In this month’s Enews we consider the upcoming Spring Statement; the closure of the SSP Rebate Scheme; and applications for COVID-19 grants that are still available. We also update you with the latest on freeports and the impact of interest rate rises on HMRC late payments. With guidance on self-assessment returns and fuel rates for company cars, there is a lot to update you on.
- Spring Statement is the time to act, says CBI
- Coronavirus SSP Rebate Scheme set to close on 17 March
- Businesses urged to apply for remaining COVID-19 support grants
- Two freeports planned for Scotland
- HMRC raises late payment interest rate to 3%
- MPs call for road pricing to replace motoring taxes
- Over a million take advantage of extra time to file self assessment returns
- Advisory fuel rates for company cars
Spring Statement is the time to act, says CBI
The Chancellor must act at the Spring Statement or risk the UK economy drifting backwards to low growth, warns the Confederation of British Industry (CBI).
The Spring Statement will take place on 23 March 2022. The CBI has set out a range of policies it says are aimed at sparking growth via business investment.
These include a permanent investment incentive to replace the super-deduction. The business group says this will boost business investment by £40 billion a year by 2026.
It also wants to see the Apprenticeship Levy turned into a Skills Challenge Fund. In addition, the government should tackle high energy prices by improving home energy efficiency through new grants for decarbonised heating systems.
CBI Director General Tony Danker said:
‘Business backs the Chancellor’s desire to foster a renewed culture of enterprise and deliver a more ambitious growth rate. His vision set out only last week to leverage the tax and regulatory system to promote business investment, upskill Britain’s workforce and stimulate innovation is the right recipe for future success.
‘Faced with a record tax burden, a cost-of-living crisis, wage pressures and the end of the super-deduction, firms will be looking to the Spring Statement for a clear signal that the government’s ambition will be matched by action.
‘That is the time to act if we want to push the economy onto a higher growth trajectory. It takes time for policies to kick in and deliver results, so there’s no point in waiting until an Autumn Budget.’
Coronavirus SSP Rebate Scheme set to close on 17 March
The Statutory Sick Pay Rebate Scheme (SSPRS) will close on 17 March 2022.
The SSPRS was reintroduced by the government on 21 December 2021 for employers with fewer than 250 employees.
The maximum claim per employee is two weeks at the statutory sick pay (SSP) rate of £96.35 per week (£192.70 in total), which is the rate for 2021/22 (£99.35 2022/23). The employer’s claim is also capped at the number of employees in its PAYE scheme on 30 November 2021.
In a statement, the government said:
‘You have until 24 March 2022 to submit any new claims for absence periods up to 17 March 2022, or to amend claims you have already submitted.
‘You will no longer be able to claim back SSP for your employees’ coronavirus-related absences or self-isolation that occur after 17 March 2022.
‘From 25 March we will return to the normal SSP rules, which means you can revert to paying SSP from the fourth qualifying day your employee is off work regardless of the reason for their sickness absence.’
Internet link: GOV.UK
Businesses urged to apply for remaining COVID-19 support grants
Businesses are being encouraged to apply for remaining coronavirus (COVID-19) grant funding from local authorities.
Hospitality, leisure and accommodation businesses can still apply for one-off cash grants of up to £6,000 through the Omicron Hospitality and Leisure Grant scheme.
The funding is made up of £556 million available through the Omicron Hospitality and Leisure Grant (OHLG) scheme and a further £294 million through the Additional Restrictions Grant (ARG) scheme.
The OHLG scheme provides businesses in the hospitality, leisure and accommodation sectors with one-off grants of up to £6,000 per premise.
To provide further support to other businesses, the ARG scheme provides councils with funding they can allocate at their discretion to businesses most in need, such as personal care businesses and supply firms.
Paul Scully, the Minister for Small Business, said:
‘We’re working to get our economy running on all cylinders again so we can focus on making the UK the best place in the world to work and do business, creating jobs along the way.
‘Eligible businesses should apply as soon as possible for the grants available to help them put the pandemic behind them and get on a sounder footing.’
Internet link: GOV.UK
Two freeports planned for Scotland
A partnership agreement to establish two green freeports in Scotland has been reached between the Scottish and UK governments.
The locations for the freeports have not yet been decided and there will be an application process with a view to setting up the freeports in 2023. Applicants in Scotland will be required to contribute towards a just transition to net-zero emissions by 2045, delivering net-zero benefits and creating new green jobs.
The UK government is expected to provide up to £52 million in seed funding to help establish green freeports in Scotland, which is in line with funding offered to the eight freeports already designated in England.
Freeports are specified geographical areas that allow certain benefits to businesses operating within them. These include a range of tax and other incentives, including a suspension from customs duties for imported goods and less burdensome customs procedures.
