Every week we take a look at what is trending in the accountancy and tax press and share items that we think will interest you. However, these are only outlines and where they relate to tax planning should not be acted upon without looking into them more completely, as everyone’s circumstances are particular to them. You need to take specific advice appropriate to your own circumstances.
While every effort is made to deliver accurate, informative and balanced articles, this content is general in nature and should not be used as the sole basis for making decisions.
TikTok Tax Repayment Fraud
Two suspects, aged 22 and 25, who are from Romania, allegedly used TikTok to persuade taxpayers to hand over tax account details with the promise of financial rewards.
HMRC cybercrime investigators arrested the pair during a raid in east London last month.
HMRC blocked £153m of suspected fraudulent tax refund claims that are thought to have used personal tax details from TikTok users.
No further details about the ongoing investigation were released by HMRC at this stage.
HMRC is urging people to be cautious of any online posts claiming ‘risk-free’ rewards in return for sharing their personal information. HMRC are warning of the prevalence of these types of scam, saying it has ‘seen similar suspected scams across multiple social media platforms – such as Instagram and Snapchat’.
Anyone giving out their tax details risks their identity being stolen.
HMRC never uses social media to offer a tax rebate or ask for personal or payment information.
Condoc on Zero Hour Contracts
The government is intent upon ending zero-hour contracts. An eight-week consultation will provide the opportunity for employers and businesses to feed back on the implementation plans.
This means there is still a chance for employers to influence the final framework before the government develops ‘final policy positions’.
The reform of zero-hours contracts is part of the government’s ambitious plan to extend workers’ rights under its Make Work Pay agenda.
However, businesses are concerned about the policy creep with unintended consequences for low-paid workers and the risk of raising unemployment figures further.
The government’s view is that the current situation creates‘one-sided flexibility’, putting employers in too strong a position.
There will not be an outright ban on zero-hours contracts, although there will be more protections for workers hired on that basis when the new rules come into force.
Under the proposed new rules, employees will have the right to:
- guaranteed hours, where the number of hours offered reflects the hours worked by a qualifying worker during a reference period;
- reasonable notice of shifts and changes to these; and
- Payment for shifts cancelled, curtailed or moved at short notice.
The consultation presents a range of options on how different thresholds and timeframes would interact with each other and affect both workers and employers, including across different sectors.
Employers will be able to use limited-term contracts to manage periods of increased demand – for example, due to seasonal fluctuations.
The consultation closes for comment at 11:59 am on 25 August.
MTD and Averaging Relief
Not all taxpayers who claimed averaging relief in their 2024/25 self-assessment tax return are automatically exempt from Making Tax Digital (MTD) for income tax for 2026/27.
The making of a claim for averaging relief is one of the circumstances in which an exemption may apply from MTD income tax for 2026/27.
Where an individual made a claim for averaging relief using the SA103 in their 2024/25 SA tax return, they are automatically exempt from MTD income tax for 2026/27. Where this was not the case, but the individual reasonably expects to make a claim for averaging relief in their tax return for either 2025/26 or 2026/27, they must apply to HMRC for exemption.
Although MTD income tax does not apply to partnerships, a partner will be within the scope of MTD income tax for 2026/27 where their total gross income from all qualifying sources (sole trades and property businesses) exceeded £50,000 in 2024/25. Where this is the case, they must keep digital records and submit quarterly updates for their qualifying sources and use MTD-compliant software to file their 2026/27 year-end tax return.
Where the partner claimed averaging relief using the SA104 in their 2024/25 SA tax return, they are not automatically exempt from MTD income tax for 2026/27 and must apply to HMRC for exemption.
As is the case for individuals, a partner must apply for exemption where they reasonably expect to make a claim for averaging relief in their tax return for either 2025/26 or 2026/27.
Phishing
Recent Government research shows:
- Cyber risks for organisations remain relatively high, with phishing attacks the most common.
- Educational institutions are particularly vulnerable to attacks.
The prevalence of cyber breaches or attacks remained fairly steady, at 43% for businesses and 28% for charities. Medium (65%) and large (69%) businesses are still more likely to have experienced a cyber breach or attack in the previous 12 months, compared to small (46%) and micro (42%) businesses.
