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1,773 happy returns at Christmas

HM Revenue and Customs (HMRC) received 1,773 online tax returns on Christmas Day – a 13 per cent increase on last year’s total of 1,566.

HMRC’s Christmas data logs reveal the busiest time for online returns on 25 December was between midday and 1pm, when 148 Yuletide returns were delivered electronically.

Christmas Eve, traditionally a much busier day for festive filing than the big day itself, saw 17,644online returns successfully submitted. This was up 4 per cent on the 17,000 received on 24 December 2013.

Another 4,811 online returns ticked all the boxes on Boxing Day – a 7 per cent increase on the 4,493 received last year.

In total, 24,228 online returns were received over the three-day festive period – up 5 per cent on the 2013 total of 23,059.

HMRC Director General of Personal Tax, Ruth Owen, said:

“You can file your online return at any time of day or night – even Christmas Day, if it suits you. But don’t leave it too late. Give yourself plenty of time to resolve any problems and if you need to call us, do it now, as our phone lines get much busier as the 31 January deadline approaches.”

The deadline for sending 2013/14 tax returns to HMRC, and paying any tax owed, is 31 January 2015.

All outstanding 2013/14 tax returns must now be submitted online, as the 31 October paper-filing deadline has passed.

For help with your tax return, contacts Davenports today on Faringdon 01367 602011 or Swindon 01793 230472

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HMRC turns attention to horsebox owners in evasion clampdown

Horsebox owners dishonestly claiming horseboxes worth hundreds of thousands of pounds as company expenses are set to be the subject of HM Revenue & Customs investigation, as it continues its clampdown on tax evasion.

Top 50 firm UHY Hacker Young believes HMRC suspects some farmers and rural business owners of buying horseboxes through their company, either falsely claiming the cost as a business expense for tax purposes, or failing to declare personal use of the horsebox and paying tax on it as a “benefit in kind”.

Horseboxes can be valuable assets, with the one used by Zara Phillips at the 2012 Olympics valued at around £500,000 – albeit complete with capacity for six horses and its own bedroom, kitchen and living room complete with satellite television. There is no suggestion that Phillips has evaded tax.

HMRC officials can now identify connections and discrepancies between an individual or company’s official tax records and information from multiple third party sources via the department’s computer system, Connect.
UHY Hacker Young says that HMRC uses DVLA databases, and even Google Streetview, to monitor the lifestyle of suspected tax evaders.

UHY Hacker Young partner Charles Homan said: “Underpaid tax relating to horseboxes is a drop in the ocean but HMRC seems to be focussing attention in this area because they can now be such valuable assets.”
“It shows how determined HMRC are to close down every little loophole and capture every mistake made in tax returns. Without the correct documentation, even owners of horseboxes who have done nothing wrong could find themselves on the receiving end of a lengthy and uncomfortable tax investigation.”

Story from Accountancy Age

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Solicitors targeted in new tax clampdown

Solicitors are being given the chance by HM Revenue and Customs (HMRC) to bring their tax affairs up to date or face tougher penalties, as part of a new tax campaign.

The Solicitors’ Tax Campaign is the latest voluntary, intelligence-led disclosure opportunity giving specific groups of taxpayers the chance to get their tax affairs in order on the best terms available.

Previous campaigns have included medical professionals, plumbers, tutors and coaches, electricians, online traders, landlords and health professionals. This approach has so far raised almost £1 billion from voluntary disclosures and follow-up activity by HMRC.

Solicitors have until 9 March 2015 to tell HMRC that they would like to take part in the campaign, and until 9 June 2015 to disclose the tax they owe and pay it.

By using this campaign to come forward voluntarily, any penalties they might have to pay will be lower than if HMRC has to approach them first.

Caroline Addison, Head of Campaigns, HMRC, said:

“Information gathered by HMRC has allowed us to identify solicitors who thought they could operate without declaring income and paying the taxes that others have to pay.

“If you have not declared all of your income, you need to put your tax affairs in order. Take this chance to come forward and put things right in a straightforward way and on the best possible terms. It will be easier and cheaper for you to come to us than for us to come to you.

“Those who make a deliberate decision not to pay the taxes due could face a penalty of 100% or more of the tax due, or even a criminal prosecution.”

Solicitors can take part in the Solicitors’ Tax Campaign by:

  • Telling HMRC they want to take part in the campaign by 9 March 2015
  • Disclosing details and paying what they owe by 9 June 2015

For more details, plus help and support on the campaign, solicitors can phone a dedicated helpline on 0300 013 4749 or visit www.gov.uk/solicitors-tax-campaign online.

