Corporate report

Signposts to key areas of guidance on GOV.UK

Updated 25 March 2021

To support mid-sized businesses to comply with their tax obligations and improve their overall experience, the information below signposts you to key areas of guidance published on GOV.UK.

1. Paying tax: Corporation Tax (CT)

1.1 Dating CT payments

Paying CT - to ensure CT payments are credited to the correct accounting period the 17 digit payslip reference must include the appropriate accounting period number. For example, if the payment is for accounting period number 5 use payment reference (UTR) 1234567890A00105A.

1.2 Paying in instalments

Quarterly instalment payments - it is the company’s responsibility to determine if it needs to make quarterly instalment payments and to declare itself as a quarterly instalment payer on its CT return.

1.3 Paying as a group

Group payment arrangements - group payments can reduce administration associated with making a large number of individual payments. It might also reduce the overall interest charges that the group needs to pay.

1.4 Income Tax on company payments

Return of Income Tax on company payments - if your company pays interest, royalties, alternative finance payments, manufactured payments, relevant distributions or any similar recurring payment, you must generally make these payments after deducting Income Tax at the basic rate - currently 20%. You need to tell us about these payments and pay the Income Tax that you have collected.

2. VAT

2.1 VAT online services

How to login and use VAT online services - what you need in order to login, what you can do using your VAT online account (in addition to submitting your VAT return), what changes you need to tell us about and when you should do this.

2.2 Correcting errors

How to correct VAT errors - information on what errors can be corrected on the next VAT return and what errors must be reported separately to us.

2.3 Prompt Payment Discounts

VAT prompt payment discounts - what to do when you issue or receive a VAT invoice offering a prompt payment discount and how to account for prompt payment discounts.

3. Income Tax

3.1 Foreign income

Tax on foreign income - information on if and how you will be taxed on foreign income.

3.2 Dividend taxation

Changes to dividend taxation - the way dividend income is taxed has changed.

4. Reclaiming Tax

4.1 CT

Quarterly instalments

Quarterly instalments - credit interest - when a company makes quarterly instalment payments that turn out to have been unnecessary or excessive, it receives ‘credit interest’ on the excess.

Overpayments

Large overpayments - only in exceptional circumstances can an overpayment of CT of £150,000 or more be made by payable order; it will usually be repaid by Bacs.

Directors’ loans

Directors loans - companies can reclaim the CT paid on a director’s loan that’s been repaid, written off or released.

4.2 VAT

Reclaiming VAT

Reclaiming VAT - you can usually reclaim the VAT paid on goods and services purchased for use in your business.

VAT repayments

VAT repayments - we have timescales and specific procedures in place for handling VAT repayments.

5. Employer duties

5.1 Pay As You Earn (PAYE)

Real Time Information

Introduction to PAYE - as an employer operating PAYE as part of your payroll, you need to complete certain tasks during each tax month.

Reporting to HM Revenue and Customs (HMRC)

Reporting to HMRC - you need to tell us if you haven’t paid any employees in a tax month.

Employment status

Employment status indicator - in employment law a person’s employment status helps determine:

• their rights
• their employer’s responsibilities

There are special rules for businesses supplying workers, for example employment intermediaries that apply.

6. PAYE and National Insurance contributions (NICs)

6.1 Payday

Recording pay - every time you pay your employees, you must use your payroll software to undertake a number of tasks like, calculating deductions, calculating employers’ NICs, producing pay slips, reporting pay and deductions.

6.2 Termination of payments and benefits

Employment Income Manual - information on the tax treatment of termination payments and benefits.

In cases of redundancy, the employer must demonstrate that the employee’s job will no longer exist.

6.3 Globally mobile employees (expatriates)

Checking an non-UK national’s right to work in the UK - globally mobile employees (GMEs) are subject to tax and NICs legislation in the same way as other employees, although there are some additional rules which apply specifically to this group.

For employees coming to work in the UK from abroad you must operate PAYE tax and NICs in the usual way, whether they are working for you on a temporary or permanent basis.

Even if the employee remains employed by an overseas business and you do not actually pay them, you are treated as their employer for tax purposes. You are responsible for recording and reporting their earnings and PAYE deductions as these individuals are recognised in the UK as ‘seconded employees’.

6.4 Payroll benefits

Pay rolling benefits and expenses - to register online with us for payroll you need to do this before the start of the tax year you want to payroll for.

On use of this service you will:

• not need to submit the form P11D
• need to work out the Class 1A NICS on benefits and complete form P11D (b)

Once the tax year has started you will need to payroll the benefits for the whole of the tax year, or until you stop providing them.

6.5 Double Taxation Relief

Double Taxation Relief (DTR) - where a company has income from a source in one country and is resident in another the UK has negotiated double taxation treaties with more than 100 other countries.

International Manual - information on key international tax issues and practical guidance on working transfer pricing.

7. Customs duties

7.1 Importing goods

Moving or importing goods - what you need to know when you start to move goods from EU countries or import goods from countries outside the EU.

7.2 Exporting goods

Exporting goods - what you need to know when exporting goods from EU countries and countries outside the EU, including export licences required, and other controls.

7.3 Repayments of duty

Refunds and waivers on customs debt - Information on when customs duties can be repaid or remitted.

7.4 Trade tariffs

Trade tariffs - Information on import and export commodity codes and for tax, duty and licences that apply to your goods.

7.5 Anti-Dumping Duty

Anti-Dumping Duty - information on how to check whether goods are liable to anti-dumping or countervailing duties, when to pay anti-dumping or countervailing duties and how to claim refunds of Anti-Dumping Duty.

