In this month’s update we update you on VAT returns, recruitment struggles and late payment interests.
VAT businesses must be ready for Making Tax Digital filing by November
HMRC is reminding businesses that they will no longer be able to use their existing Value Added Tax (VAT) online account to submit VAT returns from 1 November.
By law, all VAT-registered businesses must now sign up to Making Tax Digital (MTD) and use compatible software to keep their VAT records and file their returns.
According to HMRC, more than 1.8 million businesses are already using the MTD for VAT service. Over 19 million returns have been successfully submitted through MTD-compatible software so far, the tax authority adds.
From November, businesses who file their VAT returns on a quarterly and monthly basis will no longer be able to submit them using their existing VAT online account, unless HMRC has agreed they are exempt from MTD.
If businesses do not file their VAT returns through MTD-compatible software, they may have to pay a penalty. Even if a business currently keeps digital records, they must check their software is MTD compatible and sign up for MTD before filing their next return.
Richard Fuller, Economic Secretary to the Treasury, said:
‘MTD can help businesses get their tax right first time, which cuts the administration burden and frees up time for them to get on with what matters most to them – growing their business.’
(Source - HMRC press release)
SMEs facing recruitment struggles
Eight in ten small businesses are finding it difficult to recruit staff, according to a report published by the Federation of Small Businesses (FSB).
The FSB's 'Scaling up Skills' report found that over 80% of small firms are flagging a lack of relevant qualifications, skills and experience among candidates as a problem, while 60% say a lack of applicants is also an issue.
More positively, five in six small employers provided training for themselves and/or their staff in the previous 12 months, with seven days of training and development per staff member on average.
Though critical to future sustainable growth, only a quarter of small employers say they have undertaken leadership and management training over the same period.
FSB Policy Chair, Tina McKenzie, said:
'Our members tell us their growth potential is being held back by a lack of appropriately skilled staff, with vital roles going unfilled, ultimately harming the economy.
'This skills and training deficit is a perennial issue, but far from an insoluble one. Our report sets out a roadmap for change on every level, from schools to apprenticeships to workplaces.'
(Source - FSB website)
HMRC raises late payment interest from 11 October
HMRC will raise interest rates on tax debt from 11 October following the 0.5% increase in the base rate.
This means that the late payment interest rate will increase to 4.75% from 11 October 2022. The rate last increased to 4.25% on 23 August. This is the highest rate since the height of the financial crisis in January 2009.
Late payment interest is payable on late tax bills covering income tax, national insurance contributions (NICs), capital gains tax (CGT), Stamp Duty Land Tax (SDLT) and stamp duty reserve tax (SDRT). The corporation tax self assessment rate also increases to 4.75%.
The repayment interest rate will also be increased from the current 0.75% repayment interest rate to 1.25%.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments rise to 3.25%, up from 2.75% from 3 October 2022 (with the higher rate above applying from the normal due date).
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments rises to 2% from 1.5% from 3 October 2022.
(Source - GOV.UK)
Action Fraud warns scammers are exploiting cost-of-living crisis
Action Fraud has warned that criminals are using the ongoing cost-of-living crisis to target the public with energy rebate scams.
Action Fraud revealed that more than 1,500 reports have been filed with the National Fraud Intelligence Bureau (NFIB) regarding scam emails purporting to be from energy regulator Ofgem, offering customers energy rebates.
In order to protect themselves from scams, Action Fraud has advised individuals to contact an organisation directly if they have doubts about an email; refrain from using numbers or addresses in the message and instead use the details on the company's official website; and forward suspicious communications to firstname.lastname@example.org.
A spokesperson for Ofgem said:
'Protecting consumers is our top priority and it is alarming that vulnerable customers are being preyed upon in this way when people are already struggling so much.
'That's why, as energy regulator, on top of issuing our own warnings and advice, we have asked all energy suppliers to ensure clear and up to date information on scams is easily accessible on their websites.'
(Source - Action Fraud website)
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