Month: February 2024

Self-employed taxpayers should notify HMRC as soon as practicable when they begin working for themselves. HMRC must be officially notified by 5 October following the end of the tax year so that a self-assessment return can be issued on time and to avoid any unnecessary penalties.

HMRC’s guidance says that you are probably self-employed if you:

• run your business for yourself and take responsibility for its success or failure;
• have several customers at the same time;
• can decide how, where and when you do your work;
• can hire other people at your own expense to help you or to do the work for you;
• provide the main items of equipment to do your work;
• are responsible for finishing any unsatisfactory work in your own time;
• charge an agreed fixed price for your work; or
• sell goods or services to make a profit (including through websites or apps).

The newly self-employed should also register to pay National Insurance contributions (NICs) and monitor whether a VAT registration is required.

There is a £1,000 tax allowances for miscellaneous trading income that has been available to taxpayers since April 2017. This is known as the trading allowance.

The exemption from tax applies to taxpayers who have trading income of up to £1,000 from:

• self-employment;
• casual services, for example, babysitting or gardening; and
• hiring personal equipment, for example, power tools.

Where this £1,000 allowance covers all the individual’s relevant income (before expenses) the income is tax-free and does not have to be declared to HMRC.

HMRC continues to warn of the ever-present problem of fraudulent phishing emails, suspicious phone calls and texts. These unwanted emails, phone calls and texts are being sent from around the world as HMRC and other agencies continue to combat the problem.

These messages aim to obtain taxpayers personal and or financial information such as passwords, credit card or bank account details. The phishing emails and texts often include a link to a bogus website encouraging the recipient to enter their personal details.

For example, taxpayers who completed their tax return for the 2022-23 tax year by the 31 January 2024 deadline might be taken in by an email, phone call or text message offering a tax rebate.

Recipients of phony messages should avoid clicking on any links. HMRC asks that phishing emails and bogus text messages are reported. The emails can be sent to HMRC by email phishing@hmrc.gsi.gov.uk or by text message to 60599.

HMRC responded to 207,800 referrals from the public of suspicious contact in the past year to January – up 14% from the 181,873 reported for the previous 12 months. More than 79,000 of those referrals offered bogus tax rebates.

HMRC is clear that they do not email, text or phone a customer to tell them that they are due a refund or ask them to request a refund. Taxpayers receive repayments into their chosen bank account, and can see any transactions in their online HMRC account and in the HMRC app. 

The government published the Autumn Finance Bill 2023 on 29 November 2023. The Bill is officially known as Finance Bill 2023-24. The Bill contains the legislation for many of the tax measures announced in the recent Autumn Statement.

The Bill has now completed its passage through the House of Commons and the 1st reading at the House of Lords. This stage signals the start of the Bill's journey through the Lords. The 2nd reading of the Bill in the House of Lords is scheduled to take place on 21 February 2024.

The Bill is known as a 'Money Bill' which means that the further stages of the bill namely, the committee stage, report stage and third reading at the House of Lords are usually formalities. Once these steps have been completed, the Bill will receive Royal Assent and become an Act of Parliament.

Some of the many measures included within the Bill are:

• Making full expensing permanent for expenditure on plant & machinery.
• Extending the sunset clause for the Enterprise Investment Scheme and the Venture Capital Trust scheme to 6 April 2035. 
• Reforming the film, TV and video games tax reliefs to refundable expenditure credits.
• Expanding the ‘cash basis’ – a simplified way for over four million smaller, growing traders to use a simpler method of calculating their profits and pay their income tax.
• Legislating for more generous support for loss-making R&D intensive SMEs as announced in spring.
• Setting the rates of excise duty and certain environmental taxes.

The Autumn Finance Bill will be followed by the Spring Finance Bill 2024 which will be published after the Spring Budget which is taking place on 6 March 2024. This will cover any remaining tax measures needed ahead of April 2024 and will become the second Finance Act of 2024.