Taxation News

Don't rush Finance Bill, CIOT urges Darling

Taxation — Fri, 19 Mar 2010 10:00:00 +0000

The Chartered Institute of Taxation (CIOT) has written to the Chancellor to urge him not to rush through substantial tax changes introduced in next week’s Budget.

The professional body is has expressed its concern that ‘MPs’ minds will… be elsewhere’ after 24 March, as they prepare for a general election that is widely expected to announced for 6 May.

This will inevitably lead to the Finance Bill being pushed through in a single day, according to the CIOT, and proper parliamentary scrutiny will be ignored.

The institute has therefore is asked Alistair Darling to include in the Bill only those measures essential to maintaining the Government’s revenue-raising capacity, such as renewing the provision of income tax, while leaving other measures to a post-election Finance Bill, when they can be debated at greater length.

Strike scheduled to hit HMRC on Budget day

Taxation — Thu, 18 Mar 2010 15:00:00 +0000

HMRC have insisted it will be business as usual at the department on Budget day, in spite of a planned UK-wide strike could see thousands of tax workers stay at home.

The industrial action has been organised by the Public and Commercial Services Union (PCS) as the second in a fortnight. Last week, around 200,000 PCS subscribers took part in a two-day walkout in protest against changes to the Civil Service compensation scheme, that the union believes will lead to employees being ‘robbed of up to a third of their entitlements and lead to loyal civil and public servants losing tens of thousands of pounds if they are forced out of a job’.

An estimated 52,000 HMRC employees were among those striking on 8 and 9 March, leading to some of the department’s call centres, including the Liverpool site, being forced to ask members of the public to call back another day.

28,000 medics reminded of tax health plan

Taxation — Wed, 17 Mar 2010 16:00:00 +0000

Around one in ten medical professionals is set to receive a letter reminding them about HMRC’s tax health plan (THP).

Individuals who intend to use the THP to disclose previously undeclared income have until 31 March to inform the Revenue of their aim to do so. The department has confirmed that the deadline will not be extended.

Individuals will then be expected to make their disclosures by 30 June, when they must also pay all taxes due plus interest and a reduced penalty.

HMRC have begun writing to around 28,000 taxpayers – doctors registered with General Medical Council and dentists – who have not registered with the THP. This is estimated at about 10% of the UK’s medical professionals.

More uniform approach to tax under appeal

Taxation — Mon, 15 Mar 2010 12:00:00 +0000

HMRC are to apply a more consistent approach to the collection of debts in litigation; payment of tax will normally be required in all such cases.

This change will take effect in relation to all decisions made by the tribunals and courts on or after the first of next month.

Currently, where a tribunal or court has found against the taxpayer but there is a further appeal, the taxman must repay overpaid tax where there is a judgment in favour of a taxpayer, even though that judgment is subject to appeal.

However, where the Revenue has a judgment in its favour it does not consistently collect the tax before the appeal is heard. A party to litigation is legally bound to accept the judgment of a tribunal or court, even though they may be appealing against it.

Taxpayers expected to waste £9bn in 2010

Taxation — Fri, 12 Mar 2010 11:00:00 +0000

Britons will waste £9 billion in unnecessary tax payments this year by failing to take simple tax-planning measures, according to Unbiased.co.uk, a web portal for users seeking financial advice.

A new report by the site shows that the biggest tax wastage will be caused by failure to claim nearly £4 billion of tax credits and by overpaying inheritance tax of almost £2 billion.

Taxpayers are also predicted to mistakenly hand over £516 million of capital gains tax because of poor tax management, and waste the opportunity to use personal tax allowances to the tune of £328 million.

Unbiased.co.uk’s document claims that while almost a third (31%) of individuals expecting taxes to rise substantially after the forthcoming general election, with a quarter (25%) of people expecting couples with young children to be hardest hit.

Revised guidance on land remediation relief

Taxation — Fri, 12 Mar 2010 07:50:00 +0000

HMRC have published revised guidance on land remediation relief to reflect legislative changes in FA 2009. This replaces the draft guidance in Revenue & Customs Brief 29/09.

Subject to minor changes, such as paragraph numbers, the new version will be incorporated into the Corporate Intangibles and Research & Development Manual.

