The default surcharge scheme, which formerly applied to both late submission and late payment of VAT, is replaced by the two different late filing and late payment penalty regimes.
During VAT return periods beginning on or after 1st January 2023, the new late filing and late payment penalties as well as the new interest system apply. Failures pertaining to returns for periods beginning before to 1st January 2023 will be handled in accordance with the previous interest rules and default surcharge regime.
Under the system of late filing penalties, if a taxpayer misses a deadline for filing a VAT return, they will incur a penalty point; if a certain number of points are accumulated, a penalty will be imposed; and the amount of points necessary for a penalty to be assessed depends on how frequently the taxpayer files their VAT reports (two points for annual returns, four points for quarterly returns and five points for monthly returns).
A person is subject to one penalty point if they fail to submit a VAT return by the deadline or earlier. Unless a person has already accrued the required amount of penalty points, they will not be assessed a penalty point for a return.
These following adjustments will be made to a person’s penalty point total if the frequency of their filing responsibilities changes:
| Old return period | New return period | Adjustment |
|---|---|---|
| Annual | Quarterly | Add 2 penalty points |
| Annual | Monthly | Add 3 penalty points |
| Quarterly | Annual | Deduct 2 penalty poin |
| Quarterly | Monthly | Add 1 penalty point |
| Monthly | Annual | Deduct 3 penalty points |
| Monthly | Quarterly | Deduct 1 penalty point |
Penalty Points
Penalty points generally expire 24 months from the first day of the month following the month in which the offense that resulted in the penalty point being awarded.
Taxpayers at the points threshold must meet their return obligations and submit all submissions within 24 months, with annual returns requiring two years, quarterly returns requiring a year, and monthly returns requiring six months of compliance.
Penalties
Late payment penalties consist of two penalty charges: a first on day 15 and day 30, and a second on day 31 until VAT is paid in full. Penalties will stop if the taxpayer agrees a time to pay (TTP) arrangement with HMRC.
No penalty is payable if the VAT due is paid within 15 days, or if the person contacts HMRC with proposals for paying the VAT and a TTP arrangement is made. Late payment fees will be charged on any payments made after the due date.
A first penalty is due if:- the due VAT is not paid in full until 15 days after the due date, and the TTP agreement has not been signed after the proposal to HMRC until 15 days after the due date.
If the due VAT is paid in full, or a TTP is proposed, 15 days after the due date but within 30 days of the due date, the first penalty is 2% of the amount then the balance is due on the 15thday.
If the tax due is not paid in full and the TTP is not provided until 30 days after the due date, the first penalty amount is:
– 2% of the remaining amount due on 15th,
– 2% of the remaining amount due on 30th.
A second penalty will be due if: – VAT is due 31 days after the due date, calculated at a daily rate of 4% per annum, on the remaining VAT amount until fully paid or until the date of receipt of the request for Vat payment. TTP resulted in an agreement with HMRC.
The second penalty is charged when paying VAT.
Acquaintance Period
HMRC says it will take a lighter approach to the initial 2% late payment penalty for taxpayers during the first year of operating the new system. During the first year, when taxpayers do their best to comply, HMRC will not impose the first penalty after the second 15 days, giving taxpayers 30 days to reach HMRC before the penalty is established.
Interests
HMRC charges interest on late payment fees from the date VAT payment is deferred until payment is made in full. If the application is delayed and payment is not made within 30 days, late interest will also be charged. Interest is calculated at the Bank of England base rate plus 2.5%.
HMRC will pay repayment interest (RPI) on any VAT owed by the taxpayer. RPI is calculated from the latest of the following:
• the day after the due date
• the date of presentation,
and until the date of issue of the return. Repayment interest calculated on the basis of the BoE base rate of less than 1% or more than 0.5%.
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If you would like to know how we can help you with all of this, or anything else, feel free to contact us
How Making Tax Digital for Income Tax (MTD ITSA)HMRC has finally published detailed guidance on how Making Tax Digital for Income Tax (MTD ITSA) will work for buy-to-let landlords and sole traders with qualifying income over £10,000 which will see the end of self-assessment tax returns.
The new income tax framework for Making Tax Digital will be mandatory from 6 April 2024 and the definition of qualifying income is critical to how the system will work.
HMRC is calling on individuals, tax agents and accountants to start using the beta testing environment to feedback on their experiences and iron out any teething problems with the system. However, the trial is quite limited and is only open to landlords with UK and overseas property income, and self-employed with a sole source of income.
