Budget 2010: HMRC Officers to Get Powers to Open People’s Post Without Asking Permission

Officers will be allowed to intercept any suspicious mail anywhere in the country and open it before it is delivered, under plans being drawn up by the Government to amend the Postal Services Act.

The measure is billed as a bid to crack down on tobacco smuggling. However, a HM Revenue and Customs spokesman said the powers could be applied much more widely.

Currently, Royal Mail staff have a legal right to intercept suspicious letters and parcels in mail centres and sorting offices and pass them to HM Revenue and Customs.

Tax inspectors must then notify the addressee and agree a mutually acceptable time to open the letter or parcel, before deciding whether to take any enforcement acdtion.

However the Government is now proposing to remove the legal requirement which will now allow inspectors to open suspicious post without asking permission first.

Treasury documents say: “HMRC will no longer be required to notify the addressee and invite them to attend before such packets can be opened”.

The new measure will be passed into law as part of the Budget over the next few weeks, and amend section 106 of the Postal Services Act 2000.

Under current law, the only other enforcement officers who can open mail are border guards who can open the post without permission at ports and airports.

The change was disclosed in a Treasury document published alongside the Budget headlined “Tackling tobacco smuggling in the post”. However a HM Revenue and Customs spokesman said the powers would be applied much more broadly.

The spokesman said: “The change is mainly directed at helping to combat tobacco smuggling but the powers in s106 apply to any contraband including prohibited or restricted goods.”

She declined to say how many times HM Revenue and Customs had used the existing powers in recent years.

Accountants warned that it was likely tax inspectors would seek to use the powers in other areas once they became law.

Heather Taylor, a senior tax partner at Grant Thornton, said: “This seems like a very small and limited change, but it could be a very big step for increased powers HMRC. Once new powers are in the hands of HMRC they tend to be extended.”

Civil liberties campaigners were appalled about the increased powers. Alex Deane, a spokesman for Big Brother Watch, said: “This is a dreadful development. The post has always been regarded as near-sacrosanct in law.

“The last time our mail was opened by the authorities without notice, our country was fighting a World War. I hardly think that the situation produced by the government’s tobacco tax compares.

“Once the principle of opening our mail has been accepted, what else will the Government use as an excuse to pry into our post?”

HM Revenue and Customs are growing increasingly aggressive in their battle with tax evaders. Earlier this year it announced plans for a crack down on middle class professionals who do not pay their fair share of tax.

A Royal Mail spokesman said: “Royal Mail has no powers to open the mail and in rare cases when an item of mail clearly poses a hazard to other mail and/or the safety of our people - for example, if a noxious chemical was spilling from a package - we would call in HMRC and, usually, the police.”

The Telegraph

HMRC Cracks Down on Tax Avoidant Smokers

Some smokers are avoiding tax in their choice of cigarette according to HM Revenue & Customs.

It seems duty paid on normal cigarettes is equivalent to duty paid on longer ones which HMRC deems as avoidance of tax.

To combat this from January 2011 any cigarette longer than 8cm, excluding the tip, will be treated as a separate cigarette and receive added duty, according to the Daily Telegraph.

A HMRC spokesman told the newspaper the technical change “is designed to stop a tax avoidance method”.

In a further crackdown any cigarette which is a further 3cm above the 8cm, will be treated as a third cigarette. Meaning any cigarette 12cm or longer will be treated as three cigarettes, not one.

A normal cigarette excluding the tip is 6cm in length.

The taxman has yet to announce the level of duty the brands, affected by this change, will have to pay. It also has not confirmed whether certain slim cigarettes, which are longer than the usual size, will be affected.

The chancellor announced in the budget this week cigarettes would rise by 15p immediately or 1% above inflation which is set at 3%. He added from 2011 to 2015 duty on cigarettes would rise 2% above inflation.

Accountancy Age

Sports Stars Demand Equality over Champions League Tax Breaks

International sports stars are demanding that they be exempt from tax when they compete in the UK, after a waiver was announced in the Budget for foreign-based footballers playing in the 2011 Champions League final at Wembley.

The move was requested by sports minister Gerry Sutcliffe after the UK lost the right to hold the 2010 final specifically due to tax reasons.

But the exemption has lead to accusations of discrimination, with sports stars appearing in other high profile UK events, such as Wimbledon, demanding equal treatment, reports the Financial Times.

Accountancy Age

Summertime Begins 2010

Summer time will start on Sunday 28 March at 1.00am GMT throughout European Union Member States. The Clocks go forward an hour. This means that at 1.00am (GMT) the UK will move to 2.00am British Summer Time (BST).

The 9th EC Directive on summer time harmonised, for an indefinite period, the dates on which summer time begins and ends across member states as the last Sundays in March and October respectively. Under the Directive, summer time begins and ends at 1.00am GMT in each Member State. Amendments to the Summer Time Act to implement the Directive came into force on 11 March 2002.

Time zones are the responsibility of individual Member States and vary across the EU. The UK is not planning to move to Central European Time.

£9bn of Tax to be ‘Overpaid’ by Britons This Year

A “colossal” £9bn of tax will be overpaid by Britons this year as people fail to take steps to the amount they pay, according to new research.

A study by a leading website found that people will waste:

£3.94bn in unclaimed tax credits;

£1.97bn through avoidable inheritance tax;

£742m lost through not saving money into a pension;

£516m in avoidable capital gains tax;

£442m from late or incorrectly submitted self-assessment tax returns;

£328m from failing to make use of personal allowances;

£36m in avoidable tax on savings interest.

On average every tax payer in the UK will pay £186 more than they need to, with 86% of people doing nothing to reduce their tax burden. Despite this, it is estimated that wastage has dropped 9% from the previous year.

“Whilst it is encouraging to see our annual tax wastage is set to go down by 9% this year, £9 billion is still a colossal amount to be lost through error and avoidable circumstances,” said Karen Barrett, chief executive.

R&D Tax Credit to Survive Tory Election Win

The Tories have ditched plans to scrap tax incentives for research and development if they win the general election expected on 6 May.

Party leader David Cameron welcomed a report proposing the u-turn from opposition industry ‘Czar’ Sir James Dyson on how to rebalance the UK economy away from over-dependence on the City.

Cameron said the Dyson Report “represents an exciting and ambitious step forward in our desire to make Britain Europe’s leading generator of new technology”. 

Shadow chancellor George Osborne has previously proposed scrapping most of the corporation tax breaks in order to fund a reduction in the headline rate of tax on business.

But a Conservative spokesman said a Tory government “will keep R & D tax credits” refocused along lines proposed by Dyson, who urged that when public finances allow the rate of the relief should be increased to 200%.

The beneficiaries would be “high tech companies, small businesses and new start-ups “in order to stimulate a new wave of technology”.

Dyson also proposed increasing the generosity of the Enterprise Investment Scheme providing relief for “angel” investors.

Accountancy Age

2010 Budget Accounced

Gordon Brown has announced the Budget will be on Wednesday 24 March in 2 weeks