News

HMRC have published initial detail on the manner in which they will interpret terms used in the sections of the Scotland Act 2012, which set out the definition of a Scottish taxpayer.

The department is seeking views on whether draft technical guidance provides clarity on the principles by which Scottish taxpayer status should be decided. The definition is focused on where the individual lives, not where he or she works.

The annual end-of-year reconciliation for PAYE taxpayers has begun, to check that people have paid the right amount of tax in 2014/15. HMRC expect the process to be completed by October.

Tax calculations – P800s – will be issued, and people due a repayment will receive a cheque about two weeks after the calculation, according to the Revenue.

The Low Incomes Tax Reform Group (LITRG) has reissued its guidance on what taxpayers should do if they receive a P800. The information includes explanations on how a person may be able to reduce a tax bill or have it set aside.

Government plans to reduce administrative costs to business by £10bn will fail unless the complexity of the tax code is tackled, the Institute of Chartered Accountants in England and Wales (ICAEW) has warned.

Two of the UK’s three longest Finance Acts were enacted in the previous parliament, the ICAEW notes in a letter to the chancellor of the exchequer, George Osborne, while calling for a “one in, two out” principle to apply to tax laws.

Payments made by HMRC to informants have hit a record high, according to legal experts.

Tax whistleblowers netted £605,000 in the year ended 31 March 2015, up from £402,000 over the previous 12 months.

The rise was driven in part by a surge in public awareness about the Revenue’s efforts to track down evaders, leading to more individuals alerting the department to possible fraud by former employers or ex-partners, said said City law firm RPC.

Ebooks

In a speech delivered in May 2015 to the German newspaper association, Jean-Claude Juncker, president of the European Commission said that, in 2016, the commission will consider introducing a reduced VAT rate for online books and newspapers. This follows the March 2015 Court of Justice of the EU case where Luxembourg and France lost appeals concerning their introduction of a reduced VAT rate on ebooks.

RPI

The retail prices index for March 2015 is 257.1.

An avoidance scheme designed to exploit the employment allowance has been deemed by tax officials to be ineffective.

HMRC intend to challenge all uses of the arrangement, which the department claims “simply does not work”. Users are urged to withdraw.

The European Commission (EC) has proposed ways to remove VAT barriers in the cross-border delivery of goods ordered and services received online.

The communication A Digital Single Market Strategy for Europe acknowledges that the administrative burden of VAT compliance and distortions of competition cause problems for businesses.

Tax officials will cancel penalties for late self assessment returns that have since been submitted their return with a reasonable excuse, HMRC have confirmed.

The Revenue’s director-general of personal tax, Ruth Owen, told BBC Radio 4’s Money Box programme that there had been a change in department policy, meaning most taxpayers’ excuses would be accepted at face value rather than be submitted to inquiry.

Tax transparency is becoming the norm, but many companies do not yet have systems or resources in place to meet new requirements, according to a study from accountancy giant EY.

Changes to tax breaks designed to promote investment in small and growing firms will deter investors from taking advantage, according to the Chartered Institute of Taxation (CIOT).

The professional body warned that new legislation creates greater complexity and denies relief to existing financiers that want to increase their investments.

The government has seen a dramatic rise in the number of taxpayers facing scrutiny through a special initiative dedicated to combatting tax evasion.

A total of 6,051 individuals and businesses were referred to HMRC’s managing serious defaulters (MSD) programme in 2014/15, up 31% on the previous year’s 4,624, according to official figures released following a freedom of information request by accountancy group Baker Tilly.

The numbers show growth of 423% between 2013/14 and 2012/13 (1,094).

Law Society warns over anti-avoidance measures