Revenue news

Minor benefits

Under regulations laid recently, employers will be able to give their employees access to pensions advice without incurring a tax charge.

ITEPA, s 210 allows the Treasury to make provision by regulation powers to exempt minor benefits from tax so long as the benefit is available to an employer's employees generally on similar terms. As announced in the 2004 Budget, the new exemption for pensions information and advice included in these regulations will apply only if the benefit is generally available to all employees and will be limited to £150 for each employee a year. If the cost to the employer is higher than £150, the whole amount will be subject to tax. Other advice on investment, tax, leisure and legal matters will not be covered.

The regulations also remove a possible tax charge where employees can have a free or subsidised meal in a canteen, or elsewhere on an employer's premises, or are able to make use of recreational benefits where the facility is not provided by their own employer.

The regulations come into force on 14 December 2004.

(Inland Revenue news release dated 24 November 2004.)

On the move

The Boards of Inland Revenue and Customs and Excise, along with most London based policy personnel, and some support services are moving offices between 20 November and 17 December 2004. Departments moving are:

Inland Revenue

Analysis and research, business tax, capital and savings, cross cutting policy, international, personal tax, strategy and co-ordination, regulatory impact unit, marketing and communication.

Customs and Excise

Business services and taxes including: business services and tax, policy group, regional business services and delivery, large business group and business change.

Logistics and finance

Strategy unit including: tax strategy, customs, cross cutting inter department, e-business and support strategies, information and e-services, lorry road user charge, machinery of government division.

The new address will be: 1 Parliament Street, London SW1A 2BQ; DX 147380, Parliament Square 3. Telephone lines for Customs and Excise will be automatically transferred until 31 March 2005. However, Inland Revenue phone lines will not be transferred. Anyone unable to get hold of a contact in the Inland Revenue, should call Somerset House switchboard, 020 7438 6622.

All post will automatically be sent on to the new offices for a period after the moves.

(www.inlandrevenue.gov.uk)

New Bill

The Commissioners for Revenue and Customs Bill integrating the Inland Revenue and Customs into the new single department was published on 25 November 2004.

The Bill also creates a new independent prosecutions office, the Revenue and Customs Prosecutions Office (RCPO), to prosecute HM Revenue and Customs cases in England and Wales. The creation of RCPO is intended to:

Explanatory Notes accompany the Bill. The Bill and Explanatory Notes are published by the Stationery Office. An electronic version is available from the Parliamentary website and paper versions are available from Stationery Office bookshops.

(HM Treasury press release dated 25 November 2004.)

Online update

A growing number of tax advisers are using the Revenue's current online services. During 2003-04, 188,871 returns have been filed online by agents, and 121,188 returns have been filed using the electronic lodgement service.

In Working Together 19, the Revenue has responded to the following queries.

Why are some clients missing or their details incomplete on the Revenue website?

Multiple self assessment agent references may be for the same address (e.g. two offices may have been merged). Currently your online credentials can only support one reference for each of the main services (corporation tax, PAYE and self assessment). If you have multiple references, you can either create separate credentials (user id and password) for each reference or alternatively contact your local agent maintainer to consolidate your agent references.

Where a client has authorised more than one agent (e.g. for different accounting periods), neither agent can view the client's data at present.

The client's details will not appear on the client list until authority to file on his behalf has been processed. Check with the local tax office for any missing records.

If the Revenue does not have a current address for a client, the list will only show the unique taxpayer reference and not the client's name. If this is the case, the adviser or the client should contact the Revenue with the correct address.

If the firm has set up multiple users and assistants within its organisation, clients can also be assigned to an individual user or assistant. This means that when a user or assistant logs in on the website, he can only see clients that are assigned to him and not his colleagues.

Why are the self assessment statements online not up to date?

The statements available online are electronic copies of the paper statements and, as such, they reflect the account position at that date. The Revenue has developed a 'real time' statement that is currently available to individuals (agents who are self assessment taxpayers can view these by registering and logging in as individuals, as opposed to agents). There is also a demonstration available on the Revenue website at www.ir.gov.uk/individuals/onlinedemo/home.htm. This service enables taxpayers to view self assessment accounts by tax year, view latest balances and drill down into penalty and interest calculations and see how payments have been allocated. The Revenue is planning to release this service to agents to enable them to see their clients' self assessment accounts in 2005.

(Working Together 19, November 2004.)

Managing debt

The debt management service arm of the Receivables Management Service (RMS) is responsible for pursuing debts in respect of PAYE/NIC (Class 1), corporation tax, self assessment, overpaid tax credits and child benefit, interest, penalties and other NICs.

It is also responsible for pursuing over one million self-assessment returns and provides specialist insolvency and voluntary arrangement services.

The RMS's fundamental approach to debt is that:

• where the taxpayer has the means to pay in one sum, he is expected to do so;


• where it accepts that the taxpayer is unable to pay in full, it will try to negotiate an arrangement to recover the debt and, where appropriate, secure future compliance;


• where it is unable to negotiate an arrangement or where payment is refused or where its contacts are ignored, it will use the enforcement methods available to it to recover the debt.

Where taxpayers are unable to pay in full, they should be encouraged to contact RMS at the earliest opportunity.

Where help is to be given, it will be conditional on the immediate submission of any outstanding returns (in order to determine the true liability), and the timely submission of future returns. There are no prescriptive time limits, as payment plans need to be based on ability to pay. But for a self assessment taxpayer with continuing liability, the RMS would look to him returning to a compliant state, i.e. being able to pay in full on the due date, within as short a period as possible but certainly within a maximum period of three years. This would mean including debts arising during the interim period within the payment plan. Outside the three-year timespan, the RMS would consider bankruptcy as an option.

While payments due from employers mainly represent deductions from employees, the RMS does not preclude helping such businesses overcome temporary difficulties but it would look for such debts to be cleared within a maximum of 12 months with payment of current deductions, and submission of any returns, being an absolute condition.

Where agreeing to a payment plan which extends for more than three months, the RMS will seek and record comprehensive details of income, expenditure and assets to enable us to agree a repayment figure. Arrangements are always confirmed in writing and are subject to periodic review.

RMS staff will talk to authorised agents either where its records indicate that a form 64-8 is held or where it receives written authority from the taxpayer. This will include discussion of time to pay.

Letters are not normally copied to agents. Where an agent is negotiating time to pay on behalf of a client, the RMS will write to the agent and copy to the taxpayer, who is ultimately responsible for payment.

The RMS does not normally involve tax agents when pursuing payment. It views the debt as being the direct responsibility of the taxpayer and looks to him for payment. However, as the result of agent input within Working Together, the RMS is currently looking at whether agent involvement would be either feasible or desirable.

(Working Together 19, November 2004.)

Issue: 3986 / Categories: