January 2023 Newsletter

Welcome to our January 2023 newsletter/blog looking at some of what has happened since December 2022 and a few items that come into place in the near future which I hope is of interest to our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!

Last chance! …. Your 2022 self assessment tax return has to be submitted by 31 January 2023. If you have not yet let us have the information to prepare the return then you may already be too late. However we will do what we can to prepare and submit your return but you must help us by letting us have the information without delay.

The latest Not a Budget Statement has now been published as the Finance Bill 2022-23. This enacts all of the legislation introduced in the Autumn Statement. A summary of the contents of the Autumn Statement was sent out in our special “Making the Pips Squeak” special newsletter on 18 November 2022. A summary of the main announcements in the Statement can be found on our web site.

UK tax returns due to be filed by 31 January 2023

Don’t forget that your Self Assessment Income Tax Return for 2022 has to be filed by 31 January 2023. If you have not already sent us the information to submit your return then you are late in getting the information to us and it may be that we cannot submit your return on time.

Every year there are clients who just do not get the information to us with sufficient time to file their returns. Whilst we do our best to complete and file the returns it is not always possible to have everything done in time for the filing deadline.

It is your responsibility to get us the information in good time. As far as HMRC are concerned it is your responsibility to file your return. We will do everything we can to help you but we are not miracle workers. If we do not have the information, we cannot produce the return.

If you are still to get us the information − now is the time to do it!

MTD Delayed − again!

On 19 December 2022 HMRC officially announced that Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) has been postponed by two years.

A component of the UK government’s initiative to digitalise the tax system, the scheme was previously slated for April 2024. The fresh postponement sees this pushed back to April 2026 to “maximise the benefits”, according to Victoria Atkins, financial secretary to the Treasury.

“It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC,” Atkins said.

“Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs.”

The postponement of MTD for ITSA means that the mandatory use of software is being phased in from April 2026, rather than April 2024, with HMRC reiterating that MTD remains “a critical part” of the Revenue’s plan to modernise the UK tax system.

“A phased approach to mandating MTD for income tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring,”

Caroline Miskin, ICAEW senior technical manager, digital taxation, said that the delay “is the right move” but stressed that “fundamental changes to the policy and design of MTD” are needed.

From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.

This is the fifth delay of implementation of MTD and the only surprise is that it has been delayed with HMRC originally insisting that there would be no more delays once the 2024 date was set. It has been clear for a while that the timetable was a tight one with here being little software ready to engage with the HMRC computers and the system had not been tested at all.

Most frustrating for us at Stewart & Partners is that we have been pushing our clients to get ready for the change in how tax information is supplied to HMRC only for HMRC to keep pushing back the deadline.

“I believe that online bookkeeping is the way for all clients to go for the future. There are all sorts of software that will suit our different sizes of clients.” said Simon Lever of Stewart & Partners. “There are many benefits in online bookkeeping that our clients would benefit from. All clients should consider electronic bookkeeping even though the deadline forcing them to change has been pushed back.”

Companies House warning on scam emails

Companies House is warning that customers have reported a spate of suspicious emails claiming to be sent from the register.

The warning is important as many companies will be completing their year end annual accounts at the moment and could be duped by the scammers.

‘We will never contact you by email to find out who your officers are or ask for secure information such as authentication codes,’ Companies House stressed.

‘Be scam aware and remember to check the 'from' email address to help you spot a scam.’

If you receive a suspicious email with a link to a web page that asks for your email address and password, it may be a scam.

Always check that the URL website address is a genuine Companies House or gov.uk address. For example, a request to reset your password for the online filing service will have an address that starts: ewf.companieshouse.gov.uk.

If the link does not contain ‘.gov.uk’ within the address, it is not a Companies House page and could be a scam. Do not enter any details or click any links or buttons. The web page is not linked to Companies House services and will send your details to the scammers.

If you receive a suspicious email, forward it to phishing@companieshouse.gov.uk and then delete it.

If anyone calls claiming to be from Companies House and asks for authentication codes, it is important to try to get a return telephone number and contact Companies House immediately on 0303 1234 500 to report the incident.

Are you and/or your employees able to claim tax relief on work related expenses?

Some employees may be able to get tax relief on expenses if their employer has not already reimbursed them. This includes things like:

• uniforms and work clothing
• buying equipment
• professional fees and subscriptions
• using their own vehicles for work travel (this does not mean their journey from home to work)
• working from home

Anyone can check if they are eligible to claim on GOV.UK and if they are, they can set up a Government Gateway user ID to access their personal tax account, if they do not already have one and claim online.

