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14 August 2006 / Mike Truman
Categories: News
31 Aug deadline; Enabling letters; Negligible values

31 August deadline

Do not forget that the deadline for tax credit renewals is 31 August 2006, rather than 30 September, as previously. In the tax credits renewal process, final information about income and circumstances for 2005-06 is used to finalise the award for that year and renew the claim for 2006-07.

Enabling letters

As well as the new intervention letters, HMRC have begun sending out the, now familiar, enabling letters to a selection of smaller self-employed taxpayers, suggesting how they may make sure that their tax return is correct. The Tax Faculty advises that this year's exercise has started and advisers should be aware that their clients might be recipients.
As in previous years, the letters do not highlight any particular failure in a previous return, but they point out common errors and are sent with some frequently asked questions. Letters are being sent to selected businesses with turnover up to £150,000 and all HMRC offices should have sent their letters by the end of August. Authorised agents should be sent a copy of the letter to clients at least four working days before the letter is sent to the client.
As HMRC have emphasised before, the small business letters are an informal approach designed by HMRC to improve compliance. They do not amount to a formal enquiry.
The Tax Faculty confirms that the small business letters are not the same as the 'interventions' letters which some taxpayers may be receiving at the moment, although, confusingly, both the small business letters exercise and the new interventions pilots are being carried out at the same time. See Mike Truman's article 'Taxation needs YOU' on page 552 of this week's issue of Taxation for more on intervention letters.

Negligible values

HMRC have accepted the following security as having negligible value during July 2006 for the purposes of a claim under TCGA 1992, s 24(2).



Effective date

Leggmason Inv Strat Assets Sec plc

ZDP shares


Where the value of shares has become negligible, an allowable loss may be established by the owner claiming that they are treated as being sold and reacquired, either on the date of the claim or at a specified time within the two tax years prior to the date of claim.
See for the full list of negligible value securities.

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