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Time to act deadlines

Are you prepared? Have you taken action?

Although many tax deadlines recur every year, they still seem to catch some individuals and businesses by surprise. The ability to meet deadlines to take advantage of valuable tax reliefs that save you money or to avoid penalties is just one reason why timely tax planning is so important.

To help you plan and take appropriate action, Time to act sets out forthcoming tax deadlines. Although the deadline dates provided below give an indication of how urgently you need to consider the issues, some will require initial attention well in advance.

Click on the category headings below to see more information about each deadline.

  • Corporate tax
  • Private client
  • Employment tax
  • Indirect tax

Corporate tax

Mandatory disclosure rules

Deadline for action: Ongoing

Issue: UK intermediaries that promote or assist in the design or implementation of a cross-border arrangement that meets a relevant hallmark may be required to report details of that arrangement to HMRC under the mandatory disclosure rules. In certain circumstances, the obligation to report may instead fall on the relevant UK taxpayer. A cross-border arrangement may be reportable if it circumvents the automatic exchange of information between tax authorities under the common reporting standard or involves an opaque offshore structure that obscures the beneficial ownership of assets. A report must be made within 30 days of the reportable arrangement being made available for implementation or, for arrangements entered into before 28 March 2023, within a 30-day period beginning with the earliest of: that date; the reportable arrangement being ready for implementation; or, the first step in the implementation of the reportable arrangement being made. 

Action: Intermediaries and taxpayers should ensure that they have implemented appropriate procedures and processes and ensure that reporting obligations are met on a timely basis. 

Register overseas

Deadline for action: Ongoing

Issue: Relevant entities (companies and limited liability partnerships registered outside the UK, foreign foundations and non-UK partnerships with legal personality) looking to acquire, and certain relevant entities looking to dispose of, qualifying estate (UK residential or commercial property held freehold or on leasehold for a term of more than seven years), or registrable charges over such estate, must be registered on the Companies House register of overseas entities in order to register the property transaction with the relevant land registry. Registered relevant entities must file an annual update every year following registration. It is not generally possible for relevant overseas entities to directly acquire or dispose of UK property or registrable charges over such property without being registered. Failure to meet the obligation to register, where required, carries a criminal sanction for the entity and every officer of the entity who is in default, ranging from fines of £2,500 per day for failing to update the register, to unlimited fines for making a materially false statement, and prison sentences.

Action: Relevant entities looking to acquire, and certain relevant entities looking to dispose of, qualifying estate or charges, that are not already registered should ensure they are registered and have completed any necessary reporting on the Companies House register of overseas entities sufficiently in advance of the intended transaction, as acquisitions and certain disposals by relevant entities cannot be registered at the relevant land registry until registration on the register of overseas entities has been completed. Registered relevant entities must file an annual update within 14 days of the anniversary of the date that they registered.

Corporation tax instalment payments due for very large companies

Deadline for action: 14 March 2023

Issue: The dates on which corporation tax payments are due depend on whether a company is large, very large, or not large for these purposes. Very large companies are generally required to make four corporation tax instalment payments, two months and 13 days after the first day of their accounting period and every three months thereafter. Very large companies with a 31 December 2023 accounting reference date are required to make their first corporation tax instalment payment on 14 March 2023. Second, third or fourth instalment payments are due on the same day for very large companies with 30 September 2023, 30 June 2023 and 31 March 2023 period ends respectively. 

Action: Companies should consider whether they are subject to the corporation tax quarterly instalment payment regime for very large companies and, if so, should make arrangements to calculate and pay any instalments due. Very large companies are broadly companies with annual taxable profits exceeding £20m. For members of groups, this threshold is divided by the number of active group companies.

Corporation tax return filing

Deadline for action: 31 March 2023

Issue: Companies and other entities subject to corporation tax are required to file their corporation tax return by the relevant anniversary of their accounting reference date for all relevant corporation tax accounting periods. Entities subject to UK corporation tax include UK companies, non-UK companies with a UK permanent establishment or a UK property business, non-UK companies and certain collective investment vehicles disposing of UK property, clubs, cooperatives and other unincorporated associations.

Action: Such entities with a 31 March 2022 accounting period end should ensure their 2022 corporation tax return is filed by 31 March 2023 to avoid late filing penalties, starting from £100. 

Corporation tax claims and elections

Deadline for action: 31 March 2023

Issue: Companies and other entities subject to corporation tax must make certain claims and elections by the relevant anniversary of their accounting reference date. Those with a 31 March accounting reference date must make any relevant outstanding claims and elections for periods ended 31 March 2021 (eg claims for R&D tax relief, creative sector reliefs, loss carry-backs, group relief and capital allowances; and, elections for patent box treatment) and 31 March 2019 (eg double taxation relief and overpayment relief claims) by 31 March 2023.

Action: Entities subject to corporation tax in the relevant period with 31 March accounting period ends should ensure that relevant claims and elections for earlier accounting periods are made by 31 March 2023 to benefit from them.

Publication of tax strategy

Deadline for action: 31 March 2023

Issue: Large businesses are required to publish details of their UK tax strategy (including certain prescribed information) on the internet by the end of their accounting period. Large businesses include: multinational groups (with global annual turnover exceeding €750m); and, single UK entities (UK companies, partnerships and permanent establishments) or other groups with annual turnover exceeding £200m or gross assets exceeding £2bn, after excluding figures for non-UK entities other than their UK permanent establishments.

