News
Revenue news
Working Together
Complex returns
The Revenue has announced some developments with its complex personal returns teams. It plans is to increase the responsibilities of the complex personal return teams by around 6,000 taxpayers.
News
Revenue news
Working Together
Complex returns
The Revenue has announced some developments with its complex personal returns teams. It plans is to increase the responsibilities of the complex personal return teams by around 6,000 taxpayers.
As before, new taxpayers for the complex personal return teams will be identified by reference to high levels of income and/or wealth and some indication of actual or potential complexity about their tax affairs. One change the Revenue is making this year relates to close company directors. It has previously said that it was not planning for complex personal return teams to deal with people whose main source of income was a close company directorship and there was no indication of complexity beyond the business accounts. This year, teams will be dealing with such taxpayers, where their total income is high and different tax offices already deal with the director and the company.
This year, for the first time, based on information for the years ended 5 April 2002 and 2003, there will be a small number of transfers from complex personal return teams to other tax offices. Taxpayers and professional advisers concerned will be notified by letter to explain that responsibility is being transferred to another tax office.
Electronic lodgement service
The Revenue has recently enhanced its Internet filing service and removed many of the previous restrictions of the service. For example, partnership and trust returns can be filed, as can capital gains tax form SA108, with up to 100 separate shares/securities disposals. The capacity of the additional information box entries has also been increased.
However, given the continued demand for the electronic lodgement service, the Revenue will be extending its support for this service until at least April 2006.
2003-04 tax returns
Following certain changes announced in the Budget, some amendments have been necessary to the 2003-04 tax return guidance. The relevant changes are detailed on the Revenue website, and revised versions of the forms affected are also available (see: www.inlandrevenue.gov.uk/sa/forms/net-03-04.htm).
PAYE concentrations
Agents who deal with clients whose tax affairs are dealt with by one of the Revenue's large pay-as-you-earn offices, may be interested in the Revenue's proposal to set up a Working Together group for 'remote pay-as-you-earn concentrations'. The Revenue will provide further information (and details of an 'open day' at Manchester's Chapel Wharf Area Office) on the Working Together pages of its website in due course.
Repayment claims
The general repayment claim form, R38, can be downloaded from the Revenue website at www.inlandrevenue.gov.uk/forms/r38.pdf.
Employer successions
The Revenue has clarified the position about employer successions under pay-as-you-earn. Regulations 102 to 104 of the Income Tax (PAYE) Regulations SI 2003 No 2682 govern the way in which employer successions take place and can allow the new owner to take over the operation of PAYE without completion of forms P45.
A succession arises when:
* there has been a change of ownership of a business; and
* the new owner agrees to take over the records of the old employer.
Both conditions must be satisfied before the Revenue will consider an employer succession. Where the new owner continues an existing business, but does not assume responsibility for the pay records of the previous owner, an employer succession has not taken place.
The old owner:
* is responsible for payments of pay-as-you-earn and National Insurance contributions up to the date the succession took place;
* does not complete forms P45 for the employees transferring to the new employer;
* does not complete a form P35 for the year in which the succession took place; and
* does not complete forms P14 for the year in which the succession took place.
The new owner:
* will require a new employer's pay-as-you-earn reference;
* is responsible for payments of pay-as-you-earn and National Insurance contributions from the date the succession took place;
* completes a P35 for the whole of the tax year in which the succession took place; and
* completes forms P14 for the whole of the tax year in which the succession took place.
With regard to the construction industry scheme, if a contractor's business changes hands, the old contractor is treated as if the business ceases, and the new owner is treated as starting a new business.
(Working Together Issue 18, August 2004.)
Interest mailshot
The Revenue's latest tax deduction scheme for interest mailshot (TDSI 9, dated 31 August 2004) deals with various topics, including the following.
The Revenue has updated its leaflet IR110, Bank and building society interest. A guide for savers, but this will only be available via the Revenue's website. Advisers without access to the Internet will be able to obtain the leaflet from their local tax office.
In an attempt to prevent complaints to banks and building societies, the Revenue reminds advisers that a form R105 ('Application for a not ordinarily resident saver to receive interest without tax being taken off') will only have effect from the date of receipt by the bank, etc. Tax deducted previously can only be repaid by the Revenue and this will normally only be where the customer lives in a country that has a double taxation agreement with the United Kingdom or has an entitlement to United Kingdom personal allowances.
The Revenue has published a new leaflet IR111, Bank and Building Society Interest — Are you paying tax when you don't need to?. This is available from the St Austell orderline on 01726 201 021 or from the Revenue website.
Finally, the mailshot contains a list of frequently asked questions regarding the completion of forms R85, which may be of interest to practitioners assisting clients with these forms.
(TDSI mailshot, 31 August 2004.)
Chief information officer
Steve Lamey has been appointed as chief information officer of HM Revenue and Customs. Mr Lamey is currently with the BG Group plc, and will take up his new post shortly. He has significant experience of senior information management roles, information technology and change management.
The chief information officer position is a board level appointment with responsibility for reshaping and integrating the Inland Revenue's and Customs' information technology functions.
(Inland Revenue news release dated 2 September 2004.)
New help sheet
The Revenue has published its IR236: Self Employed help sheet in respect of foster carers and adult placement carers. This is on the website at www.inlandrevenue.gov.uk/pdfs/2003_04/self_employment/ir236.pdf.
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