For independent help and support contact Davenports Accountancy today on 01367 602011

 

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Tax reconciliation errors affect ‘thousands’

HMRC has “stopped” issuing income tax repayments after a leaked email revealed that end of year tax reconciliations for thousands of taxpayers may have been calculated wrongly, the Telegraph reported this morning. An HMRC spokesman told AccountingWEB that the process is “continuing as normal”. But the email, now reproduced below, said that some large employers were involved “so several thousands of employees may be affected”.

The Telegraph reported that “HMRC said tens of thousands would ultimately be affected but admitted it currently had no idea about the scale of problem”.

It added that a spokesman for HMRC said the incorrect letters were not demands but merely tax summaries, and that “no one has been asked to hand a penny over in tax because of this”.

HMRC told AccountingWEB: “The majority of the errors have happened because an employer failed to make a final payment statement for the 2013/14 tax year meaning our records were incomplete despite reminders that these submissions had to be made. We are sorry this has happened and we will issue corrected calculations in the next few weeks.”

HMRC has provided a copy of the note sent to stakeholders including employers, professional bodies and business groups. It is reproduced in full below.

“We are today emailing our stakeholders to explain that we are aware that a number of employees recently received a form 2013-14 P800 which was issued during our bulk 2013-14 End of Year reconciliation exercise.

The 2013-14 P800 shows an incorrect overpayment or underpayment where the pay and tax shown on the P800 is incorrect and does not match that shown on their 2013-14 P60.

The most common scenarios are where:

  • An incorrect overpayment is created as the 2013-14 reconciliation is based upon the Full Payment Submission (FPS) up to month 11 although the employment continued all year.
  • Where the year to date figures supplied are incorrect, for example where an employer reference changed in-year and the previous pay and tax is incorrectly included in the “year to date” (YTD) totals.
  • We have received an “Earlier Year Update” (EYU) and this is yet to be processed to the account.
  • There is a duplicate employment (often caused by differences in works numbers and other changes throughout the year)

We are urgently investigating these cases and will look to resolve the matter in the next 6-8 weeks.

We currently do not know the scale of the issue, but some large employers are involved, so several thousands of employees may be affected.

Next Steps

We are very sorry that some customers will receive an incorrect 2013-14 P800 tax calculation.

We are urgently investigating these cases and will look to resolve the matter and issue a revised P800 to the employee in the next 6-8 weeks.

Employers and their agents should not send any 2013-14 EYUs unless requested by us. We are aware that there are still some 2013-14 EYUs which we have yet to process to the relevant account.

If an employee asks about a 2013-14 P800 which they think is incorrect, they should advise them:

  • Not to repay any underpayment shown on the P800
  • Not to cash any payable order they may have received
  • Employees will not be affected by the incorrect tax code as we will issue a revised P800 before Annual Coding.”

Story from AccountingWeb

If you’ve received a P800T and you believe it’s incorrect contact Davenports Accountancy today on 01367 602011 to see how we can help.

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Health workers have one week to join tax campaign

Workers in the health and wellbeing professions who have taxable income that they have not told HM Revenue and Customs (HMRC) about have one week to come forward and register.

The Health and Wellbeing Tax Plan offers health professionals a time-limited chance to bring their tax affairs up to date, on the best terms.

The campaign covers physiotherapists, occupational therapists, chiropractors, osteopaths, chiropodists, podiatrists, homeopaths, dieticians, nutritional therapists, reflexologists, acupuncturists, psychologists, speech, language and art therapists and others.

Health professionals have until 31 December to tell HMRC that they would like to take part in the campaign, and until 6 April 2014 to disclose the details and pay the tax owed.

After 31 December, HMRC will take a much closer look at their tax affairs. By using this campaign to come forward, any penalty the health workers might have to pay will be lower than if HMRC goes to them first.

Marian Wilson, Head of HMRC Campaigns, said:

“This campaign gives health and wellbeing professionals a quick and straightforward way to bring their tax affairs up to date. Help, advice and support is available.

“After the opportunity closes on 6 April, HMRC will use information we hold from third parties and regulatory bodies to identify people who have not paid what they owe. Penalties – or even criminal prosecution – could follow.”

People can take part in the Health and Wellbeing campaign by:

·  telling HMRC by 31 December that they want to take part in the campaign

·  disclosing the details and paying what they owe by 6 April 2014

For more details, plus help and support about the campaign, people can visit HMRC’s website:https://www.gov.uk/voluntary-disclosure-health-wellbeing or call a dedicated health and wellbeing campaign helpline on 0845 600 4507

The Health and Wellbeing Tax Plan is not aimed at doctors and dentists, who were covered by a previous HMRC campaign.

