If you are a new parent, you can now claim Child Benefit via the HMRC app. However, high earners should note that some or all of the benefit may be clawed back via the High Income Child Benefit Charge.

Key dates

Child Benefit can be claimed from the day after that on which you registered the birth of your child, or once a child comes to live with you. Claims can be backdated for up to three months.

This note explains the nature of the child benefit, how to claim and the impact of the High Income Child Benefit Charge.

Nature Child Benefit

You will normally be eligible to claim Child Benefit it you are responsible for a child under the age of 16 (or under the age of 20 where your child has stayed in approved education or training). Child benefit is also available if you foster a child, as long as you are not receiving anything towards their accommodation or maintenance from your local council. If you adopt a child, you can apply as soon as the child comes to live with you – you do not need to wait until the adoption process is complete.

Only one person can claim child benefit. Consequently, it may be necessary to decide who claims.

For 2023/24 child benefit is payable at the rate of £24.00 per week for the first child and £15.90 per week for the second and any subsequent children. For two children, it is worth just over £2,000 a year.

Other advantages

Claiming Child Benefit confers advantages in addition to the actual payments. By claiming child benefit, you will receive National Insurance credits which will help you to build up qualifying years for state benefit purposes. This is particularly advantageous if you will not pay sufficient National Insurance for the year to be a qualifying year. This may be the case if you do not do any paid work, for example, if you are a stay-at-home parent, or if your earnings are less than the lower earnings threshold of £123 per week if you are an employee or, if you are self-employed, your profits are less than the small profits threshold of £6,725 a year. You need 35 qualifying years to earn a full state pension and at least 10 qualifying years for a reduced state pension. If you have at least one child, claiming child benefit will provide you with 16 qualifying years or more.

Claiming child benefit will also mean that your child is allocated a National Insurance number automatically when they reach the age of 16.

Consequently, it is always worth claiming Child Benefit, even if you elect not to receive the payments where they would clawed back by the High Income Child Benefit Charge.

Claiming Child Benefit

There are various ways in which a claim for Child Benefit can be made.

You can now claim via the HMRC app. If you do not already have the app you can download it from the App Store for iOS or from the Google Play Store for Android. You will need to sign into the app using your Government ID and password. If you do not already have one, you will be able to create one on the sign in page. The app has a dedicated Child Benefit section from which you will be able to make an online claim. Once you have made a claim, you will also be able to view your payments and other details.

You can also claim online via the Gov.uk website at www.gov.uk/child-benefit/how-to-claim.

To make a claim, you will need to have the following to hand:

  • your child’s birth certificate or adoption certificate;
  • your bank or building society details;
  • your National Insurance number: and
  • your partner’s National Insurance number if you have a partner.

Claims can also be made by post by completing child benefit form CH2 (available to download from the Gov.uk website at www.gov.uk/government/publications/claim-child-benefit-if-you-cannot-claim-online) and sending it to the address on the form.

You can also claim by calling HMRC’s Child Benefit helpline on 0300 200 3100.

As claims can only be backdated by three months, it is advisable to claim as soon as you are able so that you do not lose out.

High Income Child Benefit Charge

The High Income Child Benefit Charge (HICBC) is a tax charge that claws back some or all of the child benefit that you have received if either you or your partner have income of more than £50,000. Any maintenance from a former partner is not taken into account. Where both partners have income in excess of £50,000, the charge is levied on the person with the highest income.

It should be noted that your partner may be liable for the charge, even if they are not a biological parent of the child/children is respect of whom the child benefit is paid.

The charge claws back 1% of the child benefit paid for every £100 by which income exceeds £50,000. Once income reaches £60,000, the tax charge is equal to the child benefit paid in the tax year.

To avoid having to repay the benefit, you can elect not to receive it. However, it is still beneficial to make a claim to benefit from the associated National Insurance credits.


The Chancellor, Jeremy Hunt, presented his Spring Budget on 15 March 2023. There were no changes to the income tax rates and thresholds, which had been announced previously. However, the Chancellor unveiled the successor to the capital allowances super-deduction which ends on 31 March 2023.

