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ICAEW technical round-up: September 2022

Author: ICAEW Insights

Published: 28 Sep 2022

This month’s top technical stories include a raft of tax announcements from the mini-Budget, government corrects previous statements on the amount employers can reimburse for business travel, and ICAEW’s response to consultation on repayment agents.

Need to know

Employers cannot reimburse more than approved amount for business travel: Government corrects previous statements on the amount that employers can reimburse in relation to business mileage for the use of the employee’s own car free of income tax and national insurance contributions.

HMRC interest rates for late and early payments following base rate increase: Following the Monetary Policy Committee decision to increase the Bank of England base rate to 2.25%, HMRC has announced increases to both interest charged on late paid tax and the rate paid on repayments of tax.

VAT: HMRC provides update on online error correction form: The new form, launched in August, is HMRC’s preferred option for notification of errors in VAT returns.

Variable direct debits for PAYE: Functionality to allow employers to set up a recurring direct debit to pay PAYE and national insurance liabilities will launch early in October. ICAEW’s Tax Faculty provides more details.

Developing Countries Trading Scheme to replace UK Generalised System of Preferences:

The government has announced a scheme to improve access to the UK market for developing countries.

 

Mini-Budget tax announcements

Mini-Budget: tax changes in full: The Chancellor took some big swings when it came to tax in his mini-Budget.

NIC reversal leaves little time for employers and software developers, says ICAEW: ICAEW’s Tax Faculty illuminates the practicalities behind reversing the 1.25 percentage point rise in national insurance contributions.

The Growth Plan 2022: income tax rate cuts to boost growth: The new government’s mini-Budget cuts headline income tax rates to support its pro-growth agenda, encourage spending and incentivise entrepreneurship.

The Growth Plan 2022: off-payroll working rules reversed from April 2023: Workers providing their services via an intermediary are to regain sole responsibility for determining their employment status and paying the appropriate amount of tax and national insurance contributions under the IR35 rules.

The Growth Plan 2022: SDLT changes in England and Northern Ireland: Chancellor abolishes 2% stamp duty land tax band for residential property and increases thresholds for first-time buyer relief in a bid to boost the property market and fuel growth.

The Growth Plan 2022: au revoir OTS: The Chancellor has announced that the Office for Tax Simplification (OTS) will be closed down, although two existing projects currently in progress will continue.

The Growth Plan 2022: 19% CT rate and £1m AIA from April 2023: Chancellor Kwasi Kwarteng confirms that the corporate tax rate increase in April 2023 will be cancelled and that the temporary £1m annual investment allowance limit will become permanent.

The Growth Plan 2022: investment zones: The government announced that it will introduce investment zones across the UK as part of its plan for growth. Investment zones will benefit from tax incentives, planning liberalisation and wider support for the local economy.

The Growth Plan 2022: alcohol duty reform and rates freeze: Government publishes response to alcohol duty consultation.

The Growth Plan 2022: VAT-free shopping re-introduced to Great Britain: Scheme returns allowing overseas visitors to claim back the VAT paid on purchases of goods taken home in their personal baggage.

The Growth Plan 2022: Chancellor extends reliefs and incentives for investment: EIS and VCT schemes extended and scope of SEIS and CSOP schemes widened.

 

Member helpsheets and guidance 

Importers can seek permission for short CHIEF extension: HMRC has launched an online application to request permission for continued access to Customs Handling of Import and Export Freight (CHIEF) for imports beyond 30 September.

HMRC online gForms can now be viewed before completion: HMRC has improved functionality around gForms to allow the entire form to be viewed before completion.

Controlling staff access to the agent services account: HMRC has provided further details of the ‘access groups’ functionality, which it is developing in the agent services account.

 

Consultations

ICAEW calls for UK crypto asset tax reform: ICAEW highlights the difficulties taxpayers face in applying the current tax regime to crypto asset activity. It makes the case for a brand-new set of rules to apply in this area.

UK Single Trade Window needs a proper pilot, says ICAEW: In its response to the government’s consultation on the proposed Single Trade Window, ICAEW’s Tax Faculty focused on the importance of testing for a smooth launch of the new system.

ICAEW calls for refocusing of R&D tax relief changes: In its response to the draft Finance Bill clauses published on 20 July 2022, ICAEW has highlighted those measures that it believes will inhibit R&D activity and therefore growth in the UK.

ICAEW responds to consultation on repayment agents: ICAEW shares many of HMRC’s concerns over the tax repayment agent market. However, HMRC should also promote entitlement to reliefs and make it easier to claim, to avoid relief going unclaimed.

 

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