It is important to note that only individuals whose accounting period aligns with the tax year from 6 April to 5 April of a given year will be able to participate in the beta trial.
However, to date, only a few software providers are geared up for the extension of MTD so until HMRC authorises new providers the testing environment will be limited.
The new system will replace self-assessment tax returns for anyone who qualifies for MTD for income tax as they will have to submit all non-qualifying income through the personal tax account system instead.
The new deadline for annual updates – end-of-year statements – will be 31 January after the end of each tax year.
HMRC will use data from self-assessment tax returns to calculate qualifying income in the first instance and will contact all affected taxpayers directly to inform them that they fall under the mandatory MTD for income tax rules.
For the first time, HMRC has provided a clear definition of what will be included in ‘qualifying income’, how to report other income and how residence and domicile affect qualifying income.
It is important to note that the qualification criteria are very specific and only include revenue from buy-to-let rentals and self-employment income, for example, but not income earned from a job and paid via PAYE.
The HMRC guidance states that ‘qualifying income is the combined income that you get in a tax year from self-employment and property income sources. We assess this before you deduct expenses (gross income or turnover). All of your qualifying income must be reported through Making Tax Digital compatible software.
‘All other sources of income reported through self-assessment, such as income from employment, dividends or savings, do not count towards your qualifying income. You will need to report income from these sources using either your Making Tax Digital compatible software (if it has the functionality) or HMRC online services account’.
Foreign income remitted to the UK by anyone registered as a non-dom and paying the remittance basis, will not contribute to qualifying income.
Equally anyone resident outside the UK and earning money would only have to include UK-based earnings in their qualifying income calculation.
Income from foreign property or foreign self-employment will count towards qualifying income if the individual is treated as the UK domiciled for that tax year.
It also states that if the accounting period is longer or shorter than 12 months, and HMRC has the necessary data, it will annualise qualifying income.
For example, if you have become self-employed, but you have only been trading for six months in your first tax year, then HMRC will double your income to find your qualifying income.
The guidance includes examples of how qualifying income is calculated, including the treatment of disguised investment management fees or income-based carried interest.
It is worth noting that income from a partnership does not count towards qualifying income unless the individual receives disguised investment management fees or income-based carried interest.
Anyone who goes self-employed or starts operating as a landlord after 6 April 2023 will not be required to sign up to MTD until they have filed their first annual self-assessment.
Some general partnerships will need to meet the Making Tax Digital for Income Tax requirements by 6 April 2025 but all other partnerships will have to enrol in the system later, although HMRC has not given further details.
The guidance also provides more information about the annual updates, called the end-of-period statement, which is required in addition to the quarterly updates. It will only be possible to submit an annual update if all quarterly submissions have been made.
Every business will require its own end-of-period statement, regardless of whether the owner is the same.
Before confirming the statement, it will be possible to make accounting adjustments, make tax adjustments and claim reliefs or allowances. Then it appears that the new MTD software will adjust the filed quarterly reports.
The HMRC guidance states: ‘These adjustments will amend the data that you have sent through your quarterly updates.
There is also an interesting note that states: ‘When you confirm an end of the period stated, you will be declaring that the information you have provided for that business is correct and complete… you have finalised your tax position for that business, for the tax year.’
After submitting an end-of-period statement, individuals and their accountants will be able to see an updated estimate of the tax bill.
Useful links
Here are links to the documents HMRC issued:
Check if you can sign up for MTD for Income Tax
Check when to sign up for MTD for Income Tax
Using MTD for income tax
Sign up as an individual for Making Tax Digital for Income Tax
As a VAT registered business, you claim back the VAT on your purchases. But if you are claiming the VAT paid on entertainment and subsistence VAT recovery is blocked and things can be difficult.
HMRC has set clear rules in relation to what is and what is not claimable for entertainment and subsistence purposes, however, applying those rules correctly can be confusing.
The VAT rule for entertaining expenses is that you cannot claim back the VAT you have incurred. There are two exceptions to that rule:
If a business owner hosts a business meeting at a restaurant with a client and has incurred costs, the assumption is that the business can claim VAT on that. However, you cannot because wining and dining of clients is classed as ‘hospitality’ as opposed to ‘business entertainment and hospitality is something where you cannot claim the input VAT back on.
HMRC views client entertainment as hospitality as the owner is entertaining the client with the intention of bringing sales and profit. The profit eventually goes back to the owner. Hence, the rules say no to the input VAT claim.
