Babies, Exams and Mini-Budgets
Update 60 - bABIES, EXAMS & MINI-BUDGET
Since my last email, Lauren has had her baby. Little Jacob was born on the 19th August. We haven't had cuddles yet, but we're hoping for a visit really soon.
Tynam is now an FCCA accountant - meaning he has enough post exam experience to be a "fellow" of the Association of Chartered Certified Accountants (basically means he is getting as old and boring as me).
Also, congratulations to Josie who has passed her final AAT exam with flying colours, which means she will soon be moving onto the ACCA exams (which are gross and really hard, but don't tell her).
In other slightly less-exciting news:
1. Emergency mini-budget
A mini-budget has been set for the 23 September. The announcements are expected to include a reversal of the national insurance rise, a reversal of the corporation tax changes due to come in next year, changes to business rates and potentially VAT and income tax changes. It will certainly be interesting with Truss and the revised cabinet looking to 'make their mark'. As usual, I will provide a summary of what the speech and announcements actually mean in real life to businesses and individuals, once the spin has been removed.
2. HMRC PAYE DD
Many, many years ago when HMRC was actually run by real people who you could talk to (I know! It's a wild thought, isn't it?), I used to attend monthly meetings to represent my accounting body and in those meetings I used to question why PAYE couldn't be collected by direct debit, using the exact same technology they were already using for VAT DD's. Anyway, 15 or so years later, we have a variable DD for PAYE! From this month you will be able to sign up to a PAYE DD, similar to the VAT one. This means that once you have submitted your FPS & EPS's for the month, HMRC will automatically collect the PAYE/NI/Student loans etc that are due. No more late payments!
You can set this up through your HMRC online account. Unfortunately, agents do not have the ability to do this on your behalf, so we can't do this for you.
3. HMRC Customs Update
If your business imports goods into the UK, then you need to move to the Customs Declaration Service (CDS) now. If you do not, you will not be able to import goods into the UK from 1 October 2022, when the old system shuts down.
By 30 September 2022, you need to set up a new Direct Debit Instruction for the CDS if you use a duty deferment account. If you do not do this, you will not be able to use your duty deferment account and will need to make immediate payments each time you make an import declaration.
Even if you use a customs agent to help you with customs declarations, there are still actions you need to take. See Customs Declaration Service - GOV.UK (www.gov.uk)
4. Reimbursing Fuel
Despite HMRC increasing the advised fuel rate, the amount that you reimburse employees for using their own vehicle has not changed. We have had a number of queries about this recently. Where employees use their own car for business journeys, the tax-free reimbursement rate continues to be 45p per mile plus 5p per passenger. Despite lobbying, this rate has not increased for nearly 10 years.
5. Electric Cars
In order to obtain the best tax advantages of putting an electric car through your business, it should be new. Second hand electric cars have a much slower release of the tax relief. The vehicle must also be in your possession before we can claim anything, so just having the car on order by your year end will unfortunately not help your current year's tax bill.
6. Van or Car
Speaking of cars, please don't be conned by van sales people. Quite a lot of popular "vans" are classed as cars by HMRC and attract huge tax liabilities. Examples of this are VW Transporters and Vauxhall Vivaros. This is a really complicated and contentious area of tax, please speak to us before you consider buying one of these vehicles
Photo by Fé Ngô on Unsplash
All information correct at the time of publishing. The contents of this newsletter do not constitute advice. Please speak to your accountant or advisor.