The government published the Spring Finance Bill 2023 on 23 March 2023. The Bill is officially known as the Finance (No 2) Bill, because it is the second Finance Bill of the 2022–23 Parliamentary session. The Bill contains the legislation for many of the tax measures announced in the recent Spring Budget as well as previously announced changes. The Bill is 478 pages long, with 352 clauses and 24 schedules. Explanatory notes to the Bill have also been published.

Some of the many measures included within the Bill are:

• The introduction of full expensing for expenditure on plant and machinery
• The extension of the 50% First Year Allowance
• The permanent increase to £1m of the Annual Investment Allowance
• Changes to R&D relief
• Changes to the Seed Enterprise Investment Scheme
• Abolition of the pension's lifetime allowance charge
• Changes to alcohol duty
• Air Passenger duty changes

The Bill received its first reading in Parliament on Tuesday 21 March, and the majority of measures will come into effect for financial year 2023-24. It will now follow the normal passage through Parliament.

In some circumstances it can be beneficial to make voluntary National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New State Pension.

Usually, HMRC allow you to pay voluntary contributions for the past 6 tax years. The deadline is 5 April each year. However, there is currently an opportunity for people to make up for gaps in their NICs for the tax years from April 2006 to April 2017 as part of transitional measures to the New State Pension. This deadline was set to expire on 5 April 2023 but has now been extended until 31 July 2023 after the government accepted significant public concern that many taxpayers would not meet the deadline.

You might want to consider making voluntary NICs if:

• You are close to State Pension age and do not have enough qualifying years to get the full State Pension.
• You know you will not be able to get the qualifying years you need to get the full State Pension during the remainder of your working life.
• You are self-employed and do not have to pay Class 2 National Insurance contributions because you have low profits.
• You live outside the UK but want to qualify for certain benefits.

If you fall within any of these categories, it may be beneficial to get a State Pension forecast and examine whether you should consider making voluntary NICs to make up missing years, known as topping up. Not everyone will benefit from making voluntary NICs and a lot depends on how close you are to retirement age and your NIC payments to date. If you think this opportunity may be relevant to your circumstances, please be in touch.

The first monthly returns and payments affected by HMRC’s new VAT penalty regime were due by 7 March 2023. The new VAT penalty rules apply to the late submission and / or late payments of VAT returns for VAT return periods beginning on or after 1 January 2023.

Under the new regime, there are separate penalties for late VAT returns and late payment of VAT as well as a new methodology to the way interest is charged. This replaces the old default surcharge regime and for most taxpayers should represent a fairer system.

The new system is points-based. This means that taxpayers will incur a penalty point for each missed VAT submission deadline. At a certain threshold of points, a financial penalty of £200 will be charged and the taxpayer will be notified. The threshold varies depending on the required submission frequency (monthly, quarterly, annual). For quarterly VAT returns, the penalty points threshold will be 4 points. The penalty points will reset to zero following a period of compliance, for quarterly returns this requires 12-months of compliance. There are also time limits after which a point cannot be levied.

The new regime also sees the introduction of two new late payment penalties. A first payment penalty of 2% of the unpaid tax that remains outstanding 16-30 days after the due date. The second payment penalty increases to 4% of any unpaid tax that is 31 or more days overdue. To help with the introduction of the new system, HMRC has confirmed that it will not be charging a first late payment penalty for the first year of the new regime (1 January – 31 December 2023) once the debt is paid in full within 30-days of the payment due date or if a payment plan is agreed.

Late payment interest will be charged from the date a payment is overdue, until the date it is paid in full. Late payment interest is calculated as the Bank of England base rate plus 2.5%.

There is a significant amount of information about companies that can be obtained from Companies House. Companies House is responsible for incorporating and dissolving limited companies, examining and storing company information and making company information available to the public.

Much of this information is freely available. This is in line with the government’s commitment to free data and means that all publicly available digital data held on the UK register of companies is accessible without a charge.

This includes:

• company information, for example, registered address and date of incorporation;
• current and resigned officers;
• document images;
• mortgage charge data;
• previous company names; and
• insolvency information.

There is also a service called WebCheck that allows you to view a company's filing history and purchase copies of document images and a selection of company reports for a nominal fee. You can also elect to monitor a company and receive email alerts of any new documents filed at Companies House. This can be a useful resource to check your own company records at Companies House to ensure there no unexpected filings.

