Welcome to the March 2024 Newsletter from Walsh & Co

HMRC has published guidance on Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) for landlords and sole traders, outlining requirements and estimated timescales.

Meanwhile, the number of investigations into tax fraud has fallen by more than a half, according to recent data.

HMRC publishes guidance on MTD for ITSA for sole traders and landlords

HMRC recently published guidance on the Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) requirements for sole traders and landlords.

MTD for ITSA will require businesses and landlords with qualifying income to maintain digital records and update HMRC each quarter via compatible software.

In the guidance, HMRC stated that MTD for ITSA will be introduced in two phases:

• from April 2026 for those with qualifying income over £50,000
• from April 2027 for those with qualifying income over £30,000.

HMRC said that MTD 'exploits the opportunities offered by digitalisation to make it easier for everyone to get tax right'. It said that digitalising government tax services helps to reduce the risk of unintentional customer errors; save taxpayers time when they submit their tax returns; supports wider productivity and less time managing paperwork; and enables HMRC to better tailor its services to its customers.

In its latest guidance, HMRC estimates a transitional cost to business of around £561 million and a net increase in the continuing costs of tax compliance of around £196 million for businesses mandated to use MTD for ITSA.

The guidance can be found here.

Number of tax fraud cases opened by HMRC fallen by more than half

The number of civil investigations into alleged tax fraud has fallen by more than a half, data has shown.

The number of investigations into wealthy, offshore and corporate taxpayers fell from 1,417 in 2018/19 to just 627 in 2022/23. According to HMRC, its fraud investigation units focus on the 'highest value' tax fraud.

It stressed that the number of investigations into wealthy, offshore and corporate taxpayers does not take into account overall compliance activity, which saw 300,000 investigations started in 2022/23.

Robert Palmer, Executive Director at Tax Justice UK, commented: 'We know HMRC is underfunded and resources have been diverted for work on Covid and Brexit.

'Parliamentary research shows that when the government invests in HMRC, the return on investment is significant. Until the department is properly funded, vast sums of money owed, often by the richest people and companies, will go unrecovered.'

A spokesperson for HMRC said: 'These specific figures relate solely to the work of our fraud investigation service and do not take account of our overall compliance activity. In 2022/23, we opened 300,000 compliance interventions across a range of tax risks, including avoidance and evasion, and secured £34 billion in additional tax revenue.'

ESSENTIAL TAX DATES FOR MARCH

1 March        
New Advisory Fuel Rates (AFR) for company car users apply from today.

2 March
5% late payment penalty on any 2022/23 outstanding tax which was due on 31 January 2024 and still remains unpaid.

19 March
PAYE, Student loan and CIS deductions are due for the month to 5 March 2024.

31 March
End of corporation tax financial year.
End of CT61 quarterly period.
Filing date for Company Tax Return Form CT600 for period ended 31 March 2023.
Last minute planning for tax year 2023/24 - please contact us for advice.

QUOTE OF THE MONTH

'Cash access is too important to be left to innumerable individual commercial decisions which, taken together, represent a significant threat to people and businesses' ability to withdraw, process and deposit cash.'

Martin McTague, National Chair of the Federation of Small Businesses (FSB), commenting on the business group's call to preserve access to cash for small firms.

ON OUR WEBSITE

A wealth of resources for businesses
With topics ranging from the Bribery Act 2010 to the National Minimum Wage and the National Living Wage, the Your Business section of our site is a hub of essential information.

Useful information for individuals
For a comprehensive bank of guides covering Venture Capital Trusts, the dividend nil-rate and much more, please visit the Your Money area of our website.

500 firms named and shamed for underpaying staff
The government recently named and shamed more than 500 UK employers for underpaying their employees.
Click here for the full story

Less than 3% of individuals paid CGT over decade to 2020, research shows
Research carried out by the London School of Economics has revealed that less than 3% of adults in the UK paid capital gains tax (CGT) over the last decade to 2020.
Click here for the full story

Business group urges Chancellor to outline 'sustainable growth plan'
The British Chambers of Commerce (BCC) has urged Chancellor Jeremy Hunt to use the Spring Budget to outline a 'sustainable growth plan'.
Click here for the full story

HMRC warns self assessment taxpayers as scam referrals rise
HMRC is warning people to be wary of bogus tax refund offers following the self assessment deadline on 31 January.
Click here for the full story

British families facing a 'triple savings challenge', Foundation warns
A report published by the Resolution Foundation has warned that UK families are facing a 'triple savings challenge' of insufficient 'rainy day' savings of at least £1,000.
Click here for the full story