Action: The head UK entity of a relevant large business with a 31 March 2023 accounting reference date should ensure that it has published the group’s UK tax strategy by 31 March 2023 or, if sooner, within 15 months of the publication of its previous tax strategy. The tax strategy must include all prescribed information and must be published in an internet location that is accessible to the public free of charge. Penalties for failure to comply with the requirements start at £7,500.

Senior accounting officer certificate

Deadline for action: 31 March 2023

Issue: Certain large companies or members of large groups are required to identify a senior accounting officer (SAO) and notify the name of the SAO to HMRC. The SAO must provide HMRC with an annual compliance certificate. The notification and certificate must be provided to HMRC no later than the Companies House filing date for the company’s accounts. The SAO certificate must state whether or not the company had appropriate tax accounting arrangements throughout the financial period and, if not, provide appropriate details. Large companies and large groups for this purpose are those with annual turnover exceeding £200m or gross assets exceeding £2bn, after excluding figures for companies that are not incorporated in the UK.

Action: Relevant public companies with a 30 September 2022 period end and other relevant companies with a 30 June 2022 period end must notify HMRC of the identity of their SAO and the SAO must provide their certificate to HMRC by 31 March 2023. Companies are liable to a £5,000 penalty for failure to notify, and SAOs are personally liable for penalties of £5,000 for failure to maintain appropriate tax accounting arrangements and £5,000 for failure to provide an accurate certificate.

Notification of uncertain tax treatments

Deadline for action: 31 March 2023

Issue: Certain large businesses are required to notify HMRC where they have adopted an uncertain tax treatment (UTT) in corporation tax, income tax (including income tax due under PAYE) and/or VAT returns. A tax treatment is ‘uncertain’ if it results in the recognition of an accounting provision or relies on an interpretation of tax legislation that is contrary to HMRC’s known view, and is reportable if it gives rise to a potential tax saving (when compared with the tax that would have been paid if a treatment that was not uncertain was adopted) of more than £5m in a return, or returns for the same financial year. The requirement to notify UTTs applies to corporate groups, single companies, partnerships and LLPs with annual turnover exceeding £200m and/or a balance sheet total of more than £2bn after excluding figures for non-UK entities other than for their UK permanent establishments and other activities subject to UK corporation tax. Notifications in respect of corporation tax are generally due by the relevant tax return filing deadline.

Action: Relevant businesses that draw up accounts to 31 March 2022 should ensure that, where appropriate, UTTs in respect of corporation tax are notified to HMRC by 31 March 2023.

Country-by-country reporting – notification and filing requirements

Deadline for action: 31 March 2023

Issue: UK companies (or other entities) that are members of multinational groups with global turnover exceeding €750m are required to meet certain compliance requirements under the country-by-country reporting (CbCR) regime. 

UK entities that are ultimate parent entities of relevant multinational groups must: 

  • notify HMRC that they are responsible for filing an annual CbCR report (and provide details of relevant group entities) by their accounting reference date; and
  • file an annual CbCR report to HMRC by the anniversary of their accounting reference date.

Certain UK entities that are members of relevant multinational groups without being ultimate parent entities must:

  • by their accounting reference date, notify HMRC whether they, and where relevant other named UK group entities, are exempt from CbCR filing requirements and, if so, provide the name of the group’s intended CbCR reporting entity and jurisdiction (with which HMRC has an effective exchange of information agreement) in which the report will be filed; and
  • by the anniversary of their accounting reference date, notify HMRC that the CbCR report has been filed and provide the name of the reporting entity and jurisdiction in which the report has been filed, or file a CbCR report to HMRC.

Certain other UK entities that are members of multinational groups must, by their accounting reference date, confirm which UK entity has met the notification obligation on their behalf and the date of notification.

Action: Where relevant, UK entities with 31 March 2023 period ends should ensure that, by 31 March 2023, they notify HMRC:

  • that they are an ultimate parent entity or are a non-exempt reporting entity for CbCR purposes; or
  • of the identity of another group company that will file a CbCR report and provide all prescribed information; or
  • of the identity of the UK entity that has met the notification obligation on their behalf.

Where relevant, UK entities with 31 March 2022 period ends should ensure that, by 31 March 2023:

  • they file a CbCR report; or
  • they notify HMRC that the CbCR report has been filed by another entity in the group, providing all prescribed information. 

Corporate interest restriction– group reporting company notification and return submission

Deadline for action: 31 March 2023

Issue: Groups of companies (including ‘single company groups’) with net UK corporate interest expense and other financing costs exceeding £2m are subject to the corporate interest restriction (CIR) rules and hence may be required to submit certain CIR filings to HMRC. Groups that wish to nominate a group reporting company to submit the group’s CIR return (and/or revoke an earlier nomination) for an accounting period (and subsequent accounting periods) must notify HMRC of the eligible UK group reporting company within 12 months of the end of the relevant accounting period. If no group company is nominated, HMRC may nominate one. The appointed group reporting company must submit a full or, if the relevant conditions are met, abbreviated CIR return on behalf of the group by the later of: the anniversary of the group’s accounting reference date; or, where it was appointed by HMRC, three months after its appointment.

