Finance Bill 2006
The Finance Bill has been published and can be found on the Internet at www.publications.parliament.uk/pa/cm200506/cmbills/161/2006161.pdf.
Explanatory notes can be found by following the link on the Treasury website, www.hm-treasury.gov.uk.
Treasury press release, 7 April 2006
IHT and trusts
As we went to press, we learned that the Treasury has back-tracked on some of its proposals regarding inheritance tax on trusts. The new tax charge will not apply to life insurance policies currently held in trust.
Retirement annuities
From 6 April 2007, HMRC will collect any tax due on income from retirement annuities (RACs) under the PAYE system. At present, tax at the basic rate is deducted at source, unless the taxpayer's income falls below the level of their allowances, when a claim can be made for the annuity to be paid gross. HMRC estimates that approximately half of the current 1.2 million annuities are paid gross. Letters will be sent to those from whom HMRC will require further information to enable a PAYE code number to be allocated for 2007-08 and there is also a dedicated annuity telephone helpline (0845 366 7868) for those who require further information.
HMRC have stated that they will also be working out whether or not too much tax has been paid in the past, although they state that they
'will not normally pursue any back-tax on RACs that has been underpaid under the old system unless, for example, there has been a deliberate attempt to defraud the department
by means of false statements'.
In early 2007, HMRC will write to everyone who receives a retirement annuity pension to tell them how their pension will be taxed under PAYE, and explain the changes.
HMRC press release, 3 April 2006
Coming to the UK
HMRC have published a new page on their website 'Coming to Work in the UK and Working Overseas' (at www.hmrc.gov.uk/nic/work/index.htm), which gives details of the special National Insurance rules that apply when people come to the UK from abroad to work in this country.
Leaflets CA65 (National Insurance contributions for people working for embassies) and CA76 (National Insurance abroad — A guide for employers of employees from abroad) have both been withdrawn.
HMRC website, 3 April 2006
HMRC complaints
In a move to improve transparency and accountability, the Independent Police Complaints Authority (IPCC) will investigate the most serious allegations of misconduct made against HMRC staff in England and Wales and will have a 'guardianship' role over all conduct-related complaints and allegations against HMRC officers.
The IPCC role will not replace that of the existing HMRC complaints systems for tax or customs matters; or the role of the Revenue Adjudicator and the Parliamentary Ombudsman in dealing with complaints about HMRC. The IPCC will be concerned with investigation of the most serious complaints referred to them from HMRC about the conduct of staff and their work with members of the public; examples include death in custody, corruption or serious assault.
Separate arrangements will made for Scotland and Northern Ireland.
HMRC press release, 3 April 2006
Non-resident landlords
The annual information return (form NRLY), that letting agents and certain tenants of non-resident landlords must make to HMRC, has been amended. The form is on the HMRC website at www.hmrc.gov.uk/cnr/nrl_p40_nrly.pdf and users should note that, from 1 April 2006, the form should be sent to the APSS Audit Unit (address on the form), and not to the Accounts Office at Cumbernauld.
Notes relating to completion of the form can be found at www.hmrc.gov.uk/cnr/nrl_p40_nrly_notes.pdf.
HMRC website, 1 April 2006
Iceland Stock Exchange
HMRC have announced that, with effect from 31 March 2006, the Iceland Stock Exchange is a 'recognised stock exchange' under TA 1988, s 841(1)(b).
The full list of overseas recognised stock exchanges is on the Internet at www.hmrc.gov.uk/fid/rse.htm.
HMRC website, 5 April 2006
Tax credits
HMRC has published Code of Practice 26, What happens if we have paid you too much tax credit? (www.hmrc.gov.uk/leaflets/cop26.pdf)
The booklet deals with claimants who have difficulty repaying an overpayment, and the reasons that they might be able to dispute HMRC's decision to recover an overpayment.
HMRC website, 6 April 2006
