Welcome to our January newsletter.
2022 is now in full swing and the start of the year brings opportunities for a fresh start.
Our tax team is working around the clock to ensure tax returns are processed in time for the 31st January deadline next week. With literally thousands of returns to process, the number of cakes and biscuits fuelling the tax team suggests any healthy eating resolutions are waiting until February to commence!
January is also a prime time for individuals (and businesses) to review their tax position, and ensure you have claimed all the relevant allowances before 5 April. Our Year End Tax Review guide offers some actionable tips to consider, so do take a look.
The beginning of the year is a good time to reflect on your business' position, including what you have achieved, and importantly, making plans for the year ahead. We offer a few tips below on preparing a 2022 strategic plan, and encourage all businesses to take the time to prepare one for the year ahead.
Finally, if January has you considering a new role, our growing firm is always looking for people to join us who share our commitment to providing clients with an outstanding level of service. Take a look at some of the opportunities available on our website, and do get in touch if you'd like to join the Carpenter Box team.
I hope you enjoy this newsletter.
Year End Tax Review 2021-22
Last year's Autumn Budget saw a number of tax changes announced, including a National Insurance Contribution hike, followed by the Health and Social Care Levy in 2023, and an increase in applicable tax rates to dividends.
We recommend you undertake an annual review of your financial affairs, in order to check that you are not paying more tax than you need to and whether the structures you set up in the past are still appropriate.
Between now and the end of the tax year (5 April 2022) is a good time to assess whether you have claimed all the relevant allowances and are as well defended against high tax charges as you can be.
Of course, the personal circumstances of each individual must be taken into account in deciding whether any particular plan is suitable or advantageous, but these suggestions may give you some ideas. We are happy to discuss them with you in more detail.
Our Year End Tax Review for the 2021-22 tax year offers information and action points to consider before the end of the tax year.
Now's the time to review your position
Preparing a 2022 strategic plan
The beginning of a new year is the perfect time to reflect on what your business has achieved over the last year, whilst also making plans for the year ahead.
This can be achieved with a strategic plan and we encourage all businesses to consider taking time to prepare one for 2022.
It is easier to get to your destination with a plan. If you have a vision of what you want your business to look like when it is "complete" then you are in a position to drive your business towards the vision and you can monitor how you are doing as you go along.
A plan looks at everything business could do and narrows it down to the activities it is actually good at doing. A strategic plan also helps you determine where to spend your time, resources and money.
Find out how to form your strategic plan
Cryptoassets and capital gains tax: a nudge from HMRC
As predicted, HMRC has now written to UK holders of cryptoassets. This is considered to be a 'nudge' for them to check their capital gains tax position.
The letter informs recipients that disposals of cryptoassets may give rise to capital gains tax liabilities.
It explains that disposals of cryptoassets include:
- Selling them for sterling or other 'fiat' currencies;
- Using them to purchase goods and services;
- Gifting them;
- Exchanging them for other cryptoassets.
The last example, exchanging one cryptoassets for another, is particularly important.
There remains a widespread misconception that a gain or a loss only arises when funds are withdrawn from an exchange. This is not the case. Each exchange of one cryptoasset for another gives rise to a potential gain or loss.
Read more about the tax implications
Managing tax debt from the pandemic
The amount of tax owed to HMRC during the COVID-19 pandemic has almost tripled from pre-pandemic levels. A total of £42 billion was owed to HMRC at the end of September 2021, compared to £16 billion in January 2020, according to a recent National Audit Office report.
This debt has largely been a result of the economic impact of the pandemic on taxpayers and the switch by HMRC from a focus on debt collection to a support role, including the various schemes and grants introduced. There has also been fraud identified under the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS).
In the short term HMRC have advised they will strike a balance between pursuing debt and giving taxpayers time to financially recover. However, as the economy starts to recover from the pandemic, they will return to focus on debt collection.
Read more about managing tax debt
Government support for businesses in 2022
On 21 December 2021, Rishi Sunak announced a £1 billion fund to help businesses hit by the rise in COVID-19 cases.
Mr Sunak described these grants as 'generous'. Time will tell whether he's correct or whether further support measures will be required for businesses in the coming weeks.
