HMRC delays new VAT penalty rules
The first step towards alignment of VAT and direct tax penalties was due to take place in just two months but yesterday the government announced a delay. What’s the full story?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
HMRC’s original timetable for the harmonisation of its late filing penalty and late payment interest regimes across most direct and indirect taxes was due to start on 1 April 2022 with the scrapping of the VAT surcharge rules. Following the announcement by the Treasury on 13 January this has been put back by nine months until 1 January 2023.
When the new rules take effect late filing penalties will be charged using a points system. Points will be added to a taxpayer’s record for each late filing and penalties will escalate the more points are racked up. For late payments there will be varying charges according to how late each payment is.
HMRC’s updated guidance about the new penalty and interest rules can be viewed here and here.
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