The Association of Taxation Technicians (ATT) is calling for guidance from HMRC on the status of virtual office seasonal parties this year.

The ATT is asking for clarity on whether a 'virtual party' – particularly one that includes a party box – will be eligible for the usual tax exemption that applies for annual parties. Current rules allow employers to spend up to £150 per head (including VAT) towards the costs of an annual function such as a seasonal party, without creating a tax liability.

To qualify the party must be an annual event which is open to all staff generally, or all staff at a specific location, if the employer has more than one location. If the employer has more than one annual event in a tax year, for all the events to be tax-free the combined cost per head must be under £150.

The ATT has warned that with employers considering alternative ways to express seasonal greetings and boost morale, online events and so-called 'virtual parties' could create unintended tax consequences.

Jeremy Coker, President of the ATT, said: 'It is a pity that HMRC are still on mute about virtual Christmas parties.

'There have been suggestions that a 'virtual party' is not really a party for tax purposes – even though so many other activities such as conferences and training have been moved online.

'We are also concerned that HMRC will seek to split out the cost of any food, drink or party favours sent to employees' homes as a party box to accompany the online event, and treat this element as a taxable benefit because some employees could opt out of the event itself.'

HMRC has started writing to 4,000 businesses in the hospitality sector requesting them to verify their claims made under the government's Eat Out to Help Out scheme.

The compliance checks are part of an effort to recover money paid out in error, HMRC said. Treasury figures revealed that more than 84,700 food and drink establishments took part in the Eat Out to Help Out scheme, which offered customers a 50% discount on sit-down meals purchased on Mondays, Tuesdays and Wednesdays in August.

130,000 claims were recorded under the scheme, with an estimated cost of £522 million. HMRC has revealed that around 4,000 claims were made in error, and it is now writing to those businesses that submitted the claims to request that they check their records.

HMRC is giving affected businesses 60 days to respond to the letter. Businesses that fail to respond may be subject to a formal compliance check.

In a statement, HMRC said: 'We understand mistakes happen, particularly in these challenging times. This means we will not look for innocent errors and small mistakes for compliance action.'

HMRC has warned self assessment taxpayers to be alert to the danger of scammers posing as the tax authority in the lead up to the tax return deadline.

Every year HMRC issues thousands of SMS messages and emails as part of its push to remind people to file before the 31 January deadline. HMRC says it is aware that fraudsters use calls, emails and texts to contact customers.

In the last 12 months, it has responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious webpages to internet service providers so that they can be taken down.

Many scams target customers to inform them of a fake tax rebate or tax refund. The imposters use language intended to convince the customer to hand over personal information, including bank details, in order to claim the refund.

Karl Khan, Interim Director General for Customer Services at HMRC, said: 'We know that criminals take advantage of the self assessment deadline to panic customers into sharing their personal or financial details and even paying bogus 'tax due'.

'If someone calls, emails or texts claiming to be from HMRC, offering financial help or asking for money, it might be a scam. Please take a moment to think before parting with any private information or money.'

The Treasury has confirmed that the £1 million cap on the Annual Investment Allowance (AIA) is to be extended for an additional year as the government continues to look at ways to stimulate the economy.

The AIA provides a tax write off against profits for expenditure incurred on plant and machinery by businesses and owners of commercial property.

Businesses can now continue to claim up to £1 million in same-year tax relief through the AIA for capital investments in plant and machinery assets until 1 January 2022. The temporary £1 million cap was originally due to revert to £200,000 on 1 January 2021.

Commenting on the extension, Jesse Norman, Financial Secretary to the Treasury, said: 'It is vital that we support business through the difficult months ahead.

'Extending the AIA's £1 million cap will give businesses the confidence they need to invest into next year, helping them to grow whilst benefitting the wider economy too.'

Contactless payments via debit cards reached a record level in August, accounting for 62% of all debit card transactions during the month, according to data released by UK Finance.

UK Finance found that 46% of all credit card transactions were contactless during August, representing an increase of 14.6% when compared to the previous month.

The easing of lockdown restrictions and the government's 'Eat Out to Help Out' scheme, combined with the increased £45 contactless spending limit, boosted all contactless card transactions in August by 7%, the data revealed.

Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'As lockdown restrictions continued to be eased in August, we saw record numbers of customers choosing to make contactless payments using debit cards. Contactless card transactions using either debit or credit cards also increased compared to July, suggesting that consumers are taking advantage of the £45 contactless spending limit.

