Existing (taken form HMRC website)
VAT reverse charge on construction and building services
The reverse charge for VAT registered construction businesses came in on 1 March 2021 and was explained in a Revenue and Customs Brief issues in June 2020.
In February 2020, September 2020 and January 2021, we wrote to every VAT-registered construction business, advising them to check if they’re liable for the reverse charge.
Business who are liable must apply these rules going forward and more information is available in the scope and operation of the reverse charge.
The key aspects are:
• it applies to standard and reduced-rated supplies of building and construction services made to VAT and Construction Industry Scheme (CIS) registered businesses, who in turn also make onward supplies of those building and construction services
• the contractor is responsible for paying the output VAT due rather than the sub-contractor, and can continue to reclaim this amount as input tax
• the scope of supplies affected is closely aligned to the supplies required to be reported under the CIS, but does not include supplies of staff or workers for use by the customer
• supplies to CIS registered businesses can be excluded from the reverse charge if the customer is an ‘end user’ or ‘intermediary supplier’ (a business that is closely associated with an end user) — this exclusion:
• covers property developers and other ‘deemed contractors’ provided the construction services concerned are not being re-supplied by them
• only applies if the customer notifies their supplier in writing that they are an ‘end user’ or ‘intermediary supplier’ (this can be done by correspondence or as part of terms and conditions as explained in the technical guidance)
Changes to Claiming Subcontractor Construction Industry Scheme (CIS) deductions
In order to claim CIS deductions as a subcontractor on your Employer Payment Summary (EPS), your business must be a limited company operating within the construction industry. If your company is not a limited company, you should report the deductions on your Self Assessment (SA) Tax Return instead of using the EPS to claim them.
From April 2022, we are introducing an additional field on the EPS. Limited companies must enter their Corporation Tax Unique Taxpayer Reference (CT UTR) or COTAX reference number in that field to claim credit for these deductions.
Any EPS submissions which include a claim for CIS deductions, but don’t include the CT UTR will be rejected. If you can not satisfy the new CT UTR validation but need to report anything else, you must remove the claim for CIS deductions and resubmit your EPS.
If you have lost or cannot find your CT UTR, you can request your Corporation Tax UTR online. We will send it to the business address registered with Companies House.
If we do your wages we will be inContact if necessary.
NEW Business or change of trade
An individual who starts a new trade or property business, must give notice to HMRC of their liability for income tax by 5 October after the tax year in which their trade or property letting business commenced.
Under these new rules, this now reduced the amount of time you have to notify the Revenue.
Don’t forget they have put the NIC and Dividend Tax up by 1.25%.
Making Tax Digital
The government is extending the requirement to operate Making Tax Digital (MTD) to the 4.2m taxpayers with business and/or property income over £10,000, including landlords, sole traders and partnerships, for their Income Tax obligations.
These changes will apply to businesses, self-employed individuals and landlords who have profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs).
This will come into force by April 2024, it will mean that everyone with an income over £10,000 will have to submit quarterly returns via Bookkeeping software (like QuickBooks) to HMRC. This will mean that if you run a business and have rental income over these limits you will have to submit returns for both every 3 months. These have been set by HMRC as the quarter dates in March, June, September and December. You will also have to submit a combined return as well.
Therefore there will be a minimum of 5 returns to be done each year (one business) or 9 returns (one business and one rental). And this is on top of the VAT reports!

VAT Late filing Penalties
The new regime will issue automatic penalties, with no warning messages or default periods (although this could change), when the VAT payment is late by:
• 15 to 30 days - 2% penalty
• Over 30 days - 4% of the late paid tax.
• 31 days or more – daily penalties at 4% of the outstanding amount
In addition to the late payment penalty, the taxpayer will also be charged interest on any tax paid late at the rate of 2.5% plus the Bank of England base rate. This is in line with other taxes.

Late filing
The taxpayer will only be subject to a financial penalty for late filing if they have accrued sufficient points for being tardy with a certain number of VAT returns under MTD.
The points threshold will depend on the submission frequency of the return:
Submission frequency Penalty threshold Period of compliance
Annual 2 points 24 months
Quarterly 4 points 12 months
Monthly 5 points 6 months
Under the “points means penalties” regime up to three quarterly VAT returns may be late with no penalty, but on the fourth late submission an automatic financial penalty of £200 is triggered. Also, every late submission after that threshold has been breached will trigger another £200 fine, but those additional penalties will not add points to the points slate.
The taxpayer will be able to appeal against all points and penalties awarded, and tax agents will probably be able to make appeals on behalf of their clients.
Each point will expire after two years or 1 year (for quarterly submissions), and this lifetime clock starts running from the month after the month in which the late filing occurred, not the month when HMRC tell the taxpayer the point has been levied. HMRC has 11 weeks to levy points after the quarterly filing deadline is missed, 48 weeks for annual filings, and just two weeks for monthly filings.
The points slate can only be wiped clean when the taxpayer achieves both of:
• No late submissions for a period of compliance; and
• All returns filed for the previous 24 months, even if they have been filed late.
The period of compliance varies with the submission frequency of the return as shown in the table above.

Spring Statement
NIC threshold has been raised to £12,570, however it would appear that the employer’s will still have to start paying NIC at £9,110. So, he is still taking money from the businesses just not so much from the employees. This will all change in July 2022 so this might change again.
I am not sure on how this affect the rules for state pensions but it currently looks like an increase in the cost for the company to about £500. If there is at least two employees this will not be the case.
We will investigate on how this can be mitigated over the next few months and contact those who will be adversely affected.