Tax Deadline Put Back by HMRC Over Strike
January 26, 2012 by Davenports Tax Team
Filed under Accountancy News
No fines will be handed out to anyone who submits their self-assessment tax returns online in the first two days of February.
The official deadline for submitting forms is 31 January, but a planned strike for that day is set to cause last-minute disruption.
So HM Revenue and Customs (HMRC) has effectively put back the deadline by two days.
More than two million people have still to file their returns online.
The tax authority has changed the procedure after earlier telling the BBC that there would be leniency owing to the strike.
The public sector union, the PCS, is planning strikes at call centres and inquiry offices to protest against the appointment of private companies to run call-handling trials in two contact centres.
Fines
The countdown to the tax return deadline has started in earnest. On Tuesday, 182,530 forms were filed online.
HMRC is introducing a much tougher system of fines this year. The £100 penalty will apply whether or not there is tax owed.
Penalties can mount up if a taxpayer neglects to send in a form, to £1,300 after six months and £1,600 after a year.
Even so, 600,000 of the nine million people who have to fill in the returns were expected to put off submitting them until 31 January.
On past form, 15% per cent of them, about 90,000, will ring for help and may find it impossible to get an answer, owing to the strike on deadline day.
“We have always been very clear that we want the returns - not the penalties. For that reason, we do not want anyone who cannot get through for help and advice on 31 January to be disadvantaged in any way,” said HMRC’s acting-director of general personal tax, Stephen Banyard.
David Gauke, exchequer secretary to the Treasury, said: “This strike could have caused thousands of people to incur fines, so I am pleased that HMRC has taken this commonsense approach.
“The government does not want anyone trying to file their tax return on time to be unfairly penalised because they were unable to get through for help and advice on the 31st.”
Those who have tax to pay will not face any interest on payments made on 1 and 2 February.
Appeals
Anyone who files after 2 February will be fined £100, although the normal appeals procedure is in place.
This requires taxpayers with a “reasonable excuse” to write to their tax office quoting their unique taxpayer reference. They should not wait for the penalty notice.
Examples given of valid excuses which would normally be accepted include the loss of documents through theft, fire or flood and the onset of a life-threatening illness.
Those choosing to send in tax returns on paper were required to submit them by 31 October. Some 34,000 penalty notices were sent out after the deadline passed.
Story from BBC News
HMRC Will Cancel Late Filing Penalties for Soliders
January 25, 2012 by Davenports Tax Team
Filed under Accountancy News
British armed forces personnel in active service who have failed to file their tax return in time will have their penalties cancelled as a ‘Reasonable Excuse’ if they get in touch with HMRC.
As discussed on BBC Money Box, soldiers serving in Afghanistan will still face penalties if they fail to file by the 31 January deadline, but there will the chance to appeal.
Paul Lewis said: “HMRC refused to talk about this all week, but on Saturday morning at 11.30, [half an hour before Moneybox was broadcast], they told us if armed forces let us know, we will immediately cancel penalties. They will accept serving in Afghanistan as a Reasonable Excuse.
An HMRC spokesperson also told AccountingWEB: “For a service person who is serving with the military in Afghanistan, we appreciate that they have higher priorities than filling out their tax return. They’re in a fairly unique position, a combat position, and obviously that has to come first for them, and we completely understand and support that.
“So if they couldn’t complete the return by 31 January the penalty notice would be automatically generated by the system. However, if the service person contacts us as soon as they can to point out that they didn’t complete it because they were on a tour of duty in Afghanistan, we would cancel that penalty notice.
HMRC confirmed that while there is a 30-day deadline to appeal, they will “apply common sense”, and this will be waived for those serving in Afghanistan.
“You’re supposed to appeal within 30 days, but again we know that being on active service in Afghanistan is a pretty unique position, so we would be very flexible about that and as soon as they got in touch we would make sure they didn’t have anything to pay.
The advice is, don’t wait for penalty - send a letter in to accompany your late return.
