Enews – October 2017
In this month’s eNews we update you on the latest government announcements on Making Tax Digital for Business (MTDfB). We also include the announcement of the Budget dates by Philip Hammond and Derek Mackay. With HMRC offering a new support service for growing businesses, a new Trusts Registration Service, updated phishing guidance and the ‘paper’ tax return deadline looming, there is lots to consider.
- Research & Development (R&D) Tax Credits
- Making Tax Digital for VAT
- Budget on Wednesday 22 November and 14 December
- Deadline for ‘paper’ self assessment tax returns
- HMRC offer tax support to growing businesses
- Trusts Registration Service
- HMRC phishing and scam advice
Research & Development (R&D) Tax Credits
R&D Tax Credits are a tax break put in place by the UK Government, to encourage companies to spend more on R&D in the UK.
SME’s, both profitable and loss making, can get back up to 33% of the amount they’ve spent on qualifying R&D.
The money is paid as a corporation tax refund, or can be carried forwards to future years.
Are you (or have you in the last 2 years) developed any new systems, products, processes or software in your business?
Are you working in an innovative way to create advances in the sector within which you operate?
If you would like to know more about this tax relief please let us know.
Making Tax Digital for VAT
The government have issued information on how Making Tax Digital for Business (MTDfB) is expected to work for VAT once the rules are introduced in April 2019.
Under the proposed rules, which have been issued subject to consultation, VAT registered businesses with turnover over the VAT registration threshold will be required to submit their VAT return digitally using software. Businesses with a turnover above the VAT threshold (currently £85,000) will have to:
- keep their records digitally (for VAT purposes only) and
- provide their VAT return information to HMRC through Making Tax Digital (MTD) functional compatible software.
This software will either be a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The functions of the compatible software include:
- keeping records in a specified digital form
- preserving digital records in a specified digital form
- creating a VAT return from the digital records and providing HMRC with this information digitally
- providing HMRC with VAT data on a voluntary basis and
- receiving information from HMRC via the API platform that the business has complied.
Businesses will need to preserve digital records in the software for up to six years. Further information on the required information can be found in Annex 1
The government will make the final detailed requirements available to the software providers by April 2018 to allow time for the software to be developed and tested prior to the rules coming into effect from April 2019.
VAT is the first tax to be reportable under MTD and businesses within the scope of MTD will need to keep their records digitally, using approved MTD functional compatible software, from 1 April 2019. The software will create the return from the digital records and this will need to be submitted under MTD for return periods starting on or after 1 April 2019.
We will keep you informed of developments in this area and ensure we are ready to deal with the new requirements. Please contact us for more information.
Internet link: GOV.UK MTD VAT legislation overview
Budget on Wednesday 22 November and 14 December
Chancellor Philip Hammond has announced that he will deliver the Autumn Budget on Wednesday 22 November.
The Autumn Budget will be the second Budget to be delivered this year, and will outline the government’s proposed tax changes and spending plans in response to forecasts from the Office for Budget Responsibility (OBR). The 2017 Autumn Budget will be the first of its kind under the government’s new fiscal timetable. During the 2016 Autumn Statement, the Chancellor announced that the annual Budget will now take place in the Autumn, as opposed to Spring.
Going forward Philip Hammond will make a Spring Statement each year, responding to a forecast produced by the OBR. The first Spring Statement will be delivered in 2018.
Meanwhile Finance Secretary Derek Mackay has confirmed the Scottish Draft Budget 2018/19 will be published on 14 December, three weeks after the Budget for the rest of the United Kingdom.
We will update you on pertinent announcements from the Autumn Budget and Scottish Budget in due course.
Deadline for ‘paper’ self assessment tax returns
For those individuals who have previously submitted ‘paper’ self assessment tax returns the deadline for the 2016/17 return is 31 October 2017. Returns submitted after that date must be submitted electronically or they will incur a minimum penalty of £100. The penalty applies even when there is no tax to pay or the tax is paid on time.
If you would like any help with the completion of your return please do get in touch.
Internet link: GOV.UK deadline
HMRC offer tax support to growing businesses
HMRC have announced the introduction of a new service to directly help mid-sized businesses as they expand and grow. This is to be known as the Growth Support Service.
According to HMRC there are approximately 170,000 mid-sized businesses registered in the UK. The businesses with either a turnover of more than £10 million or more than 20 employees, that are undergoing significant growth, can now seek help from HMRC to access the services they need.
The Financial Secretary to the Treasury Mel Stride said:
‘Mid-sized businesses make vital contribution to the UK economy and I want to see them grow, succeed and prosper.
The Growth Support Service will help these expanding businesses access tailored tax assistance so that tax administration doesn’t stand in the way of their growth and ensures businesses can focus on finding new opportunities.
Businesses who meet the eligibility requirements can apply online; they will then be contacted by their dedicated growth support specialist at HMRC, to discuss their requirements. The bespoke service will generally last between three to six months.’
Smaller business can access the Small Business Online Forum.
Please do contact us for help and support.
Internet link: GOV.UK news
Trusts Registration Service
HMRC have launched a new Trusts Registration Service (TRS), so that trustees can register their trust online and provide information on the beneficial owners of the trust. The new service launched in early July for trustees and replaces the 41G (Trust) paper form, which was withdrawn at the end of April.
Under the existing self assessment rules, the trustees (or their agents) must register details of a trust with HMRC by 5 October of the year after a liability to Income Tax or Capital Gains Tax (CGT) first arises. The registration process, which will need completing via TRS, includes providing information about the beneficial owners of the trust.
In subsequent years, or where the trust is already registered for self assessment, the trustees (or their agent) of either a UK or non-UK trust that incurs a UK tax liability are required to provide beneficial ownership information about the trust, using the TRS, by 31 January following the end of the tax year.
The new service is not currently available to agents. HMRC have advised that agents will be able to register on behalf of trustees from October 2017 and agents and lead trustees can enter updates for changes of circumstances from early 2018.
HMRC have also confirmed that in this first year of TRS there will be no penalty imposed where registration is completed after 5 October but before 5 December 2017.
A Self Assessment Trust and Estate Tax Return (SA900) must still be submitted after the end of each tax year, reporting any income and gains.
If you would like help or guidance on trusts please contact us.
Internet link: GOV.UK trusts-and-estates
HMRC phishing and scam advice
HMRC have updated their list of examples of websites, emails, letters, text messages and phone calls used by scammers and fraudsters to obtain individual’s personal information.
The guidance can be used to help you decide if a contact from HMRC is genuine, this guidance provides examples of the different methods that fraudsters use to get individuals to disclose personal information.
You can also read about how to recognise genuine contact from HMRC, and how to tell when an email is phishing/bogus.
Internet link: GOV.UK phishing-and-bogus-emails-HMRC