The Telegraph Tax Guide 2022 : Your Complete Guide to the Tax Return for 2021/22

The Telegraph Tax Guide is the UK's bestselling tax handbook, containing everything you need to know about completing a self-assessment tax return for the 2021/22 financial year. With advice on how to complete self-assessment tax returns and a number of tax saving tips, this indispensable book includes: - Key changes from the Budget and Treasury Statements - Dealing effectively with HR Revenue and Customs - Worked illustrations showing you how to complete your tax submission - How living or working abroad affects the tax that you pay - Tax saving tips which help you save money Whether you are self-employed, work part time of full time, are unemployed or retired, if you pay tax The Telegraph Tax Guide is invaluable. It helps ensure that you are as tax efficient as possible, offering practical advice, timetables and examples that make the complex and challenging world of tax returns easier to understand. Cover 1 Contents 6 About the author 14 Introduction 16 01 You and HMRC 18 Tax offices 18 Wealthy taxpayers 19 Taxpayers with particular needs 19 Accounts offices 19 Dealing with HMRC 20 Personal tax account 21 Compliance checks and enquiries 22 Determinations 23 Assessments and appeals 23 Prosecutions 24 Your Charter 24 Complaints 27 Changes in legislation 28 02 Tax rates and allowances 30 Income Tax rates 30 Scottish Income Tax rates 30 Allowances 31 Personal allowance 32 Marriage allowance 33 Married couple’s allowance 34 Blind person’s relief 38 03 Tax credits 40 Who can claim? 40 Child Tax Credit 41 Working Tax Credit 42 Income limits 44 How to claim 44 Payment 45 Tax credits and other benefits 45 Tapering 45 Annual renewal 47 Changes in circumstances 48 Income disregard 49 Penalties and interest 49 Help and advice 50 04 Interest payments and other outgoings 52 Home annuity loans 53 Buy-to-let: finance costs 53 Business loans 55 Gift Aid 56 Gifts of assets to charities 57 Payroll giving 58 05 Working in employment 60 Am I employed? 60 Earnings 61 The Pay As You Earn (PAYE) system 61 Code numbers 61 Emergency tax codes 65 How tax is worked out using your tax code 66 Form P60 66 Starting work 67 Moving jobs 67 Tax-deductible expenses 69 Tax-free expenses 70 Employee travel 72 Home working 74 Benefits-in-kind 74 Employee share ownership 82 Enterprise Management Incentives 84 Payments on termination of employment 85 06 Value Added Tax 88 What is VAT? 88 Rates of VAT 88 Exempt supplies 89 Registration 89 Voluntary registration 91 Cancellation of registration 92 Help from HMRC 92 VAT invoices 92 Records, accounting and Returns 93 Online filing of Returns 94 Making VAT digital 95 Input tax 95 Motor cars and fuel 96 Bad debts 97 Special schemes for retailers 98 Flat Rate Scheme 98 Cash accounting 99 Annual accounting 100 VAT visits and inspections 101 Penalties, surcharges and interest 101 Appeals 103 Complaints 103 07 Working for yourself 104 Am I self-employed? 104 Starting up in business 105 Records 105 Accounts 106 Cash accounting for businesses 110 Fixed-rate deduction scheme 111 Small business income allowance 112 Tax Return information 113 Profits for tax 115 Profits of the tax year 116 Pre-trading and post-cessation expenses 118 Capital allowances 119 Losses 122 Limit of reliefs 124 Taking on staff 125 Some other ways to save on tax 126 Foster carers 127 Furnished holiday accommodation 128 Other special situations 129 08 National Insurance and state benefits 130 National Insurance numbers 130 National Insurance Contributions 131 Social Security benefits 134 Capital limits 139 Cap on benefits 140 Benefits and rates 141 State Pension Credit 141 09 State and private pensions 144 The new State Pension 144 Deferment 145 State Pension forecast 147 Private pensions 147 Stakeholder pensions 153 10 Savings and investment income 154 Tax-free income 