Welcome to the April 2022 Newsletter from Certax Accounting

On 1 April 2022 the Plastic Packaging Tax (PPT) takes effect, and will be charged at a rate of £200 per tonne. The PPT only applies to manufacturers and importers of plastic packaging components which contain less than 30% recycled plastic.

Meanwhile, research published by HMRC has revealed that it collected an extra £195 million via Making Tax Digital for VAT (MTD for VAT). The tax authority stated that the collection of the additional revenue was due to the reduction in error on tax returns.

Plastic Packaging Tax comes into force this April

The UK government will introduce the PPT on 1 April 2022.

From this date, firms that manufacture or import plastic packaging must check if they are liable for the PPT. Firms will have 30 days to register for the tax from the date they become liable.

Businesses will not need to file a PPT return or pay the tax until July 2022 at the earliest. However, they may need to register before this point.

The government says the PPT will incentivise businesses to use recycled plastic in the production of plastic packaging. Manufacturing or importing ten tonnes or more of plastic packaging containing less than 30% recycled plastic will be taxed at £200 per tonne.

Businesses over the registration threshold who already include recycled plastic in their packaging will still need to register but will not pay any tax.

The government said: 'Businesses who import plastic packaging need to check who is responsible for complying with and paying the PPT. This is unlikely to be the suppliers.

'The retailer is the consignee and in control of the import, so are the businesses who will need to register for the tax where they pass the ten-tonne registration threshold.

'If businesses import finished plastic packaging components using incoterms, they will need to agree with the other business about who is responsible for including the details on their PPT return and paying the tax.'

MTD for VAT brings in an extra £195 million in tax

An estimated £195 million extra tax revenue has been collected via MTD for VAT, according to research from HMRC.

The research, conducted by HMRC and peer reviewed by independent academics, showed that in 2019/20 the estimated additional tax revenue was between £185 million to £195 million, compared to a previous estimate of £115 million.

The tax authority stated that the additional revenue was due to the reduction in error on tax returns.

The research revealed that, for businesses below the £85,000 turnover threshold, the estimated additional tax revenue that is collected is £19 per business per quarter, which is a 2.2% increase from the average liability estimates for businesses not signed up to MTD.

For businesses above the threshold, the estimate of the average additional tax revenue is £57 per business per quarter and is a 0.9% increase.

Lucy Frazer, Financial Secretary to the Treasury, said: 'This research provides peer reviewed evidence that Making Tax Digital is likely already achieving what it was intended to do – cutting out error. This will help cut down the amount of time businesses spend on their tax affairs, freeing up more time for them to do what they care most about – being productive and growing.'

ESSENTIAL TAX DATES FOR APRIL

1 April All VAT registered businesses to keep digital records and submit VAT returns under the Making Tax Digital (MTD) regime. 5% late payment penalty on any 2020/21 outstanding tax which was due on 31 January 2022 and still remains unpaid.

5 April Deadline for 2021/22 ISA investments and pension contributions. Last day to make disposals using the 2021/22 CGT exemption.

14 April Due date for income tax for the CT61 period to 31 March 2022.

19 April Automatic interest on unpaid PAYE tax, Student loan deductions, Class 1 NI or CIS deductions for 2021/22. Penalties may also apply if any payments have been made late throughout the tax year. Small employer PAYE quarterly payments due for pay period 6 January to 5 April 2022. PAYE, Student loan and CIS deductions are due for the month to 5 April 2022. Deadline for employers' final 2021/22 PAYE return to be submitted online.

QUOTE OF THE MONTH

'The government's decision to include paid-for scam adverts in the Online Safety Bill, along with promises to make reimbursement mandatory for bank transfer scam victims was a huge step in the right direction, but it's now up to the government and regulators to get it right.'

Jenny Ross, Money Editor at consumer group Which?, commenting on its data that revealed that online shopping and auction fraud are amongst the most reported types of fraud in the UK.