Late payment interest to be cut
A cut to the Bank of England base rate means there will be another reduction in HMRC's penalty interest rates. What are the new charges and when will they take effect?
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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?
Interest rates were cut from 4.25% to 4% on 6 August. HMRC penalty interest rates are set at the Bank of England base rate plus 4%, and as such a corresponding change to penalty interest will soon take effect.
From 18 August the interest rate on late corporation tax paid quarterly will be reduced from 6.75% to 6.5%. Whereas late payment interest on other taxes will go from 8.25% to 8% from 27 August.
The rate of repayment interest, which is a tax-free payment made on overpaid tax, will also be reduced from 3.25% to 3% from 27 August.
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