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Why was inflation so high in 2022?

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.

HMRC app and texting service improve access to tax information

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.

HMRC issues tax warnings for online sellers and content creators

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.

New business energy bill support scheme from April 2023 – Blog

The UK government’s current Energy Bill Relief Scheme (EBRS) is continuing to offer discounted energy costs for non-domestic consumers of wholesale gas and electricity until the end of March.

This six-month scheme, which started on 1st October 2022 and will end on 31st March 2023, was always intended to be a temporary measure to help businesses continue to operate throughout the cost of energy crisis over the winter.

Now this is coming to an end, the government will be replacing it with the new Energy Bills Discount Scheme (EBDS) from 1st April 2023 until 31st March 2024. This twelve-month scheme will be less generous, as there is no ‘government supported price’ cap, and businesses with energy costs below a certain amount will not qualify.

Here’s how the new energy bill support scheme for businesses will work, and how it could affect your business in the next year.

Company car fuel benefit charge increases in 2023

With so much upheaval around the mini-budget and Autumn Statement at the end of last year, some of the details that would usually have been published with the Statement took some time to emerge. This included information on the fuel benefit charge for company cars, which arrived in a bulletin from HMRC three weeks late.

This tax applies to employees whose job requires the use of a company car or van that can also be used outside of work hours, with fuel paid for by their employer – which HMRC classifies as ‘free fuel’ and therefore a taxable benefit. If the employer doesn’t subsidise the benefit, it will cost the employee, as the tax still needs to be paid.

The fuel benefit charge for company vehicles has been updated annually in line with the September Consumer Price Index for several years now, so the anticipated figure of 10.1% based on the CPI published in October turned out to be correct. This blog explains the changes to the fuel benefit charge from April 2023 and how this may affect employees and employers.

Is your High Income Child Benefit Charge tax return overdue?

Many parents are not aware of the High Income Child Benefit Charge (HICBC). It’s a confusing kind of tax, requiring individuals who need to repay some or all of the Child Benefit payments they’ve received to submit a tax return every year, even if their income is already taxed through PAYE.

Since there is little public awareness about the requirement to pay back Child Benefit if your income is above a certain threshold, many people are at risk of receiving penalties from HMRC and having to pay back thousands of pounds they weren’t even aware they owed.

Currently, the number of people estimated to be in default for the High Income Child Benefit Charge is over 60,000. If you’re liable for paying the HICBC, but haven’t been submitting Self Assessment Tax returns each year, then you could be one of many middle-income families who will find themselves owing several thousand pounds in backdated Child Benefit repayments.

Read on to find out how the High Income Child Benefit Charge works, who it applies to, and what will happen if you’re liable for this charge but haven’t been paying.

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