HMRC VAT Government Gateway Portal to Close

HMRC VAT Government Gateway Portal to Close

This is just to remind anyone who is registered for VAT voluntarily and whose annual turnover is less than the £85,000 threshold, that HMRC’s Government Gateway Portal, in other words, the way in which VAT returns have been filed for a number of years, will close with effect from 7^th November.

This means that any VAT returns for periods after 30 September can no longer be filed in this way and you will have to register for Making Tax Digital (MTD).

For those to whom this is applicable, please read on as we are producing the email sent by HMRC to traders in that position who they call “customers”. If this is applicable to you and you do not know how to proceed, please do not hesitate to contact us so that we can make sure you remain compliant.

“Dear customer,

We previously let you know that from Tuesday 1 November 2022 your clients will no longer be able to use their existing VAT online account to file their monthly or quarterly VAT returns.

That’s because by law, all VAT-registered businesses must now sign up to Making Tax Digital (MTD) and use MTD-compatible software to keep their VAT records and file their VAT returns.  

If your clients do not sign up for MTD and file their VAT returns through MTD-compatible software, they may have to pay a penalty. The best way for businesses to avoid penalties is to start using MTD now.  

What businesses need to do now, or they could face a penalty 

If your clients haven’t signed up to MTD and started using compatible software already, they must follow these steps now: 

Step 1. Choose MTD-compatible software that’s right for them – you can find a list of software, including free options, on GOV.UK.

Step 2. Check the permissions in their software – once they’ve allowed it to work with MTD, they can file their return easily. Go to GOV.UK and search ‘manage permissions for tax software’ for information on how your clients should do this.

Step 3. Keep digital records for their current and future VAT returns – you can find out what records they need to keep on GOV.UK.

Step 4. Sign up for MTD and file their future VAT returns using your MTD-compatible software – to find out how to do this, go to GOV.UK and search ‘record VAT’.

If your clients are already signed up to MTD, no further action is required.

Information for businesses due to file by 7 November 2022

If your client’s turnover is under the VAT threshold of £85,000 and they haven’t signed up to MTD in time to file their next return by 7 November 2022, they can still use their existing VAT online account for that return only.

However, they must complete the steps above in order to file any returns due after 1 December 2022 if they file monthly or quarterly VAT returns, or they could face a penalty.

We’ll be contacting these businesses directly to let them know.

Businesses that file annual VAT returns will still be able to use their VAT online account until 15 May 2023. 

How to apply for an exemption from using MTD-compatible software

If your client is already exempt from filing VAT returns online or if they or their business are subject to an insolvency procedure, they’re automatically exempt from MTD.

You can check if they can apply for an exemption on GOV.UK. HMRC will consider each application on a case-by-case basis.

Help and support available   

You can find more information on how to support your clients on GOV.UK, including a step-by-step guide to signing up for MTD on your clients’ behalf.   

You can signpost your clients to help and support for MTD on GOV.UK, where they can find useful videos, register for live webinars and see the latest guidance and updates on MTD for VAT.   

Protect yourself and your client’s information    

You should never ask for or use your client’s HMRC sign in details to access their tax account.

If you need to access your client’s information, then you should obtain the correct authorisation from your client and use HMRC’s agent digital services.  

If you cannot get your client’s information using agent digital services, then we recommend asking your client to sign into their Personal Tax Account and provide the information or contact HMRC.

If someone contacts you or your client saying they’re from HMRC and wants you to transfer money urgently or give personal information, never let yourself be rushed. Take your time and check HMRC’s advice about scams on GOV.UK.”

EU VAT Issues

One of the consequences of Brexit for businesses has been that dealing with other EU countries has suddenly become an extremely complicated matter.

Terri Bruce, a fellow UK200 member firm Dains Accountants in the West Midlands is one of the leading experts in the country on the consequences of EU VAT transactions.

If you have any dealings with Europe then you will need to read the attached below. It will not necessarily give you any answers immediately but will further your understanding of how these transactions work and the need to take further advice.

Business Confidence Survey – Your expectations for the next 12 months

We are conducting a short survey to understand how businesses are coping in the current climate, including their outlook for the future.

We conduct this business confidence survey from time to time to understand confidence levels and the views of businesses on their outlook. The findings provide us with insights to develop appropriate support for businesses and individuals.

We share these insights with the government and other industry bodies to ensure the right conversations are taking place and measures being developed to support business in the longer-term.