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One week left to settle past tax bills

Taxpayers who have failed to submit tax returns for past years have one week left to come forward and take advantage of an HM Revenue and Customs (HMRC) campaign.

Launched on 9 July, the campaign is aimed at people who received a Self Assessment tax return, or a notice to complete a tax return for any year up to and including 2011-12, but have failed to submit it.

To benefit from the campaign terms and to avoid a higher penalty, participants have until 15 October to complete and submit their outstanding tax returns, and pay the tax and National Insurance Contributions that they owe.

After 15 October, penalties of up to 100 per cent of the tax, or even criminal investigation, could follow.

Marian Wilson, HMRC’s head of campaigns, said:

“People who take part in this campaign will receive the best terms available – but they need to send returns without delay to meet the 15 October closing date.

“I urge people to take advantage of the quickest and most straightforward way to bring their tax affairs up to date and benefit now from the best terms available rather than face a higher bill later.”

HMRC campaigns launched so far have produced more than £553 million by people coming forward voluntarily to pay the tax they owe. HMRC analyses information using a state-of-the-art software system, Connect, to identify people who have gaps in their tax records.

This campaign follows last year’s Tax Return Initiative, which covered higher-rate taxpayers who had failed to submit 2008-09 or 2009-10 returns. As a result of the campaign, more than £30 million was paid to HMRC in outstanding tax, with over 3,000 people coming forward voluntarily, filing more than 5,500 tax returns. After an opportunity focusing on higher rate taxpayers closed last year, HMRC issued £58 million in tax demands to those who did not come forward.

Help is available from HMRC:

·  online at  http://hmrc.gov.uk/campaigns/mtrc.htm

·  through a dedicated helpline on 0845 601 8818

For additional help or advice call Davenports Accountancy today on 0845 351 0381 to see how we can help you

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Tax opportunity for landlords to put house in order

Landlords who rent out residential property, and fail to tell HM Revenue and Customs (HMRC) about all the rental income, are being offered the chance to come forward and put their tax affairs straight – before HMRC comes to them.

HMRC estimates that up to 1.5 million landlords in this sector may be underpaying up to £500 million in UK tax every year.

Under HMRC’s new Let Property Campaign, landlords who may owe tax – whether through misunderstanding the rules or deliberate evasion – can come forward and tell HMRC about any unpaid tax on rents, and pay what they owe, including any penalties and interest due.

The campaign is open to all residential property landlords – from those that have multiple properties, to single rentals, and from specialist landlords such as student or workforce rentals, to holiday lettings. HMRC will be working with a variety of bodies over the next few months to develop tools and guidance to support landlords of all types and help them get their affairs up to date.

Marian Wilson, Head of HMRC Campaigns, said:

“All rent from letting out a residential property or holiday home has to be declared for income tax purposes. Telling us is simple and straightforward.

“We appreciate some people will have made honest mistakes, and some may not be fully aware that the rent from a property is taxable, and that is why it always makes sense to talk to us so we can help. It is always cheaper to come forward voluntarily and pay the tax you owe, rather than wait for HMRC to come calling.

“Telling HMRC about your tax liabilities is simple and straightforward, and help, advice and support are available. The message for all landlords owing tax is simple – it is better to come to us before we come to you.”

HMRC will use information it holds about property rental in the UK and abroad, along with information already held on HMRC‘s digital intelligence system Connect, to identify people who have not paid what they owe. For those that fail to come forward, higher penalties – or even criminal prosecution – could follow.

For more details, visit HMRC’s website.

More help is available for landlords by calling HMRC’s Let Property Campaign Hotline on 03000 514 479, between 9am and 5pm, Monday to Friday.

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Time is running out for higher income parents to register for Self Assessment

Higher income parents currently receiving Child Benefit have just four weeks to register for Self Assessment with HM Revenue and Customs (HMRC) in order to avoid a penalty.

Parents who stopped receiving Child Benefit payments before 7 January 2013 do not need to take any action. However, parents who did not stop their payments until after 7 January or who are continuing to receive Child Benefit, and with income over £50,000, must register for Self Assessment for the 2012-13 tax year by 5 October 2013. This will enable them to declare the Child Benefit received, pay the tax charge on time and avoid penalties for failure to notify HMRC on time.

Letters are currently being sent to around two million higher rate taxpayers, including those affected by recent changes to Child Benefit. These will remind them they must declare any additional income or register now with HMRC for Self Assessment, in order to pay the High Income Child Benefit Charge, if they have not already done so.

