Welcome to the Christmas 2022 Newsletter from Walsh & Co

The Treasury has confirmed that Making Tax Digital for income tax self assessment (MTD for ITSA) has been delayed until April 2026. The move comes as the cost-of-living crisis and rising bills continue to adversely affect businesses and individuals.

Meanwhile, research carried out by the Institute of Directors (IoD) has found that the government's Energy Bill Relief Scheme (EBRS) has helped to remove 'serious risk' for a significant number of businesses.

MTD for ITSA delayed for two more years

In a written statement, the Treasury has announced that Making Tax Digital for income tax self assessment (MTD for ITSA) will be delayed for two more years until April 2026.

MTD for ITSA was due to take effect from April 2024 and would've required all self-employed individuals and landlords with income over £10,000 to report earnings quarterly through the MTD for ITSA system.

However, Victoria Atkins, Financial Secretary to the Treasury, confirmed that the mandation of MTD for ITSA will now be introduced from April 2026, with businesses, self-employed individuals and landlords with income over £50,000 required to join first. From April 2027, those with income over £30,000 will be mandated to join, the Treasury said.

Ms Atkins stated that the government 'understands businesses and self-employed individuals are currently facing a challenging economic environment, and that the transition to MTD for ITSA represents a significant change for taxpayers, their agents and for HMRC'.

The Treasury said that the government now intends to review the needs of smaller businesses in regard to MTD for ITSA, and will consider how the initiative can be shaped to meet their needs.

Once the review is finalised, the government will outline plans for any further mandation of MTD for ITSA.

The Treasury also stated that the government will not extend MTD for ITSA to general partnerships in 2025, saying that the government 'remains committed to introducing MTD for ITSA for partnerships at a later date'.

EBRS has 'removed serious risk for quarter of businesses', IoD finds

The government's Energy Bill Relief Scheme (EBRS) has helped to remove 'serious risk' for a quarter of UK businesses, the Institute of Directors (IoD) has found.

Data published by the IoD revealed that 24% of small business leaders feel that the EBRS has 'removed a serious risk to their business'.

5% of leaders polled stated that their business would've stopped trading if it were not for the energy price cap. An additional 11% of firms have been able to keep their premises open longer because of the EBRS.

35% of businesses believe that having the EBRS this winter has made it easier for them to plan.

Commenting on the matter, Alex Hall-Chen, Senior Policy Adviser at the IoD, said: 'We know that the cost of energy has been a significant concern for business. However, our data shows that the government's EBRS has been a crucial intervention, removing a serious risk to around a quarter of businesses. This suggests that the government was right to introduce the scheme in order to provide sufficient time to identify the characteristics of those businesses.

'We therefore urge the government to continue the EBRS for sectors of the economy particularly vulnerable to current fluctuations in international energy markets.'

ESSENTIAL TAX DATES FOR JANUARY

1 January
Due date for payment of corporation tax for period ended 31 March 2022.

14 January
Due date for income tax for the CT61 quarter to 31 December 2022.

19 January
PAYE, Student loan and CIS deductions are due for the month to 5 January 2023.
PAYE quarterly payments are due for small employers for the pay periods 6 October 2022 to 5 January 2023.

31 January
Deadline for submitting your 2021/22 self assessment return (£100 automatic penalty if your return is late) and the balance of your 2021/22 liability together with the first payment on account for 2022/23 are also due.
Capital gains tax payment for 2021/22.
Balancing payment – 2021/22 income tax and Class 4 NICs. Class 2 NICs also due.

QUOTE OF THE MONTH

'Falling real incomes, increase in mortgage costs and higher unemployment will place significant pressure on household finances and weigh on their ability to service debt.'

Andrew Bailey, Governor of the Bank of England (BoE), commenting on the Bank's warning that millions are set to face higher mortgage payments over the coming months.  

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