Other news in brief

HMRC have announced that they will be waiving late filing and late payment penalties for 2020/21 self-assessment returns for one month, in recognition of the pressures facing taxpayers and agents due to COVID-19. This means that: (i) late filing penalties will not be issued if the return is filed online by 28 February 2022; and (ii) late payment penalties will not be issued if the payment is made by 1 April 2022. Please note that this is a penalty waiver, not an extension to the statutory filing and payment deadlines which remain at 31 January 2022. As such, interest on late payments will be charged from 1 February 2022.

On 23 December 2021, HM Treasury announced that the Chancellor of the Exchequer has commissioned the Office for Budget Responsibility (OBR) to produce an economic and fiscal forecast for Wednesday 23 March 2022. These forecasts are generally produced by the OBR in advance of a Spring Statement or Budget so it appears likely one or other of these events will take place on 23 March. The Government’s normal tax policy cycle has been disrupted in recent years and we have had a Budget in the spring in both 2020 and 2021 but it is unclear currently whether we will see a return to the Government’s preferred approach of one annual Budget in the autumn this year. If the Chancellor confirms a Spring Statement for March then significant tax or spending announcements are more likely to be held back until a Budget takes place later in the year.

The Public Bill Committee stage for Finance (No. 2) Bill 2021-22 (here referred to as Finance Bill 2022) commenced on 14 December 2021. Prior to the House of Commons Christmas recess, various provisions of the Bill were agreed by the Committee without amendment, and Clause 14 and Schedule 2 (qualifying asset-holding companies) were agreed with the amendments proposed by the Government. Prior to the recess, the Government also proposed amendments to the legislation on the notification of uncertain tax treatment for large businesses (Schedule 15), however, these have not yet been considered by the Committee. The proposed changes to Schedule 15 are intended to ensure that: (i) a business is only required to notify of a provision with respect to VAT or PAYE after (rather than before) deciding to include a provision in its accounts; and (ii) a partnership need only notify about provisions in its own accounts, rather than the accounts of its members. The Public Bill Committee is next scheduled to meet on 11 January and will conclude on 13 January.

The Bank of England Monetary Policy Committee voted on 16 December 2021 to increase the Bank of England base rate to 0.25 percent from 0.1 percent. As a consequence of the change in the base rate, HMRC have increased interest rates for late payments to 2.75 percent with effect from 4 January 2022. Repayment interest rates remain unchanged.