New reporting requirement for FRS businesses
New reporting requirement for FRS businesses
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HMRC clarifies treatment of averaging relief under MTD IT
HMRC has updated its guidance to explain how averaging relief claims will operate under Making Tax Digital for Income Tax (MTD IT). The clarification addresses concerns about how farmers and creators will claim relief once quarterly reporting becomes mandatory. What has changed?
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Double up on the employment allowance
You’re the sole shareholder of a limited company which employs several members of staff. You’re working on plans to start another business with an ex-colleague. Can both businesses benefit from the full employment allowance (EA)?
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VAT cut for children's holiday activities over summer
The government has announced a temporary reduction in the rate of VAT applying to certain children's holiday activity programmes during the summer holidays. The measure is intended to help families with childcare costs during the school break. What has changed?
HMRC’s latest Business Brief sets out the new rules which will apply for VAT return periods commencing on or after 1 June 2022.
The change is needed to correct HMRC’s previous guidance regarding FRS-registered businesses that used postponed accounting for imports rather than paying VAT at the point of entry to the UK. Previously HMRC's guidance was to include the value of imports in their FRS turnover, whereas the legislation says it should be excluded. As a result, many businesses have underpaid VAT, while some have overpaid. The good news is that HMRC is not asking businesses to repay any VAT that has been underpaid as a result of its earlier guidance but will allow those that overpaid to claim a refund.
All FRS-registered businesses using postponed accounting must from the beginning of June 2022 exclude the value of imported goods from their turnover liable to the FRS rate. Instead, they must work out the VAT payable at the normal rate applicable to the goods and include this amount in Box 1 of their returns.
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