HMRC May Have Missed Time Limit On Tax Bills

People hit with an unexpected tax demand may be able to refuse to pay up as HM Revenue & Customs could have exceeded its own time limits in which to ask for the money, experts said, the Scotsman reported on its web site.

Under tax rules HMRC must issue demands for underpaid tax within 12 months of the end of the tax year in which it became aware that people had underpaid, the newspaper added.

It emerged over the weekend that nearly six million people have paid the wrong amount of tax through the Pay As You Earn (PAYE) system.

Around 4.3 million of these have paid too much and are due a refund, but 1.4 million have underpaid and will have to handover an average of £1,428 each.

But if people provided HMRC with all the information they needed to get their tax code right, it should have used this information within 12 months of the end of the tax year in which it was received to claw back the extra money.

From Accountancy Age

Advertiser Websites and Social Networking Activity to be Covered in the CAP Code from 1st March 2011.

The digital remit of the Advertising Standards Authority (ASA) is to be extended significantly to deliver more comprehensive consumer protection online. Importantly, for IAB members, methods of branded communication such as advertisers’ own websites and social networking pages will now be covered within the CAP Code.

The ASA’s present remit online includes ads in paid-for space and sales promotions wherever they appear. But from next year, the rules in the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (the CAP Code) will apply in full to marketing communications online, including the rules relating to misleading advertising, social responsibility and the protection of children. The remit will apply to all sectors and all businesses and organisations regardless of size.

The Committee of Advertising Practice (CAP), the body responsible for writing the CAP Code, has decided to extend the digital remit of the ASA in response to a formal recommendation from a wide cross-section of UK industry, including the IAB. CAP has today published a document detailing the new remit and sanctions. In summary:

The new remit will ensure the same high standards as in other media and will cover:

• Advertisers’ own marketing communications on their own websites and;
• Marketing communications in other non-paid-for space under their control, such as social networking sites like Facebook and Twitter.

The remit is focussed on ‘selling’ messages in order to protect the right to freedom of speech online. For example, journalistic and editorial content and material related to causes and ideas - except those that are direct solicitations of donations for fund-raising - are excluded from the remit.

Nick Stringer, director of regulatory affairs for the IAB said: “Self-regulation must maintain pace with today’s fast-moving digital environment and changing consumer behaviour. The ASA’s extended digital media remit aims to protect internet users and enhance their trust, as well as industry and political confidence, in the medium.”

Implementation

The remit will come into force on 1 March 2011 after a six month period of grace to allow the ASA and CAP to conduct training work to raise awareness and educate business on the requirements of the CAP Code, particularly amongst those who may not previously have been subject to ASA regulation. Website owners and agencies are urged to sign up to CAP Services at www.cap.org.uk to receive guidance and training to help ensure their sites comply with the new rules before 1 March 2011.

CAP Chairman Andrew Brown said, “Extending the online remit of the ASA has been a top priority for UK industry over the last couple of years. Our aim has been to extend further in the online world the principles that are already well established in our system, namely those of effective consumer protection and fair competition.”

To help their members better understand the reasons behind and implications of the ASA’s new remit, the IAB has published a list of FAQs on its website (111k), and will be launching a programme of education – to include briefing documents and events – in the coming months.

Amy Kean, head of the IAB social media council, said: “The ASA’s new remit should be celebrated by the social media industry, as the move will only serve to reinforce the integrity of the discipline and reassure advertisers that the work of their agencies remains ethical and transparent. We intend to spend the next few months helping social media practitioners make sense of the changes with ongoing conversations about how the updated CAP Code will be implemented.”

Sanctions

In addition to the ASA’s present sanctions, which already achieve a high level of compliance, CAP member bodies have agreed new sanctions to apply to the extended remit such as:

• Removal of paid-for search advertising – ads that link to the page hosting the non-compliant marketing communication may be removed with the agreement of the search engines.
• ASA paid-for search advertisements - the ASA could place advertisements online highlighting an advertiser‟s continued non-compliance.

Funding

The industry has agreed to apply the standard 0.1% levy on paid-for advertisements appearing on internet search engines through media and search agencies. This is an extension of the existing funding mechanism in other media that pays for the ASA and it will be supplemented initially with seed capital from Google.

ASA Chairman Lord Chris Smith said, “This significant extension of the ASA’s remit has the protection of children and consumers at its heart. We have received over 4,500 complaints since 2008 about marketing communications on websites that we couldn’t deal with, but from 1 March anyone who has a concern about a marketing communication online will be able to turn to the ASA.”

