.png)
.png)
News briefing, 22 March 2013
Our weekly comments on tax stories by the national press
Admin
A proposal to close 281 tax enquiry centres risks undermining a telephone help service that already keeps millions hanging on the line, according to the Public Accounts Committee (PAC) of MPs.
Times; Telegraph; Independent; Guardian
Two stories have been conflated here: the PAC report does not mention the enquiry centre closures because it was prepared before the announcement of the changes – which reflect declining use of the centres. The Revenue’s intention is to create a dedicated and specially staffed service for vulnerable taxpayers. While there are certainly dangers in the revamp, the stories do not accurately reflect the taxman’s announcement. The poor call-handling was a story in December, when it was criticised by the National Audit Office.
HMRC doubled the amount they spent on debt-collection agencies last year, according to national accountancy group UHY Hacker Young.
Financial Times
Since the Revenue began using debt collection agencies in 2009, the worry has been that taxpayers will find it harder to prove a debt is not due or is in dispute. On the other hand, HMRC claim third party agencies have brought in more unpaid tax than the department would have been able to do on its own, and they have improved the provision of timely information to them.
Avoidance
UK taxpayers with money in Jersey will be forced to give details of their holdings to HMRC, under a new agreement between the Treasury and the Crown Dependency.
Financial Times
The accord is part of the ongoing effort by the UK authorities to bring tax evaders into the fold. It is modelled on a contract between Jersey and the USA.
Higher earners face having up to £17,000 a year seized from their earnings by HMRC, under new rules aimed at people owing money to the tax authorities.
Telegraph
The story is actually an announcement that people will be given up to a year, and possibly longer, to pay tax due by increasing the amount the Revenue collects through PAYE coding out. The beauty of PAYE is tax is ‘painlessly’ extracted from salary before the worker is paid. Historically, there have been relatively low limits to the amounts of tax arrears the Revenue can recover by coding out: reducing allowances so that more PAYE tax is paid. A consultation will take place on increasing this limit for those on higher incomes.
Thousands of wealthy investors who exploited a tax sheltering scheme that was encouraged by the Treasury could be hit by a further clampdown on tax avoidance.
Times
Experts were predicting that reforms could be made to the business property renovation allowance because schemes have been created using the relief enabling taxpayers to take advantage of the allowance at no financial risk.
Business
Companies bidding for state contracts will not have to prove that they have clean tax records dating back ten years, after the government ditched the retrospective proposal.
Telegraph
The original plan would have been problematic, particularly given the obligation for businesses is to keep records for only six years. The compliance rule will now apply going forward from 1 April 2013.
Employers are in line to get tax relief worth up to £500 per worker to pay third-party providers to help tackle workplace absence.
Telegraph
Relief for such expenditure would be tax allowable as being wholly and exclusively for business purposes – but it would also be a benefit in kind as far as the employee is concerned, or else the employer would have to pay the tax under a PAYE settlement agreement. This would negate the relief originally given for the expense. The latest proposal will mean amounts up to £500 are not taxed as a benefit.
The controversial process of fracking has won backing from the government, with the Budget promising a "generous" new tax regime for extracting shale gas.
Financial Times; Telegraph; Independent; Guardian
The extraction of shale gas has the makings of the next boom business. Following consultation, allowances to encourage fracking will be in Finance Bill 2014. The Budget notes claim the government will “ensure local communities benefit from shale gas development in their area”.
Income tax and NI
Almost 900,000 extra people will be pulled into the 40% tax band over the next two years.
Times
The government does not want higher earners to benefit from the increases in personal allowance, meaning the threshold at which higher tax rate is falling accordingly.
People with broken career histories will find it easier to qualify for the new state pension, after the government said it will relax rules on topping up voluntary National Insurance contributions (NICs).
Financial Times
The news will help people who now need 35 years, instead of the previous 30, to qualify for a full state pension.
The taxman has postponed the biggest overhaul of payroll taxes in 70 years, real-time information, following complaints that small businesses were either unaware or unprepared for the change (the cost of setting up for which is a cause for concern for some firms).
Financial Times; Telegraph; Telegraph
Not quite! The truth is employers with fewer than 50 members of staff will be allowed to report payments to employees on a monthly basis, rather than at the time of the payment, until October. The professional representative bodies have been calling for the change for some time and hope it will be made permanent in either its current or amended form.
Non-resident athletes will be exempt from income tax while competing in the London Anniversary Games this year and in 2014's Commonwealth Games.
Times
Such tax exemptions are standard fare for major international competitions for which countries have to bid to be the host, as a condition laid down by games organisers for the events being held in the country. The extension to a regular Diamond League athletics event is a departure.
- Blog
Leave a comment