News

The penalties regime of the real-time information (RTI) reporting of PAYE will not begin October, HMRC have announced, signalling a six-month postponement.

Automatic fines for late filing and overdue payments were due to begin on 6 April, but the Revenue has introduced a delay after finding it needed time to improve RTI systems and guidance.

The new timetable will be:

October 2015 has been set by the government as the launch date for the scheme to allow people to top up their additional state pension via a new class 3A voluntary National Insurance contribution.

The arrangement – announced in last year’s autumn statement – will run for a limited period to help taxpayers who will reach state pension age before 6 April 2016. Those expected to benefit most are low-earning workers, carers and the self-employed, who have always been excluded from the state second pension and state earnings related pension scheme.

HMRC tackled record levels of online fraud in the run-up to last month’s self assessment deadline, the department has revealed.

Taxpayers reported 23,247 incidents of phishing o the Revenue during the three months to 31 January: an increase of 47% on the same period a year earlier. As a result, the department closed 178 web sources of bogus emails offering tax refunds during January 2014, marking year-on-year growth of 274% 

The taxman was alerted to more than 91,000 incidents of phishing during the whole of 2013 and put a stop to 1,476 sites.

Texts

HMRC will be sending SMS alerts to some taxpayers, to acknowledge receipt of claims for tax credits. The text messages will be sent for a short period starting from 5 February.

NI reduction

HMRC have published new guidance for businesses on the employment allowance, setting out details on eligibility and how to claim it. Employers will be able to claim up to £2,000 off their National Insurance (NI) bill from April.

OTS issues second report on employee benefits and expenses

HMRC have set out their VAT position following the decision of the Court of Justice of the European Union (CJEU) in Fiscale Eenheid PPG Holdings BV cs te Hoogezand (C-26/12). The case concerned an employer’s entitlement to deduct VAT paid on services relating to the administration and management of a defined benefit pension scheme.

HMRC have warned of another problem with their business tax dashboard, following the recent month eight error.

The latest error means the dashboard is not showing the correct liability position for tax months nine and ten of some PAYE schemes. Employers may find they are being told they owe more tax than expected for the affected months.

The practice of Construction Industry Training Board (CITB) levy deduction will no longer be supported by HMRC, the department has announced.

The CITB is responsible for promoting vocational training in the construction industry. It can impose a charge on employers or contractors to fund its operations.

Many contractors recoup the fee from subcontractors in the form of a deduction made from the “gross amount of payment” shown on monthly returns.

Record filings

A record 10.74m tax returns were filed for 2012/13 by 31 January, the highest proportion (93.4%) of on-time submissions recorded. Around 8.48m were filed online, passing last year's figure by 0.55m. The busiest day for online returns was 31 January, when HMRC received 569,847. The busiest hour occurred between 4pm and 5pm on the same day: 45,706 returns were received at more than 12 a second, while 21,027 taxpayers filed their return between 11pm and midnight on deadline day.

HMRC have published Revenue & Customs Brief 3/14 to clarify the definition of the term “student” in connection with the VAT liability of construction works to buildings that are “used for a relevant residential purpose”.

Previous definitions have been misinterpreted in some cases. The revised guidance in HMRC’s VAT Construction Manual at VCONST15360 attempts to set out the Revenue’s policy more clearly, stating:

The terms of HMRC’s concession covering capital gains tax (CGT) on damages have been reduced to make only the first £500,000 of compensation exempt.

The online filing deadline for self assessment returns has been extended by a fortnight for some taxpayers, it is understood.

Tolley Tax is reporting on an automated HMRC email response to a requests for a user ID that included a reminder to “file your tax return online before midnight 15 February to avoid receiving a penalty”.