From April 2012, businesses (with very few exceptions) will have to file their VAT Returns online and pay their liability electronically. If you are not already online, now is the time to set it up.
HMRC strongly recommends you sign up to using the online service before April 2012, so that you have time to get familiar with the new service. It has also proved useful to set up online filing, and the associated direct debit mandate, some time before the first return needs to be submitted, to avoid delays in either the submission or payment of your first return.
When you submit your VAT Returns online, you must also pay any VAT due electronically. Paying electronically will normally give you to up to seven extra calendar days to submit your return and pay your VAT, unless you make annual returns or payments on account. The extended due date will be shown on your online return and you must ensure that cleared funds reach HMRC's bank account by this date. If your payment clears later than this, you may be liable to a surcharge for late payment.
Moving to online filing
Thursday 26 January 2012
Tuesday 24 January 2012
T-7 and counting ...
Time is ticking away and with only 7 calender days left, the 31st January will be here before we know it.
All Self Assessment Tax Returns for the year ended 5th April 2011 must be filed online by 31st January 2012. (The deadline for most paper returns is long gone.)
If you have received a notification from HMRC that they are expecting a self assessment return from your, or you have had any assessable income during the tax year, you need to file a tax return by the deadline date.
All Self Assessment Tax Returns for the year ended 5th April 2011 must be filed online by 31st January 2012. (The deadline for most paper returns is long gone.)
If you have received a notification from HMRC that they are expecting a self assessment return from your, or you have had any assessable income during the tax year, you need to file a tax return by the deadline date.
Friday 20 January 2012
More on PAYE Filing Penalties
Recent Tribunal decisions on penalties for PAYE returns that are filed late are inconsistent, and the taxman should issue penalty notices to taxpayers more promptly after a deadline is missed, a senior tax accountant said.
As HMRC prepares to challenge a tribunal ruling that criticized its practice of allowing fines to accumulate before issuing penalty notices, recent tribunals have reached different verdicts on the increasingly controversial subject.
Chas Roy-Chowdhury, head of taxation at the ACCA accountancy institute, said tribunal decisions on penalties were "all over the place".
The taxman should be more understanding if businesses make an honest mistake when submitting end-of-year P35 returns - which show employees' income tax and national insurance contributions - Roy-Chowdhury added.
For example, some businesses, or their tax advisers, may mistakenly send a "test version" of their P35, wrongly believing that they have completed the return.
In Croydon North Conservative Association v commissioners for HMRC - heard in the first-tier tribunal last November - the association appealed against an "unfair" £800 penalty for a P35 return that was filed late.
The employer filed their P35 online on 30 March 2011 - more than ten months after the 19 May 2010 deadline for sending the return.
The association appealed against the fine, arguing that its treasurer had no experience of PAYE. It also said that HMRC had taken eight months to notify it about the fine and that an earlier call or letter explaining that the P35 was late would have solved the problem.
The tribunal ruled in favour of the taxman, concluding that penalty notices were not intended to serve as reminders and that burden was on the taxpayer to establish a reasonable excuse for late returns.
In another case about tax penalties - Global Legalisation Services Limited v the commissioners for HMRC - heard in the first-tier tribunal last August - a company successfully appealed against a £800 penalty for a P35 form that was sent late.
The company's tax adviser said that it believed it had filed the return successfully.
After sending the the P35 return online the agent received an email from HMRC confirming receipt but warning that if the submission was a "test submission" the form should be resent using the "live transmission" in order to be processed.
HMRC said that sending a "test submission" requires the employer to "actively access test mode on the system" - meaning that the employer does not have a reasonable excuse for sending the form late.
Roy-Chowdhury said that the taxman should be prepared to reduce tax penalties to encourage people to file late returns quickly.
"When HMRC issues penalties [for late filing of a P35 form] it could say there is a £500 penalty but if you file within 30 days you will pay £100," he said.
A plan to collect income tax and national insurance contributions from employees' pay packets in "real time" rather than annually should make it easier for HMRC officials to send tax reminders and penalties quicker. The new system is due to start from April 2013.
Under real-time PAYE, employers will send HMRC information about tax and other deductions from employees' pay when, or before they make the salary or wage payment to the employee, rather than sending returns at the end of the year under the current system.
As HMRC prepares to challenge a tribunal ruling that criticized its practice of allowing fines to accumulate before issuing penalty notices, recent tribunals have reached different verdicts on the increasingly controversial subject.