Action: Affected groups (and groups not currently affected that might be in future) with an accounting period ended on 31 March 2022 that wish to do so, should nominate an eligible UK group reporting company. That company should ensure it is authorised by 50% of eligible UK group companies and give notice to HMRC that it is the group reporting company by 31 March 2023. Group reporting companies with a 31 March 2022 accounting reference date must generally file their CIR return by 31 March 2023, to include relevant elections for that and, where relevant, subsequent periods, including: group ratio election; group ratio (blended) election; group EBITDA (chargeable gains) election; interest allowance (alternative calculation) election; interest allowance (non-consolidated investment) election; interest allowance (consolidated partnerships) election; and, abbreviated return election.

Corporate interest restriction – elections not in CIR return

Deadline for action: 31 March 2023

Issue: Groups of companies (including ‘single company groups’) subject to the corporate interest restriction (CIR) may wish to make certain elections which are made outside the annual CIR return. The following elections may be relevant for some entities/groups within the scope of the CIR rules.

  • When calculating tax interest amounts for purposes of the CIR, companies that account for creditor relationships (receivables) on a fair value accounting basis may make an irrevocable election for these amounts to instead be determined on an amortised cost basis. The election must be made within 12 months of the end of the first relevant accounting period in which fair value accounting is applied.
  • Companies providing public infrastructure assets may qualify for alternative CIR rules that may give rise to reduced interest restrictions. Qualifying companies that wish to elect for the alternative treatment to apply must do so by the end of the accounting period they wish the alternative treatment to apply from.
  • The CIR legislation applies standard rules to determine the relevant group accounting period end date when no group accounts are prepared. The ultimate parent company may elect for a different accounting period end date than that which would otherwise apply by that date.

Action: Entities/groups wishing to benefit from elections made outside the annual CIR return should take the following action.

  • Companies with 31 March 2022 period ends that wish to elect to apply the amortised cost basis for CIR purposes to creditor relationships recognised for accounting purposes at fair value should do so by 31 March 2023.
  • Those with 31 March 2023 period ends, that meet the requirements to elect into the alternative treatment for public infrastructure companies (which may include certain property companies) and wish to do so for that period and subsequent periods, should do so by that date.
  • Where no group accounts are prepared and a group wishes to prepare its CIR return to 31 March 2023, the ultimate parent entity should elect to do so by that date.

Corporation tax group deductions allowance

Deadline for action: 31 March 2023

Issue: Relief for corporation tax losses carried forward is generally restricted to the ‘deductions allowance’ plus 50% of the profits above the deductions allowance. The amount of the annual deductions allowance is £5m per corporate group. In order for group members to claim a deductions allowance, a group company must be nominated to allocate the allowance and submit a group allowance allocation statement to HMRC.

Action: To benefit from the deductions allowance at the time tax returns are first submitted, and thereby optimise tax cash flow, groups should make a group allowance nomination, and the nominated company should submit the group allowance allocation statement, on or before the date the affected tax returns are filed; ie no later than 31 March 2023 for groups with a 31 March 2022 period end. The final deadline for submitting a deductions allowance allocation statement for the period ended 31 March 2021 is 31 March 2023. Affected groups should therefore ensure a nomination is made and allocation statement submitted by that date, if they have not already done so, to benefit from the deductions allowance.

Foreign branch profits exemption election

Deadline for action: 31 March 2023

Issue: UK companies with foreign branch profits arising in territories with an effective tax rate lower than the UK rate may benefit from claiming exemption from UK corporation tax on those profits. Companies wishing to benefit must elect for exemption, which applies to all profits and losses of all foreign branches of the entity making the irrevocable election, before the start of the first accounting period for which exemption will apply. Those with a 31 March accounting reference date must elect by 31 March 2023 for the exemption to apply from 1 April 2023.

Action: Companies with foreign branch operations should review all their overseas branch activities before the start of the first period to which exemption would apply to determine the overall impact of making a foreign branch exemption election. Where it is considered appropriate to make the election, companies should ensure the election is filed before the start of the first exempt period.

Payment of gift aid by charity subsidiaries

Deadline for action: 31 March 2023

Issue: Companies wholly owned by charities can set gift aid donations paid in the nine months following their period end against taxable profits for the period. Where a charity uses a subsidiary company to undertake non-charitable activities, such as trading, it is possible for the corporation tax that would otherwise be due on the profits to be reduced by way of a gift aid payment of those profits.

Action: Gift aid donations for the period ended 30 June 2022 must be physically paid by 31 March 2023. Subject to available reserves, the amount of gift aid may be based on what would otherwise be the taxable profits so as to ensure that the payment may be optimised, but only non-repayable payments of money, such as a cheque or bank transfer (not book entries on inter-company account), qualify.

Diverted profits tax

Deadline for action: 31 March 2023

Issue: A company generally has a duty to notify HMRC if it is potentially within the scope of diverted profits tax (DPT). Companies which are potentially within the scope of DPT in an accounting period must notify HMRC within three months of the period end.

Action: Those with a 31 December 2022 period end must notify HMRC by 31 March 2023 if they have profits arising which potentially come within the scope of DPT unless, for example, no charge to DPT would arise for the period. HMRC has confirmed that companies do not have to notify in certain circumstances, but advice should be taken to confirm the position.

Annual tax on enveloped dwellings - Amended returns

Deadline for action: 31 March 2023

Issue: 2021/22 amended annual tax on enveloped dwellings (ATED) returns (where the original return was incorrect, the property was disposed, or a relief can be claimed), in respect of relevant high value residential properties are due by 31 March 2023. Relevant high value properties are those owned by certain non-natural persons with a market value in excess of £500,000 (generally as at 1 April 2017 for 2021/22 or on the date of any subsequent substantial acquisition or disposal). The ATED liability depends on the valuation band the property falls within (again, generally based on market value as at 1 April 2017 for 2021/22 or the date of any subsequent substantial acquisition or disposal). 