Beware of companies claiming to assist employees to make the claim as they can charge more than 50% of the reclaim as a fee.

Check out claiming Income Tax relief for your employment expenses on the HMRC web site. Tell your employees about this too − it will cost you nothing and will show you are a caring employer.

Payroll benefits in kind for 2023/24

If you wish to include benefits in kind in your payroll rather than prepare year end forms P11d talk to us now so that an application can be made in good time for the start of the 2023/24 tax year. It will not be possible to do this once the new tax year has started.

90 day re-authentication process getting easier

If you use online bookkeeping then you will know the frustration of having to renew the bank feeds every 90 days.

The Financial Conduct Authority (FCA) has agreed that online bookkeeping companies can now simplify the process of re-authenticating bank feeds.

Xero has announced for its customers that software users will only need to reconfirm consent for bank feeds to continue every 90 days - by clicking on a ‘reconfirm consent’ button in the software. This means that you will no longer be required to login to your bank accounts to re-authenticate the bank feeds. Provided you give permission to do so, we will be able to reconfirm consent on your behalf.

Since this requires changes within each bank’s system as well as some work by Xero, UK banks are going live with the changes on different dates. NatWest, Lloyds Bank, Barclays Bank, HSBC Group (excl. Corporate accounts), and Santander UK amongst others are available now and Xero is ready to facilitate this. Some banks have not announced their implementation dates yet.

Once a bank has gone live with their change, we will need to re-authenticate your bank feed one more time to trigger the new process with that bank. This consent expires after 90 days. After the expiration date of 90 days, we will be prompted to click on a reconfirm consent’ button in the Xero app instead.

New Stewart & Partners Property Group

We are pleased to announce a new Stewart & Partners Property Group has been set up.

The group is for all clients and contacts who are involved in property, but the main focus will be towards residential property.

There will shortly be a dedicated page on our web site but initially we will be sending out monthly newsletters to clients and contacts to keep them up to date with what is happening in the property world.

If you are a client of Stewart & Partners and are involved in property then we will sign you up to the newsletter automatically. If you are a contact or just wish to receive the newsletter then let us know that you wish to be included and to receive the newsletter by e-mail. If you do not receive anything form us then please contact Simon to be put on the mailing list.

You can unsubscribe from the newsletter at any time.

Changes to company car tax rates from April 2025

Income Tax and employer National Insurance contributions charges are due if an employer provides employees with a company car that is available for private use.

Currently, the company car tax rates are set until the 2024 to 2025 tax year. The new company car tax rates announced at the Autumn Statement, will come into effect from 6 April 2025, 6 April 2026 and 6 April 2027 respectively.

Company car tax rates for zero emission vehicles and ultra-low emission vehicles, emitting less than 75g of CO2 per kilometre, will increase in:

• 2025 to 2026 by 1 percentage point

• 2026 to 2027 by a further 1 percentage point

• 2027 to 2028 by a further 1 percentage point, up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars

Rates for all other vehicle bands will be increased by 1 percentage point for the 2025 to 2026 tax year up to a maximum appropriate percentage of 37%, these rates will then be frozen for tax years 2026 to 2027 and 2027 to 2028.

HMRC have published details of the new company car tax rates.

The new rates will only affect employees who are provided with a company car that is available for private use. The reporting requirements to HMRC will remain the same and employers will not be required to do anything differently. Benefits can be reported either after the year end on forms P11d or through the payroll if payrolling benefits is set up (see above).

How to Grow your Business

We have written a new booklet titled How to Grow Your business which offers ten strategies you can use to take your business to the next level.

We can help − Just ask us

Are you considering starting a new arm to your business or do you have a query about tax planning? Do you need advice about financing or cashflow, maybe you just need help in accessing a loan.

We have a broad range of experience that goes far beyond just preparing accounts and tax returns. We also have access to a broad range of tools that will help with providing answers. Get in touch as we will probably have an answer to help you with your challenges.

Even if you just want help planning for the future with all the proposed tax changes, we are here for you.

And finally….

Last year was a year of many changes and struggles. Let's hope that this year brings more stability and growth.

If you have any queries you can book a free 15 minute zoom meeting with me.

Finally, don’t forget to make time for yourself and do not let your business run you, you should run your business.