Getting ready for Making Tax Digital for VAT
With 1.5 million businesses already signed up to Making Tax Digital (MTD), we are supporting businesses who haven’t yet joined to make sure they’re ready for April 2022, when all VAT registered businesses, regardless of turnover, will have to start following MTD rules.
To help businesses get ready, we are writing to all those under the VAT threshold of £85,000 who are yet to sign up to MTD VAT to encourage them to take steps to prepare, including reading the guidance on GOV.UK, keeping digital records and finding MTD compatible software.
Manchester Metropolitan University has signed up and is already experiencing the benefits of MTD, such as providing more accurate data. You can find out more about their experience with MTD for VAT by watching our case study, which we would be grateful if you could share with your network.
You can find further information about MTD on GOV.UK.
Self Assessment customers use monthly payment plans
More than 20,000 Self Assessment customers have used our online monthly payment plan service since April to spread the cost of their tax bill, totalling £46 million so far.
Customers have until 31 January 2022 to complete their tax return for the 2020 to 2021 financial year and pay their bill. If they can’t pay in full, customers can set up their own Time to Pay arrangement online if they:
- have filed their tax return for the 2020 to 2021 financial year
- owe less than £30,000
- are within 60 days of the payment deadline
- plan to pay their debt off within the next 12 months or less
If customers owe more than £30,000, or need longer to pay, they should call the Self Assessment Payment Helpline on 0300 200 3822.
Self-serve Time to Pay is just one way customers can pay their Self Assessment tax bill. A full list of alternative payment methods is available on GOV.UK.
We also continue to urge everyone to be alert if they are contacted out of the blue by someone asking for money or personal information. Customers should always type in the full online address (www.gov.uk/hmrc) to get the correct link for filing their Self Assessment return online securely and free of charge.
HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department. If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact us straight away and to search GOV.UK for ‘HMRC scams’.
Changes to CT and VAT Phones lines during December
Throughout December, we are running a trial of reducing the hours on some of our telephony services so that we can dedicate the time to clear extra post that was received through the pandemic period.
To test the approach, we will close our VAT and CT phone lines (with the exception of the bereavement line) on 10 and 17 December.
By April, we expect to be delivering normal, pre-pandemic performance across our core service lines.
As with any trial, we’ll keep a close eye on our progress, responding to any issues as we go. Towards the end of December, we’ll take a view on what to do next and update you in early January.
Tax avoidance – don’t get caught out
HMRC’s refreshed ‘Tax avoidance - don’t get caught out’ campaign helps contractors who are self-employed or employed through an agency or umbrella company to understand their pay arrangements, so they don’t get an unexpected tax bill.
Contractors or agency workers who may be employed through an ‘umbrella company’ can read our guide on what it’s like to work through an umbrella company to see if they are at risk of tax avoidance.
They can also use our payslip guide to understand more how their payslip could look, and use the interactive risk checker to check their employment arrangements for the potential of being involved in tax avoidance.
To further help support your clients, customers and members, we ask that you also signpost the:
A ‘contractor’ is someone who provides services to clients that do not directly engage them. This may be through an ‘umbrella company’, an agency, a partnership, or their own company, such as a Personal Service Company. This applies to employed and self-employed individuals.
HMRC wants to help the contractor community to understand their pay arrangements, so they don’t end up with an unexpected tax bill.
But it is not something we can do on our own. We would appreciate your support in reaching contractors and agency workers with the helpful messages contained in the ‘Tax avoidance - don’t get caught out’ campaign.
HMRC issue briefing: HMRC’s approach to tax fraud
HMRC has published an issue briefing to explain how we use a range of powers to tackle tax fraud.
While the majority of people abide by the law and pay their taxes, there are some who deliberately and dishonestly set out to defraud HMRC by evading tax, stealing public funds or cheating the system in other ways.
Tax fraud undermines our economy, creates unfair competition for legitimate businesses and deprives our vital public services of much-needed funds. It also supports other crimes that harm our communities.