We are conducting this survey in collaboration with other members firms of the UK200Group, the UK’s leading professional services group of independent quality assured chartered accountancy and law firms, of which we are a member.

This means we will capture feedback from businesses from right across the UK which we can use to help develop and shape support to help businesses like yours.

The survey will only take 1-2 minutes of your time to participate. It contains just 4 short questions.

Please take a moment to participate:

https://survey.zohopublic.eu/zs/JNBjTh

Updated Emergency Budget

Following the government’s change of mind on the abolition of 45% additional rate for taxpayers earning over £150,000, we have updated the Emergency Budget report for the subsequent U-turn. It would appear that it won’t be so easy for some people to fill their boots after all.

Emergency Budget

We have pleasure in attaching details and some very significant points of the Chancellor’s speech last Friday.

We are not going to present much of an editorial but the markets have reacted negatively so far.

We will be pleased to address any particular questions you may have as a result of the information provided.

Our simple comment is that it looks like taxes will be reduced for quite a few people in the 2023/24 tax year.

The political landscape means that this may well only be of short duration so it may well be an opportunity to “fill your boots” for one year. We await further developments and in assisting with optimising your tax situation.

Office Closure 19th September

The offices at the Martlet Partnership LLP will be closed Monday 19^th September, the day of Her Majesty the Queen’s funeral.

We will re-open at 9:00am on Tuesday 20^th September.

Association of Chartered Certified Accountants

The Martlet Partnership is pleased to announce that the Association of Chartered Certified Accountants has re-awarded us with approved employer status, which enables us to offer contracts to students who wish to train for this qualification and also those qualified members of the Association, who wish to obtain practicing certificates and audit qualifications.

Research & Development Tax Credit delays

HMRC decided to pause payments for Research & Development Tax Credits in April due to an increase of fraud, mostly linked to organised criminal gangs.

In April alone, HMRC had received over 8,000 claims and although started paying some claims from 10^th May, HMRC are still recovering from the recent pause in payments, and expect to be processing 80% of claims within 40 days by the end of this month.

Over a thousand letters have been issued to claimants identified as high risk challenging irregular claims. HMRC request that claimants do not contact them to chase their claims, as they work through the backlog.

Therefore, if you are waiting for an R&D Tax Credit payment, it may take a little longer than it used to.

Mileage rates change

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 September 2022, increasing rates between one and two pence per mile. Please note that these rates only apply for employees who have a company car but where fuel is not paid in full by the employer.

Unfortunately, no change has been made in rates to the mileage payment due to employees who use their own vehicles for work. This is a pity as the rate of 45p a mile has been unchanged for many years and of course the price of petrol has increased dramatically.

The advisory fuel rates that apply from 1 September 2022 have been increased for some classes of vehicles from the June 2022 rates with a one pence increase on petrol vehicles under 2000cc and two pence for vehicles over 2000cc. 

The equivalent diesel vehicle rate goes up one penny for vehicles under 2000cc and 2p for over 2000cc, while LPG rates remain unchanged except for a one pence rise for vehicles over 2000cc.

The previous rates, effective June 2022, can be used for up to one month from the date the new rates apply.

The rates only apply in the following circumstances:

• reimburse employees for business travel in their company cars; or
• require employees to repay the cost of fuel used for private travel.

These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

The advisory electricity rate for fully electric cars remains at 5p per mile. Electricity is not a fuel for car fuel benefit purposes.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory fuel rates from 1 September 2022

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC increase interest rates

Following the latest increase in the Bank of England base rate to 1.75%, HMRC will raise interest rates on late tax bills by 0.5%.

This means that the late payment interest rate will increase to 4.25% from 23 August 2022. The rate last increased to 3.75% on 5 July. This is the highest rate since the height of the financial crisis in January 2009.

Late payment interest is payable on late tax bills covering income tax, National Insurance contributions, capital gain tax, stamp duty land tax, stamp duty and stamp duty reserve tax. The corporation tax pay and file rate also increases to 4.25%.

HMRC are also increasing interest paid to taxpayers on overpayments. This is the first rise since 29^th September 2009 but they are only raising the rate by 0.25% to point 0.75% which contrasts with their increase in monies due to them of 0.5%.

However, interest paid on corporation tax paid before the due date rises to 1.5% which is significantly better than the rate which can be obtained from most banks!