HMRC’s Chief Executive, Lin Homer, said:

“HMRC wants to ensure that people avoid possible penalties and pay the right amount of tax. If you had any additional income last year, or have been affected by the changes to Child Benefit, you have until 5 October to register for Self Assessment.”

Over 400,000 people with higher incomes have already opted out of receiving Child Benefit payments. Those who did not receive any payments relating to the period after 7 January do not need to register for Self Assessment.

People who fail to register could face a penalty of up to 100 per cent of the tax due, depending on the circumstances. They might be able to come out of Self Assessment in future years if they (or their partner if they are the Child Benefit recipient) choose to opt out of receiving Child Benefit and avoid incurring the tax charge. People who want to opt out should go to hmrc.gov.uk/childbenefitcharge

More information on whether people need to register for Self Assessment can be found at:http://www.hmrc.gov.uk/yourtaxreturn

The High Income Child Benefit Charge came into effect on 7 January 2013. Parents are liable to pay the tax charge if all of the following statements apply, or applied to them in the 2012-13 tax year:

– they have an individual income of over £50,000 a year, and

– either they or their partner received Child Benefit payments relating to the period after 7 January 2013, and

– their income for the tax year is higher than their partner’s. The partner with the higher income is liable to pay the charge if both partners have income over £50,000.

To check whether the tax charge applies and to register, parents should go tohttp://hmrc.gov.uk/childbenefitcharge

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Parents on higher incomes reminded to register for Self Assessment

Parents on higher incomes who continued to receive Child Benefit after January 2013 have been reminded that they must register for Self Assessment by 5 October 2013 to avoid any penalties in relation to the High Income Child Benefit Charge.

This month, HM Revenue and Customs (HMRC) will be writing to around two million higher rate taxpayers, including those affected by recent changes to Child Benefit. The letter reminds them that if their income is over £50,000 and they or their partner received Child Benefit in 2012/13, they will need to complete a Self Assessment tax return for the 2012/13 tax year. They must register now with HMRC for Self Assessment if they have not already done so.

Over 390,000 people with higher incomes have already opted out of receiving Child Benefit.

HMRC’s Chief Executive, Lin Homer, said:

“HMRC is committed to helping people pay the right amount of tax. If you have had certain changes to your income in the last year, including those affected by the changes to Child Benefit, you have until 5 October to register for Self Assessment.”

The High Income Child Benefit Charge came into effect on 7 January 2013. You are liable to pay the tax charge if all of the following statements apply, or applied to you in the 2012/13 tax year:

– you have an individual income of over £50,000 a year, and
– either you or your partner received any Child Benefit payments after 7 January 2013, and
– your income for the tax year is higher than your partner’s. The partner with the higher income is liable to pay the charge if both partners have income over £50,000.

People who stopped Child Benefit payments before 7 January 2013 do not need to take any further action. To check whether the tax charge applies and to register, go to http://www.hmrc.gov.uk/childbenefitcharge.

If the charge does apply, then you must register for Self Assessment for the 2012/13 tax year by 5 October 2013, so that you can declare the Child Benefit you received, pay the tax charge on time and avoid any penalties.

You might be able to come out of Self Assessment in future years if you (or your partner if they are the Child Benefit recipient) choose to opt out of receiving Child Benefit and avoid incurring the tax charge. Go to http://www.hmrc.gov.uk/childbenefitcharge if you want to opt out.

More information on whether you need to register for Self Assessment can be found at: http://www.hmrc.gov.uk/sa/need-tax-return.htm.

For help completing your Self Assessment, contact Davenports Accountancy today on 0845 351 0381

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Simplifying National Insurance for the self-employed

Plans to simplify the way self-employed people pay National Insurance Contributions (NICs) have been published for consultation by HM Revenue and Customs (HMRC).

HMRC is exploring whether it would be simpler and more straight-forward to collect these contributions alongside Class 4 NICs and Income Tax through the Self Assessment (SA) process. Self-employed people are required to file an annual SA return and the Class 4 NICs paid by self-employed people are already collected through SA.

This aims to reduce the administrative burden on self-employed people.

The self-employed and those who represent them are encouraged to respond to the consultation. The closing date is 9 October 2013 and, based on the responses received, HMRC will review the current system of collecting Class 2 NICs.

The consultation document Simplifying the National Insurance Processes for the Self-employed can be found at here.

The consultation is open from 18 July to 9 October. It was announced at Budget 2013.

The consultation outlines ways to reduce the burden on self-employed people, focusing specifically on collecting Class 2 NICs through Self Assessment. This is a process change and will not result in increased NICs liabilities for the self-employed.

If you’re self-employed and need help or advice contact Davenports Accountancy today on 0845 351 0381

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