Chas Roy-Chowdhury, head of taxation at the ACCA accountancy institute, said tribunal decisions on penalties were "all over the place".
The taxman should be more understanding if businesses make an honest mistake when submitting end-of-year P35 returns - which show employees' income tax and national insurance contributions - Roy-Chowdhury added.
For example, some businesses, or their tax advisers, may mistakenly send a "test version" of their P35, wrongly believing that they have completed the return.
In Croydon North Conservative Association v commissioners for HMRC - heard in the first-tier tribunal last November - the association appealed against an "unfair" £800 penalty for a P35 return that was filed late.
The employer filed their P35 online on 30 March 2011 - more than ten months after the 19 May 2010 deadline for sending the return.
The association appealed against the fine, arguing that its treasurer had no experience of PAYE. It also said that HMRC had taken eight months to notify it about the fine and that an earlier call or letter explaining that the P35 was late would have solved the problem.
The tribunal ruled in favour of the taxman, concluding that penalty notices were not intended to serve as reminders and that burden was on the taxpayer to establish a reasonable excuse for late returns.
In another case about tax penalties - Global Legalisation Services Limited v the commissioners for HMRC - heard in the first-tier tribunal last August - a company successfully appealed against a £800 penalty for a P35 form that was sent late.
The company's tax adviser said that it believed it had filed the return successfully.
After sending the the P35 return online the agent received an email from HMRC confirming receipt but warning that if the submission was a "test submission" the form should be resent using the "live transmission" in order to be processed.
HMRC said that sending a "test submission" requires the employer to "actively access test mode on the system" - meaning that the employer does not have a reasonable excuse for sending the form late.
Roy-Chowdhury said that the taxman should be prepared to reduce tax penalties to encourage people to file late returns quickly.
"When HMRC issues penalties [for late filing of a P35 form] it could say there is a £500 penalty but if you file within 30 days you will pay £100," he said.
A plan to collect income tax and national insurance contributions from employees' pay packets in "real time" rather than annually should make it easier for HMRC officials to send tax reminders and penalties quicker. The new system is due to start from April 2013.
Under real-time PAYE, employers will send HMRC information about tax and other deductions from employees' pay when, or before they make the salary or wage payment to the employee, rather than sending returns at the end of the year under the current system.
Thursday 19 January 2012
HMRC missing a deadline - surely not?
HM Revenue and Customs has missed a key deadline which required it to create teams of cyber crime investigators and launch initiatives to counter the increased threat of web attacks on the authority's system and customers.
In its structural reform plan progress report for December 2011, HMRC said that work on the project should have been completed by November 2011, but recruitment activity is still ongoing and the scheme will now not be completed until February.
This serves to prove that despite unemployment rates spiralling, the country does not have the appropriate people trained and capable of fulfilling this vitally important role in protecting taxpayers data. Perhaps they will impose financial penalties on themselves as they do so readily with taxpayers who miss deadlines or do HMRC believe that they have a "reasonable excuse"?
In its structural reform plan progress report for December 2011, HMRC said that work on the project should have been completed by November 2011, but recruitment activity is still ongoing and the scheme will now not be completed until February.
This serves to prove that despite unemployment rates spiralling, the country does not have the appropriate people trained and capable of fulfilling this vitally important role in protecting taxpayers data. Perhaps they will impose financial penalties on themselves as they do so readily with taxpayers who miss deadlines or do HMRC believe that they have a "reasonable excuse"?
Wednesday 18 January 2012
The rules on being late with PAYE & NIC payments
We have become aware that some businesses are wrongly interpreting the rules regarding late settlement of monthly or quarterly PAYE payments. HMRC expect that deductions made from employees for tax and NI in one month should be correctly accounted for and paid over by 22nd of the subsequent month. The penalties regime was extended to include late PAYE returns in 2009/10 and many late penalties of up to £400 were publicised in the press recently.
There does however seem to be some confusion regarding an HMRC concession which states that for one payment only each year, if it is made late, they will not seek to impose a penalty. This means that HMRC still expect the payment to be made within reasonable time NOT as some people seem to believe, that a whole month's payment can be deferred until month 12 without a penalty as long as all other payments are made on time.
HMRC deadlines contains further details.
