TaxAntics Newsletter - October 2022
Welcome to the TaxAntics October 2022 Newsletter... which is delivered on 1 November 2022 (All Saints Day) after having to be substantially rewritten following the changes in tax policy announcements in recent weeks……
tax or treat!..
Halloween is traditionally a time to ward off bad spirits and some might think that, with everything going on globally and with the UK economy and politics, there has never been a more poignant time to reflect on its meaning. At least for our Director, Plymouth Argyle’s 4-2 victory over Exeter City in terrible weather conditions for the Devon Derby on 31 October 2022 would seem as good a start as any (Jerome originally hails from Plymouth)….
GROWTH PLAN and budget UPDATE
Originally moved to 31 October 2022, the medium term fiscal plan (or budget for short) will be bought forward from 23 November 2022 to 17 November 2022!
As you may recall, on Friday 23 September 2022, the Chancellor, Kwasi Kwarteng, unveiled the Growth Plan which was described as being aimed at tackling high energy costs and rising inflation by delivering higher productivity and wages to realise the huge potential in the British economy. Our summary can be found here:
https://www.taxantics.co.uk/jungle-chatter/newsletter-september-2022/
As you will most likely be aware, much of the plan, including the cut to the 45% additional rate of income tax, will not be going ahead.
Following an extremely negative global economic response to the UK’s growth plan, Kwasi Kwarteng had resigned as chancellor by 14 October 2022 with Jeremey Hunt as his replacement. Following Liz Truss’s resignation, Rishi Sunak become Prime Minister on 25 October.
It remains to be seen what the 17 November 2022 budget will contain. However, if early indications are right, it looks like we’re in for another spell of austerity.
Surviving a recession
According to the bank of England, the UK will be entering into a recession in late 2022. We thought it would be useful to set out some tax related pointers to help us all get through the coming times.
Scams and tax refund companies
HMRC and tax groups are already issuing warnings about criminals who try and dupe taxpayers out of personal and banking details to gain a fraudulent financial advantage. Remember, HMRC never demand or issue tax claims over the telephone so you should always be suspicious.
Many of the possible claims and reliefs described below are relatively easy to make and most people should not need to pay for support to make a claims. Tax Refund Companies can charge a high percentage of the potential claim amount which reduces the amount of money the individual receives, therefore reducing the financial relief.
TaxAntics would urge anyone who knows anyone struggling to seek professional advice and we will be providing a further dedicated article on the subject with links for support in the coming weeks.
Married Couples transferable basic rate band or Marriage Tax Allowance
A husband, wife or civil partner can transfer up to £1,260 of their Personal Allowance to their civil partner, wife or husband. This is a little over 10% of the basic £12,570 Personal Allowance for the 2022-23 tax year (6 April to 5 April).
The transfer reduces the receiving partner’s income tax by up to £252 in the tax year.
This is especially useful where one husband, wife or civil partner earns less than the personal allowance (£12,570) and the other earns less than the higher rate threshold of £50,270 (the relief is not available to higher rate tax payers).
Anyone eligible can apply online to HMRC at https://www.gov.uk/marriage-allowance .
All you will need is your National Insurance numbers and identification documents (passport/driving license etc).
Granny Nannies Specified Adult Childcare credits’
Working parents with children under twelve whose parents (or other family members) are caring for them can transfer unused Class 3 NI credits to the carers.
With up to ten years’ worth of credits available for retrospective claims, Specified Adult Childcare credits could be worth thousands of pounds in added State Pension benefit for the children’s grandparents.
More information can be found here:
Employees
All employees who worked from home during the pandemic who were not reimbursed by their employers for the increased costs of living due to being at home , should be able to claim tax relief through a special concession which HMRC have now withdrawn from 6 April 2022.
Any employee required to work from home can claim a statutory £312 per annum without evidence or the actual additional costs incurred (the actual cost can be very difficult to determine). In addition, tax relief for other items such as IT equipment or any actual cost of business telephone calls incurred by the employee can also be claimed.
Property Tax
For landlords, our August 2022 newsletter (https://www.taxantics.co.uk/jungle-chatter/taxantics-newsletter-august-2022/) gives some common items landlords should consider. Ensuring capital and revenue expenditure is correctly treated is of paramount importance. Identifying allowable revenue expenses, such as arrangement fees added onto loan capital, can also provide some welcome early tax relief.
We have continued to help many clients through the process of incorporating their personally owned property portfolios. The introduction of the mortgage interest relief restriction, estate planning requirements and organic growth have led many property investors to rethink their strategy. TaxAntics offer no obligation initial consultations and holistic advice in this area. If you know any landlords with property tax issues, we would love an introduction.
Self-Assessment Paper filing deadline
As well as being Halloween, the 31 October marks the filing deadline for paper tax returns. It is also the start of the three month count down to 31 January 2023 when most individuals should aim to file their personal tax returns online.
TaxAntics can help prevent unwelcome fireworks by ensuring tax returns are professionally prepared and make the most beneficial use of allowances and reliefs.
In addition to making sure no one pays more tax than they should have to, there are a number of ways to ease the burden of meeting a personal income tax liability.
Tax Collected through PAYE
Anyone who is likely to owe less than £3,000 as a balancing payment can have the tax they owe collected through their 2022/2023 PAYE coding notice if they already pay tax through pay as you earn (PAYE) and the return is filed online by 30 December 2022 (or by 31 October for paper returns).
This option is not available to anyone who does not:
- have enough PAYE income for HMRC to collect the tax; or
- would have more than double their normal PAYE income tax deducted; or
- pay more than half their normal PAYE income in taxes.
Where the conditions are met, HMRC would automatically seek to collect the tax through PAYE unless the taxpayer specifically indicates otherwise in their tax return.
As well as helping meet statutory deadlines, we can also provide practical tax advice on how to structure assets more tax efficiently. Avoid a winter of discontent and contact us to find out how we can help you!
Contact us now to discuss how we could help you.
IMPORTANT DATES
1 November – due date for corporation tax for period ending 31 January 2022
7 November – filing deadline for quarterly VAT return for period ending 30 September 2022
17 November – Autumn Statement (probably)
19/22 November – due date for October PAYE and CIS payments
1 December – due date for corporation tax for period ending 28 February 2022
30 December – deadline to submit online tax returns if you meet the conditions for HMRC to collect any tax due via PAYE coding notices in the 2023/24 tax year
1 January – due date for corporation tax for period ending 31 March 2022
31 January 2023 – deadline for filing self-assessment tax return and settling any taxes due for the year ended 5 April 2022
Published: 1st November 2022