Need to know
ICAEW urges members to be aware of mini-umbrella companies: HMRC has issued new guidance on the fraudulent activities of so-called ‘mini-umbrella companies’ sometimes created to avoid paying tax and national insurance. ICAEW’s Tax Faculty calls on members to ensure they are informed.
Bounce Back Loans - getting ready to repay: Businesses are being contacted by their banks about repayment of Bounce Back Loans. If repayments are not affordable, businesses should consider their options and take action.
CJRS - is an employee receiving fixed or variable pay? Whether an employee has fixed or variable pay is a key concept for calculating amounts that can be claimed under the Coronavirus Job Retention Scheme. The Tax Faculty explain that the classification of some employees is essentially the employer’s choice.
Powers to ban unfit dissolved company directors extended: The Insolvency Service is set to gain new powers for cracking down on directors who dissolve companies to avoid repaying government support monies.
HMRC steps up MTD VAT compliance activity: HMRC is taking a tougher approach to traders that should have signed up to Making Tax Digital for VAT including a trial of closing their access to online VAT returns. ICAEW’s Tax Faculty explains the steps that are being taken.
FRC - more information needed on significant balance sheet events: Better explanation of balance sheet movements and alternative performance measures are among the recommendations flagged up by a review of quoted companies’ interim reporting by the Financial Reporting Council.
Climate risk reporting needs ‘clear and pragmatic’ guidance: ICAEW has backed government moves to improve the quality of reporting around climate-related risk but warned that changes risk overwhelming organisations with their complexity.
ARGA powers strengthened on local government audit: The Audit, Reporting and Governance Authority will be reinforced with new powers over local government audit, protecting public funds and ensuring councils are best serving taxpayers.
Other technical news and updates
Government SME support scheme opens for registrations: Small businesses in the UK can now register their interest in joining ‘Help to Grow’, the government’s new scheme to help SMEs prosper post-pandemic.
Finance Bill 2021 - government tables amendments and new clauses: Ahead of the report stage scheduled for 24 May, the government has tabled several proposed amendments to the Finance Bill 2021 including to the super deduction and non-resident SDLT surcharge. It has also proposed four new clauses and a new schedule concerning VAT.
UK manufacturers operating within freeports could face tariffs: The UK government admits that post-Brexit trade deals include clauses that could prevent companies benefitting from freeport tax breaks, affecting business worth up to £35bn annually.
NIC Bill confirms reliefs for freeports and broadening of DOTAS: The government has published the National Insurance Contributions Bill, which legislates reliefs for employers of veterans and those operating in Freeports, as well as for the self-employed isolating due to COVID-19. The Bill will also enable upcoming changes to the DOTAS scheme to apply to national insurance avoidance.
FCA - fintech firms must clarify non-bank status: E-money accounts can be a convenient and accessible way to use banking services, but the financial services watchdog has warned providers they need to make clear they are not a bank.
HMRC loses Tooth, but gains second bite at discovery: The Supreme Court has ruled that there was no deliberate inaccuracy in an income tax return despite the taxpayer "fudging" the return as result of a technical issue with the software used to prepare it. However, it also confirmed that HMRC can make discovery assessments after initially deciding not to raise an enquiry.
Treasury launches first review of the Office of Tax Simplification: How effective has the Office of Tax Simplification (OTS) been in making suggestions to simplify the UK’s tax system and what more could be done in future? ICAEW’s Tax Faculty outlines HM Treasury’s review of the OTS and how you can contribute.
HM Treasury consults on new residential property developer tax: As part of a £5bn cladding remediation package following the Grenfell Tower disaster, the government is proposing a new residential property developer tax. Likely to be introduced in 2022, the tax aims to raise at least £2bn over 10 years and would apply to developers with annual profits in excess of £25m.