HMRC Stakeholder Digest – 6 January 2022

6 Jan 2022

Please see the following message which we are sharing on behalf of HMRC:

This HMRC Stakeholder Digest provides a round-up of our latest news and updates, which we’d be grateful if you could share with your clients, customers or members.

The Government has set up a dedicated support page where businesses can find the right support, advice and information to help with the impact of coronavirus (COVID-19).

Self Assessment penalty waivers

Today HMRC has announced that we will not charge: 

  1. late filing penalties for those who file online by 28 February 2022 
  2. late payment penalties for those who pay the tax due in full or set up a payment plan by 1 April 2022. 

This will give taxpayers and their representatives additional time if they need it and will operate in the same way as the equivalent waivers last year. However, HMRC is encouraging customers to file and pay on time if they can - almost 6.5 million have already done so.

Our Time to Pay options are still available to assist taxpayers. Once they have filed their 2020-21 tax return, taxpayers can set up an online payment plan to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments.  

The payment deadline for Self Assessment is 31 January and interest will be charged from 1 February on any amounts outstanding (although the £100 late filing charge will not be applied until 1 March). Normally a 5% late payment penalty is charged on any unpaid tax that is still outstanding on 3 March. This year, like last year, HMRC is giving taxpayers more time to pay or set up a payment plan. Self Assessment taxpayers will not be charged the 5% late payment penalty if they pay their tax or set up a payment plan by midnight on 1 April. They can pay their tax bill or set up a monthly payment plan online at GOV.UK. 

There is no change to the filing or payment deadline and other obligations are not affected.  This means that: 

  • Interest will be charged on late payment. The late payment interest rate from 4 January 2022 is 2.75% 
  • A return received online in February will be treated as a return received late where there is a valid reasonable excuse for the lateness. This means that: 
    • There will be an extended enquiry window  
    • For returns filed after 28 February the other late filing penalties (daily penalties from 3 months, 6 and 12 month penalties) will operate as usual;  
    • A 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2022.  Further late payment penalties will be charged at the usual 6 and 12 month points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up.  
  • We will not charge late filing penalties for SA700s and SA970s received in February. These returns can only be filed on paper.  
  • For SA800s and SA900s we will not charge a late filing penalty if taxpayers file online by the end of February. The deadline for filing SA800s and SA900s on paper was 31 October. Taxpayers who file late on paper will be charged a late filing penalty in the normal way. They can appeal against this penalty if they have a reasonable excuse for filing their paper return late. 
  • Self-employed taxpayers who need to claim certain contributory benefits soon after 31 January 2022, need to ensure their annual Class 2 National Insurance Contributions (NICs) are paid on time. This is to make sure their claims are unaffected. Class 2 NICs are included in the 2020/21 Balancing Payment that is due to be paid by 31 January 2022. Benefit entitlements may be affected if they:
    • couldn’t pay their Balancing Payment by 31 January 2022, and
    • have entered into a Time to Pay arrangement to pay off the Balancing Payment and other self assessment tax liabilities through instalments.

Affected taxpayers should contact HMRC on 0300 200 3822 for help as soon as possible. Further information is available on GOV.UK.

Get ready for Plastic Packaging Tax

Did you know that Plastic Packaging Tax (PPT) will be introduced in the UK from 1 April 2022? If you’re a business that manufactures or imports plastic packaging, read HMRC's recently updated GOV.UK guidance for more information. The latest update provides information on which packaging is subject to plastic packaging tax, what businesses need to include on a tax return for PPT, and what other substances need to be considered for multi material packaging. HMRC will continue to update you about new information added to this guide.

You may also be aware, that the first HMRC Get Ready for Plastic Packaging Tax webinars took place in October 2021. Recordings of both the ‘Introduction to Plastic Packaging Tax’ and ‘Plastic Packaging Tax – Administration and technical aspects’ sessions are now available to view on GOV.UK.