You can reclaim the VAT and a tax deduction on staff entertaining expenses. If you are entertaining clients and staff together if you have to disallow a proportion of the VAT suffered based on client and staff ratio. HMRC may not approve the claim if it is mainly for directors. Some examples where you can make a VAT claim include:
An overseas client is any client that is not ordinarily resident or carrying business in the UK. You can reclaim VAT on the cost of entertaining providing it is “of a kind and on a scale which is reasonable”. HMRC classifies that entertainment expense that is not reasonable in nature is classified as a benefit/perk to the recipient. HMRC classifies perk as a Vatable supply which in effect cancels a proportion or all of the VAT that has been claimed. HMRC will also not allow entertaining as a part of corporate events such as sporting, music, days at the races, golf days, or trips to other types of events.
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If you would like to know how we can help you with all of this, or anything else, feel free to contact us
Double taxation relief for individualsDifferent countries have their own domestic tax laws, just because an individual pays tax in one country on a particular source of income, does not automatically mean that they will not pay tax on that same income in another – this concept is known as ‘double taxation.
Generally, the UK, in common with most other countries, will seek to tax an individual’s income where either:
As such, in normal circumstances, an individual who is resident in the UK for tax purposes would be charged to tax not only on their UK income but also on any income arising elsewhere in the world. It follows therefore that certain sources of income may fall to be taxed in more than one country.
A common example of this would be income arising on investments that a UK resident has made in another country, such as rental income from a property situated outside the UK, or interest from an overseas bank account.
In these circumstances, there are several mechanisms that may apply to eliminate this double tax either in whole or in part. They can be summarised as:
Which will be applicable to a UK resident individual, will depend on the source of income and where it arises.
The UK has entered into double tax agreements (DTAs) with numerous countries to avoid or reduce the level of double taxation. These agreements include a series of articles detailing the taxes covered and how relief is to be given for a particular source of income.
For UK tax purposes, TIOPA 2010, s. 6 provides that once an Order in Council has been made declaring that an arrangement with territory outside the UK should take effect, the terms of that double tax treaty override domestic law. As such, the terms of a DTA should be the first stop when considering relief for double taxation.
Generally, a DTA will provide for relief to be given either by:
Primary taxing rights are determined by the residence of the taxpayer. Should a person be considered a resident of both countries under their domestic law, provisions (known as a ‘tie-breaker’ clause) are included to determine residence for the purposes of the agreement.
A list of UK double tax agreements in force can be found on HMRC’s website. Whilst most agreements follow a similar model, they do differ and can be complex. It is important to check the agreement with the specific country in question to ensure double tax relief is claimed correctly.
If foreign tax has been suffered, the first step when considering double tax relief is to check whether an article within a DTA gives primary taxing rights for that particular source of income to one of the countries involved to the exclusion of the other.
If a UK resident has suffered tax in another country but an article of the DTA states that source of income should only be taxed in the country of residence, then a claim for double tax relief against a UK tax liability is not possible. The foreign tax is not due under the terms of the treaty. Instead, that individual should claim relief by exemption in the country where the income arises.
For example, article 17 of the DTA between the UK and Spain covers pension income and states the following:
“Subject to the provisions of paragraph 2, of Article 18, pensions and other similar remuneration paid to an individual who is a resident of a Contracting State, shall be taxable only in that state”
This article is giving primary taxing rights to the state of residence, meaning that if a UK resident received income from a Spanish pension that falls within this article, it would only be taxed in the UK. If the individual had suffered tax on the income under Spain’s domestic laws, relief would be given by claiming back any tax suffered in Spain.
In contrast, article 6 of the same agreement which covers income from immovable property, such as rental income, provides that:
“Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other state.”
This article does not state that the income is only taxed in the state of residence, but instead states that it ‘may be taxed in that other state’. Therefore, a UK resident with a rental property in Spain, who would be liable to UK tax as part of their worldwide income, may, in addition also be liable to Spanish tax should their domestic laws allow.
If this were the case, although relief by the exemption is not possible, the individual may be able to claim relief for the tax paid in Spain as a credit against any UK liability to alleviate the double tax.
Where the articles of a DTA do not provide for relief by an exemption, and both countries have a right to tax the income, the country in which the recipient is a resident gives credit for the other country’s tax against its own tax.
In the UK, double tax relief by way of credit is available to an individual if they are resident in the UK and the foreign income has been correctly taxed under that country’s domestic law. This means that all reasonable steps must have been taken to minimize the foreign tax paid, including claiming any available allowances, reliefs, and exemptions in that country.
