CPA Bulletin

www.cpa.uk.net CPA Bulletin > November 2021 39 LEGAL: 2 At the moment, there are penalties for the late filing of VAT returns and late payment of VAT are dealt with under the default surcharge regime within HMRevenue and Customs (HMRC). This means that where either a return is filed late, or a payment is received late, the business receives a Surcharge Notice. These are then “on notice” for the next twelve months, with further defaults penalised by a charge calculated by reference to the tax due. There are several perceived faults with this system. Firstly, a business can avoid a charge for late filing by paying the VAT due in full. Secondly, there is no difference in the level of penalty for a return or payment made one day late compared with one made months late. But this will all change from 1st April 2022. From that date, there will be separate penalties charged for late filing and late payment. Additionally, the penalties will increase in stages - punishing those who file or pay significantly later more than those who miss deadlines by a few days. A key feature of the new system is that it will no longer be possible to avoid a late filing penalty if the VAT is paid on time, or if the return shows a repayment is due. If you have any queries regarding this change in policy, then you should discuss this with your Accountant. VAT Penalty Overhaul Confirmed for 2022 In response to a consultation on sexual harassment in the workplace, which was open between July to October 2019, the Government has announced it will be introducing a new duty requiring employers to take proactive steps to prevent harassment occurring. Section 26 of the Equality Act 2010 defines sexual harassment as “Engaging in unwanted conduct of a sexual nature, and the conduct has the purpose or effect of violating dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment.” The new duty would see changes to existing laws, under which an employer is only liable if an incident of sexual harassment occurs, and they have failed to take preventative steps. The Government is hopeful that this new duty will encourage employers to take positive proactive steps to make the workplace safer for everyone. The consultation proposed that, if a proactive duty were introduced, it should mirror the existing legal requirement on employers, but shift the point of liability to emphasise the importance of taking necessary preventative steps before an event occurs. Therefore, under the proposed duty, employers would still be required to take ‘all reasonable steps’ to prevent sexual harassment in their workplace - just as they are now - but they could potentially be held to account for failing to take these actions without the need for an incident to have occurred. The Government has also stated it will be looking into extending the timeframe to bring cases of sexual harassment to an Employment Tribunal, from 3 months to 6 months. In sexual harassment cases, the existing time limits may be particularly problematic, given that the trauma experienced can lead to a significant delay in considering recourse through the Employment Tribunal; and in addition, that the existing time limit was considered incompatible with the length of a company’s internal grievance procedure. The report also outlines that Government will be introducing explicit protections from third-party harassment including clients or customers. New Duty to Protect Staff from Sexual Harassment at Work The Government had announced in early September that the Temporary Insolvency Restriction Protections are being lifted, and new targeted measures to support small business and commercial tenants will be introduced. To help protect businesses from insolvency a number of changes were introduced under the Corporate Insolvency and Governance Act (Coronavirus) to protect business from creditor action since June 2020, however, these restrictions have been phased out from 1st October 2021. New legislation will come into force until March 2022 and will include: • Protecting businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more. • Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action. Should you wish to learn more on this, then speak to a member of the Top Service helpdesk on 01527 518800 . This article was kindly drafted by Top Service. Government Announced End of Temporary Insolvency Measures