Company cars - advisory fuel rates from 1 June 2011
May 26, 2011 by Davenports Tax Team
Filed under Accountancy News
HM Revenue & Customs has published new advisory fuel rates effective from 1 June 2011 and are available on the HM Revenue & Customs website:
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm
The rates are now to be reviewed four times a year. Any changes will take effect at the beginning of each calendar quarter – on 1 March, 1 June, 1 September and 1 December and will be published on the HM Revenue & Customs (HMRC) website shortly before the date of change.
In view of the increased frequency of review, HMRC will no longer consider changing the rates if fuel prices fluctuate by 5 per cent from the published rates.
Employers should make themselves aware of any changes by referring to this page in late February, May, August and November each year. It is the primary source of information.
VAT
Customs will also accept the figures in the table for VAT purposes though employers will need to retain receipts in line with current legislation.
Judge Takes Dim View of HMRC’s Approach
May 26, 2011 by Davenports Tax Team
Filed under Accountancy News
A First-tier Tribunal judge in a recent appeal took a very dim view of HMRC’s approach.
In brief, the taxpayer tried to file her tax return online in January 2010 but found that she could not access HMRC’s website. She contacted HMRC’s support line, but did not receive a reply. HMRC issued two late filing penalties: one for not filing by 31 January and the second for still not having filed her return six months later.
In support of its failure to respond in time, the Revenue claimed that the taxpayer had emailed the VAT online services helpdesk in error. It argued that the taxpayer had to take responsibility for ensuring that her tax affairs were dealt with correctly and on time, and that this was not negated by her having twice emailed the helpdesk. The department, somewhat extraordinarily, argued that it could not reasonably be expected to reply to her emails before 31 January 2010.
The First-tier Tribunal judge found the latter ‘proposition startling’, saying he was sure HMRC would expect a business to which they had sent correspondence, not only to be able to reply within 14 days but actually to do so. He said ‘there is no reason why the standards applicable to businesses and commercial organisations should not also apply to an organ of the state’.
While agreeing that it was the taxpayer’s responsibility to file her self assessment return on time, the judge added that ‘it was equally the responsibility of HMRC to provide online filing facilities that worked and provided the promised filing facility’. He was ‘wholly unimpressed by the argument that there was no obligation on HMRC to reply to the appellant’s emails to its helpdesk; there is little point in there being a helpdesk if, in fact, it does not provide help’.
The upshot was that the judge found that the taxpayer had a reasonable excuse for failing to file online by the 31 January 2010. The excuse was that the online filing facility provided by HMRC did not work as it should have and, furthermore, HMRC failed to provide her with the help that she had requested within a reasonable time which, the judge suggested should have been within three days.
The judge’s comments are total indictment of HMRC’s not infrequent unprofessional and lackadaisical dealings with taxpayers and agents. Sadly, the taxpayer lost the moral high ground by failing to file her return until several months later, so the second £100 penalty stood.
Story from Tax Advice Network
Taxman’s “Tactical” Withdrawal From Court Battle Could Harm Recruiters
May 26, 2011 by Davenports Tax Team
Filed under Accountancy News
The Taxmans’s expected decision to not appeal against a VAT tribunal ruling it lost has been described as a clever “tactical move” could harm the recruitment agent industry.
Reed Employment won a first tier tribunal in March in which it argued that it should only pay VAT on the commission fee charged to clients, and not the entirety of the charge.
HM Revenue & Customs has not confirmed whether it will appeal the decision. But Hannah Dobson, VAT director of Smith & Williamson, said that HMRC sources have indicated it will not appeal.
“This is a fantastical tactical ploy,” Dobson said. “A case through the first tier tribunal is only persuasive on others, and not binding. HMRC will turn around and say no-one else can rely on the ruling, it only applies to Reed.
“We cannot have Reed being allowed to operate in one way in an industry and everyone else in another. But that said, I think HMRC will challenge anybody else that is thinking of operating like Reed. It is in a position where it can challenge others.”
This will mean that recruitment businesses will be out of pocket for “another 12 to 24 before another court case comes out”, she added. “It has potentially delayed any repayments of VAT to anybody but at least another two years.
“If this had been binding, any client that had gone back to the temporary agency and asked for VAT back, the agency could have gone to HMRC and HMRC would have paid it back,” she said
HMRC Trials Single Compliance Process
May 18, 2011 by Davenports Tax Team
Filed under Accountancy News
HM Revenue & Customs (HMRC) has announced trials of a single compliance process for enquiries across a range of different taxes.
By simplifying and standardising the process for compliance checks HMRC will improve customer experience and reduce costs as the check will only take as long as the risks and behaviours encountered dictate.
The trials of the new process will run for six months from 1 June in 10 different locations across the UK: Reading/Slough, Newcastle, Warrington, York, Exeter, London Euston and Southampton in England; Cardiff in Wales; Belfast and Edinburgh/Dundee.
The new process will be rolled out nationally from January 2012, subject to the results of the trials.
David Gauke, Exchequer Secretary to the Treasury, said:
“This Government is committed to relieving the burden on businesses. We know that agents, individuals and businesses find some of HMRC’s current compliance practices drawn out and costly. A single compliance process could help HMRC improve the customer experience and reduce costs.
“HMRC is working directly with agents via the Compliance Reform Forum to help develop it, and will continue to work with them during the pilots.”
The single compliance process will focus solely on the risks and behaviours identified in cases and throughout the life of the compliance check, irrespective of the head of duty (VAT, Income Tax, Corporation Tax and PAYE) involved. The process will be capable of addressing lower risk cases at an appropriate level, but will also increase in intensity should the approach be warranted.
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