Key dates

The capital allowances super-deduction for companies is replaced by full expensing from 1 April 2023. Please note, the changes will only affect companies. Sole traders and partnerships do not qualify for the “full expensing” of capital purchases from 1 April 2023 but they can still claim the Annual Investment Allowance (AIA). The annual limit to qualify for the AIA is £1m of qualifying capital purchases.

This note highlights some planning points arising from this change.

Full expensing of capital expenditure

The super-deduction for companies ends on 31 March 2023. It is replaced by full expensing for capital expenditure from 1 April 2023. This applies only to companies and will be available in respect of qualifying expenditure incurred in the three-year period from 1 April 2023 to 31 March 2026. The expenditure which will qualify for full expensing is that which is eligible for main rate writing down allowances. A 50% first-year allowance will continue to apply for the same period for expenditure which is eligible for special rate capital allowances. Expenditure on cars does not qualify for first-year allowances.

Full expensing provides immediate relief for capital expenditure in full in the accounting period in which it is incurred. Unlike the annual investment allowance (AIA), there is no limit on the qualifying expenditure which can be deducted. Full expensing will therefore benefit companies who incur significant capital expenditure in excess of the AIA limit of £1 million. Likewise, there is no limit on the expenditure that will be eligible for the 50% first-year allowance.

Companies incurring significant capital expenditure have a choice of allowances. It should be remembered that capital allowances do not have to be claimed and can be tailored. Balancing charges will apply if the asset is subsequently sold as the disposal proceeds are brought into charge.

The super-deduction is an enhanced first-year capital allowance that allows companies to deduct 130% of the qualifying expenditure in the accounting period in which it is claimed. This provides the highest rate of relief, but time is very short to take advantage of this as unconditional contracts must be signed before 1 April 2023 in order to benefit.

From 1 April 2023, companies incurring expenditure eligible for main rate writing down allowances can receive 100% relief in the period in which it is incurred, either by full expensing or, where the expenditure for the year is less than £1 million, by claiming the AIA. Where significant capital projects are on the horizon with an annual cost in excess of £1 million, it would be advisable where possible to incur the expenditure before 1 April 2026 to benefit from immediate relief on the full amount.

Where a company incurs expenditure that would be eligible for the special rate writing down allowances, claiming the AIA is the best option where this remains available. Once this has been used up, claiming the 50% first-year allowance will provide the greatest deduction and secure relief at the earliest opportunity.

A reminder that full expensing and the 50% first-year allowance are not available to unincorporated businesses. However, the self-employed can benefit from immediate and full relief by claiming the AIA, the limit of which has been permanently set at £1 million.


On 15 March 2023, Chancellor Jeremy Hunt presented his first Budget to Parliament and set out a plan to reduce inflation, grow the economy and get government debt falling all whilst avoiding a recession and tackling labour shortages.

Below we set out some of the main points.


Energy Costs

The Energy Price Guarantee (EPG) brings a typical household energy bill in Great Britain down to around £2,500 per year. It has now been announced that the £2,500 EPG will be extended by 3 months to 30th June 2023, before increasing to £3,000 until the end of the EPG period on 31 March 2024. This extra 3 months at £2,500 will be worth £160 for a typical household.

A new scheme for businesses, charities and the public sector has been confirmed. The Business Energy Bills Discount Scheme will run until 31 March 2024, giving non-domestic customers discounts on their gas and electricity bills.


Additional support is being provided towards childcare costs in what the government describe as a ‘childcare revolution’. This includes 30 hours of free childcare for every child over the age of 9 months, with support being phased in until every eligible working parent of under 5s gets this support by September 2025.

For Universal Credit claimants, the government will also pay childcare costs in advance rather than arrears, when parents move into work or increase their hours. The maximum they can claim will also be boosted to £951 for one child and £1,630 for two children, an increase of around 50%.

Benefits and State Pension

As confirmed at Autumn Statement 2022, the government will also increase benefits, including the State Pension, paid to recipients in the tax year to 5 April 2024 by 10.1%.

This increase in the State Pension means that most pensioners will receive £10,600 in 2023/24, where they have 35 qualifying years. Individuals are being urged to check their contribution record on their Government Gateway account and consider making Class 3 voluntary National Insurance (NI) contributions in respect of missing qualifying years. Normally it is only possible to make voluntary NI contributions for the past 6 tax years, but until 31 July 2023, it is possible to go back as far as 6 April 2006 and pay additional contributions at the 2022/23 Class 3 rate of £15.85 per week.

