I recently read an article that described 2022 as being like a football match. The first half was “Thank god we got through that” and then we are embarking on the second half “and now what?!”
In accounting circles the year began with the usual self-assessment routines and the resigned commitment of all the tax accountants.
HMRC waived late tax return filing penalties until 28 February but for those of us who were on top of things anyway, it only extended the pain..
The accounting press has been full of scandals among the big accounting firms tarnishing reputations.
We had the Spring statement, a mini budget, cutting 5p off fuel duty, increasing the national insurance threshold, and introducing a “health and social care levy” plus some other minor measures.
MTD is also not far away now and we still lack proper guidance on how it will work in detail.
The “and what now” second half of the year has started with a hike in interest rates which added to the Cost-of-Living Crisis, rising inflation predicted recession and numerous strikes giving radio presenters ample material to lay out our path to doom every morning. .
We also have the spectacle of Conservative leadership election where democracy dictates that the next PM will be chosen by a handful of elderly tory members predominantly in the south of England who have forgotten that Scotland exists.
If Liz Truss is successful she will become the first accountant in Number 10 Downing Street.
If you wondered where else you might find an accountant lurking, the captain of the recent successful women’s football team , Leah Williamson is trainee accountant, clearly putting her training to use, showing a good ability to analyse the current situation, anticipate potential problems, and implement mitigative actions to lessen their impact.
Chartered Institute of Management Accountant qualified Truss is apparently lining up fellow chartered management accountant Thérèse Coffey as Chancellor of the Exchequer. Another accountant!
Roll on the rest of the year. Self-assessment season is just around the corner once again.
QuickBooks users beware phishing emails
QuickBooks owner Intuit has warned users that they may receive an email purportedly from the vendor’s support team notifying them that their accounts have been suspended following a failed business information review.
“We’re writing to let you know that after conducting a review of your business, we have been unable to verify some information on your account. For that reason, we have put a temporary hold on your account,”
The correspondence comes from an outlook.com email address rather than a legitimate QuickBooks address.
Intuit has issued guidance for users, stating that the company never:
- Sends an email with a supposed “software update” or “software download” attachment.
- Sends an email asking the recipient to send sign-in or password details.
- Asks for bank or credit card details in an email message.
- Asks business users for confidential information about employees in an email.
HMRC enquiry activity up 60%
It is reported that fee protection specialist Croner-i has seen the number of insurance claims increase by 60% as HMRC ramps up enquiry activity into potential tax avoidance
Coronavirus Job Retention Scheme was the main type of enquiry but there is now an increase in VAT enquiries being opened.
Dentists also seem to have been singled out for special attention from the HMRC counter avoidance team.
HMRC has clearly begun to ramp up investigations after the pandemic. The most recent high profile focus area is R&D Tax Credit claims.
Fraud squad to tackle bounce back loan fraud
The Public Sector Fraud Authority (PSFA) has been launched to tackle high levels of bounce back loan fraud with a £180m target set for the first 12 months
In part it will support the Department for Business (BEIS) and bank lenders with tools to identify fraud and recover money linked to the abuse of bounce back loans.
Companies House IT Plans
Companies House plans to invest £23m in modernising IT provision.
The initial focus will be on improving the quality of data on the company register, a cracking down on overseas property owners and investment in IT systems partly with a view to improving current services but also making new services available..
This should result in benefits for customers when filing online, with increased automation and further modernising the delivery of digital services. This will make services more intelligent and intuitive and will enable customers to get it right first time when engaging with services, helping to improve the compliance rates and quality of data held.
From April 2023, overseas based owners will need to register their property ownership and future purchases. This will provide more information for law enforcement to help them track down those using UK property as a money laundering vehicle, and sanctions will be introduced for non-compliance.
Entities who refuse to reveal their ‘beneficial owner’ will face restrictions on selling the property or land, and those who break the rules could face a fine of up to £2,500 per day or up to five years in prison.
Companies House will also be given new powers to verify and validate more data on the register, which will improve the accuracy of the data. It will also mean that it will be able to undertake more analysis as well as share information with others, in order to contribute even more to the fight against economic crime.
At the end of 2021, there were 4.8m companies on the register. During the year approximately 600,000 companies were incorporated. Altogether over 12.4m transactions supplying information were received and processed.
In addition, after two years of closure due to the pandemic Companies House has confirmed that it will permanently close its office in London with all filing being pushed to online
It has also permanently shut the public counters in Cardiff, Belfast and Edinburgh, citing low demand and the push towards digital filing of all documents.