154 Savings income 155 Dividend income 157 Accrued income 158 Rents 159 Rent-a-room 161 Non-qualifying life policies 162 Individual Savings Account 164 Lifetime ISA 166 Help-to-Buy ISA 167 Help-to-Save 168 Enterprise Investment Scheme 168 Seed Enterprise Investment Scheme 169 Venture Capital Trusts 169 Overseas investment income 170 Joint income 170 11 The family unit 172 Living together 172 Marriage/civil partnership 172 Children 173 High Income Child Benefit Charge 174 Tax-Free Childcare 175 The Child Trust Fund 175 Junior Individual Savings Account 176 Separation and divorce 176 Old age 177 Death 180 12 Residence and domicile 182 Residence 182 The automatic residence test 183 Sufficient ties test 183 Working abroad: expenses 185 Leaving the United Kingdom permanently 185 Allowances for non-UK residents 185 Income from UK property 186 Double taxation relief 187 Going abroad: Capital Gains Tax 187 Residential property in the United Kingdom 188 Coming to the United Kingdom permanently 189 Domicile 190 Taxation of non-domiciliaries 190 13 Capital gains 194 Taxable gains 194 Tax payable 195 Married couples/civil partners 197 Working out chargeable gains 198 Relief for losses 199 Business Asset Disposal Relief 200 Investors’ Relief 201 Assets owned on 31 March 1982 201 Investments in shares 202 Your home 205 A second home 207 Chattels 209 Gifts and valuations 210 Short life assets 211 Part disposals 211 Enterprise Investment Scheme 211 Seed Enterprise Investment Scheme 212 Venture Capital Trusts 213 Inheritances 213 14 How to complete your Tax Return and work out your tax 214 Do I need to complete a Tax Return? 214 Who has to complete a Tax Return? 214 Employees and pensioners with complex tax affairs 215 How do I register for Self Assessment? 215 Filing deadlines 216 The Tax Return 217 Getting started 217 Keeping proper records 218 Filling in your Tax Return 221 Working out your tax 230 Illustration 231 What HMRC do 234 Some other hints on efficient tax compliance 234 15 Paying your tax, interest and penalties 236 Tax payment dates 236 Payments on account 237 Reduced payments on account 237 Statements of Account 238 Paying your tax 239 Certificates of tax deposit 241 Business Payment Support Service 241 What if I can’t pay my tax? 242 Date of receipt 242 Interest 243 Remission of tax 243 Late payment penalty 244 Penalties 245 16 Elections and claims: time limits 248 17 Inheritance Tax 252 Potentially exempt transfers 252 Chargeable lifetime gifts 253 Gifts with reservation and pre-owned assets 253 Exemptions 253 Your home 255 Business property 256 Agricultural property 256 Rates of tax payable 257 Taper relief 257 Family home allowance 258 Transferable nil rate band 260 Death 262 Sales at a loss 264 Payment of tax 265 Interest and penalties 265 Excepted estates 266 Intestacy 266 Legacies 268 How to save on Inheritance Tax 268 18 Budget measures 270 2021/22 Personal Allowances 271 Tax rates and bands for 2021/22 272 Scottish tax rates and bands for 2021/22 272 Welsh tax rates for 2021/22 273 Rates of National Insurance Contributions for 2021/22 273 Rates of Child Tax Credits and Working Tax Credits for 2021/22 274 Pension Lifetime Allowance 275 Personal Savings Allowance 275 Savings income 275 Dividend income 276 Tax-free savings accounts 276 Value Added Tax 276 Capital Gains Tax 276 Inheritance Tax 277 Looking into the future 277 Updates from the Spring 2022 Statement 278 Appendices 280 1. Flat-rate allowances for special clothing and the upkeep of tools for 2021/22 280 2. HMRC (VAT) notices and leaflets 282 3. Rates of National Insurance Contributions for 2021/22 283 4. Social Security benefits 283 5. Rates of main Social Security benefits for 2021/22 285 6. HMRC (Revenue) explanatory booklets, leaflets and helpsheets 287 7. Main dates of the Self Assessment calendar: Tuesday 6 April 2021 to Tuesday 5 April 2022 289 Index 290