The temporary reduced rate of 12.5% for hospitality ends on 31 March. The VAT rate reverts to the standard rate of 20% from 1 April.
For those businesses (making taxable sales below £ 85,000 a year) that are not currently submitting returns via Making Tax Digital (MTD) accounting software, they will be obliged to do so for the first return that is wholly after 1 April. The first quarterly return that must be submitted by MTD is either 06/22 or 07/22 or 08/22 depending upon the return stagger used.
A new, more lenient penalty system for failure to pay and submit returns on time, replacing the existing Default Surcharge was be introduced from 1 April but has been delayed until 2023. The new points based system applies to both VAT and Income Tax Self-Assessment. There is no penalty if payment is received within 15 days of the due payment date of the VAT return.
No requirement to submit Intrastat Supplementary Declarations for Arrivals or Despatches beyond period 12/21, unless you are trading with Northern Ireland.
The VAT registration compulsory threshold will remain at £ 85,000 of taxable sales in the previous 12 months, throughout 2022. After taking account of inflation, the threshold falls in real terms.
Customs/international trade
All imports from the EU require a full entry from 1 January 2022.
Imports from the EU are more likely to be physically checked at the UK border/Inland Border Posts by Customs/Border Force staff. Additional documents required for imports from the EU either on 1 January or 1 July including health certificates and phytosanitary certificates.
More Freeports to be become operational during the year. Eight freeports have been authorised but only one, Teesside is currently open. The Freeport provides similar benefits to a Customs warehouse, so no customs duty, VAT or excise duty (alcohol, oils, tobacco) are due at import. There are other direct tax benefits available in a Freeport.
For more information on this topic, or if you require any advice please get in contact with a member of the VAT and Customs Duty team.
