News

...ATED; self-billing; agent account managers

HMRC are considering further changes to the coding out of debts and underpayments, as part of the department’s efforts to improve the collection of debt.

The Revenue can currently code out debts, PAYE underpayments and self assessment balancing payments of up to £3,000. The limit applies to all taxpayers within PAYE, regardless of their income. The taxman would like to make better use of coding out by allowing larger debts to be collected through PAYE from those with higher earnings. The proposed graduated scale is as follows.

Tax officials have moved to placate uncertainty about the VAT treatment of insolvency practitioners who act as supervisors while not having previously acted as nominees, following the First-tier Tribunal decision in Paymex Ltd (TC1210) and the HMRC publications in response to the ruling.

The department has produced Revenue & Customs Brief 17/13 to confirm the treatment:

The government is consulting on the withdrawal of relief for interest on loans to purchase life annuities, often referred to as home income plans, taken out by people aged 65 or over before 1999, as recommended by the Office for Tax Simplification in its review of pensioner taxation.

'Amnesty' will offer reduced penalty of 10%

HMRC’s guide to the years ended 31 December 2012 and 31 March 2013

Carbon price floor

Ccl1/6: a Guide to the Carbon Price Floor has been published. It contains information about the carbon price floor, which was introduced on 1 April 2013. It covers fossil fuels liable to climate change levy that are used in electricity generation.

Special scheme

VAT Information Sheet 09/13 is available. It includes some of the most used currency exchange rates needed by non-EU businesses that are registered for the special scheme in the UK so they can complete declarations and make payments to HMRC in sterling.

HMRC have clarified their policy on when laboratory pathology services are exempt from VAT.

The department treats as exempt NHS pathology services that have been outsourced to the private sector. Suppliers have challenged the view on the grounds they do not supply diagnostic services but provide information to a third party to enable it to make a diagnosis. Others have argued that they are not state-regulated institutions, or they are not performing services in a state-regulated institution.

HMRC’s tax assurance commissioner (TAC) Edward Troup handled 22 cases in the first six months of his appointment, according to a report that covers the department’s newest approach to resolving disputes with taxpayers.

Non-statutory business mileage deductions using the approved mileage allowance payments rates have been withdrawn along with agreements for board and lodging private use adjustments.

They have been replaced by simplified expenses rules as part of easier-to-follow legislation covering income tax for small businesses.

Firms can calculate allowable expenditure on vehicles using a flat rate based on mileage. The method of calculation must continue to be used for as long as the vehicle remains in the business once the rate has been used in relation.

The inheritance tax (IHT) exempt amount a UK-domiciled individual can transfer to a non-domiciled spouse or civil partner is to be increased.

There is currently a lifetime limit of £55,000 on the value of the assets that can be transferred free of IHT when the spouse or civil partner to whom the assets are transferred does not have a UK domicile.

New rules to be introduced in Finance Bill 2013 will raise the cap to the level of the prevailing nil-rate band.

107% more new complaints about HMRC in 2012/13