Story from AccountingWeb
Tutors and Coaches Have Less Than One Month to Clean The Slate On Tax
December 8, 2011 by Davenports Tax Team
Filed under Accountancy News
Private tutors and coaches have less than a month left to tell HM Revenue & Customs (HMRC) about any tax that they owe.
They were offered a special tax plan - the Tax Catch Up Plan - in October this year. Registering by 6 January 2012 ensures that tutors and coaches don’t lose out on the best terms to disclose and pay what is owed.
The Tax Catch Up Plan is for people providing tuition or coaching, regardless of whether they have a registered qualification. It is aimed at those who profit from tuition and coaching as a main or secondary income, on which the correct tax has not been paid.
The opportunity is available to people teaching traditional academic subjects, fitness and dance, musical instruments, art, life coaching, personal training and other instruction.
After 6 January 2012, using information pulled together from different sources, HMRC will investigate those who have chosen not to come forward.
Marian Wilson, Head of HMRC Campaigns, said:
“Tutors and coaches who have notified us of their intention to disclose unpaid tax will have until 31 March to tell us what they owe and make arrangements to pay.
“From January we will use the information at our disposal to investigate tutors and coaches who have not declared their full income. I therefore strongly urge anyone in this group who thinks they may have outstanding income tax liabilities to get in touch with HMRC and get their tax affairs in order.
“This is the first step for those with undisclosed income or gains to avoid a full tax investigation and much higher penalties. Contact us before we contact you.”
The Tax Catch Up Plan has two stages:
- By 6 January 2012, tutors/coaches/instructors must register with HMRC to “notify” that they plan to make a voluntary tax disclosure.
- By 31 March 2012, those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.
People can register online by completing a notification form - www.hmrc.gov.uk/ris/tcup/index.htm - or by calling HMRC on 0845 601 8817. A dedicated team is ready to help, Monday to Friday, 08:00 until 19:30.
If you think you may fall into this group, contact Davenports today to see how we can help
HMRC Targets Fashion Houses Exploiting Interns
December 8, 2011 by Davenports Tax Team
Filed under Accountancy News
Fashion houses are the latest targets of an HM Revenue & Customs campaign aimed at ending the exploitation of interns.
HMRC has written to a number of fashion houses and designer labels warning them about non-payment of the National Minimum Wage.
The letters are being sent to fashion houses that exhibited at London Fashion Week in September 2011, and are expected to do so again at the capital’s Fashion Week in February.
Michelle Wyer, HMRC’s Assistant Director for National Minimum Wage, said:
“These letters give fashion houses plenty of warning that they are under scrutiny. If they are not playing by the rules, now is the time to put things right. Non-payment of the national minimum wage is not an option.
“Our message is clear: don’t wait for us to come knocking on your door; put things right now and avoid a penalty and possible prosecution.”
Letters to 102 fashion labels have been issued, with compliance visits due to begin early in the New Year.
If you have received one of these letters, why no get in touch to see how Davenports can help
Give Your House to Your Children to Avoid IHT
August 16, 2011 by Davenports Tax Team
Filed under Accountancy News
This is a great example of the sort of Popular Misconceptions About Tax.
The simple idea is to ensure that the house isn’t owned by the parents when they die and IHT becomes payable. It should come as no surprise that the tax rules are wise to this idea.
Firstly the gift would be ignored for IHT purposes if the parents continue to live there. So the House gets caught by ‘Gift with a Reservation Of Benefit’ rules and is still subject to IHT.
But the position is now probably worse than it was. For example:
When the house is sold by the children the gain will be subject to Capital Gains Tax (CGT) unless they happen to live there with Mum & Dad. If no gift had been made there would no CGT if the property was sold shortly after the parents death.
The parents security of tenure in what is no longer ‘their’ property is now vulnerable to any court rulings that follow if their children divorce or become bankrupt.
It’s also worth noting that under the current rules no IHT is payable unless someone’s taxable estate when they die is more than £325,000 (£650,000 for married couples and registered civil partners).
