New tax year ahead
Employers running payroll need to report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April), give their employees a P60 and prepare for the new tax year, which starts on 6 April.
HMRC have published important information for employers on gov.uk, which includes:
Making Tax Digital (MTD) is now mandatory for VAT-registered businesses
MTD became mandatory for all VAT registered businesses on the 1 April 2022.
The government states that MTD helps taxpayers get their tax returns right by reducing common mistakes as well as saving time managing their tax affairs and is a key part of the overall digitalisation of UK tax.
Evidence shows MTD is succeeding in its central aims of reducing errors, while also making it faster to prepare and submit returns and boosting productivity for businesses. New research, conducted by HMRC and peer reviewed by independent academics, shows MTD is likely to have generated increased revenue for the Treasury, through reducing errors in both 2019 and 2020.
Nearly 1.6 million taxpayers had joined MTD for VAT as of December 2021 with more than 11 million returns successfully submitted.
VAT-registered businesses that have not yet signed up to MTD for VAT should do so now. All VAT-registered businesses must use MTD for VAT for their first VAT return period that starts on or after 1 April 2022. For any business concerned about this, we can help to choose the software that is right for you, whether that is one of the simple free options available, or a more advanced product for those with more complex affairs.
Please contact us about MTD – we are here to help!
Changes to VAT rates from 1 April 2022
Many in the hospitality sector were hoping that the Chancellor would extend the 12.5% reduced rate that has applied since 1 October 2021 but, as scheduled, the rate has reverted to 20% from 1 April 2022.
The increase will apply to hospitality, visitor attractions and catering services including restaurants and takeaways.
This has a consequential effect on the VAT Flat Rate Scheme percentages from 1 April 2022 as set out below:
|
Type of Business
|
Before 15 July 2020
and from 1 April 2022
|
15 July 2020 to 30 September 2021
|
1 October 2021 to 31 March 2022
|
|
Catering services including restaurants and takeaways
|
12.5%
|
4.5%
|
8.5%
|
|
Hotel or accommodation
|
10.5%
|
0%
|
5.5%
|
|
Pubs
|
6.5%
|
1%
|
4%
|
Affected businesses should ensure that their pricing policies and internal systems and processes are updated for the 1 April 2022 change in VAT rate. Please talk to us if you need any assistance with your VAT affairs.
HMRC are closing CHIEF and moving to a new single customs platform
Over the past few years, HMRC have been working with businesses on the Customs Declaration Service, a replacement for the Customs Handling of Import and Export Freight (CHIEF) system, which is now nearly 30 years old.
Last year, HMRC announced the UK will move all customs declarations from CHIEF onto the Customs Declaration Service. They are now ready for declarants to start moving to the new system, and below are more details to help affected businesses (and their agents where relevant) prepare. The CHIEF system will close in two phases:
Phase one - after 30 September 2022: the ability to make import declarations will end.
Phase two - after 31 March 2023: the ability to make export declarations will end.
The Customs Declaration Service will serve as the UK's single customs platform, with all businesses needing to declare all imported and exported goods through the Customs Declaration Service after 31 March 2023.
HMRC have sent a letter to 242,000 traders who need to start preparing for the change.
See the letter here: HMRC calls on businesses to get ready to move to customs IT platform over the summer - GOV.UK (www.gov.uk)
Preparing for the Customs Declaration Service: Preparing for the Customs Declaration Service - GOV.UK (www.gov.uk)
Contact us with any queries: 01484 541155 advice@sheards.co.uk