Notices of accelerated payment
Before the final tax liability is agreed upon or determined, taxpayers who have used a tax avoidance scheme may be required to make a payment of the amount that relates to their use of the scheme.
This is known as an advanced payment notice (APN) or an expedited partner payment in the event of members of a partnership.
An accelerated payment notice may only be issued under certain circumstances, for example, when the taxpayer is using certain arrangements disclosed under the Disclosure of Tax Avoidance Scheme (DOTAS) rules or the recipient is subject to a counteraction notice under the General Anti-Abuse Rule (GAAR).
Where an APN is issued, payment is due 90 days after the date on which the APN is received. There are penalties for not paying the accelerated payment on time.
HMRC has recently published an updated list of tax avoidance schemes on which users may be charged an accelerated payment.
Tax codes for employees
The P9X form is used to notify employers of tax codes to use for employees. The latest version of the form has just been published and shows the tax codes to use from 6 April 2022. The forms state that the basic personal allowance for the tax year starting 6 April 2022 will, as expected, be £12,570 (£12,570 2021-22) and this means that the tax code for emergency use will remain at 1257L.
The basic rate limit will be £37,700 (£37,700 2021-22) except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an intermediate rate. The new form P9X is available online on GOV.UK to download or print.
The P9X (2022) form also includes information to help employers in the new tax year. The document reminds employers that have new employees starting work between 6 April and 24 May 2022, and who provide you with a P45, to follow the instructions at www.gov.uk/new-employee
Income Tax set-off of rental business losses
Where a property business makes a loss, the loss can usually be carried forward and set against future rental business profits. HMRC’s guidance is clear that any losses made in one rental business cannot be carried across to any other rental business the customer carries on at the same time in a different legal capacity.
Under limited circumstances, property losses can be set against the general income of the same year or the following year. However, where a property business claims loss relief against general income, they must take the full amount of the loss available up to the amount of their general income.
Income Tax rental business losses can only be set against general income to the extent that they are attributable to:
- certain capital allowances,
- certain agricultural expenses
A claim has to be made on or before the first anniversary of 31 January following the end of the year of assessment. For example, where relief is to be claimed for the 2021-22 tax year, the normal filing date would be 31 January 2023 and the claim for property loss relief must be made by 31 January 2024.
There are exceptions to the loss relief rules for properties that are let on uncommercial terms (for example, at a nominal rent to a relative)