If allowable, relief is given by reducing the UK tax liability by the available credit. The available credit cannot exceed the UK tax on that same source of income, therefore the credit available is the lower of:
For this purpose, the UK tax on the foreign income is the difference between the individual’s UK tax liability for the tax year and the UK tax liability for the year without including the foreign income.
For example Rose has a taxable income of £40,000 for the year ended 05th April 2021, this is made up of employment income of £35,000 and foreign interest of £10,000. £2000 of foreign tax has been withheld on the foreign interest.
In some double tax agreements, the country with primary taxing rights may agree to tax the income at a rate lower than its normal domestic rates (this is usually seen with dividends, interest, and royalties). Where this is the case, when calculating the amount of credit allowed as a deduction against a UK tax liability, the foreign tax is restricted to the minimum tax payable per the agreement.
For example, article 11 of the DTA between the UK and Portugal which covers interest states that:
“(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other state.
(2) However, such interest may be taxed in the Contracting State in which it arises, and according to the law of that State, but where the resident of the other Contracting State is subject to tax therein respect thereof, the tax so charged in the first-mentioned state shall not exceed 10 percent of the amount of the interest.”
Applying this to a UK resident receiving interest from a bank in Portugal, the first paragraph states that interest may be taxed in the UK (being the State of residence). In addition, the second paragraph goes on to state that interest may also be taxed in Portugal, being the Contract State where it arises, but the tax charged may not exceed 10 percent of the interest.
Therefore, as under UK domestic law, the interest would be subject to tax (as UK residents are taxed on their worldwide income), the maximum amount of foreign tax that can be claimed as credit relief is restricted to 10 percent. If domestic law in Portugal is charged at a higher rate, any additional amount would not be relievable against UK tax, a claim for relief in Portugal should be made instead.
A claim for credit relief in respect of income for a tax year should be made within four years of the end of that tax year, or if later, the 31 January following the tax year in which the foreign tax is paid.
Known as unilateral relief, where there is no double tax agreement between the UK and a particular country, or where there is an agreement, but it does not cover a particular source of income, relief for foreign tax paid may still be given against the UK tax on that same source.
Subject to certain restrictions, unilateral relief by credit is essentially calculated in the same way as treaty relief by credit.
If for any reason, tax credit relief is not claimed, foreign tax is deducted from foreign income, reducing the taxable amount for UK tax purposes.
This may be advantageous where there is no UK tax payable because of losses or allowances.
For example, an individual may occur a trading loss in a tax year which they claim to set against their total income, including foreign income that has had foreign tax withheld. If the losses are large enough to reduce an individual’s taxable income to nil, no credit relief would be available as there is no UK tax liability for the year. Instead, the foreign tax can be deducted from the income. This will reduce the amount of the loss claim and the excess can then be carried forward and relieved in a later year. Contact us for more information.
VAT RETURNS IN UK ON MOTORING EXPENSESAll input tax claims must be evidenced. This requires the business to hold a VAT invoice for the expense and to be able to justify the extent to which it was used for a business purpose.
VAT on repair and maintenance costs may be treated as input tax if:
The appropriate partial exemption calculations should be done, but for a fully taxable business input tax incurred on repairs and maintenance can be claimed in full even if:
This includes VAT on repair and maintenance costs incurred by an employer on an employee’s private car, provided the costs of the repair are actually paid by the employer and included in their accounts. ‘Paid by the employer’ includes reimbursing the employee on receipt of an expense claim.
If a car is repaired under an insurance policy it is normally the case that the insured party arranges for the repair and then claims reimbursement from the insurer. In the case of repairs paid for by a business, VAT incurred on the repair costs is input tax in the same way that VAT incurred on non-insured repair and maintenance costs is. Because an insurance policy only covers the losses incurred as a result of an event, if the insured party is VAT registered, insurers tend to only pay the net cost of the repair, i.e., if a repair costs £1,000 + £200 VAT, the insurer pays the business £1,000 on the assumption that it can recover £200 from HMRC. Partially or fully exempt businesses, which cannot recover all/any of the VAT incurred on a repair may need to contact their insurer to arrange for the irrecoverable VAT cost to be reimbursed in addition to the net cost
If a business incurs VAT on-road fuel, this can be treated as input tax provided it is used making business journeys. If the car has wholly business use all of the VAT as input tax and it is claimable according to the business’s overall partial exemption position.