In-year Class 3 contributions for 2023/24 will increase to £17.45 per week.


Increasing liabilities

The personal allowance and basic rate band threshold are now frozen in place until 5 April 2028. As earnings increase, individuals will move into higher tax bands. This is often referred to as ‘fiscal drag’ because it will raise more tax without the government increasing income tax rates.

The personal allowance continues to be partially and then fully withdrawn for higher earners, with £1 of personal allowance lost for every £2 of adjusted net income over £100,000.

Summary table of key income tax rates and allowances for the tax year to 5 April 2024 (2023/24)

Band Taxable Income Tax rate in 2023/24
Other income Savings income Dividend income
Personal allowance Up to £12,570 0% 0% 0%
Basic rate £12,571 – £50,270 20% 20% 8.75%
Higher rate £50,271 – £125,140 40% 40% 33.75%
Additional rate Over £125,140 45% 45% 39.35%

Other allowances

Savings income continues to benefit from a personal savings allowance of £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Dividend income attracts a £1,000 dividend allowance in 2023/24, down from the £2,000 allowance seen in previous years. These allowances are in addition to the personal allowance and attract a 0% rate of income tax.

Pension tax relief

There was good news in the Budget for those saving in a personal pension. The current pension lifetime allowance (LTA) charge is being abolished from 6 April 2023. The LTA has caused some high earners, particularly doctors, to retire early as tax charges apply on crystallisation of pension funds if the LTA (currently £1,073,100) is exceeded.

Individuals may be able to receive 25% of their pension savings as a tax-free lump sum when they become entitled to their pension benefits. This is currently capped at 25% of the LTA and going forwards, for most individuals, will remain capped at £268,275.

Another pension limit increased by the Chancellor in the Budget was the pension Annual Allowance (AA) which increases from £40,000 to £60,000 from 6 April 2023. The AA applies to the combined pension input by the individual and, in the case of employees, their employer. Pension contributions in excess of the AA result in a tax charge on the individual, although they may take advantage of unused AA amounts from the 3 previous tax years.

For those with high incomes, the AA is tapered. From 6 April 2023, where a taxpayer’s adjusted income exceeds £260,000 (increasing from £240,000), the AA is tapered by £1 for every £2 in excess of £260,000, down to a minimum of £10,000 (increasing from £4,000).

The Money Purchase Annual Allowance (MPAA) replaces the AA when an individual starts to flexibly access a defined contribution pension scheme. The MPAA will increase from £4,000 to £10,000 on 6 April 2023.

Note that an individual’s pension contributions can be very tax efficient depending on their level of income.

The taxation rules for pensions are complex as there have been numerous changes in recent years so please talk to us about your pension contribution strategy.

Tax Efficient Savings

There were no changes to the annual limits for Individual Savings Accounts (ISAs), Child Trust Funds or the Junior ISA. These limits remain at £20,000, £9,000 and £9,000 respectively.


In the Autumn Statement, the Chancellor announced that the £12,300 annual tax-free capital gains tax exemption (or allowance) will be reduced to just £6,000 in 2023/24 and only £3,000 in 2024/25.

This change will mean that those disposing of capital assets will pay more tax, where the new lower allowance is exceeded.

Couples who are in the process of separating, or who have commenced divorce proceedings, need to be aware of new rules taking effect from 6 April 2023 concerning the transfer of capital assets between them as a result of their separation.

If you are planning any capital disposals, please contact us to discuss the best strategy for the disposal.


In the 2023 Autumn Statement, the inheritance tax nil rate band was frozen at £325,000 until April 2028. The residence nil rate band will also remain at £175,000 and the residence nil rate band taper will continue to start at £2 million.

If you anticipate your estate giving rise to inheritance tax in the future, please contact us to discuss measures that could potentially be put in place, alongside asset distribution within your family.


The VAT registration and deregistration thresholds continue to be frozen at £85,000 and £83,000 respectively, instead of increasing each year in line with inflation. This will remain the case until March 2026.

Since 1 January 2023, a new penalty regime has been in operation for late VAT return submission and late payment of VAT. The new system is designed to target more persistent offenders, with penalties escalating quickly where defaults reoccur.