Today a new regional National Insurance Contributions (NICs) holiday for new businesses came into effect.

New business set up outside London, the South East and East of England will be eligible for a holiday worth up to £5,000 for up to the first ten employees they hire in their first year of business. This means a maximum saving on their national insurance payments of up to £50,000.

The scheme will run for three years. It is estimated that 400,000 new businesses will benefit by having a lower tax bill from employing new staff.

New businesses established since the announcement in the Budget on the 22nd June, and which meet the qualifying criteria, will also be eligible to apply.

The regional NICs holiday, announced in the June Budget, will encourage the creation of private sector jobs in regions reliant on public sector employment by reducing the cost to new business of employing staff.

Exchequer Secretary to the Treasury, David Gauke:

“We need to rebalance our economy which has become over reliant on public spending and jobs provided by the public sector.

“The NICs holiday for new businesses in addition to cuts in corporation tax will provide a valuable boost to start up businesses and help foster the private sector led recovery that will drive growth in the UK over the coming years”

HMRC Issues Phone Call Scam Warning

HM Revenue & Customs (HMRC) is warning taxpayers to be vigilant following reports that thieves are making phone calls pretending to be the taxman.

The fraudsters inform taxpayers they are due a tax rebate, and ask for their bank card details over the phone. They then attempt to take money from the account using the details provided. Victims risk having their bank accounts emptied and their personal details sold on to other organised criminal gangs.

The warning comes amid a recent surge in the number of tax scam “phishing” emails reported to HMRC. In the last three months, HMRC has shut down over 180 websites that were responsible for sending out the fake tax rebate emails.

Chris Hopson, Director of Customer Contact at HMRC said:

“We only ever contact customers who are due a tax refund in writing by post. We never use telephone calls, emails or external companies in these circumstances. We strongly urge anyone receiving such a phone call not to give any information to the caller, but report it to the police straightaway.

“If customers receive an email claiming to be from HMRC, we recommend they send it to us for investigation before deleting it permanently.”

HMRC thoroughly investigates phishing attacks and works with other law enforcement agencies in the UK and overseas. In the last 18 months, scam networks have been shut down in a number of countries, including Austria, Mexico, the UK, South Korea, the USA, Thailand and Japan.

HMRC strongly advises customers to:

• Check the advice published at www.hmrc.gov.uk/security/index.htm to see if the email you have received is listed
• Forward suspicious emails to HMRC at phishing@hmrc.gsi.gov.uk and then delete it from your computer/mail account
• Do not click on websites, links contained in suspicious emails or open attachments
• Follow advice from www.getsafeonline.co.uk

If you have reason to believe that you have been the victim of an email scam, report the matter to your bank/card issuer as soon as possible. If in doubt please check with HMRC at http://www.hmrc.gov.uk/security/fraud-attempts.htm

HMRC Uncovers Untaxed Money in Grave

A businessman planned to leave £140,000 in his aunt’s grave for 20 years to avoid tax.

Tax inspectors were tipped off and obtained permission from the priest to recover their £50,000 share. The unnamed man was going to leave the money in the grave up to the time limit for tax investigations, reported The Sun.

Dave Hartnett, permanent secretary for tax, said: “Tax evasion isn’t a victimless crime. But we’re getting better at catching cheats. It’s not worth the risk.”

It was disclosed in April that the HM Revenue & Customs has paid informers £437,000 in return for tip-offs since 2007, and prosecutes around 200 people a year for tax evasion.

Investigators announced a crackdown on middle-class professionals earlier this year, with doctors already under greater scrutiny.

HMRC Make £92.3m Confiscation Order

The gang bought luxury houses in London, high performance cars, and built blocks of flats in Dubai after stealing £37.5 million in a ‘missing trader’ VAT tax fraud. The two men, who are currently serving seven year jail terms, will face a further ten years in prison each if they fail to abide by the order.

Richard Meadows, Assistant Director of Criminal Investigation for HMRC, said:

“This is the largest ever confiscation order secured by Revenue & Customs at the end of one of our most complicated investigations. I believe it to be one of the largest confiscation orders in the UK to date. The gang stole £37.5 million in a VAT tax fraud using the cash to invest in luxury property in the UK and abroad.