Action: Non-natural persons owning high value residential property that need to submit amended returns for 2021/22 to reflect the correct position should submit them by 31 March 2023.

Corporation tax payment due

Deadline for action: 1 April 2023

Issue: Companies with a tax liability falling outside the quarterly instalment payment regimes for large and very large companies must settle their liability to corporation tax and tax on loans or benefits to participators within nine months and one day after the period end. The increased ‘normal’ rate of interest will apply to tax payments made after that date by companies that do fall within a quarterly instalment payment regime. Companies with a 30 June 2022 period end should settle their corporation tax liability not paid within a quarterly instalment payment regime by 1 April 2023.

Action: Companies with a 30 June 2022 period end should calculate their liability to corporation tax and tax on loans or benefits provided to participators and make full and final payment by 1 April 2023 to avoid or mitigate interest on late tax. 

Corporation tax instalment payments due for large companies

Deadline for action: 14 April 2023

Issue: The dates on which corporation tax payments are due depend on whether a company is large, very large, or not large for these purposes. Large companies are generally required to make four corporation tax instalment payments, six months and 13 days after the first day of their accounting period and every three months thereafter. Large companies with a 30 September 2023 accounting reference date are required to make their first corporation tax instalment payment on 14 April 2023. Second, third and fourth instalment payments are due on the same day for large companies with 30 June 2023, 31 March 2023 and 31 December 2022 period ends respectively.

Action: Companies should consider whether or not they are subject to the corporation tax quarterly instalment payment regime for large companies and, if so, should make arrangements to calculate and pay any instalments due. Large companies are broadly companies with annual taxable profits between £1.5m and £20m. For members of groups, these thresholds are divided by the number of active group companies. Transitional rules apply when a company’s profits increase such that it becomes large.

Income tax withheld on interest, royalties and certain other payments to be paid over to HMRC

Deadline for action: 14 April 2023 (or earlier)

Issue: Companies may be required to withhold income tax on interest, royalties and certain other payments, including payments to non-UK recipients. Where a withholding obligation arises, this must be reported and the relevant tax paid over to HMRC within 14 days of the end of a calendar quarter or accounting period, using form CT61.

Action: Companies should withhold income tax on relevant payments where and to the extent appropriate, and report and pay tax withheld on payments made between 1 January 2023 and 31 March 2023 to HMRC using form CT61 by 14 April 2023 (or earlier for an accounting period ended between 1 January 2023 and 31 March 2023).

Annual tax on enveloped dwellings – returns

Deadline for action: 30 April 2023

Issue: 2023/24 annual tax on enveloped dwellings (ATED) returns and relief declaration returns, and 2022/23 further ATED returns (where a change in circumstances during the year increases the tax liability), in respect of relevant high value residential properties are generally due by 30 April 2023. Relevant high value properties are those owned by certain non-natural persons with a market value in excess of £500,000 (generally as at 1 April 2022 (1 April 2017 for further 2022/23 ATED returns) or on the date of any subsequent substantial acquisition or disposal). The ATED liability depends on the valuation band the property falls within (again generally based on market value as at 1 April 2022 (1 April 2017 for further 2022/23 ATED returns) or the date of any subsequent substantial acquisition or disposal). 

Action: Except where a later filing date applies, non-natural persons owning high value residential property should submit their ATED returns, further returns and/or relief declaration returns by 30 April 2023. Those with an ATED liability can apply to HMRC for a pre-return banding check (PRBC) to confirm which valuation band the property falls into, where there is ‘reasonable belief’ the property value is within 10% of a banding threshold. Although HMRC will not confirm the specific valuation, PRBCs should be applied for well before submitting the ATED return.

Annual tax on enveloped dwellings – payment

Deadline for action: 30 April 2023

Issue: Any 2023/24 and further 2022/23 annual tax on enveloped dwellings (ATED) due must be paid by 30 April 2023, or the return filing date where a later filing date applies. ATED arises on UK residential properties valued above £500,000 (generally as at 1 April 2022 (1 April 2017 for further 2022/23 ATED returns) or on the date of any subsequent substantial acquisition or disposal) that are owned by certain UK or non-UK non-natural persons, including companies, collective investment schemes and certain partnerships.

Action: Owners of affected properties should pay any ATED due by 30 April 2023. The ATED liability depends on the valuation band the property falls within. The relevant bands and liabilities are as follows:

£500,002 - £1m    £4,150 (2023/24)     £3,800 (2022/23) 
£1m - £2m    £8,450 (2023/24)   £7,700 (2022/23)
£2m – £5m   £28,650 (2023/24) 
   £26,050 (2022/23) 
£5m – £10m    £67,050 (2023/24)
   £60,900 (2022/23)
£10m – £20m   £134,550 (2023/24) 
   £122,250 (2022/23)
Over £20m
   £269,450 (2023/24)
   £244,750 (2022/23)

The charge is reduced on a pro-rata basis where, for example, the property is only owned or meets one of the exemptions for part of the period.

For more information, please get in touch with James Morris.

