Newsletter 67

We often think that HMRC are interested only in collecting in tax due by way of cash into the Treasury. During the last month however we have seen a position emerge where HMRC are keen to deny tax relief which would otherwise have been due and would have reduced a taxpayer’s liability.

Under Self Assessment it is the responsibility of the taxpayer to notify any circumstances which could lead to additional tax becoming payable. It seems however that some taxpayers may have taken the view that as their main source of income is through PAYE and tax correctly deducted, their rental property income which results in a loss after interest and overheads does not require disclosure. They may take the view that when profits are made then they will tell HMRC. Rental losses can only be carried forward to use against rental profits but HMRC are challenging undisclosed losses from earlier years and seeking to open enquiries into all aspects of a return as a consequence.

Our advice is to disclose everything including losses on a tax return as this will potentially avoid any unnecessary investigation into tax affairs.
   
LOANS FROM A COMPANY TO SHAREHOLDERS

Draft legislation has been published which confirms an announcement made in Budget 2013 and which has effect from 20 March 2013.
 
INCREASE IN NMW RATES

The Government has announced increases in the NMW rates which will come into effect on
1 October 2013.  

HMRC LAUNCH MANAGING SERIOUS DEFAULTERS (MSD)

Following on from Managing Deliberate Defaulters (MDD) programme, under MSD HMRC will closely monitor the tax affairs of more individuals and businesses who have deliberately evaded tax for up to five years.
 
EMPLOYER END OF YEAR FORMS

HMRC are reminding employers that in order to avoid penalties they must file the Employer Annual Return (P35 and P14s) online and on time.
 
EMPLOYMENT PARTICULARS

The government has updated the template of written employment particulars.
 
P11D DEADLINE APPROACHING

The forms P11D, and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2013, are due for submission to HMRC by 6 July 2013.
 
SCOTTISH RATE OF INCOME TAX

On 14 February 2013 Scottish and UK ministers agreed the final text of the Memorandum of Understanding between HMRC and the Scottish Government covering the Scottish rate of income tax.

Dividends versus Salary

In a long standing case which reached The Court of Appeal,
PA Holdings has conceded that dividends it paid to sections of its workforce under a contrived scheme of arrangement will now stand to be taxed as remuneration.  HMRC announced last week that
PA Holdings had decided against taking the case before the Supreme Court.


It is possible that HMRC could use the decision to challenge
dividends paid out by ordinary SME companies to their shareholders but HMRC state that this will not be their intention. They stated that the PA Holdings scheme was complex and that a deduction for Corporation Tax was being sought from both the Dividend and the remuneration and that the Court of Appeal had correctly drawn the conclusion that payments were either remuneration or dividends and that having decided that it was all remuneration then there was no way that it could attract the lower 10% rate of tax applicable to dividends.  Of course with remuneration there must be tax of at least 20% and NIC’s as well.


If HMRC do begin enquiries into dividends paid to shareholding members of staff then the correct paperwork voting the amounts etc will prove invaluable. If in doubt contact us on 024 7663 5522

Newsletter 66

Headlines from our latest newsletter.  Please click on any of the links below for more information :

PERSONAL ALLOWANCE UP TO £10,000 FROM 2014/15

It has been confirmed in the Budget that the basic personal allowance will be increased from the current £8,105 to £9,440 for 2013/14

NATIONAL INSURANCE - £2,000 EMPLOYMENT ALLOWANCE

The Government will introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 NIC liability from April 2014

NEW SCHEME FOR TAX FREE CHILDCARE

New tax incentives for childcare have been announced.   To be eligible, families will have to have all parents in work, with each earning less than £150,000 a year and not already receiving support through Tax Credits or Universal Credit

SUPPORT FOR THE HOUSING MARKET

Major reforms have been announced in Budget 2013, including over £5.4 billion of financial help

RTI ‘RELAXATION’ FOR SMALL EMPLOYERS

HMRC have announced that, for some smaller employers, they will relax the reporting requirement for RTI that payments to employees should be reported on or before the amount is paid to the employee

ADVISORY FUEL RATES FOR COMPANY CARS

Updated company car advisory fuel rates have been published which took effect from 1 March 2013

EMPLOYER END OF YEAR FORMS

HMRC are reminding employers that in order to avoid penalties they must file the Employer Annual Return (P35 and P14s) online and on time

REMINDER TO THOSE WITH CHILD BENEFIT AND HIGHER INCOMES

HMRC are reminding people with income over £60,000 whose family is still receiving Child Benefit to consider ‘opting out’ before 28 March if they wish to avoid filling in a tax return and repaying the benefit for the 2013/14 tax year

HMRC PUBLISH NAMES OF DELIBERATE DEFAULTERS

For the first time, HMRC have published a list of ‘deliberate tax defaulters’

ANOTHER HMRC DISCLOSURE FACILITY

HMRC have launched the Property Sales campaign, which is the latest in a long line of disclosure facilities

Newsletter 65

Headlines from our latest newsletter.  Please click on any of the links below for more information :

AUTO ENROLMENT TOOL

Under Pensions Auto Enrolment employers must:

• ‘auto enrol’ eligible employees into a pension scheme

• make employer pension contributions for them, and

• make deductions of employee pension contributions from the employees pay.  

REAL TIME INFORMATION

HMRC are issuing final reminders to employers to ‘act now’ in order to be ready to report PAYE under Real time Information (RTI).  

