Welcome to the September 2021 Newsletter from Walsh & Co

The Institute of Chartered Accountants in England and Wales (ICAEW) recently stated that the VAT rules regarding land and property are 'unnecessarily complex'. It has consequently called on HMRC to scrap all VAT exemptions and remove all VAT options.

Meanwhile, a survey carried out by resource management firm Veolia has found that 83% of firms polled were not previously aware of the Plastic Packaging Tax, which will come into effect from 2022.  


ICAEW urges HMRC to scrap exemptions to simplify VAT rules

In response to HMRC's consultation on simplifying the rules relating to land and property, the Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to abolish all VAT exemptions and remove all VAT options.

The ICAEW stated that the VAT rules regarding land and property are 'unnecessarily complex' and stand to benefit from 'significant simplification'. The Institute also highlighted the need for a more fundamental review of VAT exemptions.

In its response, the ICAEW also argued that abolishing exemptions would remove the difficulties for businesses posed by partial exemption. It suggested that all land and property transactions should be subject to VAT at the standard rate or reduced rate, other than those relating to domestic property, which should remain zero rated.

This would help to remove many of the complexities associated with the current rules, the ICAEW said.

In regard to the removal of all VAT options, the ICAEW commented: 'Any option, whether it be to tax or exempt a transaction, creates complexity and uncertainty, as there are then two possibilities for the VAT liability of what is essentially the same type of supply.'


Study reveals 83% of businesses not aware of Plastic Packaging Tax

A survey carried out by resource management firm Veolia has revealed that 83% of businesses polled were not aware of the Plastic Packaging Tax, which is due to take effect from April 2022.

The Plastic Packaging Tax is a new tax that will apply to plastic packaging manufactured in or imported into the UK that does not contain at least 30% recycled plastic.

The government states that the aim of the tax is to 'provide a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging'.

Veolia's survey found that the biggest incentives for businesses for acting more sustainably are government mandates and environmental conscience.

'The Plastic Packaging Tax is removing the economic burden of acting more sustainably and levelling the playing field for businesses,' said Tim Duret, Director of Sustainable Technology at Veolia UK and Ireland.

'In order to continue this momentum, we need to escalate the tax and roll it out across all types of plastic like construction, cars, furniture and electric goods.'


ESSENTIAL TAX DATES FOR SEPTEMBER

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

19 September
PAYE, Student loan and CIS deductions are due for the month to 5 September 2021.

30 September
End of CT61 quarterly period.


QUOTE OF THE MONTH

'With firms now having to manage debt repayments, rent arrears, business rates and skills shortages on top of rising prices, the government should move swiftly to mitigate the effects of soaring costs.'

Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), commenting on data published by the Office for National Statistics (ONS) which showed that the Retail Prices Index (RPI) reached 3.8 in July.


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.


IN THE NEWS

HMRC publishes list of excuses given by employers for not paying minimum wage
HMRC has published a list of the most absurd excuses given by employers for not paying their employees the National Minimum Wage (NMW).
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UK partners and sole traders face bigger tax bills in 2022
Sole traders and partners are likely to face bigger tax bills than expected next year after a government proposal to change the date certain businesses report their profits, the Institute of Chartered Accountants in England and Wales (ICAEW) has predicted.
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Almost 1.8 million couples claiming marriage allowance
Nearly 1.8 million married couples and those in civil partnerships are using the Marriage Allowance to save up to £252 a year in income tax, according to HMRC.
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Only 11% of businesses are measuring their carbon footprint
Just 11% of UK businesses are measuring their carbon footprint, according to the findings of a survey conducted by the British Chambers of Commerce (BCC).
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BCC calls for government to extend skills training
The British Chambers of Commerce (BCC) has urged the government to extend skills training in light of the publication of research which showed that one in five companies are considering making redundancies as a result of the coronavirus (COVID-19) pandemic.
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