Highlights from the broader tax news for the week ending 9 March 2022, including: HMRC guidance on new power; HMRC payments; refunds of VAT wrongly charged; freeport tax site designation; QAHC guidance; new VAT regulations; HMRC webinars; guidance for employers paying overseas tax; and COVID travel easement ending.
HMRC issues guidance on its new power to publish information about tax avoidance schemes
Following Royal Assent of Finance Act 2022, s86 provides HMRC the power to publish information about tax avoidance schemes and about persons suspected to be promoters of those schemes. HMRC has issued guidance explaining when details may be published, the type of information that may be published and where it may be published, alongside details concerning the process for making representations about whether the information should be published.
7,500 HMRC payment recipients still to provide new bank details
From 6 April 2022 HMRC will no longer pay tax credits, child benefit or guardian allowances into Post Office card accounts. Recipients of such payments must either provide alternative bank account details or set up a new bank account and notify HMRC of the details by 5 April 2022. While many have already provided new details to HMRC, around 7,500 HMRC payment recipients are yet to do so. If the change cannot be made in time, HMRC will suspend payments and pay the balance when it receives new bank account details. Recipients of HMRC payments can use their personal tax account to provide alternative account details. Alternatively, those receiving child benefit can change their bank account details via gov.uk or by contacting the child benefit helpline on 0300 200 3100, whereas tax credits recipients can change their bank account details by contacting the tax credits helpline on 0345 300 3900.
Refunds of VAT wrongly charged
Under EU law, it was possible in limited circumstances for a customer to seek a refund through the courts of VAT overpaid to a supplier directly from HMRC. HMRC has issued Revenue and Customs Brief 4 (2022) to announce that this has no longer been possible since 1 January 2021. Claimants who brought claims in the High Court before 1 January 2021 are unaffected.
Regulations designate freeport tax sites in three freeports
Regulations have been made to designate tax sites in East Midlands Freeport, Liverpool City Region Freeport, and Solent Freeport. The designations take effect on 22 March 2022 to allow for an enhanced 10% rate of structures and buildings allowance, an enhanced capital allowance of 100% on plant and machinery, and full relief from stamp duty land tax on property purchased and used for a qualifying commercial purpose. Business rates relief should also apply and employer’s (secondary) NIC relief will apply to eligible employees from 6 April 2022. Maps of the tax sites have been published.
HMRC issues guidance on qualifying asset holding company notifications
HMRC has published guidance including links for companies to use to register as a qualifying asset holding company (QAHC) and make mandatory annual information returns from 1 April 2022. Notifications made by any other means will not be accepted by HMRC. This together with another guidance page include details of the QAHC eligibility criteria and how to make the registration and annual notifications.
VAT: new regulations relating to distance selling and other amendments
The Value Added Tax (Enforcement Related to Distance Selling and Miscellaneous Amendments) Regulations 2022 ,SI 2022/226, were laid on 7 March 2022 to address issues identified in the VAT Act 1994 relating to the VAT e-commerce package, which the UK has implemented under the terms of the Northern Ireland (NI) Protocol. The SI also makes amendments to secondary legislation to remove the potential for double taxation of certain goods that move from the rest of world to NI via Great Britain (GB) and to provide legal certainty in relation to claims for repayment of overpaid import VAT in GB and NI. Finally, the SI makes a minor textual amendment to remove potential ambiguity.
HMRC webinars on uncertain tax treatment
HMRC is holding live interactive webinars on 9, 15 and 17 March to assist those businesses and their agents who will need to apply the notification of uncertain tax treatment rules from 1 April 2022. The webinars will provide an overview of the requirements and how businesses and agents can tell HMRC about tax uncertainties under this new notification regime. They will also include an opportunity to ask any questions attendees may have. Sign up to the webinars here. The webinars follow the publication of HMRC’s final guidance on the regime.
HMRC guidance for employers paying overseas tax on behalf of their employees
HMRC has updated its guidance on when employers can send a full payment submission (FPS) after paying an employee to include employers who pay overseas tax on behalf of their employees where they have difficulty with reporting the PAYE and national insurance contributions due on that tax by the usual deadlines of ‘on or before payment’. HMRC’s late reporting reason guidance has also been updated to reflect that late reporting reason code G should be used provided the FPS is submitted as soon as possible and no later than one month after the usual reporting date.
COVID travel easement ending
During the pandemic, HMRC stated that non-UK resident employees stranded in the UK because of coronavirus travel restrictions would not be taxed on earnings for duties performed in the UK after their planned departure date, provided they are taxed in their home state. As travel restrictions have been largely withdrawn and self-isolation regulations were removed on 24 February, this easement will end on 5 April 2022 as HMRC considers that it is no longer ‘just and reasonable’ to treat these duties as performed outside the UK. If an individual is non-UK resident, ordinarily any days they spend working in the UK will be treated as days on which they performed duties in the UK. From 6 April 2022, this will be the case even if they are prevented from leaving the UK as a result of coronavirus-related circumstances.
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.