PAYING HMRC BY BILL PAY

The ICAEW has reported that HMRC are aware that there are problems with the Bank of Santander’s Bill Pay service which is used by many individuals to pay their self assessment tax liabilities by credit or debit card.

TAX REBATE PHISHING SCAM

HMRC are warning taxpayers not to fall victim of scam emails sent by fraudsters. In 2012 taxpayers reported almost 80,000 tax rebate phishing emails and HMRC took action to close down 522 illegal sites.  
HMRC REPORT SELF ASSESSMENT STATISTICS

HMRC have reported that a record 9.61 million people submitted their self assessment tax return on time this year.  

HMRC WIN FURNISHED HOLIDAY LETTINGS TEST CASE

HMRC have been successful in a test case which considered the tax reliefs available for Furnished Holiday Lettings (FHL).  

SHARED PARENTAL LEAVE

Proposals to change the way parents can share maternity leave have been outlined as part of the Children and Families Bill.

TACKLING LONG TERM SICKNESS ABSENCE

The government has announced proposals to introduce a new independent assessment and advisory service aimed at getting people back to work.

HEALTH AND SAFETY REFORMS

The government has announced that they have made significant progress in reforming Health and Safety requirements. The government has been working towards implementing some of the recommendations made in the Löfstedt Report in 2011 and the Young Report in 2010.

CHARITIES ONLINE GIFT AID SERVICE

HMRC have announced that claiming gift aid repayments will be quicker and easier for charities and sports clubs from April 2013.

Newsletter 64

Headlines from our latest newsletter.  Please click on any of the links below for more information :

EMPLOYMENT RIGHTS - STATUTORY LIMITS

The limit on the amount of the compensatory award for unfair dismissal is set to increase from 1 February 2013.

HMRC TARGET THOSE WITH OUTSTANDING VAT RETURNS

HMRC have introduced the VAT Outstanding Returns Campaign, which is an opportunity for taxpayers to bring their VAT returns and payments up to date.

‘TAX CHEATS’ SENTENCED TO OVER 150 YEARS BEHIND BARS

HMRC have announced that the top ‘tax criminals’ of 2012 have been sentenced to a combined total of 155 years and 10 months behind bars.

PAYE CODING NOTICES

HMRC are issuing PAYE tax codes for 2013/14.

RTI IS COMING

HMRC are urging employers to get ready for major PAYE changes that come into effect from April 2013.

START UP LOAN SCHEME FOR YOUNG ENTREPRENEURS EXTENDED

David Cameron has announced a boost to the government’s Start-Up Loans Scheme, with funding being increased by £30 million to £110 million over three years.

STATE PENSION REFORM

The government have announced proposals for a new single tier pension.

CHILD BENEFIT OPT OUT

The High Income Child Benefit Charge (HICBC) was introduced from 7 January 2013. It mainly applies to a taxpayer who has ‘adjusted net income’ in excess of £50,000, where either they or their partner is in receipt of Child Benefit.

DEADLINE LOOMING FOR SELF ASSESSMENT RETURNS

HMRC are reminding taxpayers that the countdown has begun to the 31 January 2013 self assessment deadline, with just days left for anyone with an outstanding 2011/12 tax return to send it online.

HMRC BANK ACCOUNT DETAILS FOR EMPLOYERS

HMRC have updated their guidance to employers on paying PAYE liabilities.

Newsletter 63

Headlines from our latest newsletter.  Please click on any of the links below for more information :

TENFOLD INCREASE IN ANNUAL INVESTMENT ALLOWANCE
The shock announcement of the Autumn Statement was the tenfold increase in the amount of the Annual Investment Allowance (AIA).

PERSONAL ALLOWANCE FOR 2013/14
For those aged under 65 the personal allowance will be increased from the current £8,105 to £9,440.

PENSIONS SAVING
It was announced in the Autumn Statement that for tax year 2014/15 onwards:
• the annual allowance for pensions tax relieved savings will be reduced from £50,000 to £40,000

A SIMPLER TAX SYSTEM FOR SMALLER BUSINESSES
The Chancellor is to proceed with proposals to make the tax system simpler for small unincorporated businesses from April 2013.

STATUTORY RESIDENCE TEST
HMRC have announced that legislation will be introduced in Finance Bill 2013 to put the rules which determine an individual’s tax residence on a statutory basis.

GOVERNMENT MUST TACKLE RED TAPE
The CBI is calling on the Government to tackle ‘red tape’.

REMINDER TO THOSE WITH HIGH INCOME AND CHILD BENEFIT
HMRC are reminding Child Benefit recipients with higher incomes that they have a month to decide whether to stop receiving the benefit or to pay a charge on it through self assessment.

ADVISORY FUEL RATES FOR COMPANY CARS
New company car advisory fuel rates took effect from 1 December 2012.

Tax doesn't need to be taxing - especially if you have a Premium Rate Phone Number

Delays in answering phone calls to HM Revenue and Customs cost callers £136m last year, it has been estimated.

The National Audit Office (NAO) has calculated that members of the public spent £33m on call charges whilst “on hold” with HMRC phone lines in 2011-12, wasting time worth £103m to them.

HMRC uses Cable & Wireless for its 0845 rate services - More …….

http://www.bbc.co.uk/news/uk-politics-20766494