The Revenue plans to publish a page in the Business Income Manual to explain the basics of the relief.

Warning over online payment constraints

Taxation — Thu, 11 Mar 2010 12:00:00 +0000

As businesses and individuals move increasingly towards paying their taxes online, they should be aware that some banks impose financial limits, which may mean forward planning is needed.

HMRC’s guidance on how tax can be paid does not reflect these constraints.

A daily online banking limit of £10,000 seems common and many banks will charge for CHAPs payments.

The ICAEW Tax Faculty and the Chartered Institute of Taxation have raised this with HMRC, which has in turn advised taxpayers to raise it with their banks.

The £10,000 limit applies to the ‘faster payments’ service offered by some banks. These are set up in the same way as other electronic payments but are received on the same day provided the bank account at the receiving bank is enabled to accept faster payments.

HMRC are currently not able to receive these types of payments.

Class 3 contributions deadline approaches

Taxation — Thu, 11 Mar 2010 11:00:00 +0000

The deadline for making class 3 National Insurance payments for tax years from 1996/97 to 2001/02 tax years is fast approaching. Taxpayers entitled to make payment for the years must do so no later than 5 April.

Back payments must usually be paid within six years of the end of the tax year to which the contributions are related.

If payments are made more than two years after the end of the relevant tax year, the rate is likely to go up. However, special terms apply for the 1996/97 to 2001/02 tax years where the time limits for the payment of voluntary class 3 contributions were extended to 5 April 2010.

This applies to taxpayers who reach the state pension age before 24 October 2004, who are allowed to pay contributions at their original rate provided payment is made by 5 April.

Payments received after the deadline will not be accepted.

HMRC encourage online VAT payments

Taxation — Wed, 10 Mar 2010 15:00:00 +0000

HMRC have announced a change to the way by which they will accept VAT payments. From 1 April, the Revenue will treat all cheque sent by post as having been received on the date when cleared funds reach the department's bank account.

Taxpayers are advised to allow enough several days for their payments to reach the taxman and be cleared no later than the due date shown on their VAT returns. Cheques that do not clear by the due date may render the taxpayer liable to a surcharge for late payment.

The change does not affect cheque payments made by bank giro.

HMRC recommend that VAT payments be made electronically, which in most cases affords taxpayers up to seven extra calendar days in which to settle their debt. Paying by direct debit provides at least ten additional days. Individuals and businesses who file their VAT returns online must pay electronically.

First Budget of 2010 will be 'phoney'

Taxation — Wed, 10 Mar 2010 14:00:00 +0000

Alistair Darling will deliver a ‘phoney’ Budget on 24 March that will avoid introducing high-impact tax measures and instead be geared towards electioneering, according to BDO LLP.

The accounting company has forecast that it will be the second Budget of the year – following the general election expected in May – in which a newly elected administration will be forced to make ‘tough decisions’ to tackle the public deficit.

This means individual taxpayers and businesses will have to ‘steal themselves for a frustrating period of uncertainty as party politics overshadow the uncomfortable fiscal imperative to raise significant additional tax revenues as a contribution... to curb the unsustainable fiscal deficit,’ warned BDO.

Treasury announces date of Budget

Taxation — Wed, 10 Mar 2010 09:00:00 +0000

The Treasury has confirmed that the Chancellor of the Exchequer will make his 2010 Budget statement to the House of Commons at 12.30pm on Wednesday 24 March - as predicted by Taxation two weeks ago.

MPs 'alarmed' by low morale at HMRC

Taxation — Tue, 09 Mar 2010 12:00:00 +0000

A cross-party group of MPs today expresses grave concerns about low morale and a lack of efficiency at HMRC.

In a new report, the Treasury Select Committee scrutinises the Treasury and its associated bodies, noting they ‘faced extraordinary challenges during 2008-09, mainly arising from the need to respond to the emerging financial crisis and associated economic downturn’.

The document, Administration and Expenditure in the Chancellor’s Departments 2008-09, reserves its greatest criticisms for the Revenue – particularly with regards to the ‘dire results’ of a staff survey conducted in February 2009, which ranked HMRC against the responses of staff in ten other government departments