1 April 2023 – Due date for Corporation Tax due for the year ended 30 June 2022.

19 April 2023 – PAYE and NIC deductions due for month ended 5 April 2023. (If you pay your tax electronically the due date is 22 April 2023).

19 April 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2023.

19 April 2023 – CIS tax deducted for the month ended 5 April 2023 is payable by today.

30 April 2023 – 2021-22 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.

1 May 2023 – Due date for corporation tax due for the year ended 30 July 2022.

19 May 2023 – PAYE and NIC deductions due for month ended 5 May 2023. (If you pay your tax electronically the due date is 22 May 2023).

19 May 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2023.

19 May 2023 – CIS tax deducted for the month ended 5 May 2023 is payable by today.

31 May 2023 – Ensure all employees have been given their P60s for the 2022/23 tax year.

The challenge of increasing energy costs for UK businesses is a significant concern, particularly in the context of ongoing efforts to reduce greenhouse gas emissions and tackle climate change.

The current Chancellor, Jeremy Hunt, pledged in his November statement that the government would continue to support those businesses that need it the most. However, the changes to the scheme and its funding represent a fall from £18bn over six months to £5.5bn for EBDS.

The Energy Bills Discount Scheme

The scheme is now live and will last until 31 March 2024. A unit discount of up to £6.97/MWh for gas and up to £19.61/MWh for electricity for all eligible non-domestic customers will be automatically applied.

EBDS organisational eligibility

The criteria are the same as the previous Energy Bill Relief Scheme and is available to anyone on a non-domestic contract, including:

• Public sector organisations such as schools, care homes and hospitals
• Voluntary sector organisations
• Businesses

EBDS energy contract eligibility

Businesses and organisations must either be:

• on existing fixed price contracts that were agreed on or after 1 December 2021
• signing new fixed price contracts
• on deemed / out of contract or standard variable tariffs
• on flexible purchase or similar contracts
• on variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only)

How is this different to the previous scheme?

The unit discount of £6.97/MWh for gas and up to £19.61/MWh for electricity is subject to a wholesale price threshold of £107/MWh for gas and £302/MWh for electricity – this means that businesses who have energy cost below those thresholds will not receive support.

This change will mean some businesses are no longer within the scope for receiving government support because under the previous Energy Bill Relief Scheme, the supported price was set at £211/MWh for electricity and £75/MWh for gas.

Energy and trade intensive industries

Eligible Energy and Trade Intensive Industries (ETII) will receive a discount that reflects the price difference of £99/MWh for gas and £185/MWh for electricity and the relevant wholesale price.

This will apply to 70 per cent of energy volumes and will be subject to a maximum available discount of £40/MWh for gas and £89.10/MWh for electricity.

The industries eligible under this scheme are varied, from nature reserves and libraries to meat processing.

If you’re concerned about the impact of rising costs to your business, speak to a member of our team for cashflow forecasting and management accounts.

Steps have been taken to simplify VAT guidance for overseas sellers that sell goods online into the United Kingdom to help reduce the tax gap.

The guidance published by HMRC, Selling goods using an online marketplace or direct to customers in the UK, has also been translated into simplified Mandarin to support sellers exporting goods from China to comply with UK import and VAT regulations.

In 2022, the UK imported £83.3 billion in goods and services from China and Hong Kong. Online shopping accounted for 26.5 per cent of all UK retail sales in 2022, with a substantial number of goods being bought from international sellers via online marketplaces.

Marc Gill, HMRC’s Director for Individuals and Small Business Compliance, said: “We have been working closely with international partners to better understand what information overseas sellers need in order to comply with their UK tax obligations.”

HMRC is encouraging UK agents and shipping companies to share the simplified guidance with their customers.

The information explains when and how VAT and import duties must be charged to customers by international sellers. It explains the different processes for direct to customer sales, and for sellers using online marketplaces.

“We have acted on feedback from businesses to simplify and compile this online guidance into one, easily accessible place on GOV.UK. We have also recently published a simplified Mandarin translation of our guidance following research conducted with Chinese businesses.

