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ICAEW’s Tax School highlights key information and reminders for brokers together with: new choice for identification verification; withdrawal of FBI2; crypto positive factors and losses; and voluntary class 2 nationwide insurance coverage contributions (NIC).
Agent Update 104 incorporates quite a few updates for brokers. Many have been shared in tax news, however the next also needs to be famous.
HMRC identification verification: a brand new choice
When organising a authorities gateway person ID to entry HMRC companies, taxpayers must confirm their identification. HMRC is now offering an alternate method to do that.
A brand new identification checking app lets taxpayers use the digicam on their cell phone to substantiate a match with both their UK photocard driving licence or ePassport.
To make use of the app, taxpayers should:
- have a working digicam on their machine;
- use the Chrome browser in the event that they’re utilizing a cellphone working Android software program;
- have an iPhone 7 or above in the event that they’re utilizing an iPhone.
HMRC plans so as to add extra choices for proving identification throughout 2023. If they like, taxpayers can present two types of proof as a substitute of utilizing the brand new app. Taxpayers who have already got HMRC sign-in particulars are unaffected.
Arrange a Authorities Gateway ID:
Kind FBI2 to be withdrawn
The authorise a tax agent to use PAYE and Construction Industry Scheme (CIS) online services (FBI2) form is being faraway from GOV.UK on 31 January 2023. The revised authorising your agent 64-8 form launched in March 2022 can be utilized to authorise brokers for Employer PAYE and CIS companies.
HMRC will proceed to recognise present authority offered on an FBI2. ICAEW understands that HMRC will proceed to course of new FBI2 varieties that it receives, however brokers are inspired to make use of a 64-8.
Positive aspects and losses from cryptoassets
Disposals or exchanges of cryptoassets might give rise to positive factors which are taxable for capital positive factors tax (CGT) functions, or allowable losses. Taxable positive factors arising between 6 April 2021 and 5 April 2022 ought to be reported on a taxpayer’s self evaluation tax return due by 31 January 2023, and any related tax paid by that date.
Positive aspects on cryptoassets can come up in a lot of methods, not solely on transactions that people might determine as disposals. HMRC has printed guidance and a devoted manual setting out its interpretation of how the CGT laws applies to cryptoassets.
Voluntary class 2 NIC for self-employed merchants with small earnings or losses
Agent Update helpfully states the 2022/23 and 2023/24 class 2 and 4 thresholds for self-employed earnings. Nevertheless, it doesn’t point out that self-employed people with earnings of lower than the small earnings threshold of £6,725 (2021/22 £6,515) or losses can voluntarily pay class 2 NIC of £3.15 (2021/22 £3.05) per week.
To inform HMRC that voluntary funds will likely be made in these circumstances, put ‘x’ in field 36 of the short self-employment page or field 100 of the full self-employment page of the self evaluation return. The category 2 NIC ought to be paid by 31 January, alongside any self evaluation balancing fee. Paying voluntary NIC entitles the dealer to state pension and sure contributory social safety advantages.
From April 2022, these with earnings above the small earnings threshold (£6,725) and not more than the decrease earnings threshold (£11,908) aren’t liable to pay class 2 NIC, however will likely be given an NIC credit score. This credit score will present the identical advantages as if class 2 NIC had been paid (see above).
In 2022/23, class 2 NIC of £3.15 pw (2021/22 £3.05 pw) should be paid if self-employed earnings exceed the decrease earnings threshold of £11,908 (2021/22 small earnings threshold of £6,515). Merchants with earnings under the small earnings threshold or losses can nonetheless pay voluntary class 2 NIC.
The category 4 decrease earnings restrict is at present £11,909 a yr (2021/22 £9,568). In 2022/23, merchants with earnings of this determine and above can pay class 4 NIC at 9.73% (2021/22 9%) as much as the higher earnings restrict of £50,270 (2021/22 £50,270) and a couple of.73% (2021/22 2%) on earnings above this restrict.
The thresholds at which the self-employed begin paying each lessons 2 and 4 NIC, (ie, the category 2 decrease earnings threshold and the category 4 decrease earnings restrict), have been aligned for 2022/23 onwards.
The Tax School
ICAEW’s Tax School is recognised internationally as a number one authority and supply of experience on taxation. The school is the voice of tax for ICAEW, liable for all submissions to the tax authorities. Be a part of the School for skilled steerage and help enabling you to offer the perfect recommendation on tax to your purchasers or enterprise.
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