“We are determined to bring to justice the criminals behind this type of fraud and take away the proceeds of their crime. We have worked very closely with the West Midlands Regional Asset Recovery Team (RART) and law enforcement agencies across the world to bring this case to a successful conclusion.”

Syed Ahmed of Buckinghamshire and Shakeel Ahmad of Middlesex, both currently serving seven year jail terms, were each ordered to repay £92.3 million within two months or face an additional ten years in jail as well as still having to repay the money.

The judge stated the joint minimum payable by both defendants is £92.3 million.

Officers have restrained high value assets including:

• A luxury flat in Knightsbridge worth £4.5 million
• A house in Harrow worth £2 million
• A house in Buckinghamshire worth £1.5 million
• A riverside flat in Battersea worth £500,000
• Two apartment tower blocks in Dubai worth £80 million
• High performance motorcars including a Ferrari 360 Modena convertible and a Mercedes 500CL

They also gave ‘tainted gifts’ to their families including top of the range designer clothing, a Range Rover and cash totalling around £1 million.

His Honour Lord Justice Richard Flaux said:

“You are both complete liars and devious. You are adept at using others in an attempt to make your activities legitimate, creating a smokescreen to hide the value of your assets and conceal this from HMRC.”

Background

Investigations began in April 2002 into the ‘missing trader’ fraud, involving the dishonest manipulation of the VAT system through the import and export of computer processing units (CPUs). The gang used highly complex chains of VAT registered companies both here and abroad to steal £37.5 million.

The final defendant of the 21 strong crime gang was sentenced last month and ended one of the most complex investigations undertaken by HMRC which included seven trials and retrials. In total the gang were jailed for 74 years.

The conspiracy involved the import of CPUs mainly from Ireland VAT free. The goods would then be sold on more cheaply, but with VAT added, through a chain of companies each involved in the plot and sham invoices would be issued. Once the goods had been sold on a number of times they would be exported back to the EU. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods.

The gang would divide the dishonest profits of the fraud and launder them through various bank accounts both in the UK and abroad. The account holders would then withdraw the bulk of the cash and were paid a commission for their dishonest service. Some of the money is believed to have been invested in a third a tonne of gold bullion, substantial property in Dubai and a luxury flat near Harrods.

Emergency Budget

All the key points from the chancellor’s emergency Budget speech

• Calling it an “unavoidable Budget”, George Osborne says Budget details will not be buried in the book.
• Everyone will have to contribute to the recovery, but everyone will also share in the eventual prosperity.
• Estimated growth in the UK economy should hit 1.2% this year, 2.3% next year, 2.8% in 2012, 2.9% in 2013 and 2.7% in both 2014 and 2015.
• CPI rates will be 2.7% at the end of the year before returning to target “in the medium term”, which remains at 2%.
• The UK’s borrowing will fall to 1.1% of GDP within five years.
• Public sector net debt to fall to 67% of GDP by 2015/2016, compared to increases proposed by the previous government.
• Unemployment to peak at 8.1% this year before falling back to 6.15 by 2015.
• Most of the deficit reduction will come from spending cuts. 77% of the reduction will come from savings, while 23% will come from tax rises.
• George Osborne says the structural deficit will be plugged by 2015/16 and is set to be cleared one year early.
• The Civil list will be subject to the same audit by the National Audit Office and will be frozen at £7.9m annually.
• An extra £17bn in savings in public services has been found, equivalent to a 25% across the board cut. Final details will be in the spending review released on 20 October.
• Public sector pay will be frozen for two years, but the 1.7m people earning up to £21,000 will receive a pay rise of £250 a year.
• The small companies rate will be cut to 20%.
• Housing Benefit to be reduced by £1.8bn by the end of Parliament.
• Corporation tax will fall to 24% by 2014, dropping 1% a year.
• Tax relief for the video games industry has been repealed.
• Plans to increase broadband access across the country will be funded by the private sector and not through a broadband levy.
• The threshold for employers National Insurance Contributions will be increased.
• Employers outside of London and the South East will be exempt from National Insurance Contributions for the first £5,000 up to ten employees.
• About £2bn will be raised via a new banking levy charged to large banks.
• The standard rate of VAT will rise to 20% from 17.5% on 4 January 2011, bringing in £13bn a year of extra revenue.
• The increase in cider duty will be reversed at the end of the month.
• Duties on alcohol, tobacco and petrol will remain the same.
• There will be a review of oil prices in time for the next Budget aimed at stabilising pump prices. A further announcement on aviation tax by the next Budget is also expected to change a tax structure which charges each passenger to a per flight tax.
• Personal tax allowance to rise to £7,475 in April, making 23 million taxpayers an extra £170 a year better off and taking nearly a million people out of income tax.
• Capital Gains Tax stays at 18% for standard rate taxpayers but from midnight, those paying the higher rate will see CGT rise to 28%.
• The chancellor has announced that while the CGT rate for entrepreneurs’ relief will remain at 10%, the limit is to increase from £2m to £5m.
• Capital allowances are cut to mitigate more a generous corporation tax regime.
• Allowances for plant and machinery operations are reduced from 20%-18% and from 10%-8% for longer lived assets.
• Pensions will be re-linked to earnings, the state pension will increase in line with the consumer price index or 2.5% whichever is greater.

