be able to pay in the near future. If HMRC do not think that more time will help, then they can require immediate payment of a tax bill and start enforcement action if payment is not forthcoming.

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Gifts to spouse or charity

In most cases, there is no Capital Gains Tax (CGT) to be paid on the transfer of assets to a spouse or civil partner. There is, however, still disposal that has taken place for CGT purposes effectively at no gain or loss on the date of the transfer. When the asset ultimately comes to be sold, the gain or loss will be calculated from when the asset was first owned by the original spouse or civil partner.

There are a few exceptions that couples should be aware of where the relief does not apply. This mainly relates to the use of goods that are sold on by the transferee’s business and for couples that were separated and not living together for the entire tax year when the assets were transferred. Spouses or civil partners that lived together at any point in the tax year when the assets were transferred can still benefit from these rules. If a transfer did not qualify then the asset must be retrospectively valued at the date of the transfer and the transferor is liable for any gain or loss.

There are similar rules for assets that are gifted to charities. However, CGT may be due where an asset is sold to a charity for more than was paid for it and less than the market value. The gain, in this case, would be calculated based on what the charity paid rather than the market value of the asset.

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Tax Diary January/February 2022

1 January 2022 – Due date for Corporation Tax due for the year ended 31 March 2021.

19 January 2022 – PAYE and NIC deductions due for month ended 5 January 2022. (If you pay your tax electronically the due date is 22 January 2022).

19 January 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2022.

19 January 2022 – CIS tax deducted for the month ended 5 January 2022 is payable by today.

31 January 2022 – Last day to file 2020-21 self-assessment tax returns online.

31 January 2022 – Balance of self-assessment tax owing for 2020-21 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2021-22.

1 February 2022 – Due date for Corporation Tax payable for the year ended 30 April 2021.

19 February 2022 – PAYE and NIC deductions due for month ended 5 February 2022. (If you pay your tax electronically the due date is 22 February 2022)

19 February 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2022.

19 February 2022 – CIS tax deducted for the month ended 5 February 2022 is payable by today.

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Postponed VAT accounting

Since 1 January 2021, businesses registered for VAT have been able to account for import VAT on their VAT return, often referred to as postponed VAT accounting. For most businesses, this means that they can declare and recover import VAT on the same VAT return. The normal VAT recovery rules regarding any VAT that can be reclaimed apply.

This applies to all customs declarations that require businesses to account for import VAT, including supplementary declarations, except when HMRC have notified a business otherwise.

These rules save businesses from having to pay import VAT (at the port of entry) and to recover at a later date. This offers cashflow benefits for affected businesses. HMRC has confirmed that the postponed VAT accounting rules are to remain in place permanently.

Businesses are able to account for import VAT on imports into Great Britain (England, Scotland and Wales) from anywhere outside the UK. Businesses in Northern Ireland can use the postponed VAT accounting for goods imported from outside the UK and EU. The VAT rules for the movement of goods between Northern Ireland and the EU have not changed and remain subject to the Northern Ireland Protocol.

VAT registered businesses do not need any specific approval from HMRC in order to account for import VAT on their VAT return.

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VAT group registration

There are special VAT rules that allow two or more corporate bodies to be treated as a single taxable person for VAT purposes. This is known as a VAT group. Eligible persons are bodies corporate, individuals, partnerships and Scottish partnerships, provided certain conditions are satisfied. Bodies corporate includes companies of all types and limited liability partnerships.

Under a VAT group registration, the representative member accounts for any tax due on supplies made by the group to third parties outside the group. This is particularly helpful for those whose accounting is centralised. As a VAT group is treated as a single taxable person, they do not normally account for VAT on goods or services supplied between group members. Only one VAT return is required for the whole group and all members of the group are jointly and severally liable for the tax due from the representative member.

There are other important points to be aware of in respect of a VAT group registration. For example, the representative member must have all the necessary information to submit a VAT return for the group by the due date. The partial exemption de minimis limits apply to the group as a whole and not the members individually.

