Anna’s Accountancy Alerts – Week 49 4th – 10th March 2024)

Anna's Accountancy Alerts

Basis Period Reform

The rules HMRC uses to calculate sole traders’ and partners’ profits for Income Tax in a Self-Assessment return are changing for many businesses for 2023 to 2024 onwards.  This change may affect the return that taxpayers must submit by 31 January 2025 and subsequent returns.

HMRC plans to release a YouTube video in February 2024, giving a brief overview of the changes introduced by basis period reform.  The YouTube video will be an educational tool, particularly for small businesses and unrepresented customers, to help them understand the changes in the transition year and onwards.

Further information on policy change is available

Research and Development Tax Relief

HMRC has published Guidelines for Compliance to help companies see if work qualifies as Research and Development (R&D) for tax purposes. Only companies can claim R&D reliefs. 

The guidelines are designed to help avoid common errors while identifying and submitting claims to Research and Development relief by aiding businesses to:

  • find out if work may qualify as R&D for tax purposes
  • understand HMRC expectations of those making claims
  • understand HMRC’s view of who is a competent professional, able to judge if a project is seeking an advance in science or technology
  • understand the meaning of ‘scientific or technological advance’ for tax purposes
  • decide where the project begins and ends for the purposes of an R&D claim
  • understand the evidence of a qualifying project HMRC may want to see

‘Pay by Bank Account’ to Pay HMRC

Feedback has indicated that some people are unsure about using ‘pay by bank account’ when paying HMRC because they notice their payment has gone through the HMRC Shipley bank account, when they are historically used to paying HMRC Cumbernauld.

Customers should be reassured this is not a scam, that ‘pay by bank account’ is still the preferred method for paying HMRC and this will not affect payments going to the correct customer record or the time taken to update it.

This method prepopulates all payment details when you log in to your HMRC online account, making the process quicker and easier.

Stay Up-To-Date With Coronavirus & Brexit News

Coronavirus has affected us all. Whether you’re a sole trader, employer or employee. Stay up to date with the latest news – including government support, tax implications, and more.