HMRC are clamping down on landlords

HMRC are clamping down on landlords who do not declare income from lettingsHMRC are constantly reviewing who has and has not declared income properly from letting out property, whether that’s from short-term lets, long-term lets, holiday lets, letting rooms to students or to workforces. And with new, sophisticated, data sharing systems now in full force across many agencies, authorities, online, via tip-offs and surveillance, the Government has its sights on an estimated 1.5 million landlords who they think have under-paid tax.

Taxfile are here to help landlords get their tax right and to make sure all genuine expenditure is offset against their final tax bill. They can also help out when things have become complicated by liaising with HMRC on behalf of the landlord under fire. Contact Taxfile for an informal chat, without obligation (you can even book an appointment online) or ask for a copy of our ‘Landlords Beware’ information sheet.

Online banking may save you money!

Online banking can save you money on your accounting costsDo you have online banking? Sending us downloaded statement information straight from your online banking means we can more easily import the data into our system and check for expenses and income which might otherwise have been overlooked. It can also fill in the gaps where you are missing receipts or invoices. This simple service could therefore save both time and money! Most online banking platforms allow you to export this information, for example as a CSV file, and this format is perfect for our accounting system.

Don’t have online banking? No problem! We also have a new system where we can scan in your paper statements straight into our ‘Bankstream’ accounting platform, making analysis faster and easier.

Either way, ask us for further information or, better still, send us a sample download of a typical month’s bank data (or Read more

Tax bomb

Avoid Significant HMRC Penalties – file your tax return on time!

File your tax return in time or face severe fines[UPDATED AUGUST 2020] Did you know that you get an automatic £100 minimum penalty if you file your Self Assessment tax return (or pay any tax owed) even one day late? After 3 months you can add £10 per day extra to that fine (up to 90 days/£900 max) and after 6 months it gets significantly worse. And remember that you need to file your return on time even if you don’t owe any tax, or if you have already paid it! Latest indications are that there are also no warnings given by HMRC. See the table below for the detail.

Late return penalties by HMRC

So our message is simple: don’t file late, and don’t pay late! Taxfile are here to help you, of course. We know Self Assessment Tax Returns back to front and we can help you file accurately, and on time. If you’re late, we can help to sort things out quickly and so keep any HMRC penalties to a minimum.

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Taxfile Autumn Newsletter Now Available

Taxfile Newsletter Autumn 2014Download our jam-packed Autumn Newsletter right here for up-to-the-minute news, ways to save money, tips, new developments and tax information from Taxfile. Includes important news regarding tax return deadlines, refunds for C.I.S. sub-contractors working in the construction industry, key dates, ways to save money, HMRC tax news for landlords, imminent price changes plus an interesting mind map showing information about our lovely multi-lingual staff! Download the newsletter here (Acrobat PDF format – right-click to save the PDF to your hard drive then open it in Acrobat Reader or alternatively left-click the link to view the newsletter directly in most browsers).

Email Scam Warning in run-up to HMRC Tax Credits Deadline

Phishing scamsHMRC have sent out warnings over a significant threat from new ‘phishing’ emails purporting to be from them. They are, in fact, scam emails which include links to replicas of the HMRC site and are designed to trick people into disclosing security-sensitive financial and personal information such as bank details, National Insurance numbers, credit card details, passwords, mother’s maiden names and so on. In the wrong hands these details could mean theft of your money or even your identity. Many people do not realise they have been scammed until it’s too late so taxpayers need to stay alert when checking emails and browsing online.

HMRC state that they never ask for payment and personal information by email and also warned people to be very wary of opening email attachments as many contain malicious code of one form or another. This is especially difficult because some of the fraudulent emails look very genuine, even appearing on casual inspection to come from an email address like taxreturns@hmrc.gov.uk and containing promises of tax refunds or Read more

Record haul by HMRC in tax avoidance crackdown

Record anti-avoidance tax haul by HMRCBack in January we reported that HMRC had raised an extra £20.7 billion in additional revenue for the financial year 2012-13 as a result of it’s drive on tax compliance and a massive crackdown on tax avoidance by organisations and individuals alike. Now we can confirm that the financial year 2013-14 figures are in and HMRC has increased their haul to £23.9 billion in additional tax for the year – an all time record and one which represents 5% of the total tax yield for the year. This is an increase of £3.9 billion on the year before and it’s up a whopping £9 billion compared to 3 years ago. George Osborne will be doubly pleased because this year’s figure also beats the target he set in his Autumn Statement by £1 billion clear.

Of the £23.9 billion raised in these latest figures, £8 billion is derived from large businesses, £1 billion from criminals and a further £2.7 billion is the result of successfully tackling tax avoidance schemes in the courts. That leaves £12.2 billion which we Read more

The Shocking Truth about Tax on the Poor

How much is taken in taxHave you ever wondered how much of one’s total income is taken up in tax? And I don’t mean just Income Tax. I mean in ALL taxes paid by ordinary taxpayers throughout the course of a year. Such a figure would need to take into account National Insurance (income tax in all but name, some might say), the insidious Value Added Tax or ‘VAT’ – which on its own is a hefty 20% tax on what is often already taxed money for most ordinary taxpayers, and don’t forget to include Council Tax and finally, of course, Income Tax itself.