Private client

60-day reporting for disposals of UK property

Deadline for action: Ongoing 

Issue: UK resident individuals, trustees and personal representatives are liable to report and make payments on account of capital gains tax (CGT) for chargeable gains on disposals of UK residential property within 60 days of completion. Non-resident individuals, trustees and personal representatives must also report and make payments on account of CGT for chargeable gains on all disposals of UK commercial as well as residential property (including substantial indirect interests in UK land through assets deriving at least 75% of their value from that land) within 60 days of completion.

Action: Up to date records will need to be maintained for all potential property sales. Taxpayers will need to take advice on their obligations early, as the deadlines are short and the calculations can be complex.

HMRC trusts register – registration

Deadline for action: Ongoing 

Issue: Trustees of most UK connected trusts must submit a report of comprehensive trust information to HMRC within 90 days of the trust’s creation. Trustees of new UK connected trusts must provide HMRC with details of the settlor, trustees, beneficiaries and any other person who has control over the trust, together with certain other information relating to the trust, within 90 days of the trust’s creation. 

Action: The above information must be provided online, via HMRC’s trust registration service. Whilst some exclusions apply, the trust registration obligation applies to most UK express trusts as well as non-UK express trusts that acquire UK land or property or have a UK resident trustee and enter into a ‘business relationship’ within the UK. 

HMRC trusts register – changes

Deadline for action: Ongoing

Issue: Trustees of trusts that are already registered through HMRC’s trust registration service (TRS) must report prescribed changes to HMRC on an ongoing basis. Trustees must use the TRS to report changes to the lead trustee, other trustees, beneficiaries, settlor or protector of the trust.

Action: Details of any changes must be notified to HMRC through the TRS within 90 days of the change.

Mandatory disclosure rules reporting

Deadline for action: Ongoing

Issue: UK intermediaries that promote or assist in the design or implementation of a cross-border arrangement that meets a relevant hallmark may be required to report details of that arrangement to HMRC under the mandatory disclosure rules. In certain circumstances, the obligation to report may instead fall on the relevant UK taxpayer. A cross-border arrangement may be reportable if it circumvents the automatic exchange of information between tax authorities under the common reporting standard or involves an opaque offshore structure that obscures the beneficial ownership of assets. A report must be made within 30 days of the reportable arrangement being made available for implementation or, for arrangements entered into before 28 March 2023, within a 30-day period beginning with the earliest of: that date; the reportable arrangement being ready for implementation; or, the first step in the implementation of the reportable arrangement being made.  

Action: Intermediaries and taxpayers should ensure that they have implemented appropriate procedures and processes and ensure that reporting obligations are met on a timely basis.  

Register of overseas entities

Deadline for action: Ongoing

Issue: Relevant entities (companies and limited liability partnerships registered outside the UK, foreign foundations and non-UK partnerships with legal personality) looking to acquire, and certain relevant entities looking to dispose of, qualifying estate (UK residential or commercial property held freehold or on leasehold for a term of more than seven years), or registrable charges over such estate, must be registered on the Companies House register of overseas entities in order to register the property transaction with the relevant land registry. Registered relevant entities must file an annual update every year following registration. It is not generally possible for relevant overseas entities to directly acquire or dispose of UK property or registrable charges over such property without being registered. Failure to meet the obligation to register, where required, carries a criminal sanction for the entity and every officer of the entity who is in default, ranging from fines of £2,500 per day for failing to update the register, to unlimited fines for making a materially false statement, and prison sentences.

Action: Relevant entities looking to acquire, and certain relevant entities looking to dispose of, qualifying estate or charges, that are not already registered should ensure they are registered and have completed any necessary reporting on the Companies House register of overseas entities sufficiently in advance of the intended transaction, as acquisitions and certain disposals by relevant entities cannot be registered at the relevant land registry until registration on the register of overseas entities has been completed. Registered relevant entities must file an annual update within 14 days of the anniversary of the date that they registered.

Penalties for late payment of income tax, National Insurance contributions and capital gains tax 

Deadline for action: 2 March 2023

Issue: Individuals and trustees should have paid their 2021/22 tax liability by the due date of 31 January 2023. Any 2021/22 tax remaining unpaid at 2 March 2023 will be subject to a 5% penalty unless it is being collected through an individual’s tax code or a Time to Pay instalment arrangement has been agreed with HMRC. No such penalty applies to the first payment on account for the 2022/23 tax year which was due on 31 January 2023. HMRC will charge late payment interest on outstanding liabilities, at the current rate of 6% per annum, on all liabilities outstanding from 1 February 2023.

Action: Ensure full payment of any outstanding 2021/22 tax liability is made by 2 March 2023 to avoid tax geared penalties.

Annual tax on enveloped dwellings – amended returns 

Deadline for action: 31 March 2023

Issue: 2021/22 amended annual tax on enveloped dwellings (ATED) returns (where the original return was incorrect, the property was disposed, or a relief can be claimed), in respect of relevant high value residential properties are due by 31 March 2023. Relevant high value properties are those owned by certain non-natural persons with a market value in excess of £500,000 (generally as at 1 April 2017 for 2021/22 or on the date of any subsequent substantial acquisition or disposal). The ATED liability depends on the valuation band the property falls within (again, generally based on market value as at 1 April 2017 for 2021/22 or the date of any subsequent substantial acquisition or disposal). 

Action: Non-natural persons owning high value residential property that need to submit amended returns for 2021/22 to reflect the correct position should submit them by 31 March 2023.

