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.

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.

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.

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.

HMRC Launches new Tax Task Forces

HMRC have followed a recognisable strategy in building specialist teams or "Task Forces" to tackle tax avoidance and evasion in key areas of the country and certain trade sectors.

This month, HMRC have announced the creation of Task Forces to deal with

• Tax avoidance in the Construction Industry
• Tax evasion by property landlords in north west England and north Wales
• Tax avoidance generally in Scotland
• Tax avoidance in the south east of England due to non submission of Self Assessment Returns

Walker Thompson's View:  This is the tip of a very large iceberg whereby greater rewards can be obtained through the penalties arrangement than might be gathered in tax in the first place.

Special Notice about Electronic PAYE payment dates

To avoid paying late you must make sure HM Revenue & Customs (HMRC) have cleared funds by the due date.  If you pay electronically this is the 22nd of each month.  However, when the 22nd falls on a non banking day, (weekend or bank holiday), HMRC must have cleared funds by the last bank working day before the 22nd.

For example:  2011-12 PAYE month 6 for the period ended 5 October 2011. 

The due date of 22 October 2011 fell on a Saturday - a non banking day - if paying electronically, your PAYE payment must have cleared HMRC's bank account by Friday 21 October 2011.

You may therefore need to change any automatic payment dates to ensure you pay on time.  If you do not do so, you will be noted by HMRC as paying late, and late payments for this tax year may result in a penalty being charged.

For further details go to:  Late Payments

Construction Industry Returns & Penalties

If you're a contractor under the Construction Industry Scheme (CIS) you'll need to send HM Revenue & Customs (HMRC) a return each month. Your monthly returns tell them about any payments you've made to your subcontractors during the last tax month.

HMRC have prepared a new guide explaining what will happen if you send a return in late. The guide is available here. Follow link

In short the penalties are as follows

Length of delay	Penalty you will have to pay
1 day late	A fixed penalty of £100. This applies even if your return has no subcontractors on it - a nil return.
2 months late	A fixed penalty of £200. This applies even if your return has no subcontractors on it - a nil return.
6 months late	£300 or 5% of the CIS deductions shown on the return, whichever is the higher. This is as well as the penalties above.
12 months late	£300 or 5% of the CIS deductions shown on the return, whichever is the higher.

In serious cases you may be asked to pay up to £3,000 or 100% of the CIS deductions shown on the return, whichever is the higher.

These are as well as the penalties above.

The advice from Walker Thompson is to diarise forward all due dates and to use online facilities to complete the returns. A Nil Return still has to be sent when nothing is due otherwise the penalties will still apply.