New penalties for inaccuracies in returns

The new penalties are mainly introduced to penalise those who deliberately evade tax.
The penalties apply to inaccuracies in returns or other documents for VAT, Construction Industry Scheme (CIS), Income Tax, Corporation Tax (CT), Capital Gains Tax (CGT) and employers' PAYE (Pay As You Earn) and National Insurance Contributions (NICs).
Penalties are with effect from 1 April 2009.
Penalties for inaccuracies will be a percentage of the extra tax payable (or not repayable) as a result of correcting the inaccuracy. The percentage is based on a number of things including the behaviour that gave rise to the inaccuracy.
In summary, an inaccuracy made by a person in a document or return may be an inaccuracy made despite the person taking reasonable care in which case no penalty will be due.
Penalties for inaccuracies are designed to address the behaviour that led to the inaccuracy.
Penalties for deliberate inaccuracies are therefore higher than those for careless inaccuracies.
There are two deliberate categories within the legislation to reflect different degrees of seriousness. Higher penalties are charged where a person has taken active steps to cover up a deliberate inaccuracy.
Very important to remember is that there is no penalty where the taxpayer makes a mistake despite taking reasonable care.
If a document contains more than one inaccuracy, a penalty will be charged for each inaccuracy. Taxfile's tax agents in South London and Exeter will make sure no inaccuracies are in place when sending your tax return to the Hmrc.

Student Loan Deduction

Student Loans are considered to be a financial support package for students in higher education in the UK with the Government's help. They are available to help students meet their expenses while they are studying.
HM Revenue & Customs is responsible for collecting repayments of Student Loans in cases where the borrower is within the UK tax system and is no longer in higher education.
The loans are still administered by the Student Loans Company.
In most cases the employer collects Student Loan repayments by making deductions from the borrower’s pay .
The employer has the following responsibilities:
• making deductions of Student Loan repayments from thee the employee’s wages
•keeping records of the deductions made
•paying the deductions over to HM Revenue & Customs
•providing HM Revenue & Customs with details of the deductions at the year end
•giving the employee details of the deductions on their payslips
•identifying on form P45, when the employee leaves your employment, that they are liable to make Student Loan repayments.
There is an Annual Threshold, currently £15,000, below which Student Loan repayments are not due. Employers making Student Loan deductions apply a proportion of the threshold appropriate to the pay period in calculating the amount of Student Loan repayment to deduct.
The rate of deduction when calculating the amount of Student Loan deduction is 9%.
Deductions are made on a non-cumulative basis. In order to deduct the right amount from the employee's pay than the employer has to look up the Student Loan Deduction Tables on the HM Revenue & Customs website.
If you need to know more about the way Student Loans deductions work out, Taxfile's tax agents in South London and Exeter can help you get a better understanding of it.