Scottish government Secretary for Finance and the Economy, Kate Forbes, said:
‘The Scottish government will have an equal say on all bids and will expect bidders to adhere to fair work practices, including payment of the Real Living Wage.
‘We can only seize Scotland’s economic potential if we create secure, sustainable and satisfying jobs that also help build a fairer, more prosperous economy for everyone. That is my absolute priority and establishing green freeports will be integral to achieving this.’
Internet link: GOV.UK
HMRC raises late payment interest rate to 3%
Following the decision by the Bank of England to increase the base rate, HMRC has confirmed that the late payment interest rate rose a quarter of a percent.
The increase applies from 14 February 2022 for quarterly instalment payments and from 21 February 2022 for non-quarterly instalment payments.
On 2 February 2022, the Bank’s Monetary Policy Committee (MPC) increased the base rate to 0.5%.
As HMRC interest rates are linked to the Bank of England base rate, the increase in the base rate from 0.25% to 0.5% triggered an increase in rates for late payments.
On 4 February 2022, HMRC announced that the current late payment interest rate applied to the main taxes and duties would rise to 3% from 2.75%, effective from 21 February 2022.
The 3% rate is applied to late payments for income tax, national insurance contributions (NICs), capital gains tax (CGT), stamp duty land tax (SDLT), stamp duty and stamp duty reserve tax.
The corporation tax pay and file rate will also rise to 3% for late payments, while the repayment rate remains at 0.5%.
The rate for corporation tax self assessment, if unpaid from normal due date, will also be charged at 3%. The interest charged on underpaid quarterly instalment payments rises to 1.5% from 1.25%.
This is the second rate rise in just over a month following two consecutive rises in the Bank of England base rate. In line with the December 2021 announcement, interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments remains at 0.5%, which is unchanged since March 2009.
Internet link: GOV.UK
MPs call for road pricing to replace motoring taxes
The government must overhaul motoring taxes as it phases out new diesel and petrol vehicles, according to MPs.
MPs on the Transport Committee say the government must come up with new policy options by the end of the year. A ban on the sale of new diesel and petrol vehicles will be introduced by 2030, which means £35 billion will be lost in tax revenue.
In a report entitled Road Pricing, the Committee favoured a road charging system based on technology which measures road use.
Any scheme would include the drivers of electric vehicles, who would be required to pay for road usage. It would also cover vans and HGV vehicles, as well as overseas vehicle drivers.
Huw Merriman MP, Chair of the Transport Committee, said:
‘We need to talk about road pricing. Innovative technology could deliver a national road-pricing scheme which prices up a journey based on the amount of road, and type of vehicle, used. Just like our current motoring taxes but, by using price as a lever, we can offer better prices at less congested times and have technology compare these directly to public transport alternatives.
‘By offering choice, we can deliver for the driver and for the environment. Road pricing should not cost motorists more, overall, or undermine progress on active travel. Work should begin without delay. The situation is urgent. New taxes, which rely on new technology, take years to introduce.
‘A national scheme would avoid a confusing and potentially unfair and contradictory patchwork of local schemes but would be impossible to deliver if this patchwork becomes too vast. The countdown to net zero has begun. Net zero emissions should not mean zero tax revenue.’
Internet link: Parliament website
Over a million take advantage of extra time to file self-assessment returns
HMRC has revealed that more than one million taxpayers filed their late tax returns in February – taking advantage of the extra time to complete their self assessment without facing a penalty.
About 12.2 million taxpayers were expected to file a return for the 2020/21 tax year and more than 11.3 million submitted their returns by 28 February.
The deadline for submitting tax returns was 31 January but, this year, HMRC gave customers an extra month to complete it. If customers filed their returns in February, they would avoid a late filing penalty.
HMRC has given customers until 1 April to pay their outstanding tax bill or set up a Time to Pay arrangement to avoid receiving a late payment penalty. Interest has been applied to all outstanding balances since 1 February.
Lucy Frazer, Financial Secretary to the Treasury, said:
‘[The] stats show how vital the extra month was in supporting the cash flows of more than a million self-employed people and businesses across the UK, helping to ensure their survival as we recover from the pandemic.’
Internet link: HMRC press release
Advisory fuel rates for company cars
New company car advisory fuel rates have been published and took effect from 1 March 2022.
The guidance states: ‘you can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 March 2022 are:
|1400cc or less||13p|
|1401cc – 2000cc||15p|
|1400cc or less||8p|
|1401cc – 2000cc||10p|
|1600cc or less||11p|
|1601cc – 2000cc||13p|
HMRC guidance states that the rates only apply when you either:
- reimburse employees for business travel in their company cars
- require employees to repay the cost of fuel used for private travel.
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is 5p per mile. Electricity is not a fuel for car fuel benefit purposes.
If you would like to discuss your company car policy, please contact us.
Internet link: GOV.UK AFR