Highlights from the broader tax news for the week ending 17 November, including: HMRC contacting taxpayers about the extension of MTD VAT from April 2022, designation of the first freeport tax sites and a warning about self assessment scams.
HMRC starts contacting taxpayers about the extension of MTD VAT from April 2022
HMRC has started to write to VAT registered businesses with turnover below £85,000 to alert them to the need to comply with MTD VAT requirements from April 2022. The first batches of letters are being sent in November and December 2021 to stagger 1 and 2 quarterly filers and those who file monthly or annual VAT returns. Similar letters will be sent to stagger 3 quarterly filers in February 2022. HMRC is trialling three different versions of the letters to help it assess the success of slightly different approaches which will help it to design future communications campaigns. About a third of VAT registered businesses with taxable turnover below the threshold have already signed up to MTD VAT voluntarily and should not receive a letter. Some businesses may wish to apply to for a digital exclusion exemption; HMRC has indicated that it is now accepting applications from those who require an exemption from April 2022.
Designation of first freeport tax sites
Tax sites in three freeports will come into force on 19 November 2021. In Humber Freeport, the tax sites are Hull East and AMEP; in Thames Freeport, the tax sites are Dagenham, Tilbury and London Gateway; and in Teeside Freeport, the tax sites are Teesworks East, Teesworks West and Wilton International. Following designation, businesses in these freeport tax sites will be able to benefit from a number of tax reliefs including an enhanced rate of structures and buildings allowance, enhanced capital allowances for plant and machinery, stamp duty land tax relief, business rates relief and from April 2022, national insurance contributions relief. Find out more about freeports.
HMRC warns taxpayers about self assessment scams
HMRC is warning taxpayers about self assessment related scams including phone calls, letters and emails from fraudsters. In the last year, HMRC responded to 800,000 reports of suspicious contact made by the public – around 360,000 of these offered bogus tax rebates. HMRC has successfully used technology to prevent huge numbers of emails and texts from reaching the public and has taken action to prevent spoofing of HMRC phone numbers but the level of fraudulent activity continues to increase. This week, HMRC is sending more than 4m genuine emails and texts offering reminders and guidance on self assessment; these do not include any links, offer refunds, demand urgent transfer of funds or request personal information. Taxpayers should take particular care to avoid bogus websites designed to make them pay for help in submitting tax returns or charging to connect them to HMRC phone lines.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.