HMRC have said that with quarterly submissions for Income Tax, they will be able to provide taxpayers with an estimate of the tax likely to be due. I think that most of the profession is sceptical and that these estimates are likely to be inaccurate and unreliable.
If this is linked to earlier payment of income and corporation tax this would reduce businesses’ flexibility to manage their cash flow and the in-year tax estimates would not be a reliable basis for payment for most taxpayers anyway.
HMRC has been seeking information on the opportunities to reform its processes for tax payments and repayments, as well as how payment of tax might be moved closer to the time that income is earned.
The danger would be that we end up with quarterly tax payments based upon inaccurate profit figures with tax potentially being sort when none was due.
Alternative approaches include changing payment on account rules or changing the due dates within the current regime, along with the promotion of voluntary payments on account. A voluntary system would be welcomed by some taxpayers. We know of some taxpayers who already use this approach unofficially, building up credits in their tax accounts ahead of future tax payments.
Global Tax Deal
Finance ministers from the G20 have backed the global tax agreement brokered by the Organisation for Economic Co-operation and Development and urged that a detailed implementation plan be finalised by October.
Following a meeting of G20 finance ministers and the Central Bank in Venice on 9 and 10 July, a communique confirmed that the group “endorsed the key components” of the two-pillar approach to firstly, address taxation of multinationals and secondly, deal with the issue of profit shifting in a digital economy.
The OECD’s two-pillar package would create an effective global minimum corporate tax rate of at least 15% and could see $100bn of profits reallocated each year to countries in which corporations operate without paying any local taxes.
Government SME “Help to Grow” support scheme opens for registration
Small businesses can now register their interest in joining ‘Help to Grow’, the government’s new scheme.
The scheme, announced at Budget 2021, will enable small businesses to access a 12-week-programme delivered by leading business schools across the UK. The programme, which is 90% subsidised by the government, will combine:
- a practical curriculum,
- one-to-one support from a business mentor,
- peer-learning sessions, and
- an alumni network.
The second strand of Help to Grow, Help to Grow: Digital is expected to help 100,000 SMEs and is due to launch in the autumn.
In addition to being able to access advice through an online platform, eligible businesses will also be able to get a discount of up to 50% on the costs of approved software, worth up to £5,000. Vouchers are initially expected to be available for software that helps businesses:
- build customer relationships and increase sales,
- make the most of selling online, and
- manage their accounts and finances digitally.
This may be particularly useful to help businesses preparing for MTD.
The schemes are open to UK businesses with between five and 249 employees that have been operating for more than one year. Charities are not eligible for the management scheme and only businesses registered at Companies House can apply for the digital scheme.
Help to Grow Management will combine a practical curriculum, with 1:1 support from a business mentor, peer-learning sessions and an alumni network. Designed to be manageable alongside full-time work, this programme will support small business leaders to develop their strategic skills with key modules covering financial management, innovation and digital adoption. By the end of the programme participants will develop a tailored business growth plan to lead their business to its full potential. 30,000 places will be available over 3 years. The programme is 90% subsidised by government – participants will be charged £750.
Help to Grow Digital will provide free impartial advice on how technology can boost their performance through a new online platform.
Eligible businesses will also be able to get a discount of up to 50% on the costs of approved software, worth up to £5,000. Vouchers are initially expected to be available for software that helps businesses:
- build customer relationships and increase sales
- make the most of selling online
- manage their accounts and finances digitally
Business can register their interest in joining either of the schemes on:
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