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Highlights from the broader tax news for the week ending 27 July 2022, including: registering non-taxable trusts that have a historic UTR; VAT deferred due to COVID-19; June 2022 import VAT statements; and deadline for renewing tax credits.

Non-taxable trusts with a historic UTR

The deadline for trusts created or becoming registrable after 6 October 2020 is within 90 days of the trust being created, or becoming registrable, or 1 September 2022 (whichever is later). One area of uncertainty has been how to register non-taxable trusts that have a historic unique taxpayer reference (UTR) but which, in practice, have not had a tax liability that required them to register previously as a taxable trust.

HMRC has advised that when registering, trustees of such trusts should interpret the question within the trust registration service asking whether the trust has a UTR as asking whether the trust has a UTR that is currently used to submit tax returns and pay any taxes due now or which are expected to be due in the next couple of years. Trustees should therefore answer “no” if the UTR is currently dormant and the trust is currently non-taxable. If a trust without a current tax liability of the sort described here has already registered using the historic/dormant UTR, no further action needs to be taken.

Answering the UTR question correctly determines whether the trust is required to provide the additional information for taxable trusts and ensures that the trust is correctly recorded as taxable or non-taxable in HMRC’s systems.

VAT deferred due to COVID-19

Businesses that deferred VAT payments due between 20 March 2020 and 30 June 2020 as a result of COVID-19 were able to:

  • pay the VAT deferred in full by 31 March 2021;
  • join the online VAT deferral new payment scheme by 21 June 2021 to spread payments of deferred VAT over instalments; or
  • contact HMRC to make an arrangement to pay deferred VAT by 30 June 2021.

Any business that has deferred VAT still outstanding may be charged a 5% penalty or interest. HMRC is urging businesses struggling to pay deferred VAT to make contact as soon as possible to make an arrangement to pay.

Issues with import VAT statements for June 2022

ICAEW’s Tax Faculty reported that HMRC had identified a technical issue with import VAT statements produced for June 2022.

HMRC has now updated its message. Businesses should not use June 2022 import VAT statements downloaded before 13 July 2022 to complete their VAT returns. To access their replacement statement, they should visit the statement page on their dashboard and download the version that has replaced the older version. The new statement will have a publication date of 18 or 19 July.

Tax credit renewal deadline

One week prior to the 31 July deadline, HMRC reported that 222,600 tax credit claims still needed to be renewed to avoid payments stopping. HMRC also warned that tax credit claimants should remain vigilant to potential scammers and avoid being rushed when renewing their claim.
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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.