Budget 2022 – Detailed Summary

The Chancellor of the Exchequer, Rishi Sunak, today announced changes to income tax, fuel duty and National Insurance in his 2022 Spring Statement, with a backdrop of forecast growth of 3.8% this year, eroded by forecast inflation of 7.4% this year and spend of £83b on debt interest alone.

And this is before the full impact of the Ukraine-Russia war hits. Many may find themselves somewhat underwhelmed by the changes, with the cost of living increasing at the highest rate since records began nearly 70 years ago.

Here is a detailed summary of the key announcements made, for the year ahead and further into the future. “[T]oday’s statement builds a stronger, more secure economy for the United Kingdom” Do you agree? We summarise the key headlines here.

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Budget 2022 – Key Headlines

With a backdrop of forecast growth of 3.8% this year, eroded by forecast inflation of 7.4% this year and spend of £83b on debt interest alone, The Chancellor of the Exchequer, Rishi Sunak, today announced changes to income tax, fuel duty and National Insurance in his 2022 Spring Statement.

However, many may find themselves somewhat underwhelmed by the changes, with the cost of living increasing at the highest rate since records began nearly 70 years ago, with worse to come once the impact of the Ukraine-Russia war hits. Many calls of “Is that it?” went unanswered, although Rishi did hint more could be done in the future, if required.

Below we summarise the key headlines here. For more detailed analysis, please see our detailed summary.

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What protection do you have against a HMRC enquiry?

Each year HM Revenue & Customs (‘HMRC’) undertake an enormous number of tax enquiries into individuals and businesses to check they have paid the right amount of tax, both on a random and a selective basis. Since 2010 HMRC have strengthened their approach from this point of view and the general trend has been a year-on-year increase in the number of tax enquiries opened.

HMRC can consider all aspects of taxation and more recently HMRC have also used investigations to ensure that the measures put in place to support the economy through the Covid-19
pandemic have been utilised correctly.

If you are selected for a tax enquiry, we will always robustly defend you from HMRC’s questions, but the detailed questions asked can often be time consuming and intrusive.  Our fees can amount to thousands of pounds, even if no extra tax is due.

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MTD 2022 update

Making Tax Digital (‘MTD’) is an HMRC initiative attempting to transform the UK tax system, with more regular and detailed submissions of information and payments of tax to HMRC electronically.

Whilst it has been delayed several times, it aims to make tax administration more effective, efficient, and easier for taxpayers through the implementation of a fully digitalised tax system, whilst also reducing HMRC’s overheads for managing tax affairs.

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How can I reduce Corporation Tax 2022?

You pay a corporation tax rate of 19% on the profits made by your limited company and this is due to increase to up to 25% from 1 April 2023.

Profit is defined by HMRC, in the strictest sense, as whatever is left from your revenues after you’ve paid for everything you had to purchase and every person you had to employ (including yourself, salaries, not dividends).

In this article, we look at 18 perfectly legitimate and legal ways to reduce the amount you pay in corporation tax, assuming they are wholly and exclusively for the purpose of your trade.

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Pre-Year End Tax Planning Opportunities 2022

We appreciate 2021 has been another challenging year as we have been putting one foot in front of the other, so putting money aside or looking to reduce your tax probably couldn’t have been further from your mind. However, as the 5th April 2022 approaches, we don’t want you to miss out on the relevant allowances and reliefs to reduce your tax as part of your financial planning.

We therefore include below our top ten tips for you to consider to reduce the amount of tax you will end up paying in the 2021/22 tax year, if you are able to.

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How to reduce Corporation Tax?

You pay a corporation tax rate of 19% on the profits made by your limited company and this is due to increase to up to 25% from 1 April 2023 following the Spring Budget.

Profit is defined by HMRC, in the strictest sense, as whatever is left from your revenues after you’ve paid for everything you had to purchase and every person you had to employ (including yourself, salaries, not dividends).

In this article, we look at 18 perfectly legitimate and legal ways to reduce the amount you pay in corporation tax, assuming they are wholly and exclusively for the purpose of your trade.

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HMRC Fraud Investigation Service

Established in 2015 through the merger of the Special Investigations Unit and the Criminal Investigations Unit, the Fraud Investigation Service (FIS) is the elite group within HM Revenue and Customs (HMRC) investigating cases of suspected serious tax evasion, tax fraud, and aggressive tax avoidance.

For decades, Governments of all colours have been concerned with closing down and seizing the assets of criminal gangs and recovering tax revenues denied to them through fraud. HMRC have been similarly concerned with closing the tax gap – the difference between what they think they should be collecting in tax and what they actually end up collecting.

The HMRC FIS was born as a result.

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