Phishing remains the most prevalent attack, affecting 38% of businesses and 25% of charities. Interestingly, ransomware attacks on businesses declined to 1%, compared with 3% the previous year.
For charities, impersonation attacks decreased to 7% from 11% in 2024/2025, while account takeover was down to 1% from 3%.
Looking at cyber security risk management more broadly, most businesses and charities had basic technical controls in place. However, only about 30% of businesses and charities conducted risk assessments. Just 25% of businesses and 19% of charities had formal incident response plans, and very few were reviewing supply chain risks. Of those surveyed:
- 15% of businesses and 9% of charities confirmed they were reviewing their immediate supply chain risks, and
- 6% of businesses and 4% of charities were reviewing their wider supply chain risks.
These governance gaps show the need to raise the cyber governance bar, particularly around the supply chain.
Educational institutions are increasingly targeted in cyber-attacks. The survey shows that the sector had a higher proportion of breaches or attacks. In the 12 months prior to the survey:
- 98% of higher education institutions,
- 88% of further education colleges and
- 73% of secondary schools
had experienced an incident.
VAT Registration
Businesses that receive a letter from HMRC telling them they need to register for VAT should check their position carefully and register without delay if necessary.
In general, a business must register for VAT where:
- its taxable turnover for the last 12 months exceeds the VAT registration threshold (£90,000); or
- Its taxable turnover for the next 30 days is expected to exceed £90,000.
It is possible to register for VAT voluntarily.
HMRC iswriting to non-VAT registered businesseswhere its records show that the business’s turnover has exceeded £90,000. The letter asks the business tocheck if they need to register for VATand toregister for VATif they are required to do so. A business that registers for VAT late will need to pay VAT on any sales since the date it should have registered, plus interest. HMRC may also charge a penalty.
HMRC says that it will monitor the business’s response to the letter. A business that receives a letter and does not register for VAT where it is required to do so may face a penalty of up to 100% of potential lost revenue.
There are circumstances in which a business with turnover in excess of £90,000 may not be required to register for VAT. These include the following:
- Where the figure for turnover given in the letter includes exempt supplies or supplies that are outside the scope of VAT (i.e. where turnover exceeds £90,000 but taxable turnover does not). Taxable turnover is the total value of all goods and services a business supplies that are subject to VAT. This includes zero-rated supplies, even though no VAT is charged on them. It does not include exempt supplies or supplies that are outside the scope of VAT.
- Where the turnover figure quoted by HMRC is for a period longer than 12 months.
- Where an exemption from registration applies(broadly, because the business makes mainly or wholly zero-rated supplies).
- Where the business has gone over the registration threshold temporarily.
Therefore, it is important that the business reviews its position before registering for VAT. Where the business finds that it is required to register for VAT, it should do so without delay.
Deadline for Submitting a VAT Return
The deadline for submitting a VAT return and paying any VAT due to HMRC is not extended even if it falls on a weekend or a bank holiday.
HMRC has said that it has seen an increase in businesses submitting VAT returns late where the deadline falls on a weekend (i.e., Saturday or Sunday) or a bank holiday.
The general rule is that the business must submit its VAT return for a VAT accounting period no later than one calendar month and 7 days after the end of that accounting period. The VAT due to HMRC for the period should clear HMRC’s account by the same due date.
The circumstances in which the general rule does not apply include:
- where a paper return is filed, in which case the return must reach HMRC by the deadline stated on the return, generally the last day of the month following the end of the return period; and
- where the business uses the VAT annual accounting scheme, in which case the deadline is two months after the end of the period.
A business that submits a VAT return or pays VAT late may be liable to interest and penalties.
Late Payments Bill
The Small Business Protections Bill is one of the first to be put before parliament, including a cap on payment terms and new powers for the Small Business Commissioner.
Government research suggests that 38 businesses close every single day due to late payments.
The key measures in the Bill include:
- a 60-day cap on payment terms for all large firms paying smaller suppliers;
- mandatory interest on late payments, set at 8% above the Bank of England base rate; and
- A ban on the practice of withholding retention payments under construction contracts.
- The Small Business Commissioner will be given new powers to investigate poor payment practices, adjudicate disputes, and fine persistent late payers.
Questions?
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 alan.long@thelongpartnership.co.uk.
