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.
If you require assistance with a Compliance check why not contact Davenports to see if we can help. Simply complete the quick form below and one of our team will contact you back.
Business Entertainment
April 11, 2011 by Davenports Tax Team
Filed under Accountancy News
With effect from 1 May 2011 input tax is no longer blocked in respect of business entertainment of overseas customers “of a kind and on a scale which is reasonable, having regard to all the circumstances”. It is expected that HMRC will interpret this latter condition strictly.
For further assistance please contact Davenports to see how we can help. Simply complete the quick form below and one of our team will contact you shortly.
HM Revenue & Customs (HMRC) Has Issued a Warning to Anyone Who Hasn’t Yet Sent in Their 2009/10 Self Assessment Tax Return – File Online, or You Could Face a £100 Penalty.
November 10, 2010 by Davenports Tax Team
Filed under Accountancy News
The 31 October paper-filing deadline has now passed, so anyone filing a paper tax return after this date could be liable to a £100 penalty.
If you’re filing your return online for the first time, you’ll first need to register for online filing at www.hmrc.gov.uk/online. You’ll be given a User ID, and an Activation Code will be posted to you within seven working days. Once you’ve received your Activation Code you can file online.
If you’ve filed online before, make sure that you have your User ID and password – it can take seven working days to get replacements, so don’t leave it to the last minute if you need them.
The deadline for online Self Assessment returns is Monday 31 January.
More than 9m Self Assessment returns are sent out by HMRC every year. Last year, 6.4m taxpayers filed their SA returns online and on-time – a record number.
If you need any help or advice on filing your return, it is available from the HMRC website at www.hmrc.gov.uk/sa or from the Self Assessment helpline on 0845 9000 444; alternatively why not contact Davenports to see how we can help, simply complete the form below and a member of our team will contact you shortly.
Taxman Estimates £6.3bn Revenue Write-off
November 1, 2010 by Davenports Tax Team
Filed under Accountancy News
The amount of debt HMRC believes it will not collect rises from £4.5bn to £6.3bn
The level of debts owed to the taxman which the department is prepared to write off has risen by almost 40% according to UHY Hacker Young.
The firm said the amount of expected revenue HM Revenue & Customs now classed as irrecoverable had jumped from £4.5bn to more than £6.3bn in the year to 31 March 2010.
UHY Hacker Young believed the increase in bad debts had been caused by the recession forcing more businesses to keep hold of money they should pay in taxes in order to pay other bills and keep afloat.
Roy Maugham, partner at UHY Hacker Young said: “The Treasury is very hungry for cash at the moment – they have a huge hole in the government’s finances to fill.
“Our concern is this is all going to lead to much more aggressive debt collection tactics in the future against both individuals and businesses.”
Story from Accountancy Age
HMRC Issues Phone Call Scam Warning
August 11, 2010 by Davenports Tax Team
Filed under Accountancy News
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
July 26, 2010 by Davenports Tax Team
Filed under Accountancy News
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.
Budget 2010: HMRC Officers to Get Powers to Open People’s Post Without Asking Permission
March 26, 2010 by Davenports Tax Team
Filed under Accountancy News
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
