Need to know
HMRC tackles suspected R&D tax relief fraud in new campaign: ICAEW reported that payment of some R&D tax credits have been stopped while HMRC investigated some concerning claims. HMRC has now provided further details relating to this campaign.
Agent update 98 highlights developments to HMRC online services: HMRC is delivering a number of improvements to its digital services. ICAEW’s Tax Faculty summarises what is changing.
HMRC responds to professional bodies on service standards: HMRC’s response to ICAEW and other professional bodies points to improvements made, albeit from a very low baseline. The performance dashboard is now live and confirms that there are continuing delays in dealing with correspondence.
Employers: check flexible benefit packages are tax compliant: Flexible benefit packages can offer tax and NIC advantages. They can simplify administration, as well as making the benefit package more attractive to employees. However, ICAEW’s Tax Faculty warns that the underlying tax rules should not be overlooked.
Corporate criminal offence investigations: 28 cases underway: Companies or partnerships can be found guilty of a criminal charge, where someone associated with that business has facilitated tax evasion, and where they have not done enough to prevent this from occurring.
ICAEW calls for more innovative thinking on capital allowances reform: In its response to HM Treasury’s policy paper on options for reforming plant and machinery allowances, ICAEW’s Tax Faculty sets out ideas to make the regime more targeted and to help the government meet its other policy objectives.
2021 goods imported from EU: submit late supplementary declarations now: Businesses that brought goods into Great Britain from the EU between 1 January 2021 and 31 December 2021 must contact HMRC if they chose to delay making a declaration for those goods and have not yet made a supplementary declaration.
Draft Finance Bill 2022-2023
ICAEW’s Tax Faculty summarises the planned measures in the relevant sections:
Member helpsheets and guidance
R&D tax credits: further clarification on compliance checks: HMRC confirms that additional checks are being applied to repayment cases in date order including when advance assurance has been given.
Support on the extension of trust registrations: The deadline for registering non-taxable trusts becoming registerable on or after 6 October 2020 is 1 September 2022 or 90 days if longer. ICAEW’s Tax Faculty highlights the support available to all members dealing with the new requirements.
HMRC updates guidance on accounts for non-resident corporate landlords: Some uncertainty has arisen over the nature of accounts that need to be submitted with tax returns for non-UK resident companies with UK rental profits. HMRC has now updated its guidance to make the position clear.
Engagement letters and privacy notices: ICAEW has developed guidance for practice firms on what to include in engagement letters. This page provides a series of sample wordings to help you draft your own engagement letters.
Net Zero Tax Review expected in 2023: Climate Change Committee calls on HM Treasury to establish how the tax system can best support the transition to Net Zero.
HMRC revises guidance for agents: HMRC has started to revise its guidance on registering and transacting as an agent and on managing online agent accounts. ICAEW’s Tax Faculty highlights what’s new and where further improvements are required.
OTS: new framework for tax simplification review: On 18 July 2022, the Office of Tax Simplification issued a Review of simplification and its Annual Report for 2021-22.
OECD report to G20 confirms delay to two-pillar tax deal implementation: While the technical work on pillar two is close to completion, a deadline for signing a multilateral convention for the implementation of Amount A as part of pillar one has now been set for mid-2023 and expected to come into force in 2024.
Second-hand motor vehicle export refund scheme delayed: Northern Ireland Protocol negotiations delay introduction of refund scheme.
HMRC reports on performance in its 2021/22 annual report: HMRC describes a year in which its focus shifted from delivering COVID-19 support schemes back to its core purpose of collecting tax and delivering financial support. HMRC also notes that the challenging economic outlook means it expects to see continuing pressure on services for some time.
European Commission: tackling tax evasion and aggressive tax planning: The European Commission has issued a stakeholder consultation on options for addressing the role of enablers that contribute to tax evasion and aggressive tax planning.
HMRC consults on measures to protect taxpayers claiming repayments: Consultation covering the information provided by repayment agents about their services, the use of assignments, and registration of repayment agents.
HMRC consults on taxation of lending and staking of cryptoassets: HMRC contemplates changes to the taxation of DeFi lending or staking so that the tax treatment reflects their economic substance.
UK government commits to consultation on carbon border adjustment mechanism: Further to an April Environmental Audit Committee report, the government confirmed on 16 May that it would consult on implementing a domestic carbon border adjustment mechanism to address carbon leakage.
MTD ITSA: HMRC issues draft notices for consultation: Draft notices cover the use of functional compatible software, information required in quarterly updates, information required in end of period statements, and retail sales elections.
Reminder from ICAEW’s Financial Services Faculty
Following the Chancellor’s speech at Mansion House on 19 July 2022 which set out the importance of the financial services sector to the UK economy, the Financial Services and Markets Bill was announced on 20 July 2022. This was introduced to implement the Future Regulatory Framework and present how the financial services regulatory framework should adapt to the UK’s new position outside of the European Union.
The Bill also sets up the Regulator to make changes to the UK’s MIFID regime. The government also grants powers to HM Treasury to regulate cryptoassets, starting with stablecoins, along with powers to extend the supervisory regime to Critical Third Parties who provide services to financial institutions.
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