National Insurance Contributions (NIC) for the self-employed in 2023/24

Self-employed individuals are required to pay Class 2 and Class 4 NICs if their profits exceed £12,570. These NICs are usually collected with the individual’s income tax self-assessment payments.

For 2023/24, Class 2 NICs are calculated at £3.45 per week and Class 4 NICs are calculated at 9% on profits between £12,570 and £50,750, and at 2% on profits over £50,750.

Making Tax Digital (MTD) for Income Tax

Under MTD for Income Tax, businesses will keep digital records and send a quarterly summary of their business income and expenses to HMRC using MTD-compatible software. These requirements will not be phased in until April 2026, starting with sole traders and property landlords with gross income over £50,000. Other individuals subject to Income Tax will follow at a later stage.

Tax Relief for expenditure on plant and machinery

The Annual Investment Allowance (AIA), giving 100% tax relief to unincorporated businesses and companies investing in qualifying plant and machinery, is now permanently set at £1million.

The super-deduction, which gives enhanced 130% relief for new qualifying plant and machinery acquired by companies, will end on 31 March 2023.

As a replacement for the super-deduction, ‘full expensing’ (effectively 100% tax relief, called a ‘First Year Allowance’ (FYA)) will be available to companies incurring expenditure on new qualifying plant and machinery between 1 April 2023 and 31 March 2026. The qualifying criteria is quite broad although there are exclusions, including cars and features integral to a building (for example, heating systems). With regard to ‘integral features’, a smaller 50% FYA will be available. Subsequent disposals of assets on which one of these FYAs has been claimed will trigger a clawback of tax relief at a rate of 100% or 50% of the disposal proceeds, depending on the rate of the original relief. These new FYAs will mainly be of interest to companies that have already fully utilised their £1million AIA.

The separate 100% FYA for electric vehicle charge points remains available for unincorporated businesses and companies until Spring 2025.

Unincorporated businesses and their accounting year-ends

Unincorporated businesses that prepare annual accounts to a date other than 31 March or 5 April will soon need to adopt a new process for how the profits or losses arising in those accounts are reported to HMRC.

At present, ‘basis period’ rules apply that broadly allow annual accounts that end in a tax year to act as the basis of profits or losses arising in that tax year.

This new system starts with transitional rules in the tax year ending on 5 April 2024 (2023/24). Going forwards, actual profits or losses arising in a tax year must be reported to HMRC, but this does not necessarily require a change in accounting year-end.

Unfortunately, this will make it harder for some self-employed individuals to predict their income tax liabilities, but we will be on hand to help you.


New rates from 1 April 2023

From 1 April 2023, the rate of Corporation Tax will increase to 25% if a company’s profits exceed £250,000 a year. The current 19% rate will however continue to apply where profits are no more than £50,000 a year.

Where a company’s profits fall between £50,000 and £250,000 a year, the profits are taxed at the higher 25% rate, but a ‘marginal relief’ is given to reduce the liability, with the effective rate being closer to 19% for those with profits just over £50,000.

Companies in the same corporate group (or otherwise connected by association) must share the £50,000 and £250,000 thresholds between them, making the 25% rate more likely to apply.

Research & Development (R&D) Reliefs

From 1 April 2023 a raft of changes is coming to the R&D tax relief regime and claimant companies should consider obtaining updated advice if they’ve not already done so. The key changes are:

  • The Research and Development Expenditure Credit (RDEC) available to non-SME companies will be increased from 13% to 20%.
  • For SME companies, R&D tax relief rates will be reduced from 230% to 186%.
  • For loss-making SME companies, the current payable credit of 14.5% will only be available for companies whose R&D expenditure constitutes at least 40% of their total expenditure. For R&D claimants that don’t meet the new 40% test, the payable credit will be reduced from 14.5% to 10% of the eligible loss.
  • Qualifying R&D expenditure will be expanded to include data licences and cloud computing services.
  • New claimants (those who have not made a claim in the previous 3 years) will be required to inform HMRC of their intention to make a R&D claim within 6 months of the end of the accounting period to which the claim relates.

From 1 August 2023, additional information requirements will need to be fulfilled when making a R&D claim.