“By making our VAT and import duty rules easier to understand, we will be able to increase tax compliance levels for online sellers. We are asking UK freight, customs and shipping agents to help us reduce the tax gap by sharing this simplified guidance with their customers. By working together, we can help everyone pay the right amount of tax at the right time.”

HMRC’s updated guidance has been published following detailed consultation and research with overseas sellers and brings together all relevant guidance in one place on GOV.UK. By making the process clearer and easier to follow, it will support overseas sellers to comply with their tax obligations and help HMRC to reduce the tax gap.

In 2018, HMRC signed an updated Memorandum of Understanding (MOU) with the General Administration of Customs China (GACC). During the 10th UK-China Economic and Financial Dialogue in 2019, HMRC agreed to provide Chinese businesses with appropriate tax and customs guidance.

In 2020, HMRC commissioned research with Chinese online sellers. The report, Knowledge and attitudes of online sellers in China to UK tax compliance, was published in 2021. Recommendations from that research led to the development of new guidance and its translation into simplified Mandarin.

• If you need any help with VAT, get in touch and we will help.

The biting cost of living crisis and yet another rise in interest rates means families need all the financial help they can get.

With the Easter school holidays nearly here, HMRC is reminding mums and dads not to miss out on Government help to pay for childcare to help lift some of the burden.

Tax-Free Childcare can pay for any approved childcare for children aged 11 or under, or 16 if the child has a disability. More than 405,000 families used the scheme in December 2022, with each benefitting from a share of £41.5 million in government top-ups.

Victoria Atkins, Financial Secretary to The Treasury, said: “Tax-Free Childcare provides extra help with childcare costs which could make all the difference to working families and make childcare expenses more manageable. I would urge families to go online today to find out how it can help you.”

Working families, where each parent or carer earns up to £100,000, can use it, meaning for every £8 paid into an online account they will receive an additional £2 from the Government. This means parents and carers can receive up to £500 every three months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.

for every £8 paid into an online account they will receive an additional £2 from the Government. This means parents and carers can receive up to £500 every three months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.

Whether children go to nursery, a childminder, attend breakfast, after school or holiday clubs, as well as out of school activities, Tax-Free Childcare could be used.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Childcare is so important for working families, especially during school holiday time. Tax-Free Childcare provides financial support when it’s needed the most. Search ‘Tax-Free Childcare’ on GOV.UK to find out how it could help you.”

A Tax-Free Childcare account can be opened online in just 20 minutes. Money can be deposited at any time to be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time.

Families could be eligible for Tax-Free Childcare if they:

• have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they can receive support until 1 September after their 16th birthday
• earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
• each earn no more than £100,000 per annum
• do not receive tax credits, Universal Credit or childcare vouchers

A full list of the eligibility criteria is available on GOV.UK.

Also, check GOV.UK to find out what other cost of living support, including help withchildcare costs , families could be eligible for.

As a new tax year approaches, business owners need to prepare their payroll and ensure compliance with the latest tax laws and regulations.

April is also an excellent time for businesses to review their financial situation, identify areas for improvement, and plan ahead.

Here are some essential tasks for the start of the new tax year:

1. Review and update employee information

Before the start of the new tax year, business owners should review and update employee information, such as contact details, pay rates, and tax codes. This will ensure that the payroll is accurate and up-to-date.

        2. Check tax codes

HM Revenue and Customs updates tax codes annually, and business owners must ensure that the correct tax code is used for each employee. This can affect the amount of tax deducted from their pay, so it’s essential to review this information carefully.

        3. Check for changes in National Insurance contributions

The National Insurance contribution rates and thresholds change every year, so it’s important to check these and ensure that the correct amounts are deducted from employees’ pay.

        4. Review pension contributions

Employers are required to make pension contributions on behalf of their employees, and these rates can change from year to year. It’s essential to review and update the pension contributions to ensure compliance with the latest regulations.

         5. Complete payroll year-end tasks

Before the start of the new tax year, business owners need to complete payroll year-end tasks, such as issuing P60s to employees and submitting the final Full Payment Submission (FPS) to HMRC.

It’s also an excellent time for business owners to review their financial situation, identify areas for improvement, and plan ahead. Here are some essential steps business owners should take at the start of the new tax year.