There does however seem to be some confusion regarding an HMRC concession which states that for one payment only each year, if it is made late, they will not seek to impose a penalty. This means that HMRC still expect the payment to be made within reasonable time NOT as some people seem to believe, that a whole month's payment can be deferred until month 12 without a penalty as long as all other payments are made on time.
HMRC deadlines contains further details.
Tuesday 17 January 2012
Self Assessment Returns
More than 1,000 taxpayers submitted their self assessment returns on Christmas Day, HMRC figures have revealed.
The figures also show that 102 people saw in the new year at their computer completing their tax returns. In total, 11,648 filed on New Year's Eve, while 8,935 people battled hangovers to submit on New Year's Day.
It is no surprise that HMRC can collect this type of data yet cannot spend the necessary time to get basic PAYE codes correct or indeed many of the other processes which create worry and concern for taxpayers.
The figures also show that 102 people saw in the new year at their computer completing their tax returns. In total, 11,648 filed on New Year's Eve, while 8,935 people battled hangovers to submit on New Year's Day.
It is no surprise that HMRC can collect this type of data yet cannot spend the necessary time to get basic PAYE codes correct or indeed many of the other processes which create worry and concern for taxpayers.
Monday 16 January 2012
Walker Thompson Newsletter 51
WELCOME TO 2012
On 15 December 2011 Walker Thompson were successfully re-assessed against the Investors in Excellence Standard, first achieved by the firm in 2007 and again two years later.
PENSIONS AUTO ENROLMENT
The Government has confirmed that pensions auto enrolment will commence in Autumn 2012 and all employers will remain within the scope of the rules.
ADVISORY FUEL RATES FOR COMPANY CARS
New company car advisory fuel rates have been published to take effect from 1 December 2011.
CAPITAL ALLOWANCES IN ENTERPRISE ZONES
Following the Autumn Statement at the end of November 2011, more information is now available in respect of the proposal to give 100% first year allowances on plant and machinery expenditure for use in some Enterprise Zone areas.
SEED ENTERPRISE INVESTMENT SCHEME
The government has released more information on the new Seed Enterprise Investment Scheme (SEIS) aimed at smaller companies.
STATUTORY RESIDENCE TEST
The government has been consulting on introducing a Statutory Residence Test (SRT). The test which was expected to be introduced from 2012 has been delayed until 6 April 2013. More details are expected to be announced in the 2012 Budget.
SELF ASSESSMENT DEADLINE FAST APPROACHING
HMRC are reminding taxpayers that the deadline for filing self assessment tax returns is fast approaching.
THE PORTAS REVIEW
The CBI commented on a report by Mary Portas on the future of the high street.
HMRC TO ACCEPT FASTER PAYMENTS
HMRC have announced that they will now accept payments made using the Faster Payments Service. This will allow taxpayers to make faster electronic payments, typically via internet or telephone banking, enabling them to be processed on the same or next day.
2012/13 STATUTORY PAYMENTS
HMRC have announced the following statutory payment rates which are due to take affect for 2012/13. These rates are still subject to Parliamentary approval and HMRC will confirm the rates before 1 April 2012.
On 15 December 2011 Walker Thompson were successfully re-assessed against the Investors in Excellence Standard, first achieved by the firm in 2007 and again two years later.
PENSIONS AUTO ENROLMENT
The Government has confirmed that pensions auto enrolment will commence in Autumn 2012 and all employers will remain within the scope of the rules.
ADVISORY FUEL RATES FOR COMPANY CARS
New company car advisory fuel rates have been published to take effect from 1 December 2011.
CAPITAL ALLOWANCES IN ENTERPRISE ZONES
Following the Autumn Statement at the end of November 2011, more information is now available in respect of the proposal to give 100% first year allowances on plant and machinery expenditure for use in some Enterprise Zone areas.
SEED ENTERPRISE INVESTMENT SCHEME
The government has released more information on the new Seed Enterprise Investment Scheme (SEIS) aimed at smaller companies.
STATUTORY RESIDENCE TEST
The government has been consulting on introducing a Statutory Residence Test (SRT). The test which was expected to be introduced from 2012 has been delayed until 6 April 2013. More details are expected to be announced in the 2012 Budget.
SELF ASSESSMENT DEADLINE FAST APPROACHING
HMRC are reminding taxpayers that the deadline for filing self assessment tax returns is fast approaching.
THE PORTAS REVIEW
The CBI commented on a report by Mary Portas on the future of the high street.