Creative industries tax reliefs

The government continues to support the creative industries by reforming and enhancing film, TV and video games tax reliefs. The government will also extend the temporary higher rates of theatre, orchestra, and museums and galleries tax reliefs for 2 further years until April 2025.


National Insurance Contributions (NICs)

Like the main income tax bandings, employer and employee NIC thresholds are now also frozen until 5 April 2028. This broadly means that employers’ NIC will continue to apply at 13.8% to earnings in excess of £9,100 a year (£175 per week) and employees will continue to pay 12% on earnings between £12,570 and £50,270 and 2% thereafter.

Company Cars and Other Benefits

Employees are required to pay income tax on certain non-cash benefits. For example, the provision of a company car constitutes a taxable ‘benefit in kind’. Employers also pay Class 1A NIC at 13.8% on the value of benefits.

The set percentages used to calculate company car benefits are fixed until 5 April 2025 before slight increases apply to most car types, including electronic and ultra-low emission, from 6 April 2025.

More imminently, the figures used to calculate benefits-in-kind on employer-provided vans, van fuel (for private journeys in company vans), and car fuel (for private journeys in company cars) will increase in line with the Consumer Price Index (CPI) from 6 April 2023. These will become:

  • Van benefit                         £3,960
  • Van fuel benefit                  £757
  • Car fuel benefit multiplier   £27,800

Share Options

From 6 April 2023, the Company Share Option Plan (CSOP) employee share options limit will increase from £30,000 to £60,000. Additionally, restrictions on the types of shares eligible for CSOP options will be lifted.

Simplifications will also be made to the process to grant Enterprise Management Incentive (EMI) options. From 6 April 2023, there will no longer be a requirement for the company to set out any restrictions to the shares being acquired in the option agreement and the employee will no longer have to sign a working time declaration.

National Minimum Wage

The hourly rates applicable from 1 April 2023 are:

·       Over 23                  £10.42

·       21 to 22                  £10.18

·       18 to 20                  £7.49

·      Under 18             £5.28

·      Apprentice           £5.28



The rising cost of living and high energy bills may mean that you are struggling to pay your January self-assessment tax bill. However, help is at hand and you may be able to set up a Time to Pay Arrangement which will allow you to pay what you owe in instalments.

Key dates

You must file your 2021/22 self-assessment tax return by midnight on 31 January 2023, and pay any remaining tax owing for 2022/23 by the same deadline. Where you need to make payments on account of your 2022/23 tax bill, the first payment on account is also due by 31 January 2023.

This note explains what you can do if you are struggling to pay the bill.

Nature of a Time to Pay Arrangement

A Time to Pay Arrangement is an arrangement with HMRC which allows you to pay a tax bill in affordable monthly instalments. The arrangement can cover all outstanding overdue amounts plus associated interest and, where applicable, penalties.

For self-assessment bills, you may be able to set up a Time to Pay Arrangement online. If this route is not available to you, you will need to contact HMRC to discuss whether you can agree an arrangement with them.

If you are aware that you are going to have problems paying your January tax bill in full, it is advisable to either set up a Time to Pay Arrangement online or contact HMRC before the end of January, rather than miss the deadline and then try and sort it out when HMRC chase you for payment.

It should be noted that if you are able to pay your tax bill in full, HMRC expect you to do so.

Set up an arrangement online

You can set up a Time to Pay Arrangement online if:

  • you have filed your 2021/22 tax return;
  • you owe less than £30,000;
  • you are within 60 days of the payment date; and
  • you plan to pay your debt off within the next 12 months or less.

To set up an arrangement online, you will need to log in to your Government Gateway account.

Agree an arrangement with HMRC

If you are unable to set up a Time to Pay arrangement online, you will need to get in touch with HMRC. If you are struggling to pay your January self-assessment tax bill, you should call HMRC’s Self Assessment Payment Helpline on 0300 200 3822. The helpline is open from Monday to Friday, from 8am to 6pm.

HMRC will take account of your income and expenditure and also what assets you have in working out what you can afford to pay. HMRC will not usually expect the payments under the agreement to be more than 50% of your disposable income. The length of the arrangement will depend on how much tax you owe. There is no upper limit on how long a Time to Pay Arrangement can last.

Payments will usually be made by direct debit.

