HMRC phases in new IT system
The current VAT mainframe computer will be decommissioned next year. HMRC is preparing for this by moving businesses to a new IT system over the next few months. Why might this mean problems with payments?
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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 intends to start moving taxpayer accounts to a new IT system in July 2021 and hopes to finish by September 2021. This change will affect:
- VAT-registered businesses that are not signed up to Making Tax Digital, i.e. mainly voluntary registrations; and
- businesses that pay their VAT bills by direct debit.
To comply with banking regulations, HMRC has to inform businesses that pay by direct debit of the amount and payment date before the payment is taken. Due to the short timeframe between the return due date and the payment date, HMRC says it will only be able to do this by email following the change. If a business has no email on record, the direct debit will be cancelled, meaning the business is at risk of paying late. It is therefore worth logging into the business tax account now to ensure there is an email address on record.
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