The main headquarters in Cardiff will remain as a base for staff who are increasingly working on a hybrid basis.
Online services will be available 24 hours a day, 7 days a week.
Edinburgh – short-term property lets
Edinburgh Council will bring in changes to planning rules from October. It will be Scotland’s first designated short-term let control area after the Scottish government approved proposed changes to planning requirements. Currently Edinburgh accounts for a third of all short-term let accommodation in Scotland.
The changes are intended to prevent short-term lets in inappropriate places or types of building, and ensure homes are being used for local residents.
The plans will affect both new and existing properties, although existing landlords will have an additional six months to register their properties.
From October, new hosts of short-term lets across Edinburgh will be required to obtain a licence from their local authority before they operate. Existing owners will have until April 2023 to apply and can continue operating while their application is being considered.
Renting out a room in your own home, or letting your home while on holiday, will still be allowed.
Rollover relief on furnished holiday lets
The rules on rollover relief require care and attention to ascertain whether it is available on the asset being disposed of (the ‘old’ asset) and what conditions have to be met for the replacement asset (the ‘new’ asset).
The relief operates by reducing the allowable cost of the new asset by the qualifying gain on the old asset. The relief is restricted where the proceeds are not fully reinvested in the acquisition of the new asset.
All trades carried on by the same person either concurrently or successively are treated, for these purposes only, as a single trade.
The basic requirement for relief is that the old asset must be used for the purposes of a trade carried on by the vendor.
The new asset acquired must be a qualifying asset and this can be a furnished holiday let.
The old asset and the new asst must be owned by the same “person” so if the old asset is owned by a company, you cannot roll the gain into a new asset owned personally.
One problem with acquiring a furnished holiday let for rollover relief purposes is that it will not be known for certain that the property is a qualifying furnished holiday let until the first 12 months of letting have expired.
The income tax rules for a qualifying furnished holiday let still apply to determine whether it qualifies for capital gains tax (CGT) purposes.
HMRC: claim marriage allowance
At the height of the wedding season, HMRC is reminding married couples and people in civil partnerships to sign up for the marriage allowance tax break
Marriage allowance allows married couples or people in civil partnerships, including those who have been together for many years, to share their personal tax allowances if one partner earns below the personal allowance threshold of £12,570, and the other is a basic rate taxpayer.
Eligible couples can transfer 10% of their tax-free allowance to their partner, which is £1,260 in 2022/23. It means couples can reduce the tax they pay by up to £252 a year. They can apply any time and, if eligible, could backdate their claims for up to four previous tax years to receive a payment of up to £1,242.
More than two million couples currently benefit from marriage allowance, but there could be thousands more who are eligible to claim.
Even if couples do not qualify for marriage allowance when they first get married, a change in circumstances years later could mean they become newly eligible. These include:
- one partner retiring and the other remaining in work;
- a change in employment;
- a reduction in working hours which means their earnings fall below their personal allowance;
- maternity, paternity, or shared parental leave;
- unpaid leave or a career break; and
- one partner studying or in education and not earning above their personal allowance.
If a spouse or civil partner has died since 5 April 2018, the surviving person can still claim by contacting the income tax helpline.
Marriage allowance claims are automatically renewed every year. However, couples should notify HMRC if their circumstances change.
Neonatal Care (Leave and Pay) Bill
A bill currently passing through parliament now appears set to become law, although not for at least another three or four years.
At present an employee has access to either maternity, paternity, or shared parental leave in order to spend time with their baby in hospital. These are available for a limited time and will mean that the time usually intended to build a bond and care for baby will be taken up with hospital visits and the associated stresses and issues.
If the Bill is made into law, it will allow parents to take up to 12 weeks of paid leave, in addition to other leave entitlements, such as maternity and paternity leave, so that they can spend time with their baby whilst they receive neonatal treatment.
It will be available from day one of employment and will apply to parents of babies who are admitted into hospital up to the age of 28 days, and who have a continuous stay in hospital of seven full days or more.
Neonatal care leave will be paid where the parents meet certain conditions regarding continuity of service and minimum earnings, and likely at the same rate of pay as for other family friendly statutory pay. It’s expected this will follow the same tests already in place for other family friendly rights, i.e. a minimum of 26 weeks’ continuous service and earnings above the lower earnings limit.
If you have any questions about any of these, you know where to find us. If you prefer, just give me a ring on 07770 738770 or email me at firstname.lastname@example.org.