Uncertainty now and tax changes to come
We live in times of great upheaval. Stock markets are very volatile, inflation is high (and may get higher) and there is a risk of major war in Ukraine. Of course, the pandemic is still with us, although we all hope the worst is over. At the time of writing, the Prime Minister’s future is in doubt, as are the previously announced increases to National Insurance Contributions that are due in April
One of the few things that is certain is that tax still needs to be paid. However, HMRC has recognised the problems that the Omicrom wave has caused and has extended the deadline for filing self-assessment tax returns until 28 February. If yours has not yet been filed, this has given you four extra weeks to avoid penalties. For those who did not settle their self-assessment tax by 31 January, there is this year a window that extends to 1 April, before any late payment penalty will kick in. However, interest will still be payable from 1 February, as usual, so you should pay as soon as you are able.
Before Christmas, the government re-introduced the scheme that allows small employers to recover statutory sick pay (SSP) where it is paid due to a covid-related absence. This is covered in a separate article below. Now that the other coronavirus schemes have been largely wound down, HMRC will be continuing to check potentially incorrect claims and to investigate potential fraud, the latter having been highlighted recently by a government minister resigning over billions of pounds that is likely to be irrecoverable from the Bounce Back Loan Scheme.
We also know that more change is coming for businesses, with a new VAT penalty regime having been deferred until January 2023 and changes to when the profits of unincorporated businesses and limited liability partnerships (LLPs) are taxed in the pipeline too. The latter is covered in a separate article below.
Clearly, for those running businesses, there is lots to think about at the moment. In this newsletter we highlight many current issues, some of which may affect you. Please contact us to discuss any of them further.
As we approach the end of the tax year, there are other matters that you should always consider, including whether you can
- top up your pension in a tax-efficient way;
- make use of your capital gains tax annual exemption;
- make use of inheritance tax annual exemptions for certain lifetime gifts; or
- improve the tax-efficiency of income and gains arising between you and your spouse.
Again, we are here to help if you need more information.
