HMRC have recently updated their guidance on Decentralised Finance (DeFi) and the tax implications surrounding this area of cryptocurrency.
What is DeFi?
DeFi is an umbrella term used to provide products akin to traditional financial services through Distributed Ledger Technology. DeFi platforms can provide services such as Decentralised exchanges (DEXs), savings, lending and derivatives.
DeFi lending platforms facilitate lending between unconnected lenders and borrowers. A lender could then be provided with a return on their loan, allowing cryptoassets to provide a source of income in addition to any increase in the capital value of the cryptoassets.
Read more here: https://www.burgesshodgson.co.uk/wp-content/uploads/defi.pdfRead More
From 4 January 2022, Her Majesty’s Revenue and Customs (HMRC) will be pausing most webchat features for 3 months to review the service it is providing.
HMRC have found that the webchat works best when used for simple queries and to educate about the digital tools available on GOV.UK. Where it is not helpful is longer queries, such as tax coding issues for PAYE customers, where such queries take 84% longer via webchat compared to a phone call.
This Pause will allow HMRC to fully assess and improve the service to help customers in the most effective ways possible. While this is in effect, the following lines will still be available:
• Online Services Helpdesk
• National Clearance Hub
• Imports and Exports
• Debt Management
• Extra Support
• Support for pandemic-related activity will continue
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• Businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000 per premises, plus more than £100 million discretionary funding will be made available for local authorities to support other businesses
• Government will also cover the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized employers across the UK
• £30 million further funding will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter
Existing measures referred to in the Treasury statement – These additional measures will reinforce the existing package of business support, including:
• business rates relief meaning that the majority of businesses in the hospitality and leisure sectors will see a 75% reduction in their business rates bill across the entire financial year and a new 50% capped business rates relief next financial year;
• a 12.5% reduced rate of VAT for hospitality and tourism to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs, until the end of March;
• the £1.5 billion Covid Additional Relief Fund for businesses that have not previously had business rates support;
• businesses will be protected from eviction if they are behind on rent on their premises, thanks to the moratorium in place until March 2022;
• access to finance for SMEs through the Recovery Loan Scheme to June; and
• Bounce Back Loan repayment flexibility, with borrowers having the option to take a 6 month repayment holiday, three 6 month interest only periods or extend their loan to 10 years, which almost halves the monthly payment.
• support for the aviation and travel sectors, including over £12 billion since the beginning of the pandemic, and the Airport and Ground Operations Support Scheme (AGOSS) until the end of March 2022.
• HMRC stand ready to support any business impacted by the coronavirus pandemic through its Time to Pay arrangement, and the Chancellor has asked them to offer businesses in the hospitality and leisure sectors in particular the option of a short delay, and payment in instalments, on a case by case basis, as part of this.
For more information or advice on business grants, please contact firstname.lastname@example.orgRead More
In an amendment to the Statutory Sick Pay (SSP) Regulations, employees will be allowed to self-certificate for up to 28 days starting from 17 December 2021 through to 26 January 2022.
This will apply to workers whose spell of incapacity for work commenced before 17 December 2021(but is not yet longer than seven days) or any spell that begins within this period.
This is being introduced in order to allow GP capacity to be increased and support for the coronavirus vaccine booster program can be maximised.
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Last updated on November 19th, 2021 at 12:56 pm
HM Revenue and Customs have recently begun sending notices to individuals such as the one included that they believe have, or may have had crypto assets on which they potential need to pay Capital Gains Tax (“CGT”) if there has been a disposal.
HMRC has advised ICAEW that, although the letters are not being sent out to non-UK domiciled individuals, this is not an indication that its views on the situs tests for cryptoassets has changed. In its cryptoassets manual at CRYPTO22600, HMRC considers the situs of a cryptoasset for capital gains tax (CGT) and inheritance tax (IHT) and conclude that a UK resident individual will always need to pay tax on the disposal of such assets if they are the beneficial owner, regardless of their place of domicile.
Continue reading here: Crypto Capital Gains TaxRead More
A TRONC scheme is a separate organised pay arrangement used to distribute tips, gratuities and service charges to employees. Largely TRONC schemes are used in the leisure and hospitality sector.
A TRONCMASTER (person who runs the TRONC scheme) must run a separate payroll (separate PAYE scheme) from that used to process employees hourly / salary pay and report the ‘tip’ information paid to employees to HMRC.
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The Office of Tax Simplification (OTS) have published an analysis of the potential benefits, costs and implications of a change to the 5 April tax year end date (TYED).
In June, the OTS published a scoping document which outlined that it would be completing a review on the potential for moving the TYED. The OTS confirmed that it would be assessing two alternative dates, 31 March and 31 December. The review was not a call for evidence, however the CIPP policy team had the opportunity to meet with the project team to discuss the potential implications for payroll professionals.
The final report published on 15 September 2021 does not recommend a move in tax year end date, instead it focuses on the benefits, costs and implications of any potential change. The OTS suggest the simplest design would be to align to the calendar year, with an end date of 31 December, creating tangible benefits for international data exchange. However, they recognise the scale of a move to 31 March would be substantially lower.
The report identifies that there would be significant change required for any transition in TYED. The report describes the impact on the HMRC, DWP and state pension systems, alongside PAYE systems. The OTS suggest that any transition would reduce capacity for other changes to be made at the same time and suggest any timeline to move the TYED should come after the creation of the single customer account.
The OTS do make one recommendation in the report. Their research suggested that many self-employed taxpayers and landlords were informally using 31 March as a cut off date. The OTS recommended that the government formalise arrangements to allow taxpayers to use 31 March cut off, instead of 5 April in relation to the calculation of profits from self-employed and property income.
It is now with the Government to review the findings of the OTS and take any next steps on this topic. The CIPP will continue to keep you up to date with any future changes.Read More
In the 2020 GMS contract deal, agreements were made to publicly declare the names and earnings of any GP or non-GP Partner with NHS earnings exceeding £150,000 in a bid to improve pay transparency within the NHS. The rules were to apply for the 2019/20 year onwards.
Guidance has now been published on how to calculate NHS earnings and how to submit the relevant details:
If you are a GP or non-GP Partner and had NHS earnings in excess of £150,000 in 2019/20, you have until 12 November 2021 to submit the self-declaration.
In future years, you will have until the following 30 April after the year end (13 months to prepare and declare).
If you feel as though you may be affected by the Pay Transparency regulations and would like any assistance, please do not hesitate to contact the Burgess Hodgson medical team who would be happy to assist:
Kenton May: firstname.lastname@example.org
Simon Bailey: email@example.com
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The introduction of Making Tax Digital (MTD) for income tax and the proposed change in the basis period will be postponed by a year until 2024.
For more information please visit: HMRC policy paper, Customer costs and benefits for Making Tax Digital
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