It’s not often we receive good news from Her Majesty’s Revenue & Customs, but today is a wonderful exception! In case you haven’t yet heard, the penalty deadline for 2011 tax returns has now been extended to 2nd February 2012. This is due to industrial action at HMRC on the 31st January.
(Information courtesy of Lynsey).
The Tax Catch up Plan (TCP) is for people with any undeclared income, from tuition and coaching as a main or secondary income, on which the correct tax has not been issued. This is a great opportunity for a large number of South London residents who supply tuition in traditional subjects; instruction or coaching, fitness and dance instruction, musical instrument tuition, art, services provided by life coaches and others.
Under the plan, tutors and coaches have until 31 March 2012 to come forward and tell HMRC about their outstanding tax for the years up to 5 April 2010, and pay what they owe. The plan makes it easy for customers to put their tax affairs in order and keep them on the right track in the future.
Those who come forward by the deadline are likely to receive the best possible terms for paying the tax owed. If they have to pay a penalty, it is unlikely to be more than 20 per cent of the unpaid tax. Conversely, those who wait for HMRC to come to them will find that they have to pay much higher penalties, or even face criminal prosecution. After 31 March, using information pulled together from different sources, HMRC will investigate those who have chosen not to come forward.
The Head of HMRC’s campaign explains it as follows; “We are using various intelligence sources to identify and then target those who do not take advantage of this opportunity to declare their full income. The message is clear: contact us before we contact you.”
The Tax Catch up Plan has two stages:
Still confused about all these changes in the tax system? Taxfile’s tax accountants in South London are here to help for any doubts you might have. Visit their website or call them on 020 8761 8000 and find all the answers to your questions, and hands-on help if you need it.
There are certain expenses that you can claim as a minister of religion as long as they are incurred wholly and exclusively for the duties of the office or employment.
• The cost of ministry journeys from one place of work to another .Also allowable are related costs of accommodation and meals.
• Maintenance, repairs and insurance of vicarage or manse
• A proportion of the cost of lighting, heating, cleaning and maintaining of premises where you live.
• A proportion of rental cost if part of the house is used mainly for work;
• Cost of postage, stationary;
• Cost of telephone calls where a deduction is made to cover personal calls;
• Cost of repair or replacement of robes worn for divine service;
• Communion expenses such as bread and wine;
• Subscriptions to professional bodies approved by HMRC;
• Secretarial assistance cost;
• Books used in the conduct of services or preparation of sermons;
• Work-related training;
• Reasonable entertaining costs for official visits from clergy or officers of the church;
• Temporary cover cost known as locum tenens.
For more information about taxation of ministers of religion you could visit HMRC.
If you have not submitted your tax return to HM Revenue and Customs already, you must do it online by the end of this month.
If HMRC receive your tax return after 31 January you will be liable for a late filing penalty of £100.
But even if if you miss the deadline for your tax return, you will not have to pay the penalty if you pay all of the tax you owe by 31 January.
In some rare cases, you might still be allowed to send your return on paper after the October deadline when no software is available. This is the case for the following types of returns:
• SA700 – Non-resident Company Tax Return
• SA970 – Trustees of Registered Pension Schemes
According to HMRC, “Tax returns that are in an HMRC office letter box when it’s first opened on Tuesday 2 February or delivered to an HMRC office by hand on Monday 1 February will be treated as being received on the 1 February. You won’t have to pay a late filing penalty, but HMRC will have longer to start a check into the tax return – until 30 April 2011 rather than 31 January 2011″.
So if you have not managed to deal with your tax affairs so far, Taxfile’s tax accountants can still submit your tax return on your behalf at reasonable rates.
Hurry up and beat the deadline!
The 2009 Pre-Budget Report was published on 9 December 2009. The Report covers a lot of issues but we will only focus on the ones affecting self employed individuals.
According to the Pre-Budget Report 2009, the tax rates and thresholds for the year ended on 5th April 2011 will remain the same as the ones for the current tax year. The same principle will apply to National Insurance Contributions rates and thresholds in 2010/2011.
But “for the tax year 2011/12, in addition to the 0.5% increases to rates already announced at PBR 2008, the Chancellor has announced that there will be a further 0.5% increase to those rates, making a 1% increase in total from 6 April 2011. The primary threshold and lower profits limit will be increased by £570 to compensate the lowest earners.”(HM Revenue and Customs).
The Child element when calculating the CTC entitlement will increase from the current £2235 p.a. to £2300 p.a while the disabled elements will increase by 1.5%.
Also, all elements of the WTC (except the childcare element) will increase by 1.5% in 2010/2011.
The income threshold for those claiming CTC rises from 2010/2011 to £16,190.
The inheritance tax threshold will be frozen at the current level of £325,000 from the tax year 2010/2011.
For any other details to do with the Pre-Budget Report 2009 please visit HMRC.
Venture Capital Trusts were schemes introduced in 1995 to encourage individuals to invest in high-risk trading companies.
With a VCT the risk of the investment is spread over a number of companies.
VCTs must be approved by HMRC and must meet a certain qualifying conditions.
If you have subscribed for shares in Venture Capital Trusts and you are 18 or over when the shares were issued you are entitled to a few tax reliefs.
According to HMRC, these are the tax reliefs for investing in VCTs:
Income tax relief:
One of the income tax reliefs of VCTs is that you are exempted from income tax on dividends from ordinary shares. This is called dividend relief;
Another very important tax relief when investing in a VCT is called income tax relief .
The amount of the tax relief will be the smaller of the amount subscribed up to a maximum of £200,000 at 30% or the amount that reduces the tax bill to zero for the year.
The rate of 30% applies in the tax year 2006/07 and onwards and for subscriptions for shares issued in previous tax years the rate is 40%.
Capital gains tax (CGT) relief :
One of the CGT reliefs when investing in VCT schemes is called disposal relief as you may not have to pay CGT on any gain you make when you dispose of your shares. In order to qualify for the reliefs certain conditions need to be met. You can find more about them on HMRC website.
As there are no guarantees that VCT investments will be successful, Taxfile‘s tax agents recommend that you seek professional advice from financial advisers beforehand.