Well, the answer may surprise you. Before seeing the answer, though, try The Guardian’s little quiz about this and see how you get on. There are only 8 questions, and for each you simply choose from 4 possible answers – so it’s quick to complete and, once submitted, you are immediately taken to a feedback page where you will be told how your answers compared to the average respondent and, more interestingly, what the correct answers were. It’s interesting to note that, in a joint poll by The Equality Trust and Ipsos MORI, nearly 70% of people drastically underestimated how much the poorest pay in tax, as a percentage of their total income. They also over estimated how much the richest pay as a proportion of total income. This wide misconception is due to most people incorrectly focusing only on Income Tax alone which, in reality, only makes up a small proportion of total taxes paid throughout the course of a typical year.

Spoiler alert: be warned that I’m shortly going to divulge the answers Read more

The Taxpayers Charter & how it can help you

The Taxpayers CharterMany ordinary working taxpayers do not even know it exists, but The Taxpayers Charter is there to make sure that HMRC give you a service that is even-handed, accurate and based on mutual trust and respect. HMRC also want to make it as easy as possible for you to get things right.

The Charter is there to protect you and, better still, it gives you certain rights. In return for 3 simple obligations on your part (honesty, respect for HMRC staff and diligence to get things right) HMRC promises to:

  1. Respect you.
    This includes treating you with courtesy and making you aware of your rights;
  2. Help and support you to get things right.
    This includes processing the information you supply as quickly and accurately as possible and also correcting any mistakes as quickly as they can;
  3. Treat you as honest.
    This includes only questioning what you tell them if they have good grounds to do so;
  4. Treat you even-handedly.
    This includes consideration of any financial difficulties which you may be having and explaining what you can do if you disagree with their decisions, or if you wish to make a complaint;
  5. Be professional and act with integrity.
    Critically, this includes a useful sub-clause to ‘make sure that you are dealt with by people who have the right level of expertise‘ and another to ‘let you know how appeals, investigations or complaints are progressing‘. Here at Taxfile we feel that these may be the most helpful clauses of all, judging by past history;
  6. Tackle people who deliberately break the rules and challenge those who bend the rules;
  7. Protect your information and respect your privacy.
    This includes a sub-clause to respect your legal rights when they visit premises;
  8. Accept that someone else can represent you;
    Hey – we would be happy to represent you!
  9. Do all we can to keep the cost of dealing with us as low as possible.
    For example if you, or your representative (see clause 8 above) feel that an HMRC officer is relentlessly dragging out a tax enquiry with perhaps unfair queries, creating unnecessary work, then Read more

RTI (Real Time Information) – last Full Payment Submission (FPS) due soon

Exactly eleven months ago at time of writing, HMRC launched ‘RTI’ (Real Time Information) in the UK. This is the mechanism through which employees now have to report PAYE information for employees on the day it actually happens, or alternatively before that day, for example to confirm to HMRC each time an employee is paid through PAYE, including any NI or Income Tax deductions. RTI is, almost without exception, for all employees including those whose earnings fall below the NIC’s Lower Earnings Limit (‘LEL’), e.g. students.

The RTI reporting has to be done electronically using payroll software, whether that’s the employer themselves reporting it, or their nominated accountant, payroll bureau or bookkeeper. The information reported to HMRC will also now need to include new information which includes the usual hours worked by each employee and any unusual break in the normal working pattern, for instance if an employee takes unpaid leave. RTI also includes other changes to how various things are reported e.g. starter and leaver dates and also employers no longer need to submit end of year forms P14 and P35 because this will be handled on the last Full Payment Submission (‘FPS’) for the tax year in question – this is due in less than a month  at time of writing as the new tax year begins Read more

It’s official: thousands are on the wrong tax code!

With the tax return deadline being only hours away (midnight 31 January 2014) there is still time to get professional help if you need it – particularly because HMRC  often get it wrong according to new research by UHY Hacker Young.

In just one example, HMRC sent a tax bill to a pensioner which demanded over £576k in tax! With an income of only £11k per annum this was clearly incorrect but what if it had been only hundreds of pounds wrong – would the pensioner have noticed and, if so, would he have been confident enough to question it with the might of HMRC?

According to the research, HMRC employees have been making ‘basic’ errors which have led to problems such as people being on the wrong tax code and consequently underpaying or overpaying tax. While underpaying it may sound attractive on the face of it, chances are the system will catch up and then a correction will need to be made later on, leaving the taxpayer with an unforeseen bill to pay – a real blow for cashflow.

While the UHY Hacker Young research cites an error rate in 2013 of 37% in the sample tested, HMRC are arguing that the research is wrong and that their PAYE coding notices are 99% accurate. Either way, when you consider that Read more