The tax gap and compliance yield

HMRC has published an updated technical note explaining the relationship between the tax gap and compliance yield. The tax gap is the difference between the amount of tax that should in theory be paid to HMRC and what is actually paid, whilst the compliance yield is the estimate of additional revenues that HMRC considers it has generated, and the revenue losses it has prevented. The compliance yield is one of HMRC’s main performance measures. Our risk-based activities to tackle non-compliance aim to increase tax receipts and thereby reduce the tax gap. The tax gap and compliance yield – what they are and how they relate is available on GOV.UK. 

Inheritance Tax rules changed

The government announced in March 2021 that they would be reducing Inheritance Tax reporting requirements for 90 per cent of non-taxpaying estates requiring probate or confirmation.

As of 1 January 2022, the rules for Inheritance Tax changed to make the procedures easier and to reduce administrative burdens.

For more information about the new rules and to use the Inheritance Tax checker tool, visit GOV.UK.

Advice from the National Cyber Security Centre

We would like to draw your attention to advice from our colleagues at the National Cyber Security Centre (NCSC), which is the UK’s technical authority on cyber security. This relates to a critical vulnerability affecting millions of computers worldwide running online services. A wide range of people, including organisations, governments and individuals are likely to be affected by it.

We encourage you to visit this website for further advice and information on how to protect your systems and devices. You will also find further information to help you recover from or report incidents, and a range of other cyber security resources. 

HMRC is working with the NCSC on this matter to help make the UK the safest place to live and work online. A key part of this responsibility is to ensure organisations, businesses and citizens are aware of vulnerabilities that exist and are guided to the necessary steps to keep essential services and online lives and livelihoods secure.

Filing dormant company accounts with Companies House

All limited companies, whether they trade or not, must deliver annual accounts and a confirmation statement to Companies House each year. This includes dormant companies. A dormant company may not be in the forefront of directors’ minds, but even if they do not intend to carry on any kind of business activity or receive any form of income, they must still file annual accounts and send Companies House confirmation statements every year.

Some directors may think that because HMRC may not require accounts from a dormant company, the same applies to Companies House. This is not the case.

For further information on filing dormant accounts with Companies House click here.

Help to Grow schemes

Help to Grow Schemes – Boost Business’s Performance and Growth

In the March 2021 Budget, the Chancellor of the Exchequer announced the new ‘Help to Grow’ schemes, to help small and medium sized businesses across the UK learn new skills, reach new customers, and boost profits.  Eligible small businesses could access: 

1. Help to Grow: Management

Help to Grow: Management is an intensive leadership and management course that could help to improve a business’s performance and growth potential. 

Delivered by leading business schools across the UK, Help to Grow: Management is a 12-week course that is designed to be manageable alongside fulltime work. The course offers in-depth training run by expert facilitators, ten hours of 1:1 support from a business mentor, and the opportunity to share ideas with local peers during peer-networking sessions. By the end of the programme, business owners will have developed a tailored business growth plan to increase productivity and grow revenue, and help take their business to the next level.

The course is 90% subsidised by government, meaning businesses only have to pay a £750 joining fee. Businesses from any sector that have 5-249 employees and have been operating from at least one year are welcome to apply.

To find out more about Help to Grow: Management visit this website. 

2. Help to Grow: Digital:

From January 2022, businesses across the UK will be able to access free and impartial online support on software that can save time and money and boost their business’ performance. The new platform could help business owners to understand the benefits of different types of software and identify which could help their business goals. Support will be provided through interactive tools and technology-specific guides.

This online support service will be joined by a financial discount scheme, where eligible businesses will be able to apply for a discount of up to 50% on the costs of approved software, worth up to £5,000. The software could help businesses build customer relationships, increase sales, make the most of selling online and/or manage their accounts and finances digitally. The voucher will be available to UK businesses that have 5-249 employees and that have been trading for more than 12 months.

To register your interest in the scheme, please visit this website.