If payments are missed, HMRC may take enforcement action to recover the tax owed.


Interest is charged on tax debts included in a Time to Pay Arrangement from the due date until the debt is paid.

Late payment penalties are not charged if the arrangement is set up before the tax is late.

If you need help with any of the issues raised above please call us on 01242 370298.


We are all interested in trying to minimise the amount of tax we pay, and the current cost-of-living challenges have underlined the benefits of this strategy.

Basic planning

Apart from making sure you’re compliant and do not incur the wrath of HMRC, we look carefully at areas such as

  • benefits in kind or salary;
  • making sure you use your personal tax reliefs fully and efficiently;
  • minimising capital gains;
  • efficient use of pension contributions;
  • making sure that we consider paying salary instead of dividends;
  • whether the business is better as a company, a sole trader or partnership; and
  • whether you can employ your partner or spouse in the business and at what level.

We also consider any allowances you can claim, for example, child tax credits and working tax credits, whether you can claim tax relief for business use of your home, and any potential inheritance tax issues and planning.

Investments and savings

We can also, whilst looking at your overall tax affairs and your tax return, think about your investments and savings and whether they can be better utilised and if all the tax advantages available have been considered and claimed.

Some ideas to think about

Make sure you keep digital records of business mileage with the dates and the purpose so that we can easily reclaim your travel costs.

Be sure and review your pension arrangements annually with your financial advisor. It is not just about the tax advantages, it is also whether you are going to have a well-funded retirement.

Is there an opportunity to pay a partner or spouse a salary if they are working in the business and their income is at a lower tax rate than yours?

Is it worthwhile transferring some capital and income between husband and wife? This may enable you to equalise your family income levels and lead to an overall reduction in income tax for the family.

Let’s round up

There’s more to tax compliance than simply producing a tax return that is compliant and keeps HMRC happy. It is useful if you talk to us before you action any new financial transactions because there may be tax consequences and sometimes advantages.

Feel free to call us on 01242 370298 to discuss. We are keen that you minimise tax and maximise your benefits now and in the future.


We all want a long and fulfilling retirement, able to do all the things that we were unable to do whilst working or bringing up a family. But the first task to achieve this is to decide when you want to retire, and if this requires that you expect to sell your business, dispose of property or cash-in other investments.

In which case what sort of buyer have you in mind?

Other questions you will need to ask are what size of pension are you expecting at retirement and how much income will you be generating from non-pension pot investments?

We can work together to deal with these and other questions, to maximise returns over time. We also have tools that will help provide strategies to achieve these retirement goals.

Your business

Considering the value of the business and how you will extract this value to fund your retirement objectives will involve early planning. Commonly, we will want to present to any potential buyer steadily rising profits and a strong balance sheet over the last three to five years. Buyers also tend to want a business that is easy to manage.

Early discussions

Depending on your time scale, you should probably consider pension planning early in your business career, even if you do not make pension contributions immediately.

Following this, you will need to discuss if pension pots are growing at the right rate. This should be considered within five to seven years before sale, and we will need to discuss the preparation of your business for sale so that we can maximise the result.

This will involve tax planning to minimise the tax implications of the sale., whether that means capital gains or income tax, and how we might extract value from the business prior to sale that can boost your pension pot but not detract from the valuation.

Maintain focus

It is important to be immersed in the day-to-day necessity of earning a living, but it is equally important to keep an eye on retirement planning issues and make sure that you are achieving your overall goals.

It is worthwhile discussing this at least annually even if briefly, and for some of the elements it should be discussed in detail before any major changes are contemplated.

Finally, it will be beneficial to consider inheritance tax implications and the provisions of your will. This will ensure that your assets are used effectively during your lifetime and thereafter.

Let’s round up

It is worthwhile discussing retirement planning on a regular basis to stay on track and how you intend to get there. Please call us on 01242 370298, if we’ve not talked about this recently.

In his first fiscal statement since taking office, Chancellor Kwasi Kwarteng used today’s ‘mini-Budget’ to deliver a package of more than 30 measures he said would tackle high energy bills, drive down inflation and cut taxes to drive growth.

After yesterday’s indication from the Bank of England that the country may already be in recession, the Chancellor focused his messaging on ‘trickle-down’ economic measures that he said will “drive the country’s economic growth while maintaining responsible public finances.”

