The latest update from HMRC includes reminders of the NI increase, introduction of the Plastic Packaging Tax and the withdrawal of gov.uk Verify.
In the Spring Statement, the Chancellor set out the Government’s Tax Plan. It brings together proposals to reduce and reform taxes over this Parliament to support the UK economy, businesses and families in both the short and the medium term.
Key measures the Chancellor announced as part of the plan include:
- an increase to the National Insurance Primary Threshold for Class 1 NICs and the Lower Profits Limit for Class 4 NICs from 6 July 2022, aligning it with the equivalent income tax personal allowance which is set at £12,570 per annum
- from April 2022, self-employed individuals with profits between the Small Profits Threshold and the Lower Profit Limit will not pay Class 2 NICs, while allowing individuals to be able to continue to build National Insurance credits
- Employment Allowance will increase by £1,000 from 6 April 2022 to £5,000, which will benefit around 495,000 businesses
- an immediate reduction in duty on diesel and petrol from 6pm on 23 March 2022, by 5 pence per litre, for 12 months
- VAT zero rating on the installation of energy saving materials for a time-limited period
- a reduction in the basic rate of income tax to 19% from April 2024.
Further detail on future changes being considered on Capital Allowances and R&D tax relief were also set out.
Health and Social Care National Insurance contributions (NICs) uplift
National Insurance contributions will increase by 1.25 percentage points from April 2022 to help fund public services.
The government announced a new 1.25% Health and Social Care Levy to fund investment in the NHS, health and social care in September 2021. The levy is effectively introduced from April 2022 when National Insurance contributions for working age employees, self-employed people and employers will increase by 1.25 percentage points and be added to the existing NHS funding allocation.
From April 2023, the levy will be formally separated from National Insurance contributions and will also apply to the earnings of individuals working above State Pension age. National Insurance contribution rates will then return to 2021-22 levels and receipts from the levy will go directly for spending on health and social care.
Over the last few months, HMRC has asked employers and payroll software providers to include a message for employees on all payslips between 6 April 2022 and 5 April 2023, to explain their increased National Insurance contribution, reading: “1.25% uplift in NICs funds NHS, health & social care.”
Plastic Packaging Tax comes into force on 1 April 2022
On 1 April 2022 the Plastic Packaging Tax (PPT) comes into force. Manufacturers and importers of plastic packaging should visit GOV.UK, work through the eight steps listed and determine if they need to register for PPT. Businesses have 30 days to register for PPT from the date they become liable.
No business will need to file a PPT return until July 2022 at the earliest. However, they may need to register before this time. Importers of plastic packaging will need to check who is responsible for complying with and paying PPT; this is unlikely to be their suppliers.
HMRC has provided the following resources to assist businesses with the tax:
- Guidance: visit the collection page for the latest guidance, including
- Step by step guides: read to learn about what is in scope, who is liable and needs to register
- Webinars: watch the February sessions’ full recordings on GOV.UK or go straight to your area of interest by using the timestamps.
Mae’r holl arweiniad craidd ar y Dreth Deunydd Pacio Plastig bellach ar gael yn Gymraeg ar y dudalen gasgliad ar GOV.UK / All core guidance on PPT is available in Welsh at the collection page on GOV.UK.
Please signpost these resources to your network, and invite them to review these thoroughly to determine whether they are affected by PPT.
Withdrawal of Gov.uk Verify
From 1 April 2022, HMRC customers will no longer be able to use GOV.UK Verify to log into their Personal Tax Account or use any HMRC Digital services. Customers should instead use Government Gateway to sign in to HMRC Digital Services including for Self Assessment.
Trusted Helpers and customers who need extra support can access their online accounts through their Government Gateway. The Trusted Helper Service was previously only accessible via Verify, but changes have been made to allow customers to access the service using Government Gateway. Current Trusted Helper relationships will automatically transfer across to Government Gateway log-ins.
Users will need to, if they don’t already have one, create a Government Gateway User ID and navigate successfully through Identity Verification to access HMRC services.
Self Assessment users will need to enrol their Self Assessment onto a single credential – this is straight-forward and there are instructions on screen to support them.
We’ve issued targeted letters to customers to update and advise Self Assessment filers impacted by this change, and any customers with an active Trusted Helper relationship. GOV.UK will be updated to reflect this change.
Tax Avoidance Scheme Promoters
HMRC published a press release about a tax avoidance promoter being handed a £150,000 penalty for failing to provide legally required information. The company must now hand over the required records to enable HMRC to calculate the tax owed, which is currently estimated to be more than £3 million.
HMRC is not always able to share the details of its ongoing efforts to disrupt particular named promoters of tax avoidance, but as explained in its strategy for tackling promoters where it can it will to help further isolate and disrupt the business model of promoters of tax avoidance.
Statutory Sick Pay Rebate Scheme claims close on 24 March 2022
The Statutory Sick Pay Rebate Scheme (SSPRS) closed on 17 March 2022. Employers had until 24 March 2022 to submit any final claims, or to amend claims already submitted.
From 25 March, normal Statutory Sick Pay (SSP) rules will return, meaning employers will start paying SSP from the fourth qualifying day their employee is off work, regardless of the reason for their sickness absence.
For more information on eligibility and how to make a final claim, go to GOV.UK.
David Nunn is Content Manager at AAT.