So if anyone acted on this PMA Tax idea they would simply have created more problems and more tax liabilities than if they’d done nothing. Far preferable to seek out professional advice from someone who really understands the IHT rules and gives this sort of advice on a daily basis.
Story from Tax Advice Network
HMRC Help For Customers Affected By Civil Disorder
August 12, 2011 by Davenports Tax Team
Filed under Accountancy News
HM Revenue & Customs (HMRC) has today announced a single helpline number – 0845 366 1207 – to help businesses and individuals adversely affected by the recent civil disorder.
HMRC is determined to do all it can to help, and may be able to do this in a variety of ways.
The dedicated Civil Disorder helpline is available to provide comprehensive advice and deal sympathetically with problems currently faced by businesses and individuals. In particular, HMRC will:
- agree payment schedules with those who are unable to pay their tax bills due to short-term financial difficulties; and
- discuss practical solutions where businesses and individuals cannot meet their other obligations to HMRC – for instance, their records have been lost or destroyed in the disturbances.
In these circumstances, and whenever possible, HMRC will review any penalties imposed and withhold additional surcharges that would normally be triggered by missed deadlines.
In short, if you want to talk about how the disorder has affected you in relation to the tax system (including tax credits), please contact HMRC – we are here to help. There are a range of existing reliefs available and HMRC’s trained advisors will be happy to help.
HMRC’s Civil Disorder helpline will be available from 8.00am to 8.00pm, seven days a week.
To help deal with your query more efficiently, callers should have the relevant taxpayer reference number to hand e.g. Unique Taxpayer Reference (UTR) for Self Assessment customers, or VAT number for VAT-registered businesses.
HMRC Tackles London’s Fast Food VAT Dodgers
July 20, 2011 by Davenports Tax Team
Filed under Accountancy News
A new taskforce to tackle VAT abuse in London’s fast food outlets was announced today by HM Revenue & Customs (HMRC).
HMRC has identified that there is a problem with some fast food outlets deliberately falsifying their records and mis-declaring their true sales levels in order to avoid paying the correct taxes.
Mike Wells, HMRC’s Director of Risk and Intelligence, said:
“This taskforce will come down hard on fast food outlets that have chosen to break the rules and evade the taxes they should be paying. Honest businesses have absolutely nothing to worry about.
“This taskforce comes hard on the heels of one launched last month targeting the restaurant sector in London. If you deliberately seek to evade tax HMRC can and will track you down, and you’ll face not only a heavy fine, but possibly a criminal prosecution as well.”
This is the 4th taskforce launched by HMRC since May 2011. HMRC is planning a further nine taskforces in 2011/12, with more to follow in 2012/13. The taskforces come as a result of the Government’s £900m spending review investment to tackle tax evasion, avoidance and fraud from 2011/12, which aims to raise an additional £7bn each year by 2014/15.
If you are aware of someone who is evading their taxes you can tell HMRC via the Tax Evasion Hotline by phone on 0800 788 887, via the email hotline, or by post full details can be found at www.hmrc.gov.uk
SMEs Warned Over Business Records Checks
July 19, 2011 by Davenports Tax Team
Filed under Accountancy News
The taxman’s approach to small business records checks has undergone a “subtle change in tone” from being an educational exercise to a compliance check, advisors have warned.
HM Revenue & Customs yesterday released the summary of responses to its consultation on the business records checks initiative. It said that “business records checks are primarily a compliance check, not an educational exercise”.
However, Guy Smith, senior tax consultant at Abbey Tax Protection, said that this represents a “subtle change” from the way it was originally being sold to advisors.
In letters sent to businesses as part of a pilot, HMRC recommended areas of improvement for record keeping and informed the companies that they might receive visits within three months to check the improvements have been made, Smith added.
“Up until now, the underlying theme has been one of informed education,” he said. “However, that now seems to have changed with the publication of the summary of responses report.”
The consultation said: “A policy of not charging a penalty for an initial finding of significant record keeping failure would risk creating the perception that there is no need to change behaviour in relation to poor record keeping unless and until one has been caught out at least once.”
But this is in contrast to the consensus among respondents, Smith said, which favoured giving respondents time to make improvements and issuing first warnings.
