Key Insights from the Latest Tax Updates for the Week Ending 21st February 2024
This week’s tax news roundup includes significant developments such as:
- Revised HMRC guidelines detailing the necessary evidence for claiming creative industry tax relief.
- Release of a discussion paper focusing on tax thresholds, shedding light on potential changes.
- HMRC’s cautionary advisory regarding the prevalence of fraudulent tax refund offers and the need for vigilance.
- Updated guidance on insolvency matters, ensuring clarity for affected parties.
- Enhanced VAT registration guidelines, specifically tailored for businesses engaged in specified supplies.
- A timely reminder from HMRC concerning the intricacies of buying second-hand cars in Great Britain and selling them in Northern Ireland.
Documentation Requirements for Creative Industry Tax Reliefs
In light of recent changes and tax developments announced by HMRC, companies seeking creative industry tax reliefs must now provide compelling evidence to support their claims. This article delves into the specifics of these changes and what they mean for businesses operating within the creative sectors.
Understanding the Changes
Effective from 1st April 2024, companies seeking to claim creative industry tax reliefs are now required to furnish supporting evidence to substantiate their claim. This evidential requirement marks a significant shift in HMRC’s approach to tax relief claims within the creative industries.
HMRC Guidelines Update
Detailed Requirements
HMRC has recently updated its guidance regarding the evidence necessary for a valid claim for creative industry tax reliefs. The revised guidelines outline the specific documentation and information that companies need to provide to support their claims effectively.
Consequences of Non-Compliance
It’s crucial for companies to adhere to these new requirements meticulously. Failure to provide the mandatory information could result in HMRC amending the company’s tax return to remove the claim. Thus leading to potential financial implications for the business.
TLRC Report on Tax Thresholds
The Tax Law Review Committee (TLRC) has released a discussion paper addressing the intricacies of tax thresholds. This paper highlights the challenges associated with existing threshold rules and proposes principles and tools to improve future tax policies.
Involvement of ICAEW Tax Faculty
The TLRC’s discussion paper benefitted from input from various stakeholders, including the ICAEW Tax Faculty. Their contributions helped shape the report’s insights and recommendations, underscoring the collaborative nature of tax policy development.
HMRC Caution Regarding Fraudulent Tax Refund Offers
HMRC has raised awareness about the proliferation of deceptive tax refund offers, revealing that it has responded to 207,800 reports of suspicious communications from the public over the past year alone, marking a 14% increase from the previous year. Of these reports, over 79,000 were related to counterfeit tax rebates.
Taxpayers are urged to remain vigilant, especially following the self-assessment deadline on 31 January. Fraudsters may exploit this period to make fraudulent refund claims, posing a risk to unsuspecting individuals and businesses.
Find out more through HMRC’s press released linked here.
HMRC Rectifies Insolvency Guidance
HMRC has issued an apology for an error identified in its insolvency guidance published in January 2024. In the updated guidance, HMRC clarifies that all income tax and national insurance contributions (NIC) deducted and owed on any payslip issued to an employee after the relevant insolvency date must be remitted to HMRC as part of the insolvency expenses.
VAT Registration for Businesses Engaged in Specified Supplies
HMRC has made amendments to VAT Notice 700/1 concerning businesses applying for UK VAT registration due to their involvement in specified supplies, such as finance, insurance services, or investment gold, to customers outside the UK. The update stipulates that businesses applying for registration based on specified supplies must explicitly denote ‘SPECIFIED SUPPLIES’ during the registration process when describing their business activities.
Second-Hand Cars Transitioning from GB to NI
Businesses dealing with second-hand vehicles must take note of changes affecting VAT margin schemes for transactions involving Great Britain and Northern Ireland. Effective from 1 May 2024, vehicles purchased in Great Britain cannot be sold in Northern Ireland under the VAT margin scheme, signaling a shift in tax regulations impacting cross-border vehicle sales. However, it remains available for eligible vehicles purchased in Great Britain before 1st May 2023 and sold in Northern Ireland by 30th April 2024.
As HMRC reinforces its requirements for claiming creative industry tax reliefs and updates various tax-related guidelines, businesses must stay informed and compliant to avoid penalties and ensure smooth operations within the evolving regulatory landscape.
Further Information
If you would like more information on the recent tax developments or tax queries in general, please contact your usual NRB advisor or our tax team.
To keep up to date with these updates, click here to find out more about NRB’s Tax Compliance Services & Advice, helping you comply with the latest in tax law.