Reclaim overpaid tax

Deadline for action: 5 April 2023

Issue: Where a person has paid an amount of income tax or capital gains tax and believes that tax is not due, they may, in some circumstances, make a claim to HMRC for repayment of that tax. Such claims must be made within four years of the end of the tax year for which the person believes tax has been overpaid.

Action: Claims relating to overpaid tax in respect of the 2018/19 tax year should be submitted by 5 April 2023.

Pre year-end tax planning 

Deadline for action: 5 April 2023

Issue: Pre year-end tax planning may reduce tax liabilities for individuals and unincorporated businesses. Unincorporated businesses could consider issues such as the timing of capital expenditure to maximise their entitlement to capital allowances and the annual investment allowance, and whether it is beneficial to incorporate before 6 April 2023.

Action: Individuals should consider fully utilising their:

  • capital gains tax annual exemption of £12,300 for 2022/23;
  • inheritance tax annual exemption of £3,000; and
  • ISA allowances and other tax efficient investment opportunities.

Where individuals own their business, they should consider the most beneficial timing and way of extracting profits before 6 April 2023. There are many other planning ideas and deadlines that are relevant to the tax year end and professional advice should be sought to explore these where appropriate.

Pensions contributions  

Deadline for action: 5 April 2023

Issue: Maximise your pension contributions before the tax year end and consider protecting your fund after the tax year end. Unused annual allowances should be utilised, where possible, prior to 6 April 2023 if the 2022/2023 lifetime allowance of £1,073,100 permits.

Action: Reasons to make contributions before 5 April 2023 where possible include: any annual allowance that remains unused for the year to 5 April 2020 will otherwise be lost; and the annual allowance is reduced by £1 for every £2 of adjusted income over £240,000, down to a minimum of £4,000. Individuals may also need to take advice to ensure that they do not exceed the lifetime allowance of £1,073,100.

Foreign capital loss election for non-domiciliaries 

Deadline for action: 5 April 2023

Issue: Non-domiciled individuals who first used the remittance basis in 2018/19 should consider making an election to permit their foreign capital losses to be utilised against gains taxable in the UK. The election would apply for 2018/19 and all subsequent years in which the remittance basis is used, and, if appropriate, must be made before 6 April 2023, even if no capital gains were made in 2018/19.

Action: Such remittance basis users should review their particular circumstances to determine if an election is appropriate and, if so, they must make it before 6 April 2023. If the time limit is missed, access to 2018/19 foreign capital losses is generally lost forever.

Taxation of UK resident non-domiciliaries

Deadline for action: 5 April 2023

Issue: Non-domiciliaries (non-doms) not within the ‘deemed domicile’ rules can currently opt in and out of the remittance basis charge annually and the charge is calculated according to the number of tax years of residence in the UK. Such non-doms may wish to benefit from the remittance basis of taxation for their foreign income and gains. If so, a remittance basis charge of £30,000 applies to non-doms resident in the UK for at least seven of the previous nine tax years, and £60,000 for those resident for at least 12 of the previous 14 tax years. 

Action: Non-doms who wish to claim the remittance basis must do so by the fourth anniversary of the end of the relevant tax year. Claims for the remittance basis to apply for the 2018/19 tax year must therefore be made by 5 April 2023.

Taxation of long term UK resident nom dom

Deadline for action: 5 April 2023

Issue: Non-domiciliaries (non-doms) are deemed to be domiciled in the UK if they have been UK resident for at least 15 of the 20 previous tax years. A ‘formerly domiciled resident’ (FDR) (someone born in the UK, with a UK domicile of origin, who has left the UK and returns to the UK after acquiring a non-UK domicile) is subject to stricter rules. If the 15 out of 20 rule is met, ‘ordinary’ non-doms are deemed to be domiciled in the UK for income tax, capital gains tax and inheritance tax purposes. An FDR is deemed to be domiciled in the UK for any period during which they are UK resident (although they are only deemed domiciled for IHT purposes if they have been resident in the UK in at least one of the previous two tax years).

Action: Individuals who will become deemed domiciled on 6 April 2023 and existing deemed UK domiciliaries may wish to review their financial position and their options, before the 2023/24 tax year starts, including considering whether to become non-UK resident. Those who have been UK resident since 2008/09 will become deemed domiciled on 6 April 2023 and may also wish to consider transferring assets into trust before that date as this may shelter them from inheritance tax.

Taxation of UK resident nom dom offshore

Deadline for action: 5 April 2023

Issue: Offshore trusts that already exist when a settlor becomes deemed domiciled, under the 15 of 20 previous tax years rule (excluding formerly domiciled residents), for income tax and capital gains tax purposes are ‘protected’ so that trust income and gains are not taxable in the UK until there is a distribution from the trust. This protection is lost (ie an offshore trust is ‘tainted’) if an addition is made to the trust by the settlor (or the trustees of an ‘associated trust’) when the settlor is domiciled or deemed domiciled in the UK. Additions include the settlor making a non-arm’s length loan to the trustees – or failing to convert existing loans to an arm’s length basis before becoming deemed domiciled.

Action: For those who will become domiciled or deemed domiciled from 6 April 2023, steps should be taken to ensure offshore trusts are not tainted by transactions that take place after that date.

