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February 2022

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To February’s Business Companion News.

Struggling to pay your Personal Tax?
As explained below, HMRC are allowing an extra two months to pay any 2020-21 personal tax due without penalties.  If you need longer than this, you can arrange a Time To Pay Arrangement.  HMRC say you can do this online using your own government gateway.  Alternatively you can ring HMRC on 0300 200 3820 (8am – 5pm weekdays, quieter first thing) – say the words ‘set up a payment plan’ when asked.

HMRC will ask you to set up the plan as a Direct Debit – but we recommend that you insist on using a Standing Order so you remain in control. You will need to specify dates and amounts and then HMRC will confirm the details by letter.
February 2022
· Latest news round-up
· VAT – charged too much?
· Does an employee loan always need reporting to HMRC?
· Hiring an Apprentice
· February Questions and Answers
· February Key tax dates
Latest news round-up top
Late tax returns

On 7 January, HMRC announced that there would be no automatic late filing penalties provided that tax returns are filed by midnight on 28 February 2022. Anyone seeking to take advantage of the extra month should keep in mind that it is the penalty trigger, not the filing deadline itself, that has moved. This means that where a return is filed in February there will be no penalty, but the enquiry window will be extended to the relevant quarter day in 2023, i.e. 30 April.

There will also be no late payment penalty where outstanding tax is paid in full, or a time to pay arrangement is agreed, by 1 April 2022. Interest will still apply from 1 February.
Read More
VAT – charged too much? top
Does an employee loan always need reporting to HMRC? top
Suppose that a business has been paying its suppliers’ invoices for many years without really giving too much thought to the VAT being applied. The business engages an accountant to assist with its VAT returns due to an increase in business activity. The accountant immediately spots that one supplier has been incorrectly charging standard rate VAT instead of the correct reduced rate of 5%.
Read More
Employee loans are an area where businesses often get confused. The first thing many owners will think of is the temporary corporation tax charge under s. 455. However, that only applies if the loanee is a participator of a close company. It doesn’t apply to regular employees – even directors – unless they also own/control at least 5% of the company’s share capital.
Read More
Hiring an Apprentice
If you take someone on as an apprentice you can apply for an incentive payment of £3000 from the Government.  Normally employers find apprentices through a local college.  Alternatively you could arrange for an existing employee to become an apprentice – but you would be responsible for finding a training provider for them.

You are responsible for paying your apprentice for their normal working hours and the training they do as part of the apprenticeship. You must pay them at least the National Minimum Wage rate depending on their age and the year of apprenticeship training they’re in. Here is the Government Guidance.

Training time must be at least 20% of their normal working hours – it can be at college or at their place of work but the training must be overseen by a training provider. This is the government database to help you find a training provider: 

February Questions and Answers top
February Key tax dates top
Q1. We have just purchased a second property, which we intent to occupy at weekends to escape the hectic city life. We’re both in our 50s and want to start slowing down a bit! I’ve heard that there is planning that can save tax on second homes – I believe MPs are infamous for using it. Can you explain what this is? Answer

Q2. I’ve decided that the cash accounting scheme isn’t working for my business anymore. I’m intending to revert to standard VAT accounting from the start of the next VAT period. Do I need to notify HMRC or take any special measures? Answer

Q3. We have been reporting our VAT returns under MTD since April 2021. As our systems are already set up and compliant with this, am I right in assuming we will already be set up for MTD for Corporation Tax as well? I don’t want to incur further costs if that is possible. Answer
1 – Due date for payment of Corporation Tax for accounting periods ending 30 April 2021

7 – Electronic VAT return and payment due for quarter ended 31 December 2021

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/2/2022

28 – Deadline for electronic filing of self-assessment returns for 2020/21 before incurring late filing penalty following extension announced in January 2022

Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.
About Us top
Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Freeagent, Quickbooks or Xero.

‘All clients using these software packages can benefit from our support. Visit our website for a look at the resource on offer.’

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