There were a few surprises too — not least the repeal of IR35 from 6 April 2023, which means contract workers will once again be responsible for determining their tax and National Insurance contributions.

The Chancellor also announced the closure of the Office of Tax Simplification, the independent body responsible for helping to make the UK tax system simpler and easier to interact with for taxpayers.

On the OTS, Kwasi Kwarteng said: “I’m hugely grateful to the Office of Tax Simplification for everything they have achieved since 2010. But instead of a single arm’s length body which is separate from the Treasury and HMRC, we need to embed tax simplification into the heart of government.”

The reversal of National Insurance increases was announced in advance, along with increases to dividend tax rates. The Levy was expected to raise approximately £13bn a year, ring-fenced for health and social care spending but the Chancellor said that funding will be maintained.

A cut in the basic rate of income tax to 19p in April 2023, a year earlier than planned, was also announced in a bid to demonstrate support for households, as many struggle with increases in the cost of living. This was coupled with a doubling of the SDLT threshold to £250,000, with the first-time buyers’ threshold raised from £300,000 to £425,000, all effective from today.

Other key announcements were:

  • Cancellation of the planned increase in corporation tax — it remains at 19%
  • A single higher rate of income tax of 40%, abolishing the 45p rate for those who earn over £150,000 from April 2023
  • Planned beer, wine, cider, and spirits duty rate increases cancelled
  • The cap on bankers’ bonuses removed
  • Sales tax-free shopping for overseas visitors
  • Proposed changes to allow pension funds to invest more widely
  • A proposal to automatically sunset EU regulations by December 2023.
  • The additional rate for savings, dividends and default rates will also be removed from April 2023, and this change will apply UK-wide.

The Chancellor also confirmed the creation of low-tax Investment Zones across 38 local and combined authorities in England – an extension of the 2021 freeports policy – as a means of ‘levelling up’ economic growth. He also talked of liberalising planning rules and new legislation to speed up the delivery of around 100 major infrastructure projects across the UK.

Kwasi Kwarteng said: “Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise. This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s.”

Inflation likely to peak at 11%

On Thursday, with the announcement of a further 0.5% interest rate rise to 2.25%, the Bank’s Monetary Policy Committee (MPC) said it expected the UK economy would shrink by 0.1% in this third quarter of the year, after it contracted by 0.1% in the second quarter.

Having previously forecast that inflation would reach 13% in October, the MPC also said that the government’s move to subsidise domestic bills through the Energy Price Guarantee meant inflation would now likely to peak at just under 11%.

If you need to send a tax return for the 2021/22 tax year and have not sent one previously, you will need to register for Self-Assessment. This may be the case if you started a new business as a self-employed trader or as a partner in a partnership in 2021/22. You can register online.

Key dates

The deadline for registering for Self-Assessment for 2021/22 is 5 October 2022. You will need to file your return online by 31 January 2023. You can file a paper return if you wish, but you must do this by the earlier date of 31 October 2022. If you have an underpayment of £3,000 or less that you would prefer to be collected through you PAYE code, you must file your return by 30 December 2022.

This note explains what you need to do to register for Self-Assessment.

Register if you are self-employed

If you are self-employed and need to send a tax return for 2021/22 and have not sent one before you will need to register for both Self-Assessment and Class 2 National Insurance contributions. It is important that you do this by 5 October 2022, as you may be fined if you miss this deadline.

If you only have once source of income from self-employment and your turnover is £1,000 or less, you will benefit from the trading allowance and do not need to register. If, however, your income from self-employment is more than £1,000, you must complete a return and report it to HMRC.

Register online

If you already have a business account with HMRC, you will be able to register for Self-Assessment through your business account. To do this, you simply need to sign into your business account using your Government ID and password. You will then be able to add Self-Assessment to the list of services that you can use.

If you do not have a business tax account or a Government Gateway ID and password, you will need to set one up. Guidance on how to set up a Government Gateway account can be found on the Gov.uk website at https://www.gov.uk/government/publications/access-our-services-using-government-gateway/use-a-government-gateway-account. You can add a business account to your Government Gateway account.