Annual tax on enveloped dwellings – returns 

Deadline for action: 30 April 2023

Issue: 2023/24 annual tax on enveloped dwellings (ATED) returns and relief declaration returns, and 2022/23 further ATED returns (where a change in circumstances during the year increases the tax liability), in respect of relevant high value residential properties are generally due by 30 April 2023. Relevant high value properties are those owned by certain non-natural persons with a market value in excess of £500,000 (generally as at 1 April 2022 (1 April 2017 for further 2022/23 ATED returns) or on the date of any subsequent substantial acquisition or disposal). The ATED liability depends on the valuation band the property falls within (again generally based on market value as at 1 April 2022 (1 April 2017 for further 2022/23 ATED returns) or the date of any subsequent substantial acquisition or disposal). 

Action: Except where a later filing date applies, non-natural persons owning high value residential property should submit their ATED returns, further returns and/or relief declaration returns by 30 April 2023. Those with an ATED liability can apply to HMRC for a pre-return banding check (PRBC) to confirm which valuation band the property falls into, where there is ‘reasonable belief’ the property value is within 10% of a banding threshold. Although HMRC will not confirm the specific valuation, PRBCs should be applied for well before submitting the ATED return.

Annual tax on enveloped dwellings – payment  

Deadline for action: 30 April 2023

Issue: Any 2023/24 and further 2022/23  annual tax on enveloped dwellings (ATED) due must be paid by 30 April 2023, or the return filing date where a later filing date applies. ATED arises on UK residential properties valued above £500,000 (generally as at 1 April 2022 (1 April 2017 for further 2022/23 ATED returns) or on the date of any subsequent substantial acquisition or disposal) that are owned by certain UK or non-UK non-natural persons, including companies, collective investment schemes and certain partnerships.

Action: Owners of affected properties should pay any ATED due by 30 April 2023. The ATED liability depends on the valuation band the property falls within. The relevant bands and liabilities are as follows:

£500,001 - £1m   £4,150 (2023/24)     £3,800 (2022/23)
£1m - £2m      £8,450 (2023/24)   £7,700 (2022/23)
£2m – £5m   £28,650 (2023/24)    £26,050 (2022/23)
£5m – £10m    £67,050 (2023/24)     £60,900 (2022/23)
£10m – £20m    £134,550 (2023/24)    £122,250 (2022/23)
Over £20m   £269,450 (2023/24)    £244,750 (2022/23)

 

The charge is reduced on a pro-rata basis where, for example, the property is only owned or meets one of the exemptions for part of the period.

For more information, please get in touch with Gary Heynes.

Employment tax

Mandatory disclosure rules reporting

Deadline for action: Ongoing

Issue: UK intermediaries that promote or assist in the design or implementation of a cross-border arrangement that meets a relevant hallmark may be required to report details of that arrangement to HMRC under the mandatory disclosure rules. In certain circumstances, the obligation to report may instead fall on the relevant UK taxpayer. A cross-border arrangement may be reportable if it circumvents the automatic exchange of information between tax authorities under the common reporting standard or involves an opaque offshore structure that obscures the beneficial ownership of assets. A report must be made within 30 days of the reportable arrangement being made available for implementation or, for arrangements entered into before 28 March 2023, within a 30-day period beginning with the earliest of: that date; the reportable arrangement being ready for implementation; or, the first step in the implementation of the reportable arrangement being made.  

Action: Intermediaries and taxpayers should ensure that they have implemented appropriate procedures and processes and ensure that reporting obligations are met on a timely basis. 

Notification of uncertain tax treatments

Deadline for action: Ongoing – last full payment submission date falling in the financial year

Issue: Certain large businesses are required to notify HMRC where they have adopted an uncertain tax treatment (UTT) in corporation tax, income tax (including income tax due under PAYE) and/or VAT returns due to be filed on or after 1 April 2022. A tax treatment is ‘uncertain’ if it results in the recognition of an accounting provision or relies on an interpretation of tax legislation that is contrary to HMRC’s known view, and is reportable if it gives rise to a potential tax saving (when compared with the tax that would have been paid if a treatment that was not uncertain was adopted) of more than £5m in a return, or returns for the same financial year. The requirement to notify UTTs applies to corporate groups, single companies, partnerships and LLPs with annual turnover exceeding £200m and/or a balance sheet total of more than £2bn after excluding figures for non-UK entities other than for their UK permanent establishments and other activities subject to UK corporation tax. Notifications in respect of income tax due under PAYE are generally due at the same time as the last relevant return for the financial year where a UTT results from an interpretation of tax legislation that is contrary to HMRC’s known view, or at the same time as the last relevant return for the following financial year where a UTT results in the recognition of an accounting provision.

Action: Relevant businesses that draw up accounts to 31 March should ensure that, where appropriate, relevant UTTs in respect of full payment submissions (FPSs) for income tax due under PAYE are notified to HMRC by the date of the last FPS submission falling in the financial year.

Submit paper or electronic forms P46 (car)

Deadline for action: 2 February 2023, 5 April 2023 and 3 May 2023

Issue: Details of company cars provided to employees or withdrawn without a replacement for the previous quarter should be provided to HMRC using form P46(car).
These details are usually submitted electronically. The completed online form can, however, be printed out and submitted in paper form to HMRC by the relevant date. This method cannot be used for replacement vehicles and the form should not be used if the car benefit is taxed via the payrolling of benefits process.

Action: P46(car) forms (electronic or paper) covering the quarter to 5 January 2023 are required to be received by HMRC by 2 February 2023. P46(car) forms covering the quarter to 5 April 2023 are required to be received by HMRC by 5 April 2023 (electronic) or 3 May 2023 (paper). 

