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The new points-based penalty system for late VAT return submissions began on 1st January 2023, meaning the first monthly returns to be affected were due by 7th March. The first quarterly returns affected are due by 7th May.

This new regime replaces the old default surcharge system, along with a separate penalty regime for late VAT payments and a new system for charging interest.

From the start of 2023, the late submission penalties will apply for all accounting periods if a VAT return is submitted late – including nil VAT returns and repayment returns.

This means that if you keep missing VAT return deadlines and accrue too many late submission penalty points, you could be hit with a £200 fine. Keep reading to learn how the points system works and how to avoid getting a financial penalty.

Tax codes for the 2023–2024 tax year, which begins on 6th April 2023, have already been issued for most employees and directors.

Employers will use these codes to collect Income Tax and National Insurance Contributions through PAYE – but what if you’ve been assigned the wrong tax code?

This could result in you paying too much tax, which can affect your monthly budgeting, or paying too little tax, which could lead to an unexpected Income Tax bill.

The last thing anyone wants is to overpay tax and have to fight for a refund, or to underpay tax and suddenly owe significant back payments.

Here’s what you should know to make sure you’re on the right tax code and paying the appropriate amount of Income Tax in 2023.

HMRC used to focus on cash sales when looking at businesses declaring suspiciously low turnovers. Now, thanks to the decline of cash – exacerbated by COVID-19 – there has been a rise in businesses using electronic sales suppression (ESS) tools to falsify their sales records.

Electronic sales suppression involves hiding the true amount of sales or the true value of sales with ESS software, hardware, or computer code scripts. This is done at or after the point of sale, with the electronic records appearing to be credible and compliant, while really reducing the amount of tax that the business should be paying.

This counts as tax evasion, so HMRC is cracking down on individuals and businesses who use ESS tools to commit tax fraud. Criminal investigations into ESS can result in financial penalties and even prison sentences – so time is running out for anyone who has used ESS tools to reduce tax to come clean to HMRC.

The cost of living in the UK increased sharply in 2022, with annual inflation reaching its highest rate in over 40 years at 10.5% – up from 5.4% in 2021.

The Office for National Statistics (ONS) states that this is the highest annual inflation rate since 1981, but what caused this drastic effect? Its research into the components of inflation in 2022 reveals the biggest contributors to soaring prices.

The official HMRC app was launched several years ago, but the revamped version launched in 2022 has been gaining popularity as a particularly helpful resource for self-assessment taxpayers.
On top of encouraging taxpayers to use the app, HMRC is also trialling a text messaging service to help people who contact them by mobile phone to find relevant information online.
Here’s a summary of how the app and text message service work, and a reminder of what you can do to avoid being caught out by scammers pretending to be HMRC.

Following the dramatic increase in the number of people earning a living online since the lockdown days of the COVID-19 pandemic, HMRC is now sending ‘nudge letters’ to those who may have failed to declare taxable income from online activities in the last few years.

These letters are currently targeting over 2,000 people who earn money or accept gifts in exchange for content creation on social media platforms such as TikTok, Instagram, and YouTube. HMRC also plans to send another wave of letters to 2,000 sellers regarding their income from online marketplaces such as eBay, Etsy, and Facebook.

This ‘nudge letter’ exercise is part of the tax agency’s attempts to keep up with the digital economy, using data analytics from a range of online platforms to identify people whose online activities may have resulted in undeclared taxable income.

If you participate in online trading, content creation, or sponsored influencing, you may have already received one of these letters – or can expect to receive one soon. This blog explains what these HMRC notifications could mean for you, and the next steps you should take.