1. Review and update financial records

Take the opportunity to review and update financial records, including income and expenses, bank statements, receipts, and invoices. Keeping accurate financial records is crucial for meeting tax obligations and making informed business decisions.

        2. Set financial goals and budgets

Business owners should use the start of the new tax year to set financial goals and budgets for the coming year. This could include revenue targets, expense reductions, or investment plans. Having clear financial goals and budgets can help business owners make informed decisions about spending, pricing and investment.

         3. Understand tax changes

Each new tax year brings changes to tax laws and regulations. Business owners should familiarise themselves with any tax changes that may affect their business, such as changes to tax rates, allowances, or deductions. Seeking advice from a tax professional can help ensure that businesses are fully compliant with tax laws and regulations.

         4. Plan for pension contributions

The new tax year is also an excellent time to plan for pension contributions. Business owners should consider whether they are making the maximum contributions possible and whether there are any changes to contribution limits or tax relief. Pensions are an essential aspect of retirement planning, and ensuring adequate contributions are made can provide future security.

The start of April is a pivotal time of the year for business owners. Just as individuals make new year resolutions on January 1, companies can make their own resolutions on April 6.

• If you need any help with planning for a new tax year, get in touch and we will help.

A £27 billion tax cut for business to drive investment and growth featured among the headlines of Jeremy Hunt’s Spring Budget.

A ‘full expensing’ policy introduced from 1 April 2023 until 31 March 2026 and an extension to the 50 per cent first-year allowance in the same period is a transformation in capital allowances which will benefit businesses over three years.

Aimed at achieving long-term, sustainable economic growth that delivers prosperity, the Spring Budget focused on breaking down barriers to work, unshackling business investment and tackling labour shortages head on.

Chancellor of the Exchequer, Jeremy Hunt said: “Our plan is working – inflation falling, debt down and a growing economy.

“Britain is on a lasting path to growth with a revolution in childcare support, the biggest ever employment package and the best investment incentives in Europe.”

Childcare bonus

The Chancellor announced 30 hours of free childcare for every child over the age of nine months, with support being phased in until every single eligible working parent of under 5s gets this support by September 2025.

The Government will also pay the childcare costs of parents on Universal Credit moving into work or increasing their hours upfront, rather than in arrears – removing a major barrier to work for those who are on benefits. The maximum they can claim will also be boosted to £951 for one child and £1,630 for two children – an increase of around 50 per cent.

The Chancellor went on to set out plans to continue to support households with cost-of-living pressures, including keeping the Energy Price Guarantee at £2,500 for the next three months and ending the premium that over four million households pay on their prepayment meter, bringing their charges into line with comparable customers who pay by direct debit.

Taken together with all the Government’s efforts to help households with higher costs, these measures bring the total support to an average of £3,300 per UK household over 2022-23 and 2023-24.

Fuel duty rise cancelled

To help household budgets further, the planned 11 pence rise in fuel duty will be cancelled, maintaining last year’s 5p cut for another 12 months, saving a typical driver another £100 on top of the £100 saved so far since last year’s cut.

The Chancellor also set out a comprehensive plan to remove the barriers to work facing those on benefits, those with health conditions and older workers.

An increase in the pensions Annual Allowance from £40,000 to £60,000 and the abolition of the Lifetime Allowance will remove the disincentives to working for longer.

A new ‘Returnerships’ skills offer for older workers and more stringent Universal Credit job search requirements also feature in the plan that will boost the UK’s workforce, fill vacancies and support economic growth.

Boost for business growth

In line with the government’s vision for the UK to be the best place in Europe for companies to locate, invest and grow, a new policy of ‘full expensing’ will be introduced for the next three years to boost business investment in an effective cut to corporation tax of £9 billion per year. This makes the UK the joint most competitive capital allowances regime in the OECD and the only major European economy to have such a policy.

The independent Office for Budget Responsibility (OBR) forecast that this will increase business investment by three per cent for every year it is in place. Mr Hunt signalled an intention to make this scheme – which covers equipment for factories, computers and other machinery – permanent when responsible to do so.

Accompanying forecasts by the OBR confirm that with the package of measures Mr Hunt set out, the economy is on track to grow with inflation halved this year and debt falling – meeting all of Prime Minister Rishi Sunak’s economic priorities.

• If you are affected by any Budget announcements and would like to discuss them, give us a call.