Story from:
Accountancy Age

Watch the Budget Live

Watch the budget live from Westminister

http://www.parliamentlive.tv/Main/Player.aspx?meetingId=6369

Osborne: Budget will be Harshest for 30 Years

Chancellor George Osborne will claim today that the harshest Budget for 30 years will squeeze the rich more than it hits the poor. He will seek to sell his package of record spending cuts and tax rises as being stamped by fairness as he tries to win public support for a four-year austerity drive.

Nick Clegg moved to pre-empt any revolt by Liberal Democrats last night by insisting that his party’s values were at the heart of Osborne’s assault on the deficit. “This is one of the hardest things we will ever have to do,” he wrote in an e-mail to party members, an acknowledgement that the pain to come will put the coalition under immense strain, The Times reported.

When he delivers the Budget statement, at 12.30pm to the Commons, Osborne will insist that everyone is making a contribution as he tries to distinguish his measures from anything that Labour could portray as a Thatcherite attack on the poor.

A table in the Treasury Red Book, broken up into ten different income bands, will show that the wealthiest will be hit proportionately hardest, according to The Times. This does not factor in how cuts to public services will affect different parts of the country and income groups, nor does it include the Government’s impending drive on benefits.

The Budget will take 880,000 people out of income tax altogether by raising the threshold at which tax is owed by £1,000. Future Budgets will raise the threshold, taking hundreds of thousands more out of income tax — a key Liberal Democrat policy.

A key Tory policy — saving employers the cost of national insurance contributions — will mean that 650,000 workers will be exempted by raising the earnings threshold at which bosses have to start paying.

from AccountancyAge

Elgar Note Fades as 30 June Deadline Looms

The £20 banknote bearing the portrait of composer Sir Edward Elgar, has less than two weeks left in everyday use. On 8 March the Bank of England announced the note’s withdrawal from circulation on 30 June 2010. After this date the Elgar note will no longer have ‘legal tender’ status so will be less likely to be accepted in payment or in change, in retail outlets. The Adam Smith £20, first introduced in 2007, has gradually replaced its Elgar predecessor and continues in circulation.

Andrew Bailey, the Bank’s Chief Cashier and Executive Director, Banking Services, said, “People still holding any Elgar notes should deposit, spend or exchange them now, to avoid any possible difficulties in being able to do this readily after 30 June.” But he wanted to reassure the public, saying, “For several months from the end of June most banks, building societies and Post Offices should accept Elgar £20 notes for deposit to customer accounts and for other customer transactions, although the choice to exchange the notes rests with each institution.” And should anyone have any difficulties or discover their Elgar notes much later, he added, “The Bank of England will always give value for these notes and in fact all other banknotes the Bank has issued.”

Information on how to return Elgar notes to the Bank of England for exchange can be found at: http://www.bankofengland.co.uk/banknotes/about/exchanges.htm

The Elgar £20 banknote was first issued on 22 June 1999. The Adam Smith £20 banknote was first issued on 13 March 2007. In 2009-10 there were some 1.5 billion £20 banknotes in circulation, making it the most common note. Most of these were the Adam Smith notes. The average lifespan of a £20 note is 2 years.

‘Legal tender’ means that if a debtor pays in legal tender the exact amount they owe under the terms of a contract, they have a good defence in law if they are subsequently sued for non-payment of the debt. In practice, the concept of ‘legal tender’ does not govern the acceptability of banknotes as a means of payment. This is essentially a matter for agreement between the parties involved.

The Elgar notes are being withdrawn under authority given to the Bank by virtue of Section 1 (5) of the Currency and Banknotes Act 1954.

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