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February 2023

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To February’s Business Companion News.

Making Tax Digital (MTD)
HMRC have now signed up all remaining VAT registered businesses to Making Tax Digital. This includes many on VAT Annual Accounting for whom the process was delayed. If you need help submitting your VAT returns via MTD compatible software please .
Meanwhile as we reported last month, for the self-employed, MTD for ITSA has been delayed for two years until April 2026.

February 2023
· HMRC questions claims for Lettings Relief
· How to challenge a K-code
· Reporting crypto profits and losses
· HMRC is chasing down the gig-economy
· February Questions and Answers
· February Key tax dates
HMRC questions claims for Lettings Relief top
If you have claimed lettings relief to reduce the capital gains tax (CGT) payable on the disposal of a let property after 5 April 2020, you should expect to receive a letter from HMRC asking you to amend your tax return to remove that claim.
Read More
How to challenge a K-code top
Reporting crypto profits and losses top
The PAYE system should deduct approximately the right amount of tax from your salary so that you do not have further tax to pay on that income. However, it assumes that your income remains steady from year to year. This may not be the case.
Read More
HMRC defines crypto assets as: “cryptographically secured digital representations of value or contractual rights that can be transferred, stored, and traded electronically”. The various ‘tokens’ that have been created including Bitcoin, Litecoin, and Ether are all virtual, they exist only on computer servers.
Read More
HMRC is chasing down the gig-economy top
HMRC is writing to online sellers, gig economy workers, and influencers, asking them for unpaid taxes.
There are two versions of the HMRC letter.
– This letter is directed to those who sell goods, or their own services, through an online marketplace. This will include people who sell items on eBay or Etsy, as well as taxi drivers who find their customers through apps such as Uber.
Read More
February Questions and Answers top
February Key tax dates top
Q. One of my let properties required extensive repairs to cure a damp problem. The tenant was on an assured tenancy, so we reached an agreement under which I paid her to vacate the property, to allow the repairs to be carried out. The flat was relet after the repairs were completed. Is the payment to the tenant treated as capital or a revenue expense?

Q. I am the sole employee of my company and I pay myself £100 per week. Does the company have to operate a PAYE scheme and report my wages under RTI to HMRC?

Q. I work through my own company and the business is run from my home. I use my kitchen for entertaining clients as well as other rooms in the house. Can I claim back the VAT charged on fitting a new kitchen in my home on the basis that it is used partly for business purposes?
1 – Individual taxpayers who have not paid their remaining tax and NI liabilities for 2020/21 by this date face a further penalty of greater than 5% of the tax showing as due on the return.

Individual taxpayers who have not filed their 2020/21 self-assessment tax return by this date face a further penalty of the greater of £300 and 5% of the tax showing as due on the return.

2 – Employers must submit Form P46 (Car) to report cars first provided to employees during the quarter to 5 January 2023.

14 – Last day for employees to apply for deferment of primary class 1 NIC for 2022/23.

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, Xero, Quickbooks or Freeagent.

‘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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