However, if the car has a mixture of business and private motoring a VAT cost will arise on the private motoring. This VAT cost is either a restriction of input tax recovery or an output tax charge on private use.
Businesses can deal with VAT incurred on fuel costs in one of three ways:
3.1.1 Apportion fuel between business and private use
Businesses can apportion VAT incurred on fuel between business and private motoring and only treat the business element as input tax. This requires detailed mileage logs to be kept in order that the VAT incurred on fuel costs can be divided and the VAT incurred on the private element not recovered. As the record keeping required is onerous, in practice this method is only really appropriate for businesses that have very few staff.
3.1.2 Apply fuel scale charges
As an alternative to apportioning the input tax, the business could, instead, recover all of the input tax incurred on fuel in full and account for an output tax charge on the private use element.
The value of the private use can be calculated by using either:
The advantage of the standard rates is that they are simple and straightforward to apply. However, because they are standardized, they may not benefit all businesses. Each business should review its own circumstances and compare the value of the scale charge to the value of fuel purchased to determine whether their use is beneficial.
It is permissible for the business to calculate the value of fuel used on private journeys using another method. However, HMRC expect that other methods will produce an accurate open market value for the fuel, you cannot make a nominal charge. The administration costs of the record keeping necessary to justify the value of the fuel are such that, in practice, very few businesses adopt this approach.
3.1.3 Do not recover VAT incurred on fuel
Many businesses choose to not recover VAT incurred on fuel expenses because the costs of making a claim exceed the amount of VAT recovered.
The administration costs associated with apportioning fuel costs can be considerable and, because fuel scale charges are standardized, they do not benefit all businesses.
Whether or not VAT is claimed on fuel does not affect whether or not VAT can be claimed on other costs associated with running a motor car, such as repairs, maintenance, or leasing.
3.2.1 Road fuel purchased by employees
If an employee makes an expense claim for a fuel expense, the VAT shown on the invoice is recoverable based upon the above rules.
Therefore, the business will need to be able to evidence the business use of the fuel and, if the fuel is used partly for business and partly for private motoring, either keep records to justify an apportionment or apply the fuel scale charges.
Employers must be able to show that the actual cost of the fuel was reimbursed by reference to fuel receipts. In addition, the normal rule that input tax cannot be claimed unless the business holds a VAT invoice applies. As fuel is bought before it is used, HMRC recommends that employees retain all of their fuel receipts.
3.2.2 Mileage allowances paid to employees
Mileage allowances are usually set at a level that includes an element of repair, maintenance and insurance as well as fuel. Since 6 April 2011, an employee can be paid 45p per mile by the employer for using his own car for a business trip without incurring a direct tax liability (after the first 10,000 miles in a tax year, the figure falls to 25p per mile).
Input tax may only be reclaimed on the fuel element of the mileage allowance. For example, if an employer pays an employee 30p per business mile traveled and the fuel element of that is 12p per mile, the VAT element of the fuel element of the mileage allowance is 2p.
If the employer recovers VAT incurred on the fuel element of private mileage, output tax should be accounted for using the fuel scale charges.
Like all input tax claims, a VAT invoice for the fuel purchased must be held.
HMRC publishes a table of officially approved advisory fuel rates per mile. They are set according to vehicle engine capacity and fuel type and are updated quarterly.
Use of the HMRC fuel rates is not obligatory. Recognized motoring agencies, such as the RAC and AA, publish fuel cost calculators and their use is usually acceptable, or an employer may undertake their own calculations. Although other methods may give improved input tax recovery, the advantage of using HMRC rates is that the business saves the cost of justifying the use of an alternative methodology to HMRC.
In summary, the same rules apply to electric motor cars as to those which use standard fuels:
VAT incurred charging electric vehicles is subject to the same input tax recovery rules as VAT incurred on other expenses, i.e. it is recoverable by the recipient of the supply provided that the recipient receives the supply in the course or furtherance of making taxable supplies. This rule applies differently depending on how the charging cost is incurred.
VAT incurred on charging an electric vehicle at business premises or a public charging point is recoverable in the same way as VAT incurred on road fuels i.e., either input tax recovery is restricted to reflect private mileage or the input tax is recoverable in full provided that the business accounts for output tax on private use.
Unless the vehicle has exclusively business use, the record keeping required to justify either an apportionment or the value of the private use is likely to be onerous. Unlike the situation with road fuel, HMRC do not publish standardised scale charges which can be used to value private use of electricity.