Once you have registered for Self-Assessment you will receive a letter within 10 days containing your 10-digit Unique Taxpayer Reference (UTR).

You will also receive a letter before the filing deadline reminding you to file your return.

Filed a return previously?

If you did not file a tax return for 2020/21 but you have filed one online in the past, you will need to re-register online for Self-Assessment and Class 2 National Insurance. You can do this by completing form CWF1 online. You will need to sign in at https://www.access.service.gov.uk/login/signin/creds and will need your 10-digit UTR.

Previously filed a paper return?

If you have previously filed a paper return but want to file online, you can sign up for Self-Assessment through your business account. If you do not already have a business account or a Government Gateway account, you will need to set these up first.

Partner in a partnership?

If you are a partner in a partnership, you will also need to register for Self-Assessment by 5 October 2022 if you need to file a 2021/22 tax return.

If you need help with any of the issues raised above please call us on 01242 370298.

Clarification of government support to UK businesses suffering from eye-watering increases in their energy bills, have been announced 21 September 2022. Details of the support proposed are set out below.

Key features

The Government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals) whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.

It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills.

To administer support, the Government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity. This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.

The level of price reduction for each business will vary depending on their contract type and circumstances:

  • Non-domestic customers on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, their per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme. Customers entering new fixed price contracts after 1 October will receive support on the same basis.
  • Those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme. The amount of this Maximum Discount is likely to be around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases. This is why the Government is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish, underpinned by the Government’s Energy Bill Relief Scheme support.
  • For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount.

A parallel scheme, based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be established in Northern Ireland.

If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly.

Steps to take – for affected businesses

Any government support will automatically be discounted on your electricity and gas bills. No action/claim needs to be made.

Unfortunately, even with this support, energy hungry business sectors will still need to accommodate significant price increases compared to those charged a year ago.

Now is the time to revisit your financial planning to see how profitability is affected based on energy costs at the new supported rates.

A Personal Tax Account is an online account with HMRC which is essentially a ‘one-stop shop’ for your personal tax needs. You can use the account to manage your tax affairs and to undertake a number of tasks, such as filing your self-assessment tax return and checking whether you owe any tax. The account can be accessed online. There is also an app.

This update explains how to set up, access and use your account.

What can you use a Personal tax Account for?

You can use your Personal Tax Account to check your records and manage the details that HMRC hold about you. You can also use the account to do the following:

  • view a personal tax return;
  • find your National Insurance number;
  • tell HMRC about a change of name or address;
  • check your tax code;
  • check how much tax you owe;
  • view your annual summary;
  • claim a tax refund;
  • check the income that you received from work in the previous five tax years;
  • check how much income tax you paid in the previous five years;
  • check your state pension forecast;
  • check and manage your tax credits;
  • track any forms that you submitted online;
  • check or update your marriage allowance; and
  • update HMRC about any benefits-in-kind that you receive through work, such as a change of company car.

How to set up an account

If you do not already have one, you will need to set up an account online. You can do this at https://www.gov.uk/personal-tax-account. If you have a Government Gateway account, you can sign in using your Government Gateway user ID and password. You will have a Government Gateway account already if you have used an HMRC online service previously. If you are self-employed, you will have created a Government Gateway account when you registered as self-employed. Don’t worry if you have forgotten your user ID and/or password as you will be able to trigger reminders.

If you do not yet have a Government Gateway account, you can register for one with HMRC. This will take around ten minutes. You can set up an online account at https://www.gov.uk/log-in-register-hmrc-online-services. You will need to enter your personal email address; a 12-digit authorisation code will be sent to the email address provided. You will need to enter this code, then enter your full name and set up a password and a recovery word. You will then be issued with a Government Gateway ID (which you should note down). You can then add further security and decide where you want your access code to be sent, such as by text to your phone. Once the access code has been entered, you will need to confirm your full name, National Insurance number and date of birth, and also prove your identity, either from your passport or driving licence or by answering multiple choice questions. The account will then be ready to use.

Accessing your Account

Once your account has been set up, you will be able to sign in using your Government Gateway ID and password. You will also need the access code sent to your phone or by email (depending on the option chosen). You can also access your personal tax account by using the dedicated app, which you can download from either the App Store (for iOS) or the Google Play Store (for Android).