Tax bomb

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

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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.

Read more

Save Money, Beat the December Price Increase!

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Beat the price increaseWhere possible, Taxfile customers are urged to submit their records to Taxfile before December 1st 2014 so as to beat the price increases which will come into effect from that date. Taxfile has held its prices for several years now, and unusually long for our industry, however every so often we have to take stock and catch up with inflation and the ever-increasing costs of operating a business inside London. At time of writing, Taxfile customers still have time to submit their paperwork and records for professional tax and accountancy help – for example for tax returns – so can totally avoid the price increases this year if they act reasonably fast and get their figures and records etc. to us before December 1st. This will also avoid bottlenecks as we fast approach the busiest time in the tax year. Taxfile will also be sending out reminders to its active customer database.

** New – Early Bird Reduction **

* If you miss the December 1st deadline, don’t worry because we’re offering a 5% ‘Early Bird’ reduction on prevailing Taxfile prices if you submit all your records to us before the end of December.

Call 020 8761 8000, click here to contact us or book an appointment online.

Taxfile would like to thank its customers for their loyalty and custom throughout the years, and for their understanding when occasionally we have to make these increases so as to keep pace with the rising cost of operating in London.

(For tax returns, figures and records are required for the year ending 5 April 2014).

Record haul by HMRC in tax avoidance crackdown

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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

New HMRC Service to Replace Closing Enquiry Centres

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Tax adviceHer Majesty’s Revenue & Customs (‘HMRC’) have now completed a 7 month pilot scheme, held across the North East of England, whereby they closed existing HMRC Enquiry Centres and instead offered those requiring extra help with tax-related issues assistance in a different, more tailored way. With the pilot scheme now complete and deemed a success, all Enquiry Centres across the UK will be closed by 30 June 2014 (just a few days away at time of writing) in favour of the new, more tailored system.

Since the end of May, HMRC have already been rolling out the replacement service, being “a new way to support people who need extra help to get their taxes, tax credits and child benefit entitlements right”. The new service will be more tailored to individual needs and will apparently be more efficient than the Enquiry Centres, which have seen demand drastically falling over recent years. So evidently the new service is also about saving the Government money, which is good to see as it helps to reduce the UK’s overall tax burden and mitigates possible tax increases.

The Replacement Service

The replacement service will be available by telephone or face-to-face via a mobile squad of advisers, who will deal with you on the telephone, visit your home or meet you within your local community, if preferred. The HMRC specialist involved will try to resolve, as fully as possible, all tax and tax credit-related queries during the course of the initial session. This will be aided by liaison, during that session, between the adviser and other experts from different departments within HMRC; the aim being to Read more

Time for ‘tax year end planning’ (pre-Budget)

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The budget will take place on March 19th 2014 so that gives us all just 5 weeks (at time of writing) for ‘tax year end planning’. So perhaps now is the time to start reviewing investments.

N.B. We’re not financial advisers (we are tax agents and accountants) so we can’t give advice on investments. But let us simply point out that if a portfolio shows signs of some gains, one can usually realise up to £10,900 in capital gains for the tax year 2013/2014, without a capital gains tax (CGT) liability coming into force.

It might also be worth considering making the most of ISA allowances before the tax year ends (April 5th). £11,520 can currently be invested into an ISA for the tax year 2013/2014, of which £5,760 maximum can be in a ‘Cash ISA’. Because you cannot carry forward ISA allowances into a new tax year, there is only very limited time remaining to make the most of the current ISA allowance. Tax benefits in relation to ISAs are well recognised in the UK, so much so that the Treasury has already looked at the possibility of capping their total value … and who knows what news the coming Budget will bring in this regard, particularly bearing in mind the continued need for austerity measures to reduce the budget deficit during these troubled economic times.

If you would like independent financial advice, Read more

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

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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

New brochure available for download

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Taxfile's BrochureHave you ever wondered what other services the Taxfile group can help you with? Well, find all the answers in the new downloadable brochure, which outlines services undertaken at the various different offices in both South London and Exeter, Devon. From accountancy and bookkeeping for SMBs to simple tax returns for individuals and right through to the most complex of complicated tax issues – we’re here to help and the new brochure gives you all the contact details for each office including address, email, telephone, Skype ID, how to book appointments on-line and, finally, what discounts are available – both to new and existing customers – it’s all there … or rather I should say … it’s all here! (A4 PDF format, less than 1MB).

31st October Deadline

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If you would like to send your tax return for the year ended on 5th April 2009 by paper, you would have to do it by the end of this month.

Very important to remember is that the tax return has to reach HM Revenue & Customs by Saturday 31st October.

If you send your return on paper the HMRC will calculate the tax liability to be paid or owed.

If the paper return arrives after this deadline you will be charged a £100 penalty.

According to HMRC, if you miss the deadline because of the postal strike you would not be liable for paying the £100 penalty as long as you post the return before the 31st October.

If you hand deliver your return on the 2nd of November, no penalty would be due either.

In case you miss the deadline you can always send your return online.

At Taxfile in Tulse Hill we submit all the returns online as it is safer and more secure, tax returns are processed faster, and there are later deadlines to meet.

Changes to Minimum Wage from 1st October

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As explained in a previous blog post, Minimum Wage is defined as the lowest wage payable to most employees as fixed by law or union agreement.

As from 01/10/09 new rates came in place:

•£5.80 – as the main rate for workers aged 22 and over;
•£4.83 – the 18-21 rate;
•£3.57 – the 16-17 rate for workers above school leaving age but under 18.

A very important change from 01/10/09 is that fact that employers running bars and restaurants can no longer be allowed to use tips to top up pay up to the minimum wage.

Workers will now be paid at least the National Minimum Wage and be paid their tips on top of this.

If your employer is paying you less than the Minimum Wage entitlement you must report this by filing an online complaint form.

If you have any queries regarding Minimum Wage or any other tax related question, please feel free to ring us on 020 8761 8000 or come to see us in our office in Tulse Hill on the South Circular.

Taxfile: Barristers and Tax

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As a barrister you are treated as self employed by HM Revenue and Customs.

Historically barristers computed their professional profits for tax purposes on a “cash basis.”

Fees were brought into account only when received, and expenses only when paid.

From fiscal year 1999/00, it is required that all professionals including most barristers to compute their profits on a “true and fair view.”

Barristers in their first seven years of practice are still allowed to use the cash basis.

In computing their profits for tax purposes, barristers can deduct certain expenses like:

• Travelling costs from Chambers to court;

• Off street parking;

• Library and periodical subscriptions;

• Postage, printing, photocopying and stationary;

• Professional and accountancy fees;

• Devilling fees

• Chambers’ rent;

• Legal literature;

• Professional Indemnity Insurance premiums;

• Subscriptions (Circuit, Bar Council, Bar Associations)

• Bank charges;

• Use of home as an office;

• Robing room fees;

• Law report subscriptions;

• Staff costs;

• Silk application fees;

• Clothing and cleaning.

According to HMRC, “You should allow a deduction in computing profits for the cost of replacing gowns and wigs and frock coats worn by Queen’s Counsel. You should not, however, allow a deduction for expenditure on `normal clothes’, for example, black coats and pin- stripe trousers worn by male barristers or black dresses and suits worn by female barristers (this follows the decision in Mallalieu v Drummond”

Taxfile‘s tax agents will ensure you keep the necessary records of your income and expenditure and you make the right adjustments with regards the to private use of your expenditure.

Also, our tax accountants in South London and Exeter will make sure you obtain the maximum available tax deduction when calculating your taxable profits.