Mike Down, tax partner at Baker Tilly, said that the initiative “has always been a mix of educational awareness and compliance checks”. But there are still issues about whether this is a good use of resources and how well publicised it has been.
Down also said that the Taxman “jumped the gun” on the pilots. “The summary of responses said the pilot scheme began on 4 April but the first letter was sent out on 21 March. They jumped the gun. The original consultation said it would start in the second half of 2011.”
Story from: Accountancy Age
Need help with your tax, contact Davenports today
VAT Cheats Targeted in Crackdown
July 5, 2011 by Davenports Tax Team
Filed under Accountancy News
As part of a campaign launched today aimed at VAT rule-breakers, HM Revenue & Customs (HMRC) will be sending letters informing businesses how to register to pay what they owe. The new campaign focuses on individuals and businesses trading above the VAT threshold of £73,000 turnover but who have not registered for VAT.
More than 40,000 letters will be sent out over the next few weeks. Under the terms of the VAT Initiative, those who have not registered to pay VAT can come forward any time up to 30 September to tell HMRC that they want to take part. If they make a full disclosure, most face a low penalty rate of 10 per cent on VAT that has been paid late.
They will also be invited to disclose any other tax arrears. Where they have to pay a penalty on undeclared tax other than VAT, this will be lower than the customary penalty of up to 100 per cent charged to those who fall outside the opportunity.
After 30 September, using information pulled together from different sources, HMRC will investigate those who have failed to come forward. Substantial penalties or even criminal prosecution could follow.
Mike Wells, HMRC’s Director of Risk and Intelligence, said:
“This is our third campaign, raising more than £500m from voluntary disclosures and a further £100m so far from follow-up activity.
“Our campaigns are designed to ensure tax is paid so that the money is available to spend on public services used by everyone.
“The aim is to make it easy for individuals and businesses to contact us, make a full disclosure of their income and face a reduced penalty on any tax owed.
“I urge people who have not registered their businesses for VAT to get in touch with HMRC and get their tax affairs in order simply and on the best available terms.”
To use the VAT Initiative people and businesses must:
- Register with HMRC by 30 September to “notify” that they plan to make a voluntary VAT disclosure;
- Tell HMRC about VAT due and make arrangements to pay it, as well as any penalties due, by 31 December.
How to let HMRC know of the intention to make a tax disclosure:
- Online by completing a notification form at http://www.hmrc.gov.uk/ris/vat/
- Ring HMRC on 0845 600 5217
A dedicated team is available to give information and advice.
Previous HMRC campaigns have targeted offshore investments, medical professionals and people working in the plumbing industry.
For assistance with your VAT obligations, contact Davenports today using the simply form below:
Phasing Out of National Insurance Number Cards Continues
June 27, 2011 by Davenports Tax Team
Filed under Accountancy News
Traditionally HM Revenue & Customs (HMRC) has notified individuals of their National Insurance number for the first time by sending them a plastic National Insurance number card.
Last year, as part of the Government’s Spending Challenge, the Chancellor announced that HMRC would stop issuing National Insurance number cards and send letters instead (saving £820k a year).
HMRC stopped issuing replacement National Insurance number cards in October 2010. Since then, if you ask for a reminder of your National Insurance number you get a letter confirming it instead.
From July 2011, HMRC will stop issuing cards to adults. If you’re an adult and need a National Insurance number for the first time, you will receive your number on a letter from the Department for Work and Pensions (Jobcentre Plus).
However, if you are approaching age 16 and are eligible to receive a number automatically, you will still be sent a National Insurance number card. This will continue until later in the year.
Millions of people will still have a National Insurance number card. As the cards are phased out, there will be growing numbers of people who will have a letter instead. If you are an employer you will need to bear this in mind when taking on a new employee.
You do not need to have a National Insurance number card - it is your number that is important.
Find out more about how to get a National Insurance number, when you’ll need one and what to do if you don’t receive yours or forget or lose it by following the link below.
Applying for a National Insurance number