The only circumstance in which VAT incurred charging a vehicle at a domestic premises can be recovered is if it was incurred by a sole proprietor who charged the vehicle at their home and uses it for business purposes.
It is not possible for VAT to be claimed on domestic electricity used to charge a vehicle at an employee’s residence because the electricity was supplied to the employee and not to the business.
As the amount of VAT claimed must be justified to HMRC, sole proprietors may well consider that apportioning their domestic bill between electricity used for their business vehicle and that used for other purposes, and then apportioning the electricity used by the vehicle between business and private mileage, is too onerous to justify making the claim.
HMRC publish an advisory rate for electric cars, similar to the advisory rates for road fuel discussed above. As it is only 4p per mile the amount of VAT potentially recoverable on the costs of charging the vehicle for business use is minimal (1/6th of 4p per mile is 0.0067p per mile).
It is unlikely that it is worth making an input tax claim in these circumstances. The requirement to support claims for input tax with VAT invoices applies to claims for VAT incurred on electricity just as it does to VAT incurred on other fuels and VAT cannot be claimed on an employee’s domestic electricity (see above)
Please contact us if you need assistance.
MTD for INCOME TAX SELF ASSESSMENT TAX RETURNThe basic requirements of MTD for ITSA self assessment tax returns are those unincorporated businesses and landlords with turnover over £10,000 a year will be required to:
The system for paying income tax is unchanged.
The MTD for ITSA provisions applies to:
The MTD for ITSA provisions apply:
As well as the exclusions referred to above, a person will be exempt from using MTD for ITSA if they:
‘Foreign businesses’, being that person’s overseas property business and any trade, profession or vocation carried on by that person outside the UK
A person will be exempt from using MTD for ITSA for a tax year if:
HMRC’s guidance on applying for an exemption from MTD for ITSA says that if they have already confirmed that a person is exempt for MTD for VAT, then the person will not need to apply for an exemption for MTD for ITSA.
Income exemption for a person not required to use MTD for ITSA in respect of the previous tax year
A person will be exempt from using MTD for ITSA for a tax year if:
A person’s qualifying income for a tax year is the total income, before any deductions, which, for each business carried on by the person in that tax year, are included in that person’s tax return for that tax year.
A person’s qualifying income is adjusted proportionately on a time basis for periods of more or less than 12 months, or, if that method would work unreasonably or unjustly, on a just and reasonable basis.
(Income exemption for a person required to use MTD for ITSA for three tax years.)
A person will be exempt from using MTD for ITSA for a tax year if:
A person’s qualifying income for a tax year is:
A person’s qualifying income is adjusted proportionately on a time basis for periods of more or less than 12 months, or, if that method would work unreasonably or unjustly, on a just and reasonable basis.
A person can elect not to be exempt by virtue of either of the above income exemptions.
In addition to existing record-keeping requirements, a person required to use MTD for ITSA must keep digital records.
The digital records must be recorded by the earlier of:
The records to be kept are the records of each of the transactions made in the course of the business, including:
A person who carries on a business as a retailer can elect instead to retain the digital records specified in a ‘retail sales notice’ in respect of their retail sales, where such a notice has been made by HMRC.
Where a person fails to keep the required digital records, the person can be charged a penalty of up to £3,000.
Where a person discovers an error or omission in their digital records, they must correct the records as soon as possible.
A person must provide HMRC with separate quarterly updates for each trade or property business carried on, as specified in an update notice.
The basic requirement is that a person must provide updates as follows:
| Quarterly update period | Quarterly period covered | Submission deadline |
| 1 | 6 April – 5 July | 5 August |
| 2 | 6 July – 5 October | 5 November |
| 3 | 6 October – 5 January | 5 February |
| 4 | 6 January – 5 April | 5 May |
If a person makes a ‘calendar quarters election’ updates are required as follows:
| Quarterly update period | Quarterly period covered | Submission deadline |
| 1 | 1 April – 30 June | 5 August |
| 2 | 1 July – 30 September | 5 November |
| 3 | 1 October – 31 December | 5 February |
| 4 | 1 January – 31 March | 5 May |
Although for the first tax year for which a calendar quarters election has effect the first quarterly update period runs from 6 April (not 1 April) to 30 June.
An update notice is a notice made by HMRC which specifies update information to be provided which includes (but is not limited to):
A person must provide a separate end of period statement (EOPS) for each trade or property business for each relevant period (basis period or tax year). This must include:
The end of period information which may be specified by HMRC includes (but is not limited to):
Please contact us if you need assistance.