'Meanwhile, the amount of spending on UK debit cards fell slightly in August following a record high in July but remained strong at £58.4 billion. 

'The percentage of credit card balances attracting interest and the annual growth rate of outstanding balances on credit cards continued to decline – the latter dropping by 12.6% over the 12 months to August.'

In a new consultation HMRC has confirmed that Making Tax Digital (MTD) for corporation tax (CT) (MTD for CT) will not be implemented until 2026 'at the earliest'.

The consultation considers how the principles created for MTD could be established for companies within the charge to CT. It outlines the potential design of the MTD for CT system and provides companies with information in regard to what may be required of them following the introduction of MTD for CT.

HMRC is seeking feedback on the plans from companies and agents.

Commenting on the consultation, Tina Riches, Chair of the joint Association of Taxation Technicians (ATT) and Chartered Institute of Taxation (CIOT) Digitalisation and Agent Services Committee, said: 'We are disappointed that the consultation presupposes that most entities within the charge to CT should be within the scope of MTD before the costs and benefits arising to different parts of the population have been established.

'If a key purpose of MTD is to encourage taxpayers to become digital then it is not necessary to extend it to CT, as a large proportion of companies are VAT registered and so already in MTD for VAT, or using digital records anyway.'

The consultation runs from 12 November 2020 to 5 March 2021. The details can be found here.

Research carried out by think tank the Centre for Enterprise, Markets and Ethics (CEME) has suggested that the UK's wealth gap is widening as a result of the ongoing coronavirus (COVID-19) pandemic.

Around a third of individuals now have less than £1,500 in savings, the CEME found. In the three months to September, 314,000 workers lost their jobs as a result of the pandemic. Redundancies have caused many households to make use of savings they have stored up, according to the think tank.

However, a proportion of workers have strengthened their financial situation by saving more of what they earn. The CEME revealed that savings ratios have risen from 5% in 2019 to almost 30% in 2020.

Commenting on the research, Andrei Rogobete, Associate Director of the CEME, said: 'Financial inequality is rising fast against a historic background of big differences between the wealth of the rich and the poor. The so-called wealth gap is becoming a chasm as lockdowns inflict the greatest pain on people with low paid, insecure jobs.'

The Institute of Chartered Accountants in England and Wales (ICAEW) has stated that there is 'no need' to overhaul the current capital gains tax (CGT) regime.

In its response to a review of CGT carried out by the Office of Tax Simplification (OTS), the ICAEW concluded that 'the scope and boundary of CGT is generally clear', and that the tax 'largely achieves' its policy aim of discouraging schemes that attempt to convert income into a capital gain for tax purposes.

The Institute stated that some administrative and legislative improvements are possible. However, it also believes that alterations to the tax are unlikely to raise significant revenue without a major structural change to reliefs.

In regard to the different rates of CGT in use, the ICAEW found that the structure of rates is important for the tax as individuals will often be able to choose when to make disposals.

The ICAEW said: 'The current rates are intended to reflect the fact that following the removal of indexation and taper relief for individuals, the calculation of gains does not take into account the length of time an asset has been held or inflation; this is the policy basis for CGT rates being lower than the income tax rate.

'The extent to which CGT should be payable on gains arising from inflation and how it should be mitigated is a policy matter for government and parliament to determine.'

The UK's economy bounced back from recession with record growth of 15.5% from July to September, according to the latest data from the Office for National Statistics (ONS).

The return to growth comes after a six-month slump caused by the first coronavirus (COVID-19) lockdown. However, the expansion was not enough to reverse the damage caused by the pandemic.

According to the ONS, the country's economy is still 8.2% smaller than before COVID-19 struck. In September, growth was 1.1%, marking the fifth consecutive month of expansion. However, that was weaker than the levels seen in previous months.

Commenting on the data, Anna Leach, Deputy Chief Economist at the Confederation of British Industry (CBI), said: 'Economic growth bounced back strongly over the summer as lockdown was eased. But with lockdowns re-intensifying across the UK's regions and nations in October and November, we're likely to see activity fall again over the winter months.

'Many businesses have adapted their operations already . . . but the second hit to sectors that have already suffered hard may be too much to bear. Additional government support – notably the extension of the Job Retention Scheme – is welcome. And the recent good news on a vaccine gives hope for the future and may give some stimulus to spending.'