News

A new consultation from HMRC looks at how to deter taxpayers using what the department considers to be abusive tax planning schemes.

The document, Strengthening Sanctions for Tax Avoidance, suggests removing the economic benefit of avoidance, and increasing the reporting requirements of those who enter into legal tax-dodging arrangements.

The HMRC division dedicated to investigating the affairs of affluent taxpayers collected £137.2m in additional tax in 2013/14, up from £85.7m in 2012/13, an increase of 62%, according to law firm Pinsent Masons.

Around 500,000 individuals are potential targets of the Revenue team that focuses on UK residents with an annual income in excess of £150,000 or wealth of more than £1m. They are people not deemed rich enough to be the concern of the tax department’s high net-worth unit.

The tax system costs businesses up to £10bn in hidden costs a year, with small and medium-sized enterprises (SMEs) bearing the brunt, according to research by the Association of Accounting Technicians (AAT).

The organisation’s survey of 500 firms found that each SME pays an average of £4,376 in tax compliance costs, just under half the £8,907 paid by larger businesses.

Transferring ISAs

HMRC have published draft statutory instrument, tax information and impact note, and explanatory memorandum concerning the transfer of individual savings account (ISA) benefits to the surviving spouse or civil partner on the death of the ISA holder.

RPI

The retail prices index values for November and December 2014 are 257.1 and 257.5 respectively.

The rates and bands for residential property transactions subject to the Scottish land and buildings transaction tax have been revised, with an extra level added following advice from tax professionals. The new figures are set to apply from 1 April.

Charities have been issued with stern government guidance on the right way to take advantage of tax breaks.

The Charity Commission’s document explains that reasonable use of fiscal reliefs and tax planning is necessary and sensible, but urges trustees to have regard to their duty to act prudently in the best interests of their charity and not enter into arrangements that could damage the reputation of the organisation.

HMRC have backtracked on their ambition to temporarily withhold details of PAYE code changes from workers.

HMRC are to implement option three of the informal consultation on fees charged to the businesses the department supervises under money laundering regulations.

Measures set to take effect from 1 April include:

Musicians’ relief to be modelled on theatre deduction

AOSS

HMRC want volunteers to take part in the first live (private beta) release of their agent online self serve (AOSS). Practitioners can apply if they are based in the UK, have between 20 and 200 employer PAYE clients; and hold Government Gateway administrator credentials on behalf of their firm.

HMRC have taken the latest step in their review of the use of overarching contracts (OACs) in the temporary labour market to take advantage of rules for travel expenses.

Revenue officials believe the use of OACs by some employment businesses and umbrella companies allows temporary workers to benefit from tax and National Insurance relief on home-to-work travel expenses

Almost one-third of a million taxpayers will receive self assessment (SA) reminders before the end of the month.

HMRC are sending 650,000 emails ahead of the 31 January deadline to people who are yet to file their returns online or pay the tax owed.

The messages follow the launch of the Revenue’s fully digital SA service that provides real-time digital alerts with direct links to returns, guides and tools on GOV.UK. More than 670,000 individuals have already opted to go paperless next year, according to tax officials.