Late payment interest rises again
A further increase in the Bank of England’s base rate means that HMRC’s late payment interest rates will rise again next week. What will the new rates be?
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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?
On 2 February, the Bank of England announced that it would increase the base rate of interest by 0.5%, to 4%. This is the tenth successive increase since December 2021. As HMRC’s late payment and repayment interest rates are linked to the base rate, they are also set to increase. From 13 February 2023 the following rates will apply:
- Late corporation tax paid quarterly - 5%
- Interest on overpaid corporation tax - 3.75%
From 21 February, the rates for other taxes will apply:
- Late payment interest - 6.5%
- Interest on overpaid tax - 3%
If your tax payment is outstanding, make the payment as soon as possible to avoid higher interest charges. Note that these will apply even if you agreed a time to pay arrangement with HMRC, so it's still more efficient for you to pay as much as you can sooner.
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