Enews – May 2022

In this month’s Enews we consider the latest news on COVID grants for the self-employed. We also update you with the government’s energy strategy and plans to regulate cryptocurrency. With guidance on tax avoidance and the government’s one-stop shop for tax relief, there is a lot to update you on.

HMRC starts chasing up SEISS overpayments

HMRC has started to recover overpayments of Self-employment Income Support Scheme (SEISS) grants.

From April, HMRC is writing to taxpayers whose entitlement to the fourth or the fifth SEISS grant has reduced by more than £100 to ask them to repay amounts that were overpaid.

Entitlement to the fourth and fifth SEISS grants can be affected by an amendment to a tax return. HMRC’s letters include an assessment and a date by which you must make the repayment. If the payment is over 30 days late, a late payment penalty of 5% of the unpaid tax will be applied.

Even if you do not receive a letter, you must tell HMRC within 90 days if an amendment to a tax return affects your entitlement.

Anyone who needs to repay grants can make use of HMRC online tools to help them calculate what they owe. Individuals who receive a letter from HMRC are required to use the payment reference beginning with X when making their repayment.

If you are not able to pay in full, you may be able to set up a Time to Pay arrangement with HMRC.

Internet links: GOV.UK

UK government unveils energy strategy

Up to eight more nuclear reactors could be delivered to existing sites as part of the UK’s new energy strategy.

The plan, which aims to boost UK energy independence and tackle rising prices, also includes plans to increase wind, hydrogen and solar production.

Under the government’s new plans, up to 95% of the UK’s electricity could come from low-carbon sources by 2030.

The energy security strategy includes the goal of producing up to 50 gigawatts (GW) of energy through offshore wind farms, which the Department for Business, Energy and Industrial Strategy says would be more than enough to power every home in the UK.

Rain Newton-Smith, Chief Economist at the Confederation of British Industry, said:

‘This strategy sets an ambitious bar for a more resilient, low carbon energy system for the future. Bold words must now be matched by bold actions from the government.

‘The proof will be in the strategy’s delivery, in partnership between business and government. Business believes greater energy independence must go hand in hand with delivering a net-zero, higher growth economy.

‘While it’s welcome this strategy addresses some long-standing challenges, companies are continuing to really struggle with increased wholesale energy costs right now. The Government’s next step should be to provide immediate cashflow support for firms through the Recovery Loan Scheme – and move to cut bills for energy intensive industries to maintain competitiveness.’

Internet links: GOV.UK CBI website

Treasury announces it will regulate some forms of cryptocurrency

The Treasury has announced that it plans to recognise stablecoins as a valid form of payment as part of a wider government initiative to ‘make Britain a global hub for cryptoasset technology and investment’.

The Treasury defines ‘stablecoin’ as ‘a form of cryptoasset that is typically pegged to a fiat currency such as the dollar and is intended to maintain a stable value’. The government plans to bring stablecoins within regulation, creating conditions for stablecoin issuers and service providers to operate and invest in the UK.

Commenting on the issue, Chancellor Rishi Sunak said:

‘It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined… will help to ensure firms can invest, innovate and scale up in this country.

‘We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.’

Internet link: GOV.UK

HMRC names avoidance scheme promoters for first time

HMRC has named two tax avoidance schemes and their promoters for the first time, advising anyone involved to withdraw from them as soon as possible to prevent the build up of large tax bills.

Both schemes involve individuals working as contractors agreeing to an employment contract under which they are paid the National Minimum Wage (NMW). The balance of their wage is paid as a loan to try to avoid national insurance and income tax.

HMRC is letting taxpayers know as early as possible so they can steer clear of these schemes or exit them if they have already joined. This is the first time HMRC has used new powers to name tax avoidance schemes and their promoters as part of a campaign to warn the public not to get caught up in tax avoidance.

Mary Aiston, Director of Counter Avoidance at HMRC, said:

‘These schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it’s the users that end up with big tax bills.

‘New legal powers allow us to name promoters and the schemes they peddle much faster, and this announcement is just the first step. But we need the public to be vigilant, and that’s why we’re also helping people identify and steer clear of these schemes through our Tax Avoidance – Don’t Get Caught Out campaign.’

Internet link: Tax Avoidance campaign website HMRC press release

New HMRC one-stop online shop provides taxpayers with tax relief information

HMRC has launched a new one-stop online shop designed to provide taxpayers with information on the tax reliefs and financial help available from HMRC.

In a new section of the GOV.UK website, HMRC has listed financial support available to ensure individuals are not missing out. There is guidance on relief for childcare and work-related expenses, as well as information about savings and getting help if you cannot pay your tax bill.

The shop is designed to make it easier than ever for taxpayers to claim the benefits, credits and allowances they are entitled to. HMRC has provided online guidance and tools to permit people to check if they are eligible for each relief.

Myrtle Lloyd, Director General for Customer Services at HMRC, said:

‘We understand these are very difficult times for many so it’s vitally important we continue to highlight the range of support available.

‘We’d encourage those who think they may be eligible for support to take a look and claim what they’re entitled to – it could make an important difference to household budgets at a time when it’s needed the most.’

Internet link: GOV.UK

Export growth is ‘stagnant’, BCC finds

Data published by the British Chambers of Commerce (BCC) shows that UK export growth has been effectively stagnant for the past year.

The BCC’s quarterly Trade Confidence Outlook revealed that the proportion of exporters reporting increased overseas sales was 29%, whilst 25% reported a decrease.

Manufacturers were more likely to report increased export sales than business-to-business firms or business-to-consumer firms (such as online stores), the data showed.

William Bain, Head of Trade Policy at the BCC, said:

‘UK exporters are facing the headwinds of higher red tape costs from trading with the EU, raised raw material pressures and ongoing issues in global shipping markets.

‘If we are to realise the aspirations of the UK government’s Export Strategy then 2022 has to be the year where these structural factors holding back our exporters are addressed.

‘Sustained export growth should be powering our economic recovery from the pandemic.’

Internet link: BCC website

Latest guidance for employers

HMRC has published the latest issue of the Employer Bulletin. The April issue has information on various topics including:

  • Forthcoming deadlines
  • Claiming employment allowance from April 2022
  • Student loans
  • Coronavirus updates and information
  • Official rate of interest
  • Hybrid working.

Small businesses are being invited to share their views of the tax system through the Tell ABAB 2022 survey.

You can also feedback on the UK central government complaints standards by participating in a survey launched by the Parliamentary and Health Service Ombudsman.

Please contact us for help with tax matters.

Internet link: Employer Bulletin

Government inaction on long COVID could cost billions

There are now more than a million workers missing from the workforce compared to pre-pandemic figures, according to a report published by the IPPR think tank.

About 400,000 of these are no longer working because of health factors relating to the pandemic, including long Covid, according to the IPPR.

The report suggests that unresolved, this ‘will drag down economic activity this year by an estimated £8 billion’.

The nation’s health affects the economy in more ways than keeping workers away from their jobs. Poor health can affect productivity and promote chronic stress. Inhabitants of economically deprived areas of the country show poorer health, have fewer job opportunities and tend to be paid less.

Dame Sally Davies, co-chair of the Commission on Health and Prosperity, said:

‘A fairer country is a healthier one, and a healthier country is a more prosperous one. While the restrictions have eased, the scars of the pandemic still remain deep on the nation’s health and our economy.

‘Not only are we facing a severe cost of living crisis, driven in part by pandemic induced inflation, we’re also experiencing a workforce shortage driven by poor health that’s holding back the economy. It has never been more important to put good health at the heart of our society and economy – and our commission will bring forward a plan to do just that.’

Internet link: IPPR website