These include:
- Statutory Sick Pay Rebate Scheme
- Culture Recovery Fund
- Omicron Hospitality and Leisure grant (As per previous grants, businesses will need to apply through their local council. These are detailed on our website.)
Find out about the support available
Financial reports: the 3 most important in the UK
When trading in the UK, banks, third party lenders and investors will expect your financial reports to be up to date and in accordance with UK GAAP (generally accepted accounting practice). This is for both for internal management financial reports and external financial reports.
Regularly reviewing your financial reports will also help you assess and improve current performance, avoid risk, and make scalable plans for future growth.
To protect your company's financial health, secure investment and/or lending, understanding these three financial reports are key.
- Cash flow statement
- Profit and loss statement
- Balance sheet
Find out why these reports are so important
Automatic enrolment: helping your UK business comply
If you are an international business thinking of setting up a subsidiary limited company in the UK as part of your strategic plan for 2022, one of the company obligations you need to be aware of are Workplace Pension Scheme, also known as 'automatic enrolment'.
When hiring staff, these obligations become effective immediately, so it is best to be pro-active to ensure compliance and avoid fines.
Since 2012, employers are required by law to have a qualifying pension scheme. As a result, many UK employers have been affected and there has been a significant increase in fines from the The Pension's Regulator.
Due to the Pensions Act 2008, every employer in the UK must provide a workplace pension scheme for eligible staff and contribute towards it as part of their auto enrolment responsibilities.
Read more about automatic enrolment
5 minutes with…our trainees
At Carpenter Box, we are proud to offer a Platinum accredited trainee scheme and each year we welcome a new cohort to join our team.
We recently caught up with three of our newer trainees to find out more about them, including a typical day in their role and what keeps them busy outside of work! Say hello to Lewis, Sara and Matt.
Carpenter Box Financial Advisers news update
Read the January newsletter!
It's a brand new year and the perfect opportunity to take a fresh look at our finances and our priorities.
And with the Veganuary and Dry January campaigns firmly underway, it may also be a good time to look at our lifestyles and what we could do to live healthier lives.
Have you set yourself a new year's resolution this year? Do you have a clear financial objective you want to achieve during 2022? Whatever your focus for the coming year, we hope it's a happy, healthy and successful one for you.
This newsletter covers:
- Recent financial movements within the UK, including industry updates and the state of the economy
- European news
- A global overview: the US, Far East and Emerging Markets
Resources:
- 2021-22 Year End Tax Review
- 2021 Autumn Budget Summary
- South East Property Newsletter: Issue 1
- Autumn 2021 Newsletter
- Tax Rates 2021-22
- Financial Update January newsletter
- Academies newsletter: Autumn 2021
- School Fundraising Guide
- IR35 Fact Sheet
- Domestic Reverse Charge
- Electric car tax considerations
- The Momentum of Electric Vehicles
- Trust Registration Service fact sheet
- SDLT for mixed-use transactions
For a full listing of our resources and information sheets, visit our resources page on the Carpenter Box website.
Key dates and deadlines
31 January 2022
- Midnight deadline to submit online self-assessment tax returns for 2020/21.
- Midnight deadline to pay any outstanding tax you owe from 2019/20.
- Midnight deadline to pay half of any tax owed for 2020/21.
- Filing deadline for corporation tax return self-assessment form CT600 for period ended 31 January 2021 to be submitted to HMRC.
- Deadline for filing your annual accounts is 9 months after your company's financial year ends.
01 Feb 2022
- Corporation tax payment due for year end 30 April 2021, for those companies not liable to pay their liability by instalments.
07 Feb 2022
- Due date for December VAT returns unless exempted.
19 Feb 2022
- If you pay by cheque through the post, monthly payments due for PAYE, class 1 NICs and student loan deductions from January 2022.
- Construction Industry Scheme: monthly return due for period up to 5th of previous month.
21 Feb 2022
- Due date for payment of supplementary declarations for January 2022.
22 Feb 2022
- If paying electronically, pay PAYE, class 1 NICs, student loan deductions and deductions from payments to subcontractors for the month up to the 5th of this month.
28 Feb 2022
- Filing deadline for corporation tax return self-assessment form CT600 for period ended 29 February 2021 to be submitted to HMRC.
- Deadline for filing your annual accounts is 9 months after your company's financial year ends.