8. Links to further guidance that may be relevant to mid-sized businesses and covers a range of taxes

8.1 CT

For further detailed information on CT, you will find our CT Directory on GOV.UK useful.

8.2 VAT

For further detailed information on VAT, you will find our VAT Directory on GOV.UK useful.

8.3 Employer duties

Based on the common Employer Duty queries we receive, additional links to the relevant guidance have been included

General enquiries on PAYE and NI

Employer Related Securities

Incorrect deductions - P11D

8.4 Collective investment schemes

Collective Investment Schemes Centre (CISC) - contact details and information on collective investment schemes. This should be your first point of contact for queries of this nature.

8.5 Leasing arrangements of plants and machinery

Business Leasing Manual - extensive information on the taxation of leasing transactions, particularly those involving plant or machinery.

8.6 Statutory and non-statutory clearances

Statutory and non statutory clearances details on the contacts for advance HMRC clearance of approval of certain transactions.

Send your non-statutory business clearances and clearance applications to:

HM Revenue and Customs
Non Statutory Clearance Team S0563
5th Floor, Saxon House
1 Causeway Lane
Leicester
LE1 4AA

Non-statutory business clearances in relation to Securitisation transactions should be sent to the same address marked for the attention of the Securitisation team.

For clarification on Securitisation Regulations and their application to specific transactions, contact:

The Securitisation Team
Wealthy and Mid-Sized Business Compliance
S0836
Newcastle
NE98 1ZZ

8.7 Share and assets valuation

Shares and assets valuation - you may need a valuation on shares and assets for tax purposes.

8.8 Dormancy – holding companies

Dormancy - holding companies - information on the specific circumstances in which holding companies will be considered dormant.

8.9 Redress payments for interest rate hedging products

Redress payments manual - the Financial Conduct Authority identified failings in the way some banks sold interest rate hedging products, meaning some customers are entitled to compensation. We offer guidance to ensure that you correctly account for these redress payments, received from your bank, in your tax return.

8.10 Bank specific tax legislation

The contact for queries specific to businesses within this sector:

The Financial Team
Wealthy and Mid-Sized Business Compliance
S0836
Newcastle
NE98 1ZZ.

8.11 Late tax bill payments

Late tax bill payments - information on what to do if you can’t pay your tax bill on time.

8.12 End of business life

At the end of business life there may still be tax issues to resolve. We provides useful, although not exhaustive, guidance on these matters.

Selling or closing your company (Corporation Tax)

End of company life filing (Corporation Tax)

Cancelling your VAT registration

Transfer of business as a going concern

VAT notification of insolvency

Stop employing staff

8.13 Construction Industry Scheme (CIS)

Construction Industry Scheme - contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they are not registered

8.14 Life cycle events

Changes to your VAT registration details - you need to inform us if you change your name, business name or your personal or trading address.

HMRC employer helpline - also consider the effects on the payroll and expenses systems if there are major changes in the company’s structure such as a merger or acquisition of another business.

For payroll purposes, a merger is where 2 or more PAYE schemes are brought together for the same legal entity. A business merger does not always result in a PAYE scheme merger.

A succession is when the ownership of a business changes from one legal entity to another and the new owner takes responsibility for the pay records

8.15 Alcohol Warehouse Retail Scheme (AWRS)

The Alcohol Wholesaler Registration Scheme.

From 1 April 2017 businesses selling alcohol to the public, for example alcohol retailers, restaurants, pubs or bingo clubs, need to ensure that they buy from UK alcohol wholesalers approved by HMRC under the Alcohol Wholesaler Registration Scheme.

You will need to check that your wholesalers are registered by using the HMRC online database which will be available from April 2017. This database supports your business by safeguarding you from purchasing illicit alcohol.

If you are found to have purchased alcohol from an unapproved wholesaler you may be liable to a penalty, you may have your alcohol stock seized and you could even face criminal prosecution.

If you sell alcohol to the public check your suppliers are getting ready for April 2017:

• ask your suppliers if they have applied to us for approval
• if your supplier has not applied, you should encourage them to do so now, otherwise you will not be able to continue to trade with them from April 2017

8.16 Threshold summaries for reliefs, allowances, liabilities and other requirements

For a business or individual to qualify for the reliefs and allowances listed below, basic criteria must be met, which is outlined. Further restrictions, conditions, thresholds and additional factors may apply – use the links to GOV.UK to find out if this is the case.

Enterprise Investment Scheme

Basic criteria:

• qualifying trading companies raising money for their growth and development
• less than 250 employees (with some exceptions)
• less than £15 million gross assets

Venture Capital Trust

Basic criteria:

• qualifying trading companies raising money for their growth and development
• less than 250 employees (with some exceptions)
• less than £15 million gross assets

Seed Enterprise Investment Scheme

Basic criteria:

• qualifying trading companies
• less than 25 employees
• less than £200,000 gross assets

Research and development

Basic criteria:

• liable for CT

Creative Tax reliefs

Basic criteria:

• liable for CT
• directly involved in the development of certain creative arts products

Entrepreneurs’ relief

Disposal of any of the following:

• all or part of your business as a sole trader or business partner
• shares/securities in a company where you have at least 5% of shares and voting rights
• shares acquired through an Enterprise Management Incentive (EMI) scheme after 5 April 2013
• assets you lent to your business or personal company

Annual investment allowance

• £200,000

Patent box

Enables businesses to apply a lower rate of CT to profits earned from their patented inventions. This means that for businesses opting in, a tax rate of 10% will apply to profits from the exploitation of patents and similar intellectual property.

Senior accounting officer provisions

For the preceding financial year:

• UK incorporated company
• turnover £200m+
• balance sheet £2bn+