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Claiming tax relief for working from home

Employees working from home may be able to claim tax relief for certain home-related bills they pay that are related to their work.

Employers may reimburse employees for the additional household expenses incurred through regularly working at home. The relief covers expenses such as business telephone calls or heating and lighting costs for the room in which you are working. Expenses that are both for private and business use (such as broadband) cannot be claimed. Employees may also be able to claim tax relief on equipment they have bought, such as a laptop, chair or mobile phone.

Employers can pay up to £6 per week (or £26 a month for employees paid monthly) to cover an employee’s additional costs if they have to work from home. Employees do not need to keep any specific records if they receive this fixed amount.

If the expenses or allowances are not paid by the employer, then the employee can claim tax relief directly from HMRC. Employees will get tax relief based on their highest tax rate. For example, if they pay the 20% basic rate of tax and claim tax relief on £6 a week, they will get £1.20 per week in tax relief (20% of £6). Employees can claim more than the quoted amount but will need to provide evidence to HMRC. HMRC will accept backdated claims for up to 4 years.

These tax reliefs are available to anyone who has been asked to work from home on a regular basis, either for all or part of the week including working from home because of coronavirus.

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Income excluded from a property business

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in your own home, extra services to tenants and letting surplus trade accommodation. In most cases, the income from these activities will be taxed as income of a trade and not as property income.

In addition, there are certain receipts that can arise out of the use of land, and which are specifically excluded by statute from a rental business. These include yearly interest, income from the occupation of woodlands managed on a commercial basis, income from mines and quarries and income from farming and market gardening.

There is also a £1,000 property income allowance that applies to income from property (including foreign property). If a taxpayer’s annual gross property income is £1,000 or less the amount is exempt from tax and does not need to be reported on a tax return.

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Tax Diary December 2021/January 2022

1 December 2021 – Due date for Corporation Tax payable for the year ended 28 February 2021.

19 December 2021 – PAYE and NIC deductions due for month ended 5 December 2021. (If you pay your tax electronically the due date is 22 December 2021).

19 December 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2021.

19 December 2021 – CIS tax deducted for the month ended 5 December 2021 is payable by today.

30 December 2021 – Deadline for filing 2020-21 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2022-23.

1 January 2022 – Due date for Corporation Tax due for the year ended 31 March 2021.

19 January 2022 – PAYE and NIC deductions due for month ended 5 January 2022. (If you pay your tax electronically the due date is 22 January 2022).

19 January 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2022.

19 January 2022 – CIS tax deducted for the month ended 5 January 2022 is payable by today.

31 January 2022 – Last day to file 2020-21 self-assessment tax returns online.

31 January 2022 – Balance of self-assessment tax owing for 2020-21 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2021-22.

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Who needs to register for Self-Assessment

There are a number of reasons why you might need to complete a Self-Assessment return. This includes if you are self-employed, a company director, have an annual income over £100,000 and/or have income from savings, investment or property.

Taxpayers that need to complete a Self-Assessment return for the first time should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October following the end of the tax year for which a Self-Assessment return needs to be filed. If you have missed this deadline for the 2020-21 tax year you should still notify HMRC and register as soon as possible. You should also ensure that you file your 2020-21 tax return and pay any tax due by 31 January 2022.

In certain circumstances, HMRC may also ask taxpayers to complete tax returns. HMRC has an online tool www.gov.uk/check-if-you-need-tax-return/ that can help you check if you are required to submit a Self-Assessment return.

The list of taxpayers that are usually required to submit a Self-Assessment return includes:

– The self-employed;
– Taxpayers who had £2,500 or more in untaxed income;
– Those with savings or investment income of £10,000 or more before tax;
– Taxpayers who made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax;
– Company directors – unless it was for a non-profit organisation (such as a charity) and you didn’t get any pay or benefits, like a company car;
– Taxpayers whose income (or that of their partner’s) was over £50,000 and one of you claimed Child Benefit;
– Taxpayers who had income from abroad that was taxable in the UK;
– Taxpayers who lived abroad and had a UK income;
– Income over £100,000.

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