HMRC TO ACCEPT FASTER PAYMENTS
HMRC have announced that they will now accept payments made using the Faster Payments Service. This will allow taxpayers to make faster electronic payments, typically via internet or telephone banking, enabling them to be processed on the same or next day.
2012/13 STATUTORY PAYMENTS
HMRC have announced the following statutory payment rates which are due to take affect for 2012/13. These rates are still subject to Parliamentary approval and HMRC will confirm the rates before 1 April 2012.
Welcome to the Great New Year NIC Giveaway
The take up of the National Insurance Holiday scheme that formed a key part of Chancellor George Osborne's first Budget is still way below the Treasury's initial estimates, the government has confirmed.
Exchequer secretary to the Treasury David Gauke released figures about the scheme to Parliament recently. Just over 10,000 companies have taken up the scheme since June 2010. The government had hoped for a take-up of 132,000 a year when it was announced by Osborne.
The holiday exempts qualifying new businesses in eligible regions from up to £5,000 of employer national insurance contributions for each of the first ten employees hired in the first 12 months of business.
It has received criticism because it is only available in certain regions.
Professionals have call for the scheme to be rolled out across the country. HM Revenue & Customs say that they have sent around 140,000 personalised letters to all businesses that have registered for a PAYE scheme since June 2010 at a cost of around £90,000 in October.
The Exempted areas are:
Greater London (all)
The Eastern Region comprising:
The counties of Bedford, Cambridgeshire, Central Bedfordshire, Essex, Hertfordshire, Norfolk and Suffolk.
Luton, Peterborough, Southend-on-Sea and Thurrock.
The South East Region comprising:
The counties of Buckinghamshire, East Sussex, Hampshire, the Isle of Wight, Kent, Oxfordshire, Surrey and West Sussex.
Bracknell Forest, Brighton and Hove, Medway, Milton Keynes, Portsmouth, Reading, Slough, Southampton, West Berkshire, Windsor and Maidenhead and Wokingham.
Exchequer secretary to the Treasury David Gauke released figures about the scheme to Parliament recently. Just over 10,000 companies have taken up the scheme since June 2010. The government had hoped for a take-up of 132,000 a year when it was announced by Osborne.
The holiday exempts qualifying new businesses in eligible regions from up to £5,000 of employer national insurance contributions for each of the first ten employees hired in the first 12 months of business.
It has received criticism because it is only available in certain regions.
Professionals have call for the scheme to be rolled out across the country. HM Revenue & Customs say that they have sent around 140,000 personalised letters to all businesses that have registered for a PAYE scheme since June 2010 at a cost of around £90,000 in October.
The Exempted areas are:
Greater London (all)
The Eastern Region comprising:
The counties of Bedford, Cambridgeshire, Central Bedfordshire, Essex, Hertfordshire, Norfolk and Suffolk.
Luton, Peterborough, Southend-on-Sea and Thurrock.
The South East Region comprising:
The counties of Buckinghamshire, East Sussex, Hampshire, the Isle of Wight, Kent, Oxfordshire, Surrey and West Sussex.
Bracknell Forest, Brighton and Hove, Medway, Milton Keynes, Portsmouth, Reading, Slough, Southampton, West Berkshire, Windsor and Maidenhead and Wokingham.
Monday 2 January 2012
Self-employment National Insurance Contributions
Making sure you don't overpay self-employment National Insurance contributions.
If you expect to be both employed and self-employed you may be able to 'defer' some of your Class 2 and/or Class 4 National Insurance contributions. You'll pay what's due after the end of the tax year when the actual amount has been worked out. Doing this will make sure you don't pay too much National Insurance on any self-employment income.
Go to form CA72B Application for deferment of payment of Class 2 and/or Class 4 National Insurance contributions.
Walker Thompson's view: It is advisable to check and if in doubt apply as soon as possible. Deferment cannot be made retrospectively.
If you expect to be both employed and self-employed you may be able to 'defer' some of your Class 2 and/or Class 4 National Insurance contributions. You'll pay what's due after the end of the tax year when the actual amount has been worked out. Doing this will make sure you don't pay too much National Insurance on any self-employment income.
Go to form CA72B Application for deferment of payment of Class 2 and/or Class 4 National Insurance contributions.
Walker Thompson's view: It is advisable to check and if in doubt apply as soon as possible. Deferment cannot be made retrospectively.
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