Onshore and offshore employment intermediaries – quarterly report

Deadline for action: 5 February 2023 and 5 May 2023

Issue: Employment intermediaries are required to make quarterly reports to HMRC where they have not operated PAYE. The quarterly reports for the quarters to 5 January 2023 and 5 April 2023 are due by 5 February 2023 and 5 May 2023 respectively. These reports require a considerable amount of information regarding all workers provided to their clients, including those operating via personal service companies (PSC), and related payments where the intermediary, or their payroll operator, did not operate PAYE.

Action: Quarterly employment intermediary reports must be made using HMRC’s report template and submitted using HMRC’s online service. Automatic penalties arise if the report is late or incorrect, with the amount of each penalty depending on the number of offences in a 12-month period: £250 (first), £500 (second) and £1,000 (third and later). The penalty clock is reset once there has been a 12-month period without a late or incorrect return.

PAYE and National Insurance contributions reporting and payments

Deadline for action: Monthly – from 19 (or 22) February 2023

Issue: To avoid interest and penalties, employers should make a full payment submission (FPS) to HMRC at the time they pay their employees and pay over deducted income tax and National Insurance contributions (NICs) by the due date. Income tax and NICs deducted under PAYE should be paid by the 19th of the following month if paid by cheque, or the 22nd if paid electronically. The FPS and, if applicable, an employer payment summary (EPS) should also be submitted by the 19th of the following month.

Action: Employers should submit their FPSs and EPSs (including, where applicable, a report of the apprenticeship levy due and allowance claimed) and pay their PAYE tax and NICs on time. Advance payment should be made where the payment date falls on a weekend. Late payments attract interest, currently at 6% per annum, and late filing gives rise to penalties of between £100 and £400 per month, depending on the number of employees. Employers that have incurred penalties have 30 days to appeal if appropriate.

Construction industry scheme reporting and payment dates

Deadline for action: Monthly – from 19 (or 22) February 2023

Issue: Written statements to subcontractors, CIS300 monthly returns of payments made by contractors to subcontractors, and payment of the construction industry scheme (CIS) tax deducted, should be made on a monthly basis.

Action: Contractors should provide a written statement to every subcontractor from whom a deduction has been made and submit their CIS300 returns by the 19th of the following month to avoid late filing penalties. To avoid interest and late payment penalties, CIS tax deducted should be paid by the 19th of the following month if paid by cheque, or the 22nd if paid electronically. Advance payment should be made where the payment date falls on a weekend.

Check for new advisory fuel rates

Deadline for action: 1 March 2022

Issue: HMRC revises the advisory fuel rates every quarter. These rates may be used when an employer reimburses employees for fuel for business travel in their company cars, and when an employer requires employees to repay the cost of fuel used for private travel in such vehicles.

Action: Employers should review HMRC’s advisory fuel rates each quarter to ensure that they are using the current rates. If employers reimburse such costs at different rates, records must be kept that support the rates used.

For more information, please get in touch with Anne-Marie Welch.

Indirect tax

VAT return filing and payment

Deadline for action: Monthly – from 7 February 2023

Issue: VAT registered businesses and other VAT registered organisations are generally required to file their VAT return and pay over their VAT liability on a quarterly (or else monthly) basis, one month and seven days after the end of the relevant quarter (or month). 

Action: VAT registered businesses and other VAT registered organisations should ensure their VAT returns are filed and payment received by HMRC no later than one month and seven days after the end of the VAT return period to avoid scope for late filing penalties.

Notification of uncertain tax treatments

Deadline for action: Monthly – from 7 February 2023

Issue: Certain large businesses are required to notify HMRC where they have adopted an uncertain tax treatment (UTT) in corporation tax, income tax (including income tax due under PAYE) and/or VAT returns due to be filed on or after 1 April 2022. A tax treatment is ‘uncertain’ if it results in the recognition of an accounting provision or relies on an interpretation of tax legislation that is contrary to HMRC’s known view, and is reportable if it gives rise to a potential tax saving (when compared with the tax that would have been paid if a treatment that was not uncertain was adopted) of more than £5m in a return, or returns for the same financial year. The requirement to notify UTTs applies to corporate groups, single companies, partnerships and LLPs with annual turnover exceeding £200m and/or a balance sheet total of more than £2bn after excluding figures for non-UK entities other than for their UK permanent establishments and other activities subject to UK corporation tax. Notifications in respect of VAT are generally due at the same time as the last relevant return for VAT periods ending within the financial year where a UTT results from an interpretation of tax legislation that is contrary to HMRC’s known view, or at the same time as the last relevant return for the following financial year where a UTT results in the recognition of an accounting provision.

Action: Relevant businesses that draw up accounts for financial years ending between 31 December and 31 March should ensure that, where appropriate, relevant UTTs in respect of VAT are notified to HMRC by the relevant VAT return filing date. 

Plastic packaging tax return filing and payment

Deadline for action: 28 April 2023

Issue: Businesses that are subject to plastic packaging tax (PPT) are required to file their PPT return and pay over their PPT liability on a quarterly basis, on the last working day of the month following the end of the relevant calendar quarter. 

Action: Businesses subject to PPT should ensure their PPT return for the calendar quarter to 31 March 2023 is filed and payment made to HMRC no later than 28 April 2023 to avoid scope for late filing and/or late payment penalties.