March 2022 Summary
Businesses urged to apply for remaining COVID-19 support grants
Businesses are being encouraged to apply for remaining coronavirus (COVID-19) grant funding from local authorities.
Hospitality, leisure and accommodation businesses can still apply for one-off cash grants of up to £6,000 through the Omicron Hospitality and Leisure Grant scheme.
The funding is made up of £556 million available through the Omicron Hospitality and Leisure Grant (OHLG) scheme and a further £294 million through the Additional Restrictions Grant (ARG) scheme.
The OHLG scheme provides businesses in the hospitality, leisure and accommodation sectors with one-off grants of up to £6,000 per premise.
To provide further support to other businesses, the ARG scheme provides councils with funding they can allocate at their discretion to businesses most in need, such as personal care businesses and supply firms.
Paul Scully, the Minister for Small Business, said:
'We're working to get our economy running on all cylinders again so we can focus on making the UK the best place in the world to work and do business, creating jobs along the way.
'Eligible businesses should apply as soon as possible for the grants available to help them put the pandemic behind them and get on a sounder footing.'
Internet link: GOV.UK
HMRC raises late payment interest rate to 3%
Following the decision by the Bank of England to increase the base rate, HMRC has confirmed that the late payment interest rate rose a quarter of a percent.
The increase applies from 14 February 2022 for quarterly instalment payments and from 21 February 2022 for non-quarterly instalment payments.
On 2 February 2022, the Bank's Monetary Policy Committee (MPC) increased the base rate to 0.5%.
As HMRC interest rates are linked to the Bank of England base rate, the increase in the base rate from 0.25% to 0.5% triggered an increase in rates for late payments.
On 4 February 2022, HMRC announced that the current late payment interest rate applied to the main taxes and duties would rise to 3% from 2.75%, effective from 21 February 2022.
The 3% rate is applied to late payments for income tax, national insurance contributions (NICs), capital gains tax (CGT), stamp duty land tax (SDLT), stamp duty and stamp duty reserve tax.
The corporation tax pay and file rate will also rise to 3% for late payments, while the repayment rate remains at 0.5%.
The rate for corporation tax self assessment, if unpaid from normal due date, will also be charged at 3%. The interest charged on underpaid quarterly instalment payments rises to 1.5% from 1.25%.
This is the second rate rise in just over a month following two consecutive rises in the Bank of England base rate. In line with the December 2021 announcement, interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments remains at 0.5%, which is unchanged since March 2009.
Internet link: GOV.UK
MPs call for road pricing to replace motoring taxes
The government must overhaul motoring taxes as it phases out new diesel and petrol vehicles, according to MPs.
MPs on the Transport Committee say the government must come up with new policy options by the end of the year. A ban on the sale of new diesel and petrol vehicles will be introduced by 2030, which means £35 billion will be lost in tax revenue.
In a report entitled Road Pricing, the Committee favoured a road charging system based on technology which measures road use.
Any scheme would include the drivers of electric vehicles, who would be required to pay for road usage. It would also cover vans and HGV vehicles, as well as overseas vehicle drivers.
Huw Merriman MP, Chair of the Transport Committee, said:
‘We need to talk about road pricing. Innovative technology could deliver a national road-pricing scheme which prices up a journey based on the amount of road, and type of vehicle, used. Just like our current motoring taxes but, by using price as a lever, we can offer better prices at less congested times and have technology compare these directly to public transport alternatives.
‘By offering choice, we can deliver for the driver and for the environment. Road pricing should not cost motorists more, overall, or undermine progress on active travel. Work should begin without delay. The situation is urgent. New taxes, which rely on new technology, take years to introduce.
‘A national scheme would avoid a confusing and potentially unfair and contradictory patchwork of local schemes but would be impossible to deliver if this patchwork becomes too vast. The countdown to net zero has begun. Net zero emissions should not mean zero tax revenue.’
Internet link: Parliament website
Advisory fuel rates for company cars
New company car advisory fuel rates have been published and took effect from 1st March 2022.
The guidance states: ‘you can use the previous rates for up to one month from the date the new rates apply.’ The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 March 2022 are:
Engine size - Petrol
1400cc or less - 13p
1401cc - 2000cc - 15p
Over 2000cc - 22p
Engine size - LPG
1400cc or less - 8p
1401cc - 2000cc - 10p
Over 2000cc - 15p
Engine size - Diesel
1600cc or less - 11p
1601cc - 2000cc - 13p
Over 2000cc - 16p
HMRC guidance states that the rates only apply when you either:
reimburse employees for business travel in their company cars
require employees to repay the cost of fuel used for private travel.
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is 5p per mile. Electricity is not a fuel for car fuel benefit purposes.
If you would like to